Costa Mesa is a city in Orange County and as incorporated in 1953. It has since grown from a rural farming community to an urban area with an economy based on retail and commerce. According to RedFin, In May 2023, Costa Mesa home prices were up 13.9% compared to last year, selling for a median price of $1.3M. On average, homes in Costa Mesa sell after 37 days on the market compared to 25 days last year. There were 61 homes sold in May this year, down from 78 last year. Fortunately, a Costa Mesa Partition Lawyer can help explain the legal remedy of partition for those partners that wish to step away from their joint venture. Partnership disagreements are not the only scenarios where a joint owner may seek partition of shared property. Costa Mesa Partition Lawyers usually find partition actions to be the best remedy for joint owners in disputes in four broad categories:
Partition is a court-ordered process where a property owner forces a sale of jointly owned real estate. Essentially, a partition action exists to allows people who own real estate together to take their share of the equity and go their separate ways. But, as simple as this seems, partition actions can often become complex lawsuits. Disputes commonly arise as to what type of partition may be sought and the process for determining ownership interests.
For example, "Julie" bought a house with her boyfriend, "Shawn," thinking that they would get married one day. Later, after they had bought the house, Julie realized that her boyfriend was not the right person for her. Because Julie wanted to move on in her life, she also wanted to sell the house she bought with her boyfriend. Her boyfriend, however, was mad at Julie for breaking up with him, and so refused to agree to sell the house. Because they were not married, Julie could not go to a divorce lawyer, and because they both did not agree to sell, a realtor could not help Julie. Julie felt trapped. Julie then, however, found a partition lawyer and was able to get the house sold so she could move on with her life. A partition lawyer got the job done. The best Costa Mesa Partition Lawyer will be able to share information on this process with you.
What are the Steps in a Partition Action?Under the Partition of Real Property Act, the court instead appoints an appraiser to do the heavy lifting. The new statute states that the court "shall determine the fair market value of the property by ordering an appraisal." (CCP § 874.316.) The court doesn't have to be the one to order the appraisal, but this is only if all the co-owners agree to a different method of valuation.
If, however, an appraisal occurs, it shall be conducted by a disinterested third-party real estate appraiser licensed to determine the fair market value of properties. After the appraisal is conducted, parties may file objections to the value and can even offer additional evidence of value to the court.
After the valuation is complete, parties will be introduced to the key feature of the new statute: the buy-out option. If a co-owner requests a partition by sale, then the court will notify the other co-owners that they may buy all the interests of the cotenant that requested the partition. (CCP § 874.317.)
This is, essentially, a right of first refusal. The co-owners who don't want the property sold now have the option to simply buy out the requesting party. Additionally, the buy-out price will be based on the property's valuation, determined earlier in the litigation. And if one or more parties exercise the buy-out, then the court will reapportion ownership percentages based on the price paid. A top Costa Mesa Partition lawyer will be familiar with the process.
Can You Mediate a Partition Action?A partition action can always be resolved informally at any time prior to the first day of trial, or entry of judgment. In fact, in numerous instances, just filing the partition itself leads the other party to seek a resolution between them. We always encourage the parties to talk throughout every phase of the process, as that can lead to the best outcomes for everyone.
From our perspective, every piece of litigation is just part of a larger "negotiation." In any negotiation, the party who has the best leverage is usually able to achieve a more favorable outcome. The lawsuit provides the client with more leverage because they have more options available to them than without the prospect of a resolution from a judge. As such, all that a lawsuit does is provide one party with more leverage in the negotiation about how to resolve the dispute. For this reason, the best way to informally resolve a dispute is to combine discussions with active litigation, so that the matter can be quickly resolved without unnecessary expense. Throughout the process, our attorneys are in touch with our clients about their options and the prospects for informal resolution through mediation or negotiation. A knowledgeable Costa Mesa Partition Attorney will be able to give you good advice on these issues.
What are Claims for "Contribution"?Code of Civil Procedure section 874.140 states that the "court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustments among the parties according to the principles of equity."
The court in Hunter v. Schultz (1966) 240 Cal.App.2d 24 stated that the payments for interest, taxes, and insurance made by any co-tenant could be subject to reimbursement. These claims for reimbursement are commonly known as "offsets" in a partition action.
Further, the court under Milian v. De Leon (1986) 181 Cal.App.3d 1185, announced that a co-tenant who expends money for the preservation of the property, or with the [acceptance] of their co-tenant(s), is entitled to reimbursement for those expenditures before the division of the proceeds among the property owners.
That is, the general rule is that compensatory adjustments are appropriate for improvements that enhance the value of the property for all owners' benefit. (see Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035-1036.) An experienced Costa Mesa Partition Attorney will be intimately familiar with these matters.
A Partition Case Study: Gregurek v. FabbrieWhen a court orders a partition, it may order a partition by sale, or in kind. In a partition by sale, the court may appoint a referee to conduct and supervise the sale of the property, and to prepare the interlocutory judgment (CCP § 873.510). A party has the right to appeal, as long as they have standing to bring such appeal under CCP § 904.1. This CCP section lists 14 different judgments and orders a party may appeal in a civil case, including interlocutory judgments for partition actions. The following paragraphs discuss whether an appeal can be made to a trial court's order before an interlocutory judgment is entered in Gregurek v. Fabbrie (2005) 2005 WL 958418.
In Gregurek, Carol Gregurek filed a complaint for partition of a "dwelling unit" located in Seal Beach. Gregurek and Fabbrie had occupied and co-owned the unit as joint tenants. The trial court determined that pursuant to CCP § 872.820(b), under the circumstances presented at trial, sale and division of the proceeds would be more equitable than a division of the property.
The trial court notes the fact that the parties had been living in the home effectively dividing it, without success, so a division of the property would be unworkable and impractical. For example, having one party live in one half and the other in the other half, sharing common areas was not a practical way for the parties to live or for the court to order.
Therefore, the trial court ordered a partition by sale and equitable distribution, with an interlocutory judgment entered pending sale and distribution and final judgment. The court's order stated that the court would appoint a referee for conducting and supervising the sale, and that the referee would prepare the interlocutory judgment. Fabbrie appealed the trial court order before the interlocutory judgment was entered, and no judgment was ever entered.
The Court of Appeal began its analysis by noting that an appeal may be taken from "an interlocutory judgment in an action for partition determining the rights and interests of the respective parties and directing partition to be made." (CCP § 904.1, subd. (a)(9)). While the trial court ordered partition and an interlocutory judgment to be prepared by the referee, the record did not reflect that a judgment was ever entered pursuant to the trial court's order.
The Court of Appeal asked the parties to submit letter briefs addressing whether any judgment had been entered. If the parties concluded that a judgment had not been entered, then the Court asked the parties to address whether the [Court of Appeal] had jurisdiction in the appeal.
The parties' letter briefs confirmed that a judgment had not been entered in the case. Gregurek stated that the court-appointed referee did not submit an interlocutory judgment before Fabbrie filed his notice of appeal. Gregurek argued, however, that the trial court's interlocutory order amounted "in substance and effect" to an appealable interlocutory judgment of partition. She urged the Court of Appeal to use its discretionary powers and order an interlocutory judgment on its own.
The Court of Appeal declined to construe the interlocutory order as an interlocutory judgment. The court emphasizes that CCP § 904.1(a)(9) provides that interlocutory judgments of partition are appealable. Relying on legislative history, the court notes that the legislature expressly established a broader rule for appealability in CCP § 904.1(a)(8) that provides that an appeal can be taken "from an interlocutory judgment, order, or decree, hereafter made or entered in an action to redeem real or personal property from a mortgage thereof…" The legislature, according to the Court of Appeal, therefore, knew how to provide for the appealability of interlocutory orders, but chose not to do so in the context of an action for partition.
The Court also found support for their decision in the policy underlying the final judgment rule, that includes the following considerations:
(1) "[e]arly resort to the appellate courts tends to produce uncertainty and delay in the trial court";
(2) "[u]ntil a final judgment is rendered the trial court may completely obviate an appeal by altering the rulings from which an appeal would otherwise have been taken";
(3) "[l]ater actions by the trial court may provide a more complete record which dispels the appearance of error or establishes that it was harmless"; and
(4) "[h]aving the benefit of a complete adjudication by the trial court will assist the reviewing court to remedy error (if any) by giving specific directions rather than remanding for another round of open-ended proceedings."
Kinoshita v. Horio, 231 Cal. Rptr. 241, 246 (Cal. App. 1st Dist. 1986).
Despite dismissing the appeal due to the lack of an appealable judgment, the Court of Appeal did so without prejudice to Fabbrie's right to obtain an appealable judgment and then refile his notice of appeal. The Court gave no opinion on the merits of the appeal.
A person may appeal an interlocutory judgment in an action for partition, but they need to make sure that the case is ripe before they attempt to make such an appeal. Here, Fabbrie's appeal was pre-mature as he filed the appeal before the appointed referee made an interlocutory judgment, failing to meet the "judgment" part of the statute that allows appeals. As the court notes, Fabbrie had the right to appeal once the judgment was entered, but until then, the appeal failed to meet the standard required by 904.1(a)(8). Ultimately, this led to the Court of Appeal's dismissal.
How the Underwood Law Firm Can HelpA court's determination of ownership interests in a property depends on the facts and circumstances of each particular case. Factors such as agreements and who pays for certain expenses for the property can ultimately affect the outcome of a partition case. If you are considering partition as an option, or find yourself defending one, then you may benefit from good legal advice on the topic. Please contact Underwood Law Firm, P.C., for an initial consultation.
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