1. How would you rule on the first issue, and why?

2. If you rule that the property should remain in the partnership until the winding-up process is complete, how would you justify suing the partnership in conflict with D.C. law so that the assets could be properly used to satisfy partnership creditors?

The law firm of Beckman and Kirstein was comprised of Robert Beckman and David Kirstein and located in Washington, D.C. Both partners were well schooled and had many years in education and government service between them, including teaching at Harvard Law, serving as counsel to the Civil Aeronautics Board, and working as a trial attorney for the Antitrust Division of the United States Department of Justice. After forming a law practice with another attorney, the resulting partnership signed a 10-year lease for office space in a Washington, D.C., building owned by Melvin Lenkin.

The lease had a clause that stated that the individual partners as well as their successors in interest in the lease could not be held personally liable under its terms. One year after entering into the lease, the third partner dissolved the partnership by withdrawing. The partnership of Beckman and Kirstein was then formed. A little more than a year after the new partnership began and nearly eight years before the lease was to expire, Lenkin received a letter from Beckman informing Lenkin that the lease was going to be terminated in a month as the partnership of Beckman and Kirstein was to be dissolved. Lenkin then filed suit against Beckman and Kirstein for the balance due on the lease.

Beckman and Kirstein immediately filed a motion to dismiss based on the prohibition in the lease against holding partners individually liable. The lower court granted the motion and also held that, as a partnership cannot be sued in the District of Columbia, Lenkin could not even get a judgment against the partnership of Beckman and Kirstein. As a consequence, Lenkin was left without a remedy. He then appealed.

The appellate court faced the following issues:

1. Should the assets be retained in the partnership of Beckman and Kirstein until the winding-up process for the partnership or did the assets become the personal property of the partners immediately upon dissolution?

2. Should such assets be open to suit by such a creditor as Lenkin even given the prohibition in Washington, D.C., law against suing a partnership?

In resolving these issues the appellate court pointed out that the lower court’s holding that the partnership property automatically becomes the personal property of the individual partners upon dissolution was incorrect. Instead, the property of the partnership became the personal property of the ex-partners only after the windingup process was complete. Secondly, the court noted that although the partnership itself could not be sued under D.C. law, the business entity could be sued by serving both partners.

Reversed and remanded to the lower court for proceedings according to the above opinion.