Merced Partition Lawyers

Merced—which is Spanish for “Mercy”—is a City in Merced County, and is known as the Gateway to Yosemite. In 2005, Merced became home to the Tenth University of California campus, University of California, Merced. According to Redfin, in March 2024, the median sales price was $401,750, and homes stay on the market for 37 days. Merced residents who own real estate may face disputes with co-owners. There are at least four types of situations where a Merced Partition Attorney may be helpful:

• Investor-Developer co-ownership of property;
• Ex Romantic Partner co-ownership of property;
• Shared Family co-ownership of property; and
• Parent-Child co-ownership of property;

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 Merced Partition Lawyer will be able to share information on this process with you.

Generally, a partition action has four stages, which include (1) the filing of the lawsuit (2) an appraisal of the Property under the Partition of Real Property Act, (3) the determination of the parties’ interests, and appointment of a referee to sell the property, and (4) the division of the proceeds from the sale.

In California partition actions, the court must enter an interlocutory judgment where the court finds that the Plaintiff in a partition action is entitled to a partition. (CCP § 872.720.) The interlocutory judgment “determines the interests of the parties in the property and, unless it is to be later determined, the manner of partition.” (CCP § 872.720.) A top Merced Partition lawyer will be familiar with the process.

The Court may award attorneys’ fees in the partition action that are paid by a party to the action for the common benefit of all the co-owners. (CCP § 872.010.) The Supreme Court has spoken on this issue directly, holding that under former section 796, the predecessor to the current partition cost statute, “counsel fees may be allowed ... for services rendered for the common benefit even in contested partition suits.” (Capuccio v. Caire (1932) 215 Cal. 518, 528-529 (Capuccio).)

Moreover, cases interpreting those sections continue to permit the allocation of attorney fees in contested partition actions. (Forrest v. Elam (1979) 88 Cal.App.3d 164, 174.) From these authorities it is evident that the “common benefit” in a partition action is the proper distribution of the “‘respective shares and interests in said property by the ultimate judgment of the court.’ ” (Capuccio, 215 Cal. at p. 528.) This sometimes will require that “ ‘controversies’ ” be “ ‘litigated’ ” to correctly determine those shares and interests but this ultimately can be for the common benefit as well. The fact that a party resists the partition does not change this. (See Randell v. Randell (1935) 4 Cal.2d 575, 582 [“The presence and litigation of controversial issues between all the parties does not preclude the allowance of attorney's fees for services connected with such issues where such services are found to be for the common benefit of the parties.”].) A knowledgeable Merced Partition Attorney will be able to give you good advice on these issues.

Following the sale of the property, the referee will divide the proceeds of the sale among the parties in according to amounts expended for the "common benefit."

When the sale is confirmed by the court, the court may enter an order about the proceeds of sale. Under the law, the sale proceeds must be applied in a defined order. Specifically, Code of Civil Procedure section 873.820 states that the sale proceeds go towards (a) payment of expenses of the sale, (b) payment of the other costs of partition, (c) payment of any liens on the property in priority, (d) and distribution of the remainder to the parties in proportion to their shares as determined by the court.

Generally, the last part of the priority list includes what is commonly known as an "accounting" or a determination of whether one party has contributed more than their fair share to the property in the form of taxes, improvements, or other benefits for the property. For example, if one party is a 50% owner of the property, but has paid all of the property taxes for the property, then that property owner will have a claim for the remaining 50% above their interest in the property. An experienced partition lawyer will be able to help a co-owner determine their claims to the proceeds and make these arguments to the court in an effective way. An experienced Merced Partition Attorney will be intimately familiar with these matters.

In a partition action, if the court orders a partition by sale, there must be an accounting to distribute proceeds of the sale in strict compliance with the requirements of the evidentiary code. The court determines the distribution of such proceeds by calculating the expenses each co-owner incurred in relation to the property and allocate the proceeds equitably. The following paragraphs discuss how the court decided on the financial distribution of the Property’s sales proceeds between co-tenants after a judgment on partition by sale in Benedetto v. Wisch (2023) 2023 WL 7102020.

In Benedetto, Xena Benedetto and Jason Wisch, the trustee of The Living Trust of Zee Janko (the Janko trust), each owned 50% of the disputed Property as decreed by a previous trial court on February 13, 2020. The court also allocated the amount of $14,995.00 to Benedetto as an equalization of contribution, as well as a sanction award of $1,3500.00. On March 4, 2020, Benedetto filed a complaint for the partition of the Property against Wisch.

The trial court granted Benedetto’s motion for Interlocutory Judgment for partition ordering that it be partitioned by sale as agreed by both parties. The court declined to appoint a referee and ordered that the Property be partitioned by sale accepting the pending purchase offer, as agreed by both parties. Following the sale, the funds were to be held in escrow until the Court decided on their distribution. The Judge granted Benedetto’s motion to amend the interlocutory judgment, substituting Jorge Mora as the buyer of the property and gave him two weeks to perform. The order stated that if Wisch provides evidence that the Property could have sold for more than $575,000 offered by Jorge Mora, Wisch may request that a portion or entirety of the difference in price be deducted from the sales proceeds allocated to Benedetto when the court distributes the net proceeds.

Mora completed the purchase of the Property and escrow closed at an increased price of $608, 000, due to their 2-week delay in closing escrow. The escrow holder deposited $267,586.25 in net proceeds. During the tentative hearing on division of proceeds of the sale of the property, the court observed that among other things, the parties failed to diligently raise all issues in their opening briefs and their numerous objections, declarations and testimony on matters related to accounting lacked evidentiary and or legal support. The Judge issued her ruling for allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity based on Code of Civil Procedure section 872.140. The court cited case laws and noted that final accounting according to the principles of equity includes both charges and credits upon each co- tenant’s interest.

Credits, the court noted, are various expenses a party incurred for the property beyond their fractional share in the property, (Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035–[10]36 [citing California Code of Civil Procedure[,] § 872.140].) and a co- tenant who has paid a debt or obligation for the benefit of the property has a right to recover their proportionate share from the other benefitting co-tenant. (Rich v. Smith (1915) 26 Cal.App. 775; Ventre v. Tiscornia (1913) 23 Cal.App.4th 598.). Wisch did not object to Benedetto’s statement that she incurred expenses related to the Property. Benedetto sought half of the sales proceeds and credit for expenses on the Property- of $157,208.

Wisch objected to Benedetto’s claim for a credit for expenses and claimed half of the sales proceeds and claimed (1) a charge to Plaintiff for sale under market value due to a delay and occupancy issues, as per the court’s order; (2) credit for allotment quantified by the court’s previous order of $17,000 for plaintiff’s payments on mortgage (3) credit for rents received by Plaintiff amounting to $69,000.

The court held that Wisch, acquiesced in the belated sale to Mora due to his failure to pursue available remedies. The court ordered a sale price differential of $52,000, to be charged to Benedetto because the actual sale price was $608,000 while the Zillow value was approximately $660,000. As to Benedetto’s request for credit for expenses paid, the court held that she was entitled to half of it, which was $78,640. Regarding the rents Benedetto received, the court held that Wisch was entitled to half of the amount received, which was a credit of $28,000. The court credited Benedetto $16,345 per the previous judgment for equalization of contribution and sanctions awards, along with a credit of $78,640 for her proportionate (50%) share of expenses paid. This totaled to $94,985 in credits for Benedetto. However, the court charged her $52,000 due to a difference in sales price and $28,000 for rent collected, for a total of $80,000 credited to Wisch. After these calculations, Wisch had a net credit of $14,985. The net proceeds from the sale of the Property was $267,586.25. Based on the division, the court calculated Benedetto’s share to be $148,778.13 and Wisch’s share to be $118,808.12. Both parties appealed.

The California First district Court of Appeal found both appeals meritless. Benedetto argued that the tried court erred in awarding Wisch the total difference in the actual sales price of the Property and its actual value. The court held that the trial court based its decision to credit $52,000 to Wisch on extensive facts. Additionally, the court highlighted Wisch’s testimony that Benedetto kept the rest of the rent estimated at $69,000. Furthermore, the court mentioned the trial court’s order that Wisch may seek to charge some portion or all of the price differential against Plaintiff’s share of the sales proceeds, which empowered the trial court to grant more than 50 percent to Wisch.

Wisch argued that the expenses credited to Benedetto were not supported by admissible evidence and the expenses were all incurred prior to the February 13,2020 judgment and thus barred by res judicata. The court, holding that there was no error in the trial court’s decision, reiterated the trial court’s statement that Wisch did not file an evidentiary objection to Benedetto’s previous declaration which itemized list of expenses, on which the trial court based its decision on the matter. On the matter of Res Judicata, the court held that as Res Judicata is an affirmative defense which must be pleaded or otherwise raised to avoid waiver, which Wisch failed to plead during trial and therefore he cannot assert it during appeal.

Therefore, the court held that although both appeals lacked merit, the lower court's judgment needed to be amended to acknowledge that Benedetto already received the $14,995 payment referenced in the February 13, 2020 judgment. The court reversed and remanded the matter with instructions to enter a new judgment such that Wisch would receive $14,995, the double recovery amount that trial court granted to Benedetto.

A court’s determination of ownership interests and how a court distributes the proceeds from the sale of the Property depends on the facts and circumstances of each particular 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.