San Luis Obispo is located on California’s Central Coast. In 1772, the Spanish founded San Luis Obispo when Saint Junipero Serra established Mission San Luis Obispo de Tolosa. San Luis Obispo is a tourist attraction known for its beautiful beaches and hills, and home to the Madonna Inn, the Fremont Theater, the San Luis Obispo International Film Festival, and Bubblegum Alley. A doctor’s office on the corner of Santa Rosa and Pacific Streets is one of the very few commercial buildings designed by Frank Lloyd Wright. San Luis Obispo is also home to the California Polytechnical University. As a popular destination, property owners who jointly own real estate may come into conflict. Generally, a partition action is the best remedy for disputing co-owners in four broad categories:
A partition lawsuit requires real estate to be sold regardless of the requests of the other title owners. The purpose of a partition action is to permanently end all disputes and remove all obstacles to the free enjoyment of land by one person. (McGillivray v. Evans (1864) 27 Cal.92.) These types of actions can be brought for all types of real estate from houses to farms to office buildings to apartment buildings. Similarly, partition actions are available all types of ownership situations from joint tenants to tenants-in-common to partnership property to property jointly owned by former spouses.
Basically, any person who is an owner of real estate can bring a partition action in California. Code of Civil Procedure section 872.710, subdivision (a), states "A partition action may be commenced and maintained by any…owner of…such property." California Civil Code section 872.210 provides a property owner with the "absolute right to partition" absent a valid waiver. Thus, a partition action can be brought by anyone who no longer wants to own jointly owned real estate, other than spousal property.
Generally, a partition action cannot be stopped absent a valid waiver. The instances in which a court has found a valid waiver have generally involved some sort of written contract or adverse possession of property. As such, many parties try to stop a partition action through mediation, or a buy-out agreement. In most instances, the parties to a partition action can benefit from creative lawyering by those who are familiar with the different options for resolving real estate disputes. The best San Luis Obispo Partition Lawyer will be able to share information on this process with you.
What Are the Steps in a Partition Action?Broadly, a partition action has only relatively simple steps. First, a party files a lawsuit to establish their rights to the property and desire to sell the property. Second, the court determines that the property should be sold, and appoints an appraiser to appraise the property and offer the other owner the opportunity to buy out the interest. Third, if the other fails to do so, then the Court appoints a “partition referee” (who is frequently a licensed Realtor) to sell the property, and they market and sell the property and deposits the proceeds into a trust account. Fourth, the court determines how much each party should receive from the proceeds, which should include addressing offsets and claims for contribution in an “accounting.” A top San Luis Obispo Partition lawyer will be familiar with the process.
Can You Recover Your Attorneys’ Fees in a Partition Action?An action for partition may include an accounting so that the respective rights of the parties can be adjusted and settled. (Lazzarevich v. Lazzarevich, (1952) 39 Cal. 2d 48, 50–51.) A cotenant who has advanced fund to pay common expenses is entitled to reimbursement from the sale proceeds before the balance is divided and distributed to the cotenants. (Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal. App. 2d 539, 541.) A cotenant out of possession can require the cotenant in possession to account for rents and profits or other compensatory adjustment in the division of sale proceeds. (CCP § 872.430.)
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 San Luis Obispo Partition Attorney will be able to give you good advice on these issues.
What Are Claims for “Contribution”?Under the law, a property owner can make a claim for contribution for anything that they have expended for the common benefit of all the parties as it relates to their jointly-owned property. Code of Civil Procedure section 874.410 states that “the court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.” For example, the credits can include expenditure in excess of the co-tenants fractional share for necessary repairs and improvements that enhance the value of the property. (Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035-1036.) Similarly, payments for interest, taxes, and insurance made by any co-tenant could be the subject of a reimbursement claim. (Hunterv. Schultz (1966) 240 Cal.App.2d 24.) An experienced San Luis Obispo Partition Attorney will be intimately familiar with these matters.
A Partition Case Study: Johnson v. Greenelsh (2008)In general, partitions can either be in-kind, by sale, or by appraisal. When possible, a court may prefer to order a partition in-kind since this means the court won’t have to force an unwilling co-owner to sell. If a partition is in-kind, then the property is divided equitably, and ownership shares are distributed among the co-owners. If a partition is by sale, then the property is forcefully sold, and the sale proceeds are distributed among the co-owners. If a partition is by appraisal, then one owner can buy another owner’s interest with consent from all parties.
Although some courts may prefer partition in-kind, a court may also decide that partition by sale is necessary under the circumstances. This decision may be based on various considerations, such as zoning regulations or physical impracticability. The following paragraphs discuss how such circumstances affected the court’s judgment in Johnson v. Greenelsh (2008) 2008 WL 44486.
In Johnson, the Court held that partition in-kind would be impractical and ordered a partition by sale. The property in Johnson was a ranch co-owned by Johnson, Johnson’s brother, and Greenelsh. In 2003, Johnson sued Greenelsh because he wanted to partition the ranch by sale. Johnson wanted to partition the ranch by sale for the benefit of his mother, who needed the money. Greenelsh argued a partition was unnecessary because she could give Johnson a loan. The trial court was unpersuaded by Greenelsh’s argument and held that a partition would proceed, whether in-kind or by sale.
The trial court appointed a partition referee to determine the method of partition. The partition referee determined that it would be impractical to partition the ranch into parcels that could be allocated among the three owners based on their ownership interests. Based on the partition referee’s report, the trial court held that the ranch would be partitioned by sale, as requested by Johnson. Unhappy with this outcome, Greenelsh appealed to the California Second District Court of Appeal.
The primary question facing the Court of Appeal was whether there were any significant obstacles to ordering a partition in kind. Under current law, the party seeking a partition by sale generally bears the burden of proving that partition by sale would be "more equitable” than partition in kind. The Court of Appeal outlined two types of evidence that would justify a partition by sale:
The first is evidence that the property is so situated that a division into subparcels of equal value cannot be made . . . The second type of evidence which supports a partition sale rather than physical division is economic evidence to the effect that, due to the particular situation of the land, the division of the land would substantially diminish the value of each party's interest.
The partition referee’s report to the trial court had made it clear that a physical division of the ranch into equally valued parts for each owner would be impractical given the amount of time and money required. There were various physical characteristics of the ranch that prevented a clear and equitable physical division of the property, including several areas with no road access. Thus, a partition in kind would have been more costly to the parties than a partition in kind as it would have required the creation of easements. Allocating the costs of creating such easements would have substantially diminished the value of each party's interest in the underlying land.
Although the partition referee advised that partition by appraisal was an option, the trial court concluded that partition by appraisal could not be ordered because not all of the parties had given consent. The Court held:
The alternative approach for a formal subdivision or lot line adjustment so as to allow physical partition of the property is rejected by the Court as unduly expensive and time consuming . . . In the present matter it was stipulated by the parties not to divide the property. Under that stipulation the only result possible is to permit partition by sale.
In opposition to the trial court’s holding, Greenelsh had previously argued that partition by sale would not be the most equitable solution because she would suffer negative tax consequences from such a sale. However, the trial court had been unconvinced by her position and believed that a partition by sale would be the most equitable solution to the owners of the property. The Court of Appeal upheld the trial court’s judgment.
Thus, Johnson signifies that courts will consider the physical implications of dividing the land when deciding between a partition in kind and a partition by sale. If physical division of the land among the owners is impracticable, a court may force a sale, even without the consent of the owner.
When faced with impending partition, many people may assume that they cannot be forced to sell their land without their consent. However, as Johnson illustrates, that is not always the case. There may be significant obstacles related to physically dividing land in an equitable manner, especially in areas with many land-use restrictions. Such obstacles may lead a court to decide on ordering partition by sale.
How the Underwood Law Firm Can HelpAs seen in Johnson, partition law is full of intricacies that can catch an unwary property owner off guard. Courts may take into consideration certain aspects of a property that many people normally wouldn’t contemplate. It is important for one to understand how certain characteristics of their land may affect the outcome of a partition action. To avoid having property forcefully sold, it may be necessary to retain a property lawyer that understands when a partition by sale is likely to be ordered.
Our knowledgeable attorneys are available to help you navigate the complex web of case law and statutes surrounding partitions. As there are many different ways to waive the right of partition, you may benefit from good legal advice on the topic. If you find yourself contemplating a partition, or if you are faced with defending against a partition lawsuit, then please contact Underwood Law Firm, P.C. for an initial consultation.
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