Hellman v. Anderson - 233 Cal. App. 3d 840, 284 Cal. Rptr. 830 (1991)

Rule:

California's Uniform Partnership Act, Cal. Corp. Code § 15028, authorizes a charging order on the debtor partner's partnership interest, and further allows the trial court to make all other orders which the circumstances of the case may require. The statute clearly implies the judicial authority to order foreclosure and sale of the charged interest. Cal. Corp. Code § 15028(2).

Facts:

Respondent judgment creditors sought the foreclosure and sale of appellant judgment debtor's interest in a general partnership. The foreclosure and sale were requested to enforce a money judgment against the debtor in his individual capacity. The debtor's partner did not consent to the foreclosure. The trial court issued an order authorizing the foreclosure and sale. The judgment debtor and intervenors sought review of the trial court’s order. 

Issue:

1. Was the consent of the partners always necessary before a trial court could order the sale and foreclosure of a judgment debtor’s interest in a partnership? 
2. Was the order of sale and foreclosure of the judgment debtor’s interest in the partnership proper under the circumstances? 

Answer:

1) No. 2) No.

Conclusion:

The court of appeals reversed the decision. The court held that a judgment debtor's interest in a partnership may be foreclosed upon and sold, even though other partners did not consent to the sale, provided that the foreclosure did not unduly interfere with the partnership business. Because the parties relied on authority requiring non-debtor partner consent, no evidentiary showing was made on the effect of foreclosure on partnership business. Accordingly, the order was reversed and remanded for the trial court to make a finding whether foreclosure would unduly interfere with partnership business.