First National Bank of Denver v. District Court Ex Rel. the City & County of Denver

652 P.2d 613, 1982 Colo. LEXIS 710
CourtSupreme Court of Colorado
DecidedOctober 18, 1982
Docket82SA65
StatusPublished
Cited by181 cases

This text of 652 P.2d 613 (First National Bank of Denver v. District Court Ex Rel. the City & County of Denver) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First National Bank of Denver v. District Court Ex Rel. the City & County of Denver, 652 P.2d 613, 1982 Colo. LEXIS 710 (Colo. 1982).

Opinion

LEE, Justice.

In this original proceeding the petitioner First National Bank of Denver (bank), plaintiff in the trial court, claims that the district court has exceeded its jurisdiction and abused its discretion in refusing to allow the petitioner to execute on its final judgment. The petitioner requests that we *615 issue a writ of prohibition ordering the respondent court to vacate its stay of execution granted in Civil Action No. C-68753 in favor of the defendants in the trial court, Robert Sanders, Paul L. Sanders, Lawrence Sanders, J.W. Skinner, and Michael J. Bellamy. We issued our rule to show cause and we now discharge the rule.

The facts were as follows. In December of 1976, the bank brought suit on a demand promissory note executed by the five defendants. In subsequent proceedings a judgment in the amount of $182,530.55 was rendered against the defendants, jointly and severally, including $91,000 principal, $91,405.55 interest, and $125 costs, based upon a stipulation and payment schedule into which the parties had entered. Attorneys’ fees were to be determined at a later date.

On September 21, 1979, after a hearing on the bank’s motion, the district court entered orders charging partnership interests of the judgment debtors in three partnerships with payment of the unsatisfied portion of the judgment debt, costs, and interest. The orders charged the partnership interests of the named defendants in Quadrangle, Ltd., and the partnership interests of Robert Sanders, Paul L. Sanders, and Lawrence Sanders in the partnerships known as Saddleback, Ltd. and Grassroots Co.

The charging orders directed the partnerships to pay the bank all present and future shares of all distributions, credits, drawings, or payments which would have been paid to the respective named defendants for their interests in the partnerships, and further directed that such payments should continue until the judgment, including interest and costs, was satisfied in full. Until that time, the partnerships were ordered not to make capital acquisitions of property of the judgment debtors, not to loan money to nor pay any creditor of the judgment debtors, and not to make a sale or modification of partnership interests unless approval of the court or the judgment creditor was first obtained. In addition, all documents or partnership reports were to be sent to the judgment creditor, and the partnerships were instructed to make available a copy of the partnership agreements and amendments, income tax returns for the past two years, any balance sheet and profit and loss statements, and all books and records. The order charging the partnership property excluded property claimed to be exempt from execution. Section 13-54-101 et seq., C.R. S.1973 (1981 Supp.).

The order provided that: “Upon due application, any party may apply to this Court for a further modification of this Order, and the Court retains jurisdiction.”

No payments were made by the partnerships, and after approximately two years the bank orally moved the court, in an ex parte hearing, for execution and sale of the partnership interests charged in the September 1979 orders, and asked in addition for an order restraining the judgment debtors from alienating the property pending the sale. The court granted the motion and entered its order on December 1, 1981. The order provided in part as follows:

“The sheriff of the City and County of Denver, State of Colorado, is ordered to execute upon property of Robert Sanders, Lawrence Sanders, Paul Sanders, J.W. Skinner, and Michael Bellamy, being all of said Judgment Debtors’ right, title and interest in and to the following Colorado partnership, to wit:
Saddleback, Ltd.: (Robert, Lawrence and Paul Sanders only)
Grassroots Co.: (Robert, Lawrence and Paul Sanders only)
Quadrangle, Ltd.: (all Defendants) and to sell the interests of such Judgment Debtors in the above-listed partnerships at public sale in accordance with Colorado Law pertaining to such sales and to file with this Court a report of such sale within thirty (30) days after all sales are completed.”

The partnerships were restrained from assigning, transferring, or encumbering their property until the public sale was held.

On December 16, 1981, the defendants filed a motion for a stay of the execution, citing as grounds that the bank had as *616 signed its judgment to a party-opponent in another lawsuit in which Quadrangle, Ltd. was a defendant and a counterclaim plaintiff (Civil Action No. C-61262), and that the two actions were so related that the execution on the present case should be stayed pending the outcome of the other case.

On January 12, 1982, the court granted the motion and stayed execution, without hearing evidence or making findings. The bank now seeks an order from this court prohibiting the district court from staying execution against the defendants.

It is a general rule in Colorado that a court may not stay execution and thereby impair or destroy the statutory right of a judgment creditor to enforce collection of its judgment against nonexempt property of the judgment debtor. Jones v. District Court for the City and County of Denver, 135 Colo. 468, 312 P.2d 503 (1957). The petitioner argues that, since there is no allegation that the partnership interests are exempt from execution, the district court was without power to impair the judgment creditor’s rights, regardless of circumstances claimed by the debtors.

The judgment debtors, on the other hand, argue that this case may be distinguished from Jones v. District Court, supra, because sale of the partnership interests would affect the partnerships themselves as well as other partners which are not parties to this action. Because the judge ordered the sale without first providing notice and hearing to those who would be affected, they argue that the sale was void under the notice requirements of the Uniform Partnership Law, section 7-60-128(1), C.R.S.1973, which provides:

“7-60-128. Interest subject to charging order. (1) On due application to a court of competent jurisdiction by any judgment creditor of a partner, the court which entered the judgment, order, or decree, or any other court, may charge the interest of the debtor partner with payment of the unsatisfied amount of the judgment with interest thereon; and may then or later appoint a receiver of his share of the profits and of any other money due or to fall due to him in respect of the partnership and make all other orders, directions, accounts, and inquiries which the debtor partner might have made, or which the circumstances of the case may require.
“(2) The interest charged may be redeemed at any time before foreclosure or, in case of a sale being directed by the court, may be purchased without thereby causing a dissolution:
(a) With separate property by any one or more of the partners; or

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Bluebook (online)
652 P.2d 613, 1982 Colo. LEXIS 710, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-bank-of-denver-v-district-court-ex-rel-the-city-county-colo-1982.