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In CA, can a general partnership sue as an individual, or does it need to do so as a partnership?

Long Beach, CA |

The lease agreement is between a general partnership (landlord) and an individual (tenant). Due to breach by landlord, tenant withholds rent. One of the individuals in the partnership is now bringing an unlawful detaiiner suit against the tenant for non-payment. The question is does a single individual partner have full standing to sue as an individual or does the action need to be filed by the partnership with which the lease is actually drawn? (Note: the lease (standard commercial) is silent on the issue, and the judicial council form used to file the UD has a check box for "plaintiff is a... individual ... partnership ..corporation, etc. So it would seem to matter, but... ?)

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Attorney answers 3

Posted

Who made the deal? Is there anything in writing other than the lease? When rent was paid to whom or what organization was it paid? Same question for the security deposit.

If the partnership was a party to the lease (or the lessor, as I understand it), then the partnership has standing to sue. You could certainly sue in both names although you'd have to pay two filing fees and, as I understand your question, your main objective is to get this person out of there. Yes, it matters as to jurisdiction and the merits of your case. Did the individual make the deal? Doesn't sound like it. It would seem logical that the partnership would sue.

Asker

Posted

Thanks, Hillary. To clarify: the landlord indicated in the lease is the partnership. Deposit and all rent checks to date have been to the partnership. I'm seeking to help Tenant who is concerned that the individual partner may be acting without his partners consent as there has been bad faith dealings by this individual partner. The individual partner is the one who has brought the UD against tenant. The question is: does that individual, as an individual, have standing to bring the suit or do they need to have filed as the partnership?

Posted

California Code of Civil Procedure section 367 states that "[e]very action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute." (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1004.)

The real party in interest is “the person who owns or holds title to the claim or property involved, as opposed to others who may be interested or benefited by the litigation.” (Gantman v. United Pac. Ins. Co. (1991) 232 Cal.App.3d 1560, 1566.)

A complaint filed by someone other than the real party in interest is subject to general demurrer if the defect appears on the face of the complaint, i.e., it fails to state a cause of action by the plaintiff because the claim sued upon belongs to somebody else. (Carsten v. Psychology Examining Comm. Of Bd. of Med. Qual. Assur. (1980) 27 Cal.3d 793, 796.)

Perhaps your real question is whether the general partnership can represent itself in pro per in an unlawful detainer lawsuit? The answer is no, the partnership (as an entity) must be represented by counsel in any litigation.

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult with your own attorney.

Asker

Posted

Thanks for your response. The landlord is represented by counsel. The individual landlord my be trying to act without her partners' knowledge or consent. Moreover, if tenant were to pay the individual landlord, as the 3-day notice demands, then the tenant could still be in default as per the lease which requires the lease payments to be made to and in the name of the partnership.

Asker

Posted

Yes, many small general partnerships (esp family-owned like mine) would like to do their own UD’s without paying for an attorney. The self-help Landlord's Guide to Evictions, by Attorney David Brown and published by Nolo, describes a manner that general partnerships can maintain UD's in pro per in CA. For example, suppose a partnership consists of individual A and B (even unmarried), record title to the leased premises is held in the partnership name, and the lessor on the rental agreement is also listed as the partnership name. According to Nolo, the partners would foremost need to have complied with proper FBNS filing. In addition, the plaintiff in the UD suit would be listed as “A and B, a general partnership, dba [name of partnership].” One general partner could then verify the complaint (as a partner) and appear on behalf of plaintiff in pro per. I’m guessing the legal theory behind this approach is that each general partner is in fact a co-owner of the property with the full right to possession of same. If the attorneys on here do not agree with this approach, I’m wondering if it would be possible for A and B to file the lawsuit as such, and both appear as unrepresented co-owners and co-plaintiffs in the litigation? Or can one partner (A or B) simply file the UD as an individual dba [partnership name] then appear pro se?

Posted

I believe that my colleague Mr. Chen has correctly surmised the landlord's motivation for filing on behalf of one of the individual partners rather than the partnership, i.e., the ability to maintain the action pro se as an individual plaintiff, but not as a partnership entity.

If the partnership is a general partnership as you say, and not a limited one, then I disagree that the individual partner lacks standing to sue. Under California law, a general partnership imposes liability coextensively on the partners for the acts of the partnership. Thus, each partner is a real party in interest to the contracts of the partnership, and would have capacity to sue individually on those contracts. In turn, you could attack the complaint on the grounds that all necessary parties have not been joined (either the partnership entity itself, or the other general partners individually), but I assess that you could not defeat the complaint based on the individual partner's lack of standing.

That's why the general partnership form is a default form and is generally disfavored over other entities such as limited partnership or corporate forms. To determine if the landlord is a general partnership or a limited partnership, you can request a copy of the partnership certificate from the California Secretary of State. If none has been filed, then the partnership is, as you believe, a true general partnership.

Asker

Posted

Thank you for your reply. Agreed that a general partnership does indeed impose liability on the individual partners (or that it does not provide the liability protections of an LLC or corporate form), but does that affirmatively provide that an individual partner has all of the rights and standings of the general partnership, which is a separate legal entity, right? In this case, for example, the lease is between an individual (tenant) and a general partnership (landlord), and the lease requires the tenant to make payments to (and in the name of) the partnership. And all payments to date have been to and in the name of the partnership, not to any of the individual partners. ANd if the tenant were to pay the individual partner who has filed the UD action (as the 3-day notice demanded, and/or as the complaint reads) then the tenant will not have followed that requirement of the lease and could be in default and still owe those very same payments to the partnership (even though they have paid the individual partner). In this case, tenant has reason to believe that the individual partner who has filed the UD may be operating in bad faith and without the knowledge or consent of her partners, which is why tenant would like to challenge/clarify this issue.

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