Frigidaire Sales Corporation v. Union Properties, Inc.
Supreme Court of Washington
562 P.2d 244 (1977)
Mannon and Baxter co-owned Union Properties, Inc. (defendant), which served as the general partner of a limited partnership, Commercial Investors, in which Mannon and Baxter were also limited partners; Commercial had a business relationship with Frigidaire Sales Corporation (plaintiff), and when Commercial and Union proved inadequately capitalized to cover Commercial's obligations, Frigidaire sought to hold Mannon and Baxter personally liable, arguing they directly controlled Commercial's operations through Union. The trial court and court of appeals both held Frigidaire could not pierce Union's limited liability, and Frigidaire appealed.
Whether individual owners of a corporation that serves as the general partner of a limited partnership may be held personally liable for the partnership's debts based on their control over the partnership's operations through that corporation.