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Casey v. Chapman

Washington Court of Appeals
98 P.2d 1246 (2004)


Facts

James Chapman (plaintiff), Daniel Casey (defendant) and others entered into a general partnership called South 320th Federal Way Partnership. In February 1993, Casey agreed to purchase Chapman’s “entire Partnership Interest.” The partners signed the contract. Casey signed a promissory note and a security agreement under which the partnership rights being sold were to be collateral for the debt. That agreement gave Chapmen the right to foreclose and sell the interest in case of default. In 1995, Casey defaulted. Chapman gave notice that Casey was in default and began the foreclosure process. Casey was granted a temporary restraining order and a permanent injunction to prevent the sale. Casey and Chapman settled. Under the settlement, the collateral would be sold at a Uniform Commercial Code (UCC) foreclosure sale on October 15, 1999 if Casey defaulted again. Casey did not make payment, and Chapman sold the partnership interest to Bruno Investments, LLC. Chapman moved for a declaratory judgment that the sale was valid and Bruno Investments, LLC was entitled to “all voting rights, equity interests and economic interests” of the partnership interest. The trial court entered the declaratory judgment, and Casey appealed to the Washington Court of Appeals.

Rule of Law

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Holding and Reasoning (Cox, J.)

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