Texas SC: Partners must be named to be personally liable

Steve Korris Jun. 25, 2008, 12:33pm

AUSTIN � Harris County District Judge Caroline Baker improperly held an individual liable for a $2.5 million default judgment against a partnership, the Texas Supreme Court ruled June 13.

The justices unanimously lifted the judgment from William Kao, general partner in Kao Holdings Limited Partnership, and remanded the case to Baker for further proceedings.

Baker awarded judgment to Annie Lee Young for injuries she suffered in a fall at Sebring Apartments, a Kao Holdings property.
Young did not sue Kao as an individual.

"Partners against whom judgment is sought should be both named and served so that they are on notice of their personal liability," wrote Justice Nathan Hecht.

Texas rules of civil procedure provide for default judgment only against a defendant, Hecht wrote. "Kao was not a defendant," he wrote.

Texas rules of civil procedure require that judgment shall conform to the pleadings, he wrote. "Young pleaded no claim against Kao," he wrote.

When Young sued Kao Holdings, she served the partnership by serving Kao.

Kao Holdings did not answer the complaint. Young moved for default judgment and Baker granted it.

The 14th District appeals court in Houston affirmed Baker in holding Kao individually liable but reversed the award, holding that Young offered no evidence to support it.

Michael Hays and Ruth Piller represented Kao. Ricky Anderson, Melvin Houston and Eric Mcferren represented Young.

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