Kimberly is a general partner with Jared, Joshua, and Diane in a general partnership called KJJD Partners. The partnership operates a fast food joint...

Kimberly is a general partner with Jared, Joshua, and Diane in a general partnership called KJJD Partners. The partnership operates a fast food joint called We Nail The Burger! Each partner contributed $100,000 to capitalize the business. The partners hire staff to run the restaurant and stop in on occasion for lunch. The business gets its chopped meat from a local supplier to all the local diners.

While enjoying a beer and a burger after taking this Final Exam at We Nail The Burger!, Patricia bites into her burger and cracks a tooth on a fake nail, which is now embedded in her tongue. She gathers her classmates as witnesses, and lisping heavily, says to the manager, “I will THUU you.” The partners, who happen to be there for lunch, laugh at the irony of a nail in the burger, but are not worried about liability because they have insurance and they have nothing to do with the running of the place, especially ordering food and cooking. Unfortunately, Patricia loses half her tongue as a result of the injury, and the judgment against the partnership exceeds the insurance coverage and partnership capital by $1 million.

i. From whom may Patricia collect the extra $1 million in damages? How much can she collect and why? Be sure to address the liability of Kimberly, Jared, Diane, and Joshua, including the extent of liability of general versus limited partners. Does the fact that they employ others to run the restaurant make a difference?

ii. Let’s say Kimberly ends up paying the excess $1 million in damages, can Kimberly collect anything from her partner friends? Explain.

iii. Is there another type of business entity that KJJD could have used in order to minimize personal liability for things like this?