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Weichert Commercial Brokerage, Inc. v. 400 Blair Road Realty Holdings, L.L.C.

A-4606-01T1 (N.J. Super. App. Div. 2003) (Unpublished)

PARTNERSHIPS; PARTNERS; LIABILITY—Where a partnership’s attorney can’t represent that the partnership can pay an outstanding obligation, it is proper for a court to issue a judgment against both the partnership and its general partner for a liquidated amount.

A real estate limited partnership owed a commission to a broker. An initial payment was made, but the balance of the payments were not. The broker obtained a judgment against the limited partnership and its general partner, jointly. On appeal, the general partner argued that it should not have been named as a judgment debtor. The Court thought otherwise. The general partner was a management entity that served as a clearing house for the receipt and distribution of funds for the real estate limited partnership and related entities. It also served as the general partner. The only check ever issued for commissions was issued by the general partner. During oral argument before the lower court, it was conceded that the balance of the commissions remained unpaid. The real estate limited partnership’s attorney was “unable to represent to the court that the partnership itself had sufficient assets to pay” the broker. Case law has held in a similar situation that: “judgment against the partners shall be limited to liability only, and shall not be entered as a final judgment for a sum certain until there is proof that the partnership cannot satisfy the judgment.” In this case, however, the Court thought “it plain on [the] record that the inability of counsel to offer even the hint of the possibility that the partnership itself [had] assets to pay [the] obligation suffice[d] to support entry of judgment” against the general partner as well. Consequently, the lower court did not abuse its discretion when granting the judgment against the general partner even before collection efforts had been made against the limited partnership of which it was the partner.

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