Sam Gall and Dustin Marquise started a custom metal fabrication business together in Raleigh, North Carolina. Before beginning to operate their new business, Sam and Dustin properly file the articles of organization with the North Carolina Secretary of State, obtained their taxpayer identification number from the IRS and executed an operating agreement governing the rights and responsibilities of Sam and Dustin as members of their newly formed company, Custom Fab Partners, LLC. Sam and Dustin each contributed $10,000.00 in capital to Custom Fab Partners, LLCs business checking account after it was opened. Subsequently, Custom Fab Partners, LLC opened several trade accounts with vendors, including one account with Triangle Steel Corporation. After opening the trade account with Triangle Steel Corporation, Custom Fab Partners, LLC purchases, on account, $75,000 of steel from Triangle Steel Corporation. Custom Page 3 of 3 Fab Partners, LLCs business was slower than anticipated over the first several months and as a result, Custom Fab Partners, LLC was unable to pay Triangle Steel Corporation for the steel it purchased on account. Triangle Steel Corporation filed a lawsuit against Custom Fab Partners, LLC, Sam and Dustin. In response, Sam and Dustin file a motion to dismiss the lawsuit against them individually arguing that they cannot be held personally liable for the obligations of Custom Fab Partners, LLC.

i. What is the primary issue in this fact pattern?

ii. What is the rule or rules applicable to determining this issue (explain the rule or rules)?

iii. Analyze the issue using the applicable rule or rules.

iv. What is your conclusion based upon your analysis?