Orange County Partition Lawyers

Orange County is located in Southern California, and is the third most populous county in the State, the sixth most populous in the country, and more populous than 19 other states. Its largest cities are Anaheim, Santa Ana, and Irvine. It is well known for Disneyland, its beaches, South Coast Plaza, the Irvine Spectrum, Mission San Juan Capistrano, and the University of California, Irvine. As a very desirable location, home prices continue to climb, which can lead to joint ownership problems. Orange County Partition Lawyers often find that joint ownership problems fall into four categories:

• Family owned real estate where only one party wants to sell;
• Former romantic partners who jointly own real estate where only one party wants to sell;
• Jointly owned real estate where only one party wants to sell;
• Partnership real estate where only one party wants to sell;

A partition action is a lawsuit brought by a property owner seeking the court to force the sale of a jointly owned piece of real property. Typically, partition actions occur when co-owners of real estate have disputes about its ownership and use, and one of them seeks to end their ownership interest. That is, a partition action has no other purpose than to sever the unity of possession between cotenants in a piece of real property. (Rancho Santa Margarita v. Vail (1938) 11 Cal.2d 501, 539.) Currently, partition actions are governed by the provisions set forth in the Code of Civil Procedure section 872.010. These statutes set out a general process by which a property may be partitioned. 

Historically, the term "partition" comes from the basic word to break into "parts" as in physically dividing real estate in half. For example, if two siblings inherited ten acres of farmland, the property could historically be divided into five acres a piece for each of them. As most people now live in single-family homes, which cannot simply be "split in half," courts will instead order that the property be sold and the proceeds, or equity, be "split in half." The best Orange County Partition Lawyer will be able to share information on this process with you.

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 Orange County 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 Orange County Partition Attorney will be able to give you good advice on these issues.

Following the sale of the property, the referee will divide the proceeds of the sale among the parties in according to amounts expended for the "common benefit."

When the sale is confirmed by the court, the court may enter an order about the proceeds of sale. Under the law, the sale proceeds must be applied in a defined order. Specifically, Code of Civil Procedure section 873.820 states that the sale proceeds go towards (a) payment of expenses of the sale, (b) payment of the other costs of partition, (c) payment of any liens on the property in priority, (d) and distribution of the remainder to the parties in proportion to their shares as determined by the court.

Generally, the last part of the priority list includes what is commonly known as an "accounting" or a determination of whether one party has contributed more than their fair share to the property in the form of taxes, improvements, or other benefits for the property. For example, if one party is a 50% owner of the property, but has paid all of the property taxes for the property, then that property owner will have a claim for the remaining 50% above their interest in the property. An experienced partition lawyer will be able to help a co-owner determine their claims to the proceeds and make these arguments to the court in an effective way. An experienced Orange County Partition Attorney will be intimately familiar with these matters.

The legal world is full of rules and standards whose meaning might be different from what people commonly believe. One example of this is the “common benefit” standard, which is used to determine awarding attorney fees. At first glance, a common benefit may seem an easy enough standard to understand. The legal world, however, enjoys making legal definitions that are different from common understanding.

Certain actions by parties can be interpreted as for the common benefit, even if most people would agree that those actions are adversarial. If the action progresses the litigation towards resolution, even if it’s one-sided, courts often interpret the action as for the common benefit. This may be at odds with what most people commonly believe, but it is an important aspect of litigation to know.

The property at issue in Villicana v. Lindsay, Cal.App.Unpub., WL 6301218 (2016), was a property on Lowell Circle in Westminster jointly owned by Ulises Villicana and Cecile Lindsay. (Id., at 1.) They refinanced the Lowell property several times. (Id.) After living in the property for many years, they took out a home equity line of credit on the Lowell property to pay the down payment for another home on Duncannon Avenue in Westminster, where Villicana’s family lived. (Id.) They also jointly owned two houses and a vacant lot in Baja. (Id.)

In 2010, after Villicana and Lindsay’s relationship ended, Lindsay sued for partition regarding the Duncannon property. (Id.) The house was partitioned and sold. (Id.)

In 2012, Villicana sued for partition by sale. (Id.) Villicana also sought quiet title for the Lowell property and declaratory relief. (Id.)

After another year, talks between Lindsay and Villicana had reached a halt. (Id.) Frustrated, Lindsay filed a motion for interlocutory judgment and for the court to appoint a referee to carry out the sale. (Id.) Lindsay’s motion was denied because both she and Villicana had failed to follow several procedural rules. (Id., at 2.)

Before the trial, Villicana outlined the three issues he alleged were remaining in the matter. (Id.) First, whether Villicana was entitled to money that was initially refinanced from the Lowell property to buy Lindsay’s stepfather's home, but then the stepfather changed his mind and returned all the money to Lindsay. (Id.) Next, whether Villicana was entitled to rents and storage fees at the Lowell property after Lindsay kicked him out. (Id.) Finally, whether Villicana was entitled to damages because of Lindsay asserting exclusive ownership over the Lowell property. (Id.)

The trial court held that Lindsay owed $3,308.66 to Villicana. (Id.) Lindsay filed a motion for attorney fees and costs, arguing that Villicana had not been cooperative. (Id.) Villicana contended that Lindsay’s fees and costs were not for the parties’ common benefit and so were not recoverable. (Id., at 3.)

The trial court granted Lindsay’s motion and ordered Villicana to pay his half of the approved attorney fees and costs. (Id.) Villicana appealed, and the Court of Appeal upheld the trial court’s judgment. (Id.)

Villicana is helpful in understanding the idea of the “common benefit”. This legal standard is probably different from a common person’s understanding of what a common benefit is, and it is important to understand the way courts will view the issue. Even though litigation is adversarial, parties’ actions can still be construed by the courts as for the common benefit.

Villicana argued that the actions for partition and damages were separate and unrelated. (Id.) He further contended that the attorney fees and costs were not for the common benefit of the parties, and so the trial court should not have awarded them. (Id.)

Villicana did concede that a trial court can apportion attorney fees and costs in an accounting that’s incidental to the partition claim. (Id.) Villicana argued though, that in this case, the declaratory relief action was not essential to the partition claims, and it concerned damages not for the common benefit of the parties. (Id.)

Villicana went on to use several legal cases to try and bolster his arguments. (Id., at 5.) However, the Court of Appeal remained unconvinced and found distinguishable facts that would make each case unpersuasive for Villicana. (Id.) The Court of Appeal also pointed to Villicana’s own complaint:

“. . . the fees/costs in this case were incurred to adjudicate issues incidental to the petition claim. The record plainly shows Villicana's complaint alleged three causes of action (claims for partition, quiet title, and declaratory relief), and all the allegations essentially requested the same relief, i.e., an equitable division of property-related profits and expenses . . . With respect to this last claim, although Villicana sought the payment of money as “damages” the allegations in the cause of action requested an equitable disbursement of property-related assets and proceeds as part of the partition, i.e., an accounting. As a general rule, it is the substance of the cause of action that is important rather than its form. Resolution of the partition claim and an equitable allocation of rents, loan proceeds, and improvements would be for the common benefit of the co-owners.” (Id., at 6.)

The Court of Appeal held the trial court properly determined that the attorney fees were connected to the partition claim and were also for the common benefit of the parties. (Id., at 7.)

Villicana then argued that attorney fees related to Lindsay’s failed attempts to appoint a referee were not for the common benefit because her efforts were not effective. (Id.) The Court of Appeal concluded that Lindsay’s attempts were for the common benefit even if they were ultimately not productive. (Id.) Lindsay attempted to move for a referee to encourage Villicana to sell the property while the real estate market was hot. (Id.) Lindsay did not want to prolong litigation unnecessarily, so she did what she believed would move the process forward. (Id.) Even if this attempt failed, the Court of Appeal held her goals were ones that helped the common benefit. (Id.)

Villicana also contended that the trial was not about the partition action but was only motivated by Villicana wanting to pressure Lindsay into releasing her claims to the property in Baja. (Id.) The Court of Appeal called this argument “absurd”. (Id.) In Villicana and Lindsay’s discussions, the main issues discussed were all about the Lowell property, and the Baja properties were never mentioned. (Id., at 8.)

Villicana noted that Lindsay made a settlement offer involving both the Lowell property and the Baja properties. (Id.) This settlement offer, however, distinguished the two disputes very clearly. (Id.) Additionally, just because Lindsay’s offer included both the Lowell and Baja properties did not mean that the trial court was determining both disputes. (Id.)

Finally, Villicana argued that he is entitled to at least some of his own attorney fees. (Id., at 9.) The trial court denied Villicana attorney fees, arguing that he had waived his right by failing to file a timely motion. (Id.) The Court of Appeal upheld the trial court’s ruling, also noting that Villicana wanted attorney fees for the Baja dispute, which was a separate matter and not for the common benefit. (Id.)

Villicana is instructive in how a court views the “common benefit” standard for awarding attorney fees and costs. In most cases, actions that will progress the litigation towards resolution can be interpreted as for the common benefit of the parties, since it would potentially reduce the time and expense of litigation. As the Court of Appeal stated, it is the substance of the action that matters.

As seen in Villicana, partition law is full of legal jargon that must be understood properly. Courts may interpretations of terms that differ from common understanding. It is important for the parties to fully understand the legal terms that are vital to the case and have proper legal authorities to back up their arguments.

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 trying to plan a partition order, or just have any questions, please do not hesitate to reach out to our office.

Learn more here.