A referee plays an important role in the partition process when a property is being sold. As a referee, they are meant to be neutral. Usually, a referee will conduct a sale and then provide the court with a report on the sale. They can provide an accounting in their report but must exercise caution in how they word their statements. Because of their impartial role, they cannot include their opinions or “rulings” on questions of fact or law in the report they provide following the sale.
What purpose does a referee serve in a partition case?
Partition referees act as neutral third parties who are appointed by and accountable to the court. Their purpose is to assist in matters related to partitions. (CCP § 873.510.) The referee’s main goal is to get the property divided or sold. Usually, they will be tasked with determining the priority of all liens on the property. (CCP § 872.630.) But they may also determine the method of partition (physical division or sale) if the court has not already, the method of sale (public or private), prepare the property for sale, and sell the property itself. (Gray v. Superior Court (1997) 52 Cal.App.4th 165, 171.) Their responsibilities can extend even further if the court allows. Referees may perform any acts necessary within the authority given to them by the partition statutes or the court. (CCP § 873.060.)
What does a partition referee do?
A referee will make the decisions described above as necessary in a case. They will also file a report to the court. (CCP § 873.280(a).) This report must include: (1) a description of the manner in which the referee executed the referee’s trust; (2) describe the property partitioned and the share allocated to each owner; and (3) any recommendations for opening or closing roads, streets, and easements. (CCP § 873.280(b).) This report is used to advise the court but will not surmount the court’s authority. (Machado v. Machado (1944) 66 Cal.App.2d 401, 405.) As such, following the issue of the report any party in the case may move to confirm, modify, or set aside the referee’s report. (CCP § 873.290.) Once the report is finalized, and if it is not contested, the court will confirm the report and actions taken by public entities from the sale if applicable. (CCP § 873.080 (c).)
What is in a partition referee’s report?
The referee’s report will differ in its contents depending on whether the partition was by sale or division. If the partition was a physical division, then the report must include: (1) a specification of the manner in which the referee has executed the referee’s trust; (2) a description of the property divided and of the share allotted to each party, along with any recommendations as to owelty; and (3) any recommendation as to opening and closing public and private ways, roads, streets, and easements. (CCP § 873.280.) If the method of partition is through physical sale, then the referee’s report will be much longer. The bare minimum the report must include is: (1) A description of the property sold to each purchaser (2) The name of the purchaser (3) The sale price (4) The terms and conditions of the sale and the security, if any, taken (5) Any amounts payable to lienholders (6) A statement as to contractual or other arrangements or conditions as to agents’ commissions (7) Any determination and recommendation as to opening and closing public and private ways, roads, streets, and easements, and (8) Other material facts relevant to the sale and the confirmation proceeding. (CCP § 873.710.)
What can a partition referee not do?
Because a referee’s report must first be confirmed by the court, a referee may not make final determinations as to the sums owed to each party. Similarly, a referee may not apply law to the facts of the case or weigh the strength of evidence presented by the parties.
Under partition law, there is no statutory basis for a referee to conduct an accounting, however the court has discretion in what it is asking the referee to do. A court may appoint a referee to do an accounting “when the taking of an account is necessary for the information of the court before judgment, or carrying a judgment or order into effect.” (CCP § 639 (2).) A referee may provide an accounting, usually in the form of a judicial accounting, which acts as a “means of discovery and/or disclosure in order to ascertain the amounts to which the parties may be entitled” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 180.) However, they must do so in accordance with their duty of impartiality.
For example, an accounting referee made the following determinations in their report: (1) whether the subject contract was one of adhesion, (2) whether it was enforceable, and (3) the proper interpretation of the contract as a matter of law. (De Guere v. Universal City Studios, Inc. (1997) 56 Cal.App.4th 482, 488-495.) This exceeds the scope of a referee’s authority because “Issues of contract interpretation are questions of law for the trial court, but not for the referee to decide.” (Id. at 451.) A referee cannot rule on equitable or legal issues as those are to be decided by the court. (Cal. Constitution, article VI, section 22.)
For example, “Shawn” and “Julie” are former romantic partners who own a home together as co-tenants. The court appoints a referee to handle the sale. The court also appoints a referee to do an accounting. The referee must act as a neutral in handling the sale and providing an accounting. Following the sale, the referee will provide a report. If the referee was not impartial or exceeded the scope of his duties Shawn or Julie could bring a motion contesting the referee’s report.
If the referee in his report determined the legal standards for who would be reimbursed for what expenses in the accounting portion that would be improper. If the referee weighed the evidence presented by Julie and Shawn as to their expenses that would be improper. Finally, if the referee decided to opine on what the ultimate issue of the case was or decided that certain law did or did not apply, that would be beyond the scope of his duties. Any of these violations would result in the report being inadmissible.
Conclusion
A referee plays an important neutral role in the partition process when a property is being sold. In their report, a referee will describe their decisions they made and the basis for making those decisions. The contents of the report will vary by case depending on how much authority they are given by the court. Sometimes, all a referee is doing is handling the sale, other times they may determine whether a sale or physical division is appropriate. They may also be asked to do an accounting to determine distribution of proceeds. However, because of their impartial role, they cannot include their opinions on questions of fact or law in their report or else it will be invalid. If you think you may have a partition action and need an impartial referee to divide your property, at Underwood Law, our partition attorneys can help you navigate your action efficiently and with care. We are here to help.
