O.C. Partnership v. Owrutsky and Associates, P.A.
| Decision Date | 01 September 1990 |
| Docket Number | No. 1553,1553 |
| Parties | , 17 UCC Rep.Serv.2d 660 O.C. PARTNERSHIP v. OWRUTSKY AND ASSOCIATES, P.A. , |
| Court | Court of Special Appeals of Maryland |
Steven K. Fedder (Michael P. Smith and Weinberg and Green, on the brief), Baltimore, for appellant.
Morton J. Owrutsky, and Owrutsky and Associates, P.A., Salisbury, for appellee.
Argued before GARRITY and FISCHER, JJ., and JAMES S. GETTY (Retired), Specially Assigned.
After a hearing on July 24, 1990, the Circuit Court for Worcester County directed O.C. Partnership (Partnership) to pay $34,560 to Owrutsky and Associates, P.A. (Owrutsky). This was the amount allegedly held in the capital account of one of the Partnership's partners. At issue in this case is the legal effect of a charging order obtained by a judgment creditor, pursuant to § 9-505(a) of the Maryland Corporations and Associations Article, against the interest of one of the partners.
Prior to the commencement of these proceedings, the Partnership filed suit against D.R. Andersen and Associates, Inc. (Andersen), owner of fifty percent of the Partnership, for the theft of Partnership funds. In January, 1988, the Partnership obtained a judgment against Andersen in the amount of $38,489.41. Owrutsky represented Andersen during the lawsuit.
A week later, Owrutsky filed a complaint for judgment by confession against Andersen in an amount exceeding $47,000. His action was inspired by a $40,000 promissory note which Andersen allegedly executed in March, 1987 as payment for legal services rendered by Owrutsky. Owrutsky then obtained a charging order against Andersen's interest in the Partnership, alleging that Andersen was "entitled to substantial profits and other monies in respect of the partnership." Owrutsky next filed a motion for an order directing payment, challenging the Partnership's right to set off Andersen's capital account by the amount of Andersen's theft of Partnership funds.
In September, 1989, the trial court appointed a receiver to conduct an accounting of Andersen's interest in the Partnership. According to the receiver's report, at the end of 1987 there had been $34,560 in Andersen's capital account, and at the end of 1988, Andersen's capital account balance was adjusted to reflect the $38,489 judgment awarded the Partnership. The receiver, however, did not consider the fact that the judgment obtained by the Partnership against Andersen and the ensuing adjustment to Andersen's capital account were due to Andersen's prior theft of Partnership funds.
Owrutsky points out that on March 5, 1987 D.R. Andersen & Associates, Inc. signed a note in the amount of $40,000 and also signed a financing statement which was duly recorded in the Circuit Court for Worcester County, Maryland. The financing statement covered "[a]ll rights including monies due and to become due under an agreement made by debtor on May 31, 1981--'O.C. Partnership.' " After the August 13, 1987 recordation of the financing statement, several other pertinent events occurred:
1. On January 14, 1988, the Partnership obtained judgment against Andersen for thefts occurring prior to 1986.
2. On January 21, 1988, Owrutsky obtained judgment by confession on Andersen's note.
3. On February 3, 1988, Owrutsky obtained a charging order on Andersen's interest in Partnership property.
4. In late 1988, an accounting adjustment was made against Andersen's capital account to set off the Partnership's judgment.
Owrutsky avers that the issue in this case is one of priorities. We disagree. Before reaching the question of priorities, it is first necessary to calculate Andersen's Partnership interest. That interest, as reflected by the amount of Andersen's capital account, is the sum available for attachment by creditors like Owrutsky. Unfortunately, in light of Andersen's theft of Partnership funds, Andersen's debts to the Partnership exceeded the amount in Andersen's capital account.
Owrutsky presents a number of alternative reasons why he is entitled to the amount that was contained in Andersen's capital...
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91st Street Joint Venture v. Goldstein
...order only in passing because the judgment creditor had failed to establish the existence of a partnership. O.C. Partnership v. Owrutsky, 88 Md.App. 507, 596 A.2d 76 (1991), while involving the issue of the legal effect of a charging order against a debtor partner's interest, was concerned ......
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In re Keeler, Bankruptcy No. 99-2-4703-DK.
...in the partnership at the time a levy is effectuated by the obtaining of the charging order. O.C. Partnership v. Owrutsky & Associates, P.A., 88 Md.App. 507, 509, 596 A.2d 76, 77 (1991). In the case of Neubauer v. Mercantile Safe Deposit & Trust Co., (In re Neubauer), 1993 WL 56785 (D.Md.19......
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Ainslie v. Inman, Record No. 020595.
...Ainslies state that a levy on a partnership interest is effected by obtaining a charging order, see O.C. Partnership v. Owrutsky & Associates, P.A., 88 Md.App. 507, 596 A.2d 76, 78 (Md.1991), and that a charging order is a type of levy of execution pursuant to a judgment within the contempl......