South Coast Partition Lawyers

California’s South Coast comprises the southernmost third of the State, and includes the coastal parts of Ventura, Los Angeles, Orange, and San Diego Counties. The region is bounded on the north by the southern end of the Los Padres National Forest, and extends south some 200 miles to Mexico, east to the Mojave Desert, and West to the Pacific Ocean. The major cities in the South Coast include Los Angeles, San Diego, Long Beach, Santa Ana, and Anaheim. The South Coast is home to more than 20 million people. Frequently, there are at least four common types of partitions actions for which a South Coast 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 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 South Coast Partition Lawyer will be able to share information on this process with you.

The first step to a partition action is to petition the court for a partition of the property. In order to petition the court, a litigant must file a legally valid complaint for partition. As noted above, the litigant must be a co-owner of the subject property in order to have standing to file a partition complaint. (CCP § 872.210.)

Second, after filing the complaint, a litigant must then obtain an interlocutory judgment of partition in the correct procedural form. An interlocutory judgment is a temporary judgment ordered before the close of trial during the litigation of the case. Under Code of Civil Procedure section 872.720, the court must enter an interlocutory judgment when the court finds that the Plaintiff in a partition action is entitled to a partition. In order to obtain an interlocutory judgment, a litigant must establish their right to partition by proving they have an ownership interest in the subject property.

Third, if the court finds that a litigant has an ownership interest in the subject property and grants an interlocutory judgment of partition, the court will then appoint a partition referee to oversee the partition of the property. A partition referee is a neutral third party appointed by and accountable to the court to assist the court in matters related to partition actions. (CCP § 873.510.)

Fourth, Once the referee has provided the court with their report, the court must determine the proper method for partitioning the subject property. The court determines the proper method of partition by determining which method of partition is more equitable.

Fifth, once the court has determined the proper method of partitioning the subject property, the court will then order a final judgment of partition, and the property will be partitioned according to the proper method determined by the court. If the court orders a partition by sale, there must be an accounting to distribute the proceeds of the sale in strict compliance with the requirements of the evidentiary code. A top South Coast Partition lawyer will be familiar with the process.

Code of Civil Procedure, section 874.010 states that “[t]he costs of partition include: (a) [r]easonable attorney’s fees incurred or paid by a party for the common benefit.” Interestingly, the costs of partition can also include reasonable expenses necessarily incurred by a party for the common benefit in prosecuting or defending other actions or proceedings for the protection, confirmation, or perfection of title, setting the boundaries, or making a survey of the property. (CCP § 874.020.)

That attorney’s fees are considered “costs” associated with a partition action is important because Section 874.040 goes on to state the “court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable.” A knowledgeable South Coast 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 South Coast Partition Attorney will be intimately familiar with these matters.

After partition has been ordered by a court, how may one party’s lack of credibility and the other party’s role in acting as property manager, collecting rents, and paying expenses for the underlying property affect the court’s decisions regarding the equitable accounting of rents? The answer largely depends on the particular facts of the case in question. The following paragraphs discuss how such circumstances affected the court’s judgment in Kim v. Kim (2017) 2017 WL 3498916.

In June 2013, Daniel Kim (“Plaintiff” or “Appellant”) sued his mother, Ai Soo Song Kim (“Defendant” or “Respondent”), in her capacity as the trustee of the Ai Soo Song Kim Trust, for partition of real Property consisting of a one-bedroom condominium located in Redondo Beach, California (the “Property”). Plaintiff also sought an accounting of all rents and profits from the Property.

In July 2014, Plaintiff informed the court that because the parties had arranged for the condominium to be sold, he intended to file a request to dismiss his cause of action for partition. After the condominium was sold, the court ordered a bench trial limited to appellant’s request for an accounting.

In May 2015, prior to the bench trial, the parties agreed to following facts: In 1991, the parties took title to the condominium as tenants in common. Although their names appeared on the loan undertaken to buy the Property, only respondent made a down payment. After the acquisition, respondent managed the Property, which was rented to third parties. She collected the rental payments arising from it, and paid all expenses relating to the condominium, including mortgage payments, Property taxes, repairs, and homeowners’ association fees. Defendant never made any distribution of rent from the Property to Plaintiff.

At the bench trial, Plaintiff testified that while the parties owned the Property, he never requested an accounting of the rent owed him because respondent falsely told him that the Property “was operating at a loss.” Plaintiff denied that the parties ever agreed that he was to receive no rent, however, Defendant testified that after obtaining her real estate license, she bought several properties and owned some of them jointly with her children with the understanding that her children would not receive rent from such properties.

Defendant claimed she created a tenancy in common with her son for the Property as “an estate planning tool” with the understanding that he would receive no rent from the Property, but rather, would receive the Property when she died. She testified that she made the down payment, received no funds from appellant to pay for the Property, and provided all managerial services, including finding tenants, collecting rent, and ensuring that maintenance and repairs were performed.

Plaintiff contended that as a tenant in common not in possession of the condominium, he was entitled to a share of rent paid by third parties to respondent. He further argued that any purported oral agreement limiting his entitlement to rent failed under the statute of frauds, which requires specified agreements relating to the sale or lease of interests in real Property to be in writing. (Civ. Code, § 1624, subd. (a)(3).)

On July 24, 2015, the trial court held that Plaintiff was entitled to no rent from the condominium. The court held that although both parties were on the title to the Property, since Defendant acted as Property manager, collected rents, paid all expenses, and performed all maintenance, Defendant had rebutted the presumption under Evidence Code section 662 that Plaintiff held the full beneficial interest attributable to a tenant in common based on having his name on title. The court also rejected appellant’s contention regarding the statute of frauds, reasoning that the statute was inapplicable because Defendant was not contesting Plaintiff’s ownership in the Property but only his share of the rental proceeds. Defendant appealed.

On appeal, the California Second District Court of Appeal rejected Plaintiff’s contentions. The court held that (1) there was sufficient evidence to support the finding that Plaintiff had no entitlement to rental proceeds, and (2) that the trial court had applied the statute of frauds correctly.

In rejecting Plaintiff’s claim to rental proceeds, the Court of Appeal held that his claim for an accounting incorrectly focused on the recovery of a share of rental proceeds paid by third parties. The Court reasoned that, in general, if one tenant in common is in sole possession of the Property, the other tenant cannot recover rent for the first tenant’s occupancy or profits derived from the Property by the occupant’s own labor; nor can the other tenant have an accounting of those profits. (12 Witkin, Summary of Cal. Law (10th ed. 2005) Real Property, § 49, p. 98.) In certain circumstances, if the tenant in possession leases the Property to a third person, a suit by the other tenant against the lessor, requiring the lessor to account for rents collected from the third person, is proper. (Ib.) These situations did not apply to the current case.

In rejecting Plaintiff’s claim that the statute of frauds was improperly applied by the trial court, the Court determined that Plaintiff had misapprehended the evidentiary standard applicable to review. On such review, the Court reasoned that even testimony that is subject to justifiable suspicion does not justify the reversal of a judgment. It is the exclusive province of the trial judge or jury to determine the credibility of a witness and the truth or falsity of the facts upon which a determination depends.

The Court rejects the statements of a witness that the court has believed only if they are inherently improbable, physically impossible, or obviously false without resorting to inference or deduction. Under these stringent standards, the Court saw no basis to reject Defendant’s testimony, as it was neither physically impossible nor obviously false on its face. In sum, Plaintiff had placed too much weight on his own testimony and credibility as a witness and there was sufficient evidence to support the trial court’s judgment.

The Court of Appeal affirmed the trial court’s judgment awarding Plaintiff no share of the rent.

As we’ve seen, in partition actions, one party’s role in acting as property manager, collecting rents, and paying expenses for the underlying property may result in an accounting of rents that favors of that party.

As there are many different ways to waive the right of partition, and you are considering it as an option, then you may benefit from good legal advice on the topic. If you find yourself contemplating a partition action, or faced with defending one, then please contact Underwood Law Firm, P.C. for an initial consultation.

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