Code of Civil Procedure (CCP) Section 873.940 – Appointment of Referee; Referee’s Report

Code of Civil Procedure section 873.940 dictates what happens after the agreement to partition by appraisal is filed with the court and approved. The parties must have agreed to a certain partition referee in the filed agreement, or asked for the court to appoint one. After this is done, the referee prepares a report and files it with the clerk.

Code of Civil Procedure section 873.940 states:

The court shall appoint one referee or, if provided in the agreement, three referees to appraise the property and the interests involved. The referee shall report the valuations and other findings to the court in writing filed with the clerk.

“Shawn” and “Julie” are siblings who inherit a farm from their grandfather. Eventually, the siblings feud over management of the farm and Shawn sues to partition the property by sale.

During the initial stages of the lawsuit, the parties conduct discovery, take each other’s depositions, and file several competing motions on the pleadings. After each has poured thousands and thousands of dollars into litigation, they realize that it would be best if they worked together for Shawn to simply buy out Julie’s interest in the farm.

They draft up a document relaying to the court that they are in agreement to partition the property through the appraisal process, where Shawn will buy out Julie at an agreed-upon appraisal price, and file it with the court clerk under CCP § 873.920.

After the agreement is filed, Shawn files a motion to approve the partition by appraisal agreement under CCP § 873.930. The court reviews the agreement, finds that it is ultimately fair and equitable, and gives its approval for the property to be partitioned via the appraisal process.

Once this is done, pursuant to CCP § 873.940, the court appoints a partition referee who prepares and files a report on the valuation of the property, while also identifying any outstanding liens.

Law Revision Commission Comments (CCP § 873.940)

1976 Addition.

Section 873.940 is new. It follows other partition procedures with respect to the referee’s report.

Like with several of the partition statutes, section 873.940 does not include an “official” Assembly Committee Comment from the California Legislature. But this is not unusual. And that’s because the Legislature endorsed an overall adoption of the Law Revision Commission suggestions when it passed the new partition statutes in 1976.

In fact, the introduction to Assembly Bill 1671 (the bill that contained the new partition laws) states that the Revision Commission’s recommendations “reflect the intent of the Assembly Committee… in approving the various provisions of Assembly Bill 1671.” This demonstrates that the intent of the Legislature was essentially in line with that of the Revision Commission.

As to the comment and statute, they are fairly straightforward. In order for this statute to kick in, the prior stages of the partition by appraisal process must have first been completed. The parties would need to enter a valid agreement under section 873.920. The court would then need to approve that agreement under section 873.930.

Assume, however, that this has been done. At this stage, the statute provides that the court will either appoint a referee (usually a real estate broker) or use the one agreed upon by the parties. The referee will then prepare a report and file it with the court.

What goes into this report? The statute doesn’t say much outside of “reporting valuations.” But the Revision Commission Comment clarifies that section 873.940 follows other partition procedures with respect to the referee’s report.

Under section 873.710, referees for an ordinary partition by sale must prepare a report of sale when they have found a worthy buyer. In preparing the report of sale, the referee must include in the report:

“(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; (8) Other material facts relevant to the sale and the confirmation proceeding.”

Thus, it’s safe to assume that the referee’s report for the partition by appraisal process would include similar information.

Here at Underwood Law Firm, our knowledgeable attorneys are here to help navigate the complex web of case law and statutes surrounding partitions. If you are thinking of filing a partition, are already in the midst of a partition suit, or just have any questions, please do not hesitate to reach out to our office.