Code of Civil Procedure (CCP) Section 873.970 – Effect of Agreement

Code of Civil Procedure section 873.970 is designed to address the awkward situation where one party to a partition by appraisal agreement decides to back out. When this happens, the innocent party or parties may specifically enforce the agreement, via further proceedings in the court or filing a separate suit.

Code of Civil Procedure section 873.970 states:

The agreement binds the heirs, executors, administrators, successors, and assigns of the parties. In the event of default, the aggrieved parties may specifically enforce the agreement by further proceedings in the action or may pursue any other remedy they may have at law or in equity.

“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.

After the report is prepared, Shawn moves the court to confirm his buyout of Julie. After looking at all the facts, and determining the transaction is fundamentally fair, the court confirms the buyout to allow Shawn and Julie to go their separate ways.

However, only weeks later, Julie decides to back out of this arrangement. She believes that the house is actually worth more than it was appraised for, and wants instead to revert to partition by sale on the open market. In this instance, Shawn has the ability to move the court to enforce the transfer, or to file a separate lawsuit against Julie for specific performance of the partition by appraisal agreement.

Law Revision Commission Comments (CCP § 873.970)

1976 Addition.

Section 873.970 is new. Subject to the provisions of this chapter, the agreement is binding. Even though the subject of the agreement may be personal property, the agreement is specifically enforceable if the innocent party elects this remedy.

As is the case for many of the partition statutes, section 873.970 does not include an “official” Assembly Committee Comment from the California Legislature. But this is the norm. 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 simply provide that the partition by appraisal agreement is specifically enforceable. This is not referring to the original stipulation to pursue partition by appraisal, but the confirmed buyout transfer under Section 873.960.

Another interesting aspect of this statute is that it provides two options to the innocent party, assuming the other fails to abide by the buyout. They can either enforce the agreement through “further proceedings,” or they can file a separate suit (presumably one for breach of contract).

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.