When a plaintiff sues a partnership, must they immediately join the individual partners as defendants or risk having no recourse if the partnership entity turns out to be insolvent?

The underlying contract claim was brought against the partnership itself and, after about a decade of litigation, resulted in a judgment of liability that exceeded the partnership's own assets. The plaintiffs then turned to the individual partners for satisfaction, under the principle that they are jointly and severally liable for the partnership entity's debts. The partners invoked limitations, arguing that the clock had expired years before when they were not joined in the original action.

The Court held that limitations did not bar this post-judgment claim by a judgment creditor against individual partners.

It noted that the plaintiff could have sued the partners at the outset. And it acknowledged the general principle that a claim "accrues" when it could be brought. But, as the Court explained, the structure of this claim warranted a different result. The Court looked to the provisions of the Texas Revised Partnership Act, which makes this kind of liability contingent on there being a judgment entered against the partnership entity and on the entity failing to pay for 90 days. These features, the Court held, made this kind of statutory claim against individual partners more akin to indemnification than more typical tort or contract claims. Thus, the Court held, the claims were not barred by limitations.

When does this limitations clock start to run? Is it at the time judgment is entered against the partnership, when any appeal of that judgment is complete, or at some other time? This case did not require finely tuning that answer. The Court suggests that the limitations clock actually begins to run only when the judgment can be collected against an individual partner, which might mean 90 days after the judgment can be executed. So, a supersedeas filing may, it appears, have the side effect of extending the limitations period for collection claims against individual partners.