Lava Shadows, Ltd. v. Johnson

915 P.2d 331, 121 N.M. 575
CourtNew Mexico Court of Appeals
DecidedMarch 5, 1996
Docket16357
StatusPublished
Cited by12 cases

This text of 915 P.2d 331 (Lava Shadows, Ltd. v. Johnson) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lava Shadows, Ltd. v. Johnson, 915 P.2d 331, 121 N.M. 575 (N.M. Ct. App. 1996).

Opinion

OPINION

HARTZ, Judge.

1. Lava Shadows, Ltd., a limited partnership, sued John J. Johnson IV, a former general partner. Johnson counterclaimed against Lava Shadows and prevailed., The district court then entered judgment in favor of Johnson against William Weideman, a general partner of Lava Shadows. Weideman appeals, contending that the district court could not enter judgment against him because he had not been a party to the action at the time of trial. We agree and reverse.

I. BACKGROUND

2. The Lava Shadows complaint, filed on June 1, 1990, sought from Johnson an accounting and restitution for monies allegedly owing because of his overbilling for services. Johnson answered and counterclaimed for conversion, an accounting, and dissolution of the partnership. Weideman was not named as a party in either the complaint or the counterclaim, although he verified the complaint.

3. Johnson- subsequently filed for bankruptcy, and the claim against him was discharged. The counterclaim, however, proceeded to trial by the court in April 1994. After trial, District Judge Philip R. Ashby wrote counsel a letter announcing that he would award Johnson $212,845.60 in damages, against Lava Shadows. Johnson submitted requested findings of fact and conclusions of law, including a conclusion that he should have judgment against Lava Shadows and Weideman jointly and severally. This conclusion appeared in the district court’s findings and conclusions, but Lava Shadows filed for bankruptcy before judgment could be entered.

4. Shortly thereafter Judge Ashby retired from the bench. After the case was assigned to District Judge W. Daniel Schneider, Johnson moved for entry of judgment against Weideman. The caption of the motion, as with all prior pleadings, named only Lava Shadows as plaintiff and Johnson as defendant. See SCRA 1986, 1-010(A) (rule governing captions). The court’s notice of hearing, which had the same caption, was sent to Johnson’s attorney, to a former attorney for Johnson, and to Robert D. Montgomery as “attorney for Plaintiff.” Despite the absence of Weideman’s name from the caption and notice, at the hearing on February 8, 1995 Montgomery announced that he was appearing for Lava Shadows “and William Weideman, general partner.” Montgomery’s arguments on behalf of Weideman rested on Lava Shadows’ bankruptcy, not the failure to join Weideman as a party. After the hearing the court sent a letter to all counsel announcing that the motion would be granted. Montgomery then filed a pleading on behalf of Weideman entitled “Special Appearance and Motion to Determine Jurisdiction,” contesting the court’s jurisdiction to enter judgment against Weideman. The court held a hearing on the matter but rejected Weideman’s argument and entered judgment against him.

II. DISCUSSION

5. Our analysis proceeds in two steps. First, we consider the question whether Weideman was, or could be deemed to be, a party at the time of trial. Second, having answered in the negative, we consider whether after trial Weideman could be joined and judgment entered against him. Again, we answer no. We therefore reverse the judgment.

A. Was Weideman a Party at the Time of Trial?

6. It is an elementary, if not oft-stated, principle that judgment may not be entered against one not a party to the action. Fazzi v. Peters, 68 Cal.2d 590, 68 Cal.Rptr. 170, 173, 440 P.2d 242, 245 (1968) (en banc). A person does not become a party subject to liability merely by receiving notice of the action. The pleading that provides notice must seek relief against the person. Ordinarily, a court has jurisdiction to enter judgment against a person only if the person receives proper notice, and such notice must include notice that the person is a party against whom judgment is sought. See Restatement (Second) of Judgments § 2 cmt. b (1980) (“Restatement”).

7. In the present case Weideman was not named in the caption of the complaint or counterclaim. Nor did either pleading pray for relief for or against him. If Weideman is to be considered a party, it must arise from his relationship to the party Lava Shadows — a limited partnership of which he was general partner. But partnerships are now recognized as jural entities distinct from the partners themselves. “Suits may be brought by or against a partnership as such[.]” NMSA 1978, § 38-4-5 (Repl.Pamp.1987). The fact that the partnership is a party does not in itself make the partners parties. See, e.g., Fazzi; Brittany Ltd. v. Brittany of Michigan, 468 So.2d 344, 345 (Fla.Dist.Ct.App.), review denied, 479 So.2d 117 (1985); Losito v. Gingo, 107 Ga. App. 840, 131 S.E.2d 780, 781-82 (1963); Cortiza v. Rosenblat, 291 So.2d 425, 428 (La.Ct.App.1974); X-L Liquors v. Taylor, 17 N.J. 444, 111 A.2d 753, 760 (1955); Blum, Gersen & Stream v. 346 East 72nd Street Assocs., 172 A.D.2d 444, 569 N.Y.S.2d 15 (1991); Post & Front Properties v. Roanoke Constr. Co., 117 N.C.App. 93, 449 S.E.2d 765, 768-69 (1994); Foster Lumber Co. v. Glad, 303 N.W.2d 815, 816 (S.D.1981); 2 Alan R. Bromberg & Larry E. Ribstein, Bromberg and Ribstein on Partnership § 5.12(e), at 5:95 (1991). But see Fincher v. B&D Air Conditioning & Heating Co., 816 S.W.2d 509 (Tex.Ct.App.1991), writ denied (Tex. Feb. 26, 1992), and cert. denied, 506 U.S. 823, 113 S.Ct. 77, 121 L.Ed.2d 41 (1992).

8. Johnson relies, however, on National Surety Co. v. George E. Breece Lumber Co., 60 F.2d 847 (10th Cir.1932), for the proposition that “even in an action against the partnership in its own name, judgment may be rendered against a partner individually if he has been served with process or has appeared in the action.” Id. at 850. This proposition rests on a longstanding New Mexico statute, Section 38-4-5, which reads:

Suits may be brought by or against a partnership as such, or against all or either of the individual members thereof; and a judgment against the firm as such may be enforced against the partnership’s property, or that of such members as have appeared or been served with summons; but a new action may be brought against the other members in the original cause of action. When the action is against the partnership as such, service of summons on one of the members, personally, shall be sufficient service on the firm.

(Emphasis added.) In our view, this statute does not assist Johnson.

9. We first address the “served with summons” language.

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Bluebook (online)
915 P.2d 331, 121 N.M. 575, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lava-shadows-ltd-v-johnson-nmctapp-1996.