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DISTRIBUTION OF PARTNERSHIP INTEREST
© 1994 National Legal Research Group, Inc.
FLORIDA: Schiller v. Schiller, 625 So. 2d 856 (Fla. DCA 1993).
Trial court could not distribute husband's partnership interest to wife; instead, it could impose a charging lien on the partnership interest for a specific dollar amount.
The husband owned a 50% interest in a Florida general partnership which owned a parcel of real estate and a building. In the parties' dissolution proceedings, the trial court awarded the wife the husband's 50% interest in the partnership, in order to give her a 50% interest in the partnership assets (the land and the building). The husband appealed. The Florida appeals court held that the award violated the Uniform Partnership Act. Under the Uniform Partnership Act, it is well established that a creditor of an individual partner cannot levy directly on a partner's interest in a partnership or on the partnership assets, the court said, citing several dissolution cases, including Addis v. Addis , 288 Ark. 205, 703 S.W.2d 852 (1986); Warren v. Warren , 12 Ark. App. 260, 675 S.W.2d 371 (1984); and Berry v. Berry , 635 P.2d 68 (Utah 1981). This is intended to protect the interests of the other nondebtor partners, and to prevent disruption of the partnership business, the court commented.
The court noted that a general partner's interest in a partnership is personal property, consisting solely of the partner's right to receive a fair share of the profits and surplus, and the net partnership assets after dissolution of the partnership. Under the Uniform Partnership Act, the only way to reach a partner's interest in a partnership is to impose a charging lien by court order for a specific dollar amount on the partner's interest, the court said, citing Addis v. Addis, supra ; Riegler v. Riegler , 243 Ark. 113, 419 S.W.2d 311 (1967); Baum v. Baum , 51 Cal. 2d 610, 335 P.2d 481 (1959); In re Marriage of Paul , 821 P.2d 925 (Colo. Ct. App. 1991); and 59 Am. Jur. 2d "Partnership" S. 790.
On remand, the court directed, the trial court should award the wife a specific dollar amount for the value of the husband's interest in the partnership. The trial court could then retain jurisdiction to enforce the charging lien by sale of the partnership interest, appoint a receiver to obtain payments the husband would be entitled to receive, or take such other actions as the husband could take with regard to the operation of the partnership, in order to obtain payment of the debt owed to the wife. The purchaser of an interest in a partnership after enforcement of a charging lien may ultimately apply for dissolution of the partnership and, ultimately, the partnership assets could be reached, the court said, citing Smithson v. Smithson , 1984 WL 1580 (Ark. Ct. App. 1984) (not reported in S.W.2d).
Imposition of a charging lien could take place in the context of this dissolution case upon remand, the court continued, citing In re Marriage of Weiss , 695 P.2d 778 (Colo. Ct. App. 1984), and Craig v. Craig , 1982 WL 899 (Ark. Ct. App. 1982) (not reported in S.W.2d). The other general partner should be notified and joined as a party to the proceeding to impose a charging lien on the husband's partnership interest, the court added.
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