Central California Partition Lawyers

Central California is generally thought of as the middle third of the U.S. state, of California, north of Southern California, which includes Los Angeles, and south of Northern California, which includes San Francisco. It includes the northern portion of the San Joaquin Valley (which itself is the southern portion of the Central Valley, beginning at the Sacramento–San Joaquin River Delta), part of the Central Coast, the central hills of the California Coast Ranges and the foothills and mountain areas of the central Sierra Nevada. Central California can have widely varying definitions depending on the context. Some divide the state by lines of latitude making northern, central and southern sections. Others divide by county lines or watershed boundaries. Some definitions include more of the San Joaquin Valley and even larger portions of the Central Valley. Some have less or none of Central Coast. As an area with great historical roots, residents of Central California often own property with others due to inheritance, which can lead to disputes between co-owners. Frequently, there are at least four common types of partitions actions for which a Central California Partition Attorney can provide sound counsel:

• Investor-Investor shared ownership of property;
• Boyfriend-Girlfriend share ownership of property;
• Brother-Sister shared ownership of property; and
• Parent-child shared ownership of property

A partition action is an action brought by a co-owner of a piece of real property against another co-owner, seeking to divide the property according to the respective interests of the co-owners. In order to establish a right to a partition, a party must show that they have some ownership interest in the subject property. Under Code of Civil Procedure section 872.210, any owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate is owned by several persons concurrently or in successive estates may bring a partition action. (CCP § 872.210.) Therefore, a co-tenant has an absolute right to partition. (Formosa Corp. v. Rogers (1951), 108 Cal.App.2d 397.) At the Underwood Law Firm, our attorneys are more than familiar with partition actions and the step-by-step process of pursuing a partition.

Generally, a partition action cannot be stopped absent a valid waiver. Virtually universally, the instances in which a court has found a valid waiver have 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 Central California Partition Lawyer will be able to share information on this process with you.

Generally, the first step in the partition lawsuit process is not a lawsuit, but an earnest attempt to resolve the matter informally, such as through a partition agreement. Only when it is clear that litigation is the only option, is it clear that a partition lawsuit is appropriate.

When it is clear that a partition lawsuit is necessary, then the process begins with the filing of a complaint in the county where the property is located. There are several technical requirements for the partition complaint, and many important steps that must be taken during the lawsuit to ensure that the process is managed effectively.

In a partition lawsuit, there are generally four different steps. First, the court determines each party's ownership interests. Second, the court will decide on the manner of sale. Third, the court will order the property be sold. Fourth, the proceeds from the sale will be divided between the parties based on their relative contributions to the property.

While some may believe that inherited property cannot be partitioned, this is incorrect. Instead, when the property is owned as the result of an inheritance, there may be an additional step for an appraisal, and a right of first refusal, as provided by the Uniform Partition of Heirs Act. Under this act, where a co-tenant requests partition by sale, the law gives the non-partition owner the option to buy all of the interests of the co-tenants who requested the sale. A top Central California Partition lawyer will be familiar with the process.

Generally, anyone considering filing a lawsuit should consider all of their alternatives, including an informal resolution of the problem. This can take the form of a discussion with the other owner or owners about agreeing to sell the property, negotiating with the co-owner to create a formula to divide the proceeds from the sale, or retaining a lawyer to engage in a mediation with the other owners.

Throughout the partition process, and even on the day of trial, any of the owners can make an agreement about the sale of the property. This can happen through a phone call, through negotiations between the parties' lawyers, or through a mediation session with a retired judge or trained mediator. There are many benefits from a mediation session, including confidentiality provisions contained in the law in Evidence Code sections 1115 through 1129.

Specifically, Evidence Code section 1119, subdivision (a), provides "no evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation is admissible or subject to discovery, and disclosure of the evidence shall not be compelled in any arbitration, administrative adjudication, civil action, or other noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given." A knowledgeable Central California Partition Attorney will be able to give you good advice on these issues.

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 Central California Partition Attorney will be intimately familiar with these matters.

In a partition action, a trial court may “order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.” (Code Civ. Proc., § 872.140.) This provision is directed to such items as common improvements and unaccounted rents and profits. (Law Rev. Com. Comment.)

A partition by appraisal whereby either party can acquire the property of the other cotenant at the appraised value refers to an agreement in writing. (Code Civ. Proc., §§ 873.910, 873.920.) Pong Re Shin v. Jong Soon Choi (2011) 2011 WL 1797244 provides an example of a plaintiff who seeks to seeks both a partition by appraisal and appellant review of alleged accounting mistakes at the trial court level.

Shin, her husband, and Choi bought a seven-unit apartment complex in 1992 as joint tenants. Shin's husband gave up his interest in the apartment complex. In 2003, Shin created the trust and executed a quitclaim deed transferring her property interest to the trust. To purchase the apartment complex, the parties executed a balloon promissory note of $340,000. After attempts to refinance with the lender failed, Shin borrowed $245,224.63 from a private lender to pay off the note.

Choi maintained and managed the apartment complex; collected and deposited the rents into a joint account; and paid the mortgage, utility bills, and maintenance fees from the joint account. Shin had no involvement in the day-to-day management of the apartment complex but received financial statements from their joint bank account. Choi testified the apartment complex had always operated at a loss. Choi initially lived rent-free in unit 5 and moved to another unit in the apartment complex. When Choi moved out, his son lived in unit 5. Choi's daughter lived in unit 7 and paid below-market rent.

The trust sought a partition by appraisal and accounting, whereby the trust would be able to purchase Choi's legal interest or a partition by sale. The trust also sought an accounting “for the proportionate interest in the property for each party's portion of the rents, issues, revenue, profits, mortgages, carrying charges, overhead, taxes, assessments, management fees, repairs, improvements, costs, maintenance and all other income and expenses of the property.”

The trial court ordered the property sold. As to the accounting, the trial court exercised its equitable powers and announced that the trust was entitled to a portion of the rental value of units 5 and 7 occupied by Choi's family members, one-half credit for having borrowed $245,224.63 to pay off the loan, and repayment of interest at the legal rate. The trial court did not order separate accounting.

The trust's attorneys prepared the statement of decision. After setting forth the trial court's decision with respect to the rents, loan payoff, interest, and partition, the statement contains a separate section entitled “Accounting.” Under the “Accounting” heading, the statement of decision reads: “The Court finds that accounting by assessment is not available unless it is done by stipulation. The Court finds in favor of SHIN for accounting.” Although portions of the statement of decision refer to Shin, rather than the trust, the statement of decision concluded the judgment was in favor of the trust. Shin, representing the trust, filed a notice of appeal, leading to a discussion about the appeal's validity.

Choi argued that the appeal should be dismissed because Shin, as the trustee, lacked standing to appeal, and a trust cannot represent itself in court. However, it was determined that representative parties, including trustees, have standing to appeal detrimental judgments against the trust. The court liberally construed the appeal as brought by Shin in her representative capacity as trustee. Regarding representation in court, while a nonattorney trustee appearing in propria persona would engage in unauthorized practice of law, they are allowed to file a notice of appeal on behalf of the trust. As Shin obtained counsel for the appeal, the court exercised its discretion to review the merits of the case.

Because there were no standing issues, the Second District Court of Appeal stated that the sole contention on appeal was the legal error in the statement of decision in which the trial court ruled in the trust's favor on the request for an accounting but did not order a formal accounting.

Before the Court of Appeal addressed the merits of the appeal, they agreed with one of Chois waiver arguments. The Court of Appeal explained that the trust prepared the statement of decision and was in a position to write any ambiguity out of the court's tentative decision, or to clarify the nature of the trial court's accounting order in favor of the trust. Instead, the trust's attorneys created the ambiguity in the statement of decision by taking the trial court's equitable determinations out of context. Thus, the trust's drafting error in the trial court, which was raised as error for the first time on appeal, was waived.

The statement of decision also indicated that the court ruled against the trust's request for an "accounting by assessment," but in favor of its request for an "accounting." However, despite this discrepancy, the Court of Appeal concluded that the trial court did not order a formal accounting. The Court explained that perceived error alleged by the trust overlooked the trial court's exercise of discretion in making equitable determinations, which were apparent in its former decision and the examination of the statement of decision as a whole, rather than focusing narrowly on the section in the Statement of decision entitled "Accounting."

Additionally, in the initial tentative decision, the trial court did not order an "accounting by assessment" while ruling on the partition action. The reference to an "accounting by assessment" in the trial court's decision confused the accounting remedy available in a partition action with the trust's alternative request for partition by appraisal. However, since the parties did not agree to a partition by appraisal in writing as required, the trial court rejected the request and instead ordered partition by sale. The Court of Appeal opinioned that the statement of decision was inartfully written and misunderstood the trial court's pronouncement regarding the parties' failure to agree to an "accounting by assessment" in the context of the partition order. The statement, however, correctly reflected the trial court's decision on the action for partition, including its equitable discretion not to order an accounting by assessment.

Furthermore, the trial court ruled in favor of the trust's separate request for an accounting, awarded rental income and gave credit for note repayment and interest. While the statement of decision only briefly mentions the accounting award without providing detailed findings, the Court of Appeal concluded the trial court’s decision considered the evidence presented and resolved the equitable issues without ordering a separate accounting. Therefore, the challenge to the statement of decision was based on the trust's claim that the trial court miscalculated the rental income awarded to the trust. However, during the trial, evidence was presented concerning mortgage payments, loan balances, rental income, financial statements received by Shin from the joint bank account, and apartment complex maintenance fees. Based on those showings, the trial court’s findings were supported by substantial evidence. Therefore, the Court of Appeal concluded there was no legal error apparent in the statement of decision and the judgement was affirmed.

Although a court can order accounting or other compensatory adjustments among the parties, it’s crucial that a party provide the necessary supporting documentation concerning such expenses in the complaint or upon request from the court. Underwood Law Firm, P.C., has extensive experience in partition actions involving accounting requests. If you are thinking of initiating a partition action, you may benefit from legal advice on how accounting can impact sales proceeds or expenses paid by either party. Please contact Underwood Law Firm, P.C., for an initial consultation.

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