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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 1035 September Term, 1996 ___________________________________

91st STREET JOINT VENTURE, et al.

v.

EDWARD S. GOLDSTEIN

___________________________________ Eyler, Thieme, Sonner, JJ. ____________________________________ Opinion by Eyler, J. ____________________________________ Filed: March 28, 1997

The question presented by this appeal is whether the Circuit Court for Baltimore County erred in vacating a charging order pursuant to which it had appointed a receiver to transfer a joint venture interest. We hold that the trial court possessed broad

discretion to fashion the charging order and to review for basic fairness the transfer of the debtor's interest, and that it did not abuse its discretion in vacating the charging order and refusing to ratify the transfer. the judgment of the trial court. Facts On July 25, 1994, the trial court granted a petition by appellants, 91st Street Joint Venture, a joint venture and a Maryland general partnership, Joint Venture Holding, Inc., and Princess Hotel Ltd. Partnership, to confirm an arbitrator's award. Appellants and Edward S. Goldstein, appellee, are the A dispute between Accordingly, we shall affirm

joint venturers in 91st Street Joint Venture.

appellants and appellee regarding capital calls required under the joint venture agreement was the subject of the arbitrator's award. Pursuant to that award, appellee's interest in the joint

venture was reduced to 0.2022%, and a judgment, representing fees and expenses incurred in the arbitration, was entered in favor of appellants against appellee in the amount of $55,938.08. On August 5, 1994, the trial court entered a charging order against appellee's 0.2022% interest in 91st Street Joint Venture.

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The order appointed William A. Hahn, Jr., an attorney, as receiver, for the sole purpose of effectuating a transfer, assignment, and/or conveyance to the joint venture of appellee's interest therein in the event that the judgment remained unsatisfied more than 15 days after service of the order on appellee. Court. On August 18, 1994, appellee noted an appeal to this

On August 23, 1994, the trial court entered an order

staying enforcement of the judgment and fixed a supersedeas bond in the amount of $56,000. stay further provided that such stay of the enforcement of the Judgment does not extend to the right of the Movant/Petitioner [appellee] to challenge the Respondent's [appellant's] good faith request for issuance of the . . . Charging Order, the adequacy of notice given to the Petitioner and any specific provisions of said . . . Charging Order. . . . On September 21, 1994, the trial court amended its order staying enforcement of judgment. In that order, the court increased the In paragraph E, that initial order of

amount of the bond to $61,600 and deleted paragraph E of the first order of stay "in light of the pending appeal to the Court of Special Appeals of Maryland. . . ." Appellee posted a cash We dismissed

bond in the amount of $61,600 on October 20, 1994.

appellee's appeal for lack of prosecution on our own motion on June 6, 1995, and the mandate issued on July 5, 1995. On February 1, 1996, appellants sought and obtained an order dissolving the stay of enforcement of the judgment. 2 On February

23, 1996, William Hahn filed a report with the Clerk of the Circuit Court stating that he had assigned appellee's joint venture interest to the appellants, valued by an independent accounting firm at $28,950, in partial satisfaction of the judgment. On the same day, appellants filed a petition to

release part of appellee's bond and to retain it in an amount sufficient to satisfy the unsatisfied portion of the judgment. The judgment with interest at that time was $64,752.83, and the amount deposited in the Clerk's Office was $63,501.09, representing the cash bond plus accrued interest. On March 6, 1996, appellee filed an opposition to appellants' petition, a motion to release the bond, distribute the funds, and vacate the charging order, and exceptions to the receiver's report. At a hearing on March 27, 1996, the trial

court orally granted appellee's exceptions and motion to vacate the charging order and denied appellants' petition to release part of the bond. The rulings were subject to the condition

that, by April 8, 1996, appellee deposit into the court additional cash to cover the deficit between the amount held in the Clerk's registry and the amount necessary to satisfy the judgment with accrued interest. The court indicated that, if the

judgment was not fully satisfied by April 8, 1996, the court would approve the transfer of appellee's interest to appellants on that date. The court further instructed appellee's counsel to Appellee paid the deficiency into the 3

prepare a written order.

Clerk's registry on March 27, 1996.

The parties were unable to

agree to the contents of a prepared written order and appeared at a second hearing on May 7, 1996. After that hearing, the trial

court entered an order, dated May 22, granting appellee's exceptions and his motion to vacate the charging order and denying appellants' petition to release part of the bond. Appellants filed a timely appeal from the court's written order. Question Presented The parties pose several questions to this Court but, in essence, inquire whether the trial court erred in setting aside the receiver's transfer of appellee's partnership interest and in vacating the charging order and terminating the receivership. Discussion A charging order is the statutory means by which a judgment creditor may reach the partnership interest1 of a judgment debtor. Bank of Bethesda v. Koch, 44 Md. App. 350, 354 (1979).

Prior to its availability, the courts would resort to common law procedures for collection that were ill-suited for reaching partnership interests. Gose, The Charging Order Under the Typically,

Uniform Partnership Act, 28 Wash.L.Rev. 1 (1953).

despite the fact that individual partners do not have title in partnership property, partnership property would be seized under

A joint venture and a partnership are indistinguishable for all purposes relevant to the case before us. See Madison National Bank v. Newrath, 261 Md. 321 (1971). 4

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writs of execution; the debtor partner's interest in the partnership would be sold, often to the judgment creditor, subject to the payment of partnership debts and prior claims of the partnership against the debtor partner; and the sale of the debtor partner's interest would result in compulsory dissolution and winding up of the partnership. Id. As noted by at least one

jurist, "[a] more clumsy method of proceeding could hardly have grown up." Id. (quoting Lord Justice Lindley of the English

Court of Appeal, Brown Janson & Co. v. Hutchinson & Co., 1 Q.B. 737 (1895)). The charging order solution to this procedural nightmare appeared first in the Partnership Act adopted in England in 1890, and then in the 1914 Uniform Partnership Act (UPA) at

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