Purcellville Ltd. Partnership v. Treptow

37 Va. Cir. 602, 1994 Va. Cir. LEXIS 739

• Court: Loudoun County Circuit Court
• Decided: December 30, 1994
• Docket: Case No. (Chancery) 15798
• Status: Published

Opinion

By Judge Thomas D. Horne

Defendants contend in their Demurrer to the instant Bill of Complaint for an Accounting and Other Relief that absent an accounting and dissolution of the Littleton-Treptow-Pedron Limited Partnership, Complainant, a limited partner in Littleton-Treptow-Pedron, is barred from pursuing both direct and derivative damage claims against the general partners of Littleton-Treptow-Pedron. In accordance with the common law rule, absent a winding up of the partnership and a settling of accounts between partners, the general partners of Littleton-Treptow-Pedron would be prohibited from seeking such relief against another general partner. Dulles Corner Properties v. Smith, 246 Va. 153 (1993). Such a rule is based upon the relationship of general partners to each other and to the partnership. As the Court noted in Dulles Corner, “a contrary rule would result in the legal impossibility of each partner being both plaintiff and defendant in the same action at law.” Id. at 156 (authorities omitted).

The General Assembly has specifically addressed the right of a limited partner to seek recovery in a derivative action pursuant to § 50-73.62, Code of Virginia. Littleton-Treptow-Pedron is a proper party to such an action. It is not an error to join the direct claim against the general partners with those of a derivative nature on behalf of the limited partnership. The reasons for requiring a dissolution and accounting do not apply to an action by a limited partner who owes no further obligation for contribution to his fellow partners which may only be determined after a winding up of the partnership affairs.

As to the remaining matter raised on demurrer, the Court believes that the pleadings are both adequate to put the Defendants on notice as to the nature of the claims asserted and to raise factual issues not susceptible to judicial determination at this stage of the proceedings.