Anaheim Partition Lawyers

Anaheim is the second-largest city in Orange County and part of the Los Angeles metropolitan area. It is well known for being home to the Disneyland Resort, the Anaheim Convention Center, the first Carl’s Jr full-service restaurant, and two major sports teams: the Anaheim Ducks ice hockey club and the Los Angeles Angels baseball team. Anaheim houses the Anaheim Museum, Featherly Regional Park, the Ramon Peralta Adobe Historic Site, Yorba Regional Park, and the Anaheim Convention Center. There are at least four different situations where an Anaheim Partition Lawyer can be helpful:

  • Boyfriend-Girlfriend co-ownership of property;
  • Sibling-Sibling co-ownership of property;
  • Parent-Child co-ownership of property; and
  • Investor-Investor co-ownership of property.
What Is a Partition Action in California?

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 Anaheim Partition Lawyer will be able to share information on this process with you.

What Are the Steps in a Partition Action?

First, a partition action is filed. A partition action can be filed if one co-owner of real property or a piece of real estate wishes to sell the property or piece of real estate in question but the other co-owners or co-tenants do not wish to sell their ownership rights.

Second, the court may appoint a court referee to oversee the sale of the property in question. The sales procedure includes that all parties agree to the terms and conditions of the sale in writing. If the parties can not agree, as partition actions are usually very contested issues, then the referee that the court appointed may recommend terms and conditions to the court. Then the court will hold a hearing to decide whether or not to accept those terms and conditions.

Third, in California, the property’s value will be appraised via a third party or another property appraisal with no ties to any of the parties. While this is not required in all states, it is recommended to make sure that all parties are on the same metaphorical page as to the potential sale proceeds of the property in question.

Fourth, the referee will conduct the sale in the method most agreeable to all of the party’s goals. This can be via a public auction or a private sale. Regardless of the specific method of partition by sale, the court will determine if the sale was “fair.” If it is decided that the property’s sale proceeds had a lack of proper notice, the sale amount is not within reasonable the value of the property, or if the proceeds were unfair- the court would rule that the property will be up for sale again.

Lastly, the court will order that the proceeds of the sale, minus any court litigated or approved offsets or costs, will be distributed equitably amongst all of the co-owners or people with interest in the property. A top Anaheim Partition lawyer will be familiar with the process.

What Are Claims for “Contribution”?

Before the sales proceeds are distributed among the parties, a court-ordered accounting will determine the charges and credits upon each co-owner’s interest. These credits are taken out of the net proceeds before the balance is divided equally. (Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal.App.2d 539 (“Nelson”).)

“When a cotenant makes advances from his own pocket to preserve the common estate, his investment in the property increases by the entire amount advanced. Upon sale of the estate, he is entitled to his reimbursement before the balance is equally divided.” (Nelson, 230 Cal.App.2d, at p. 541, citing William v. Koyer (1914) 168 Cal.369.)

As such, a party to a partition action must produce and gather their evidence and make sure that it is presented to the court so they can receive full credit for the value that they have added to the property. While a party may have a right to these credits under the law, ultimately, they will not be counted unless they can be presented in the proper form. An experienced Anaheim Partition Attorney will be intimately familiar with these matters.

Can You Mediate or Negotiate a Partition Case?

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

A Partition Case Study: Ralston v. Dumouchel

How a partition affects the economic value of land is an important aspect that must be considered by the party bringing a partition action. For commercial properties especially, the economic analysis conducted by the Court based on the appointed partition referee’s findings may play a particularly crucial role in determining the propriety of a partition by sale versus that of a physical partition (in kind). The following paragraphs discuss how economic circumstances affected the outcome of Ralston v. Dumouchel (2014) (2014 WL 4828226).

Donald Ralston, Joseph Ralston, William Ralston, Margaret Dumouchel, and Donita Jones were siblings who inherited a piece of commercial property from their parents. In May 2011, Donald and Joseph filed a complaint against their other three siblings. Among other claims, Donald and Joseph sought partition by sale of the inherited commercial property.

In April 2012, the court issued an interlocutory judgment appointing a referee to advise the court as to whether the property should be partitioned by sale or in kind. In February 2013, the referee applied to the court for permission to hire a valuation service to assist in making a recommendation. The court granted the referee’s request. In July of that year, after receiving the valuation service’s report, the referee advised the court that the property should be partitioned by sale.

By the time of the hearing on the method of partition, only Margaret Dumouchel opposed the referee's official recommendation. Ms. Dumouchel expressed that she wanted a 20 percent share of the property to be allotted to her and claimed that such an allocation would allow the other siblings to sell the remaining 80 percent share of the property as they pleased. Ms. Dumouchel also claimed that the title to the property was defective, arguing that the defects prevented the property from being partitioned and sold. Although Dumouchel would not offer to buy the remaining 80 percent share of the property from her siblings, she offered to pay them 6.7 percent of the sale price as an equalizing payment.

At the hearing, the referee explained to the court why Ms. Dumouchel's proposal was not feasible. Among other issues, the referee explained that it would be very difficult to sell only eighty (80) percent of a piece of commercial property, especially when the property would be encumbered with a ground lease giving Ms. Dumouchel access to one hundred (100) percent of the property. The partition in kind, as proposed by Ms. Dumouchel, would be very expensive because it would necessitate costly arrangements for new surveys, permits, and easements. Furthermore, giving Margaret a 20 percent interest in the property in kind would allow her to block any subsequent sales of the remainder of the property. In effect, it would provide Ms. Dumouchel with an economic advantage over the other tenants in common. The trial court agreed with the referee and, after a hearing, entered an order requiring the referee to list the property for sale with a commercial real estate broker. Ms. Dumouchel then appealed the order to the California Fourth District Court of Appeal.

On appeal, Ms. Dumouchel contended first that the trial court’s ruling must be overturned because the trial court judge did not independently review the valuation service's report upon which the referee based its recommendation. The Court noted that although the valuation service's 200–plus–page report was not filed with the referee's recommendation, the trial court had appointed the referee—not the valuation service—to advise the best partition method for the property. The trial court appointed the referee so it would not have to wade through such a report. The referee made his recommendation based on the report, and the court independently considered and agreed with the referee's recommendation. The trial court was not legally required to read the valuation service’s report.

The Court also rejected Ms. Dumouchel’s second argument that defective title to the property rendered partition by sale inappropriate. Ms. Dumouchel did not provided sufficient evidence to the trial court to support such an assertion. Moreover, the appointed referee noted that title issues are routinely addressed during escrow and that real estate sales cannot be concluded until title issues are resolved. The Court reasoned that although it had ordered the property listed for sale, the property had not yet been sold. If title were truly defective, the Ralston siblings would be unable to obtain title insurance and any proposed deal would fall through. Thus, the court had a sufficient basis upon which to disregard Margaret's objection based on title defect.

Finally, the Court rejected Ms. Dumouchel’s claim that partition by sale would be inequitable based on her strong sentimental attachment to the property, which had, according to her declaration, been in the family for many decades. The Court responded with the following:

The cold, hard economic facts [ . . . ] persuaded the court that partition by sale was the more equitable way to divide the property. We affirm the [trial] court's order. We do not reweigh evidence or second-guess the trial court's use of its discretion. Substantial evidence supported the court's decision, and Margaret has given us no grounds for overturning it.

Since the partition referee had already determined, based on substantial evidence, that Ms. Dumouchel’s siblings would receive less money if the commercial property were divided as Ms. Dumouchel proposed than they would if it were sold as a whole, the Court declined Ms. Dumouchel’s proposal. Despite Ms. Dumouchel’s sentimental attachments, the Court was required to consider the interests of all of the other tenants and to apply purely economic criteria to its determination.

The Court affirmed the trial court’s interlocutory order for partition by sale and awarded costs on appeal to Dumouchel’s siblings.

Learn more here.

How the Underwood Law Firm Can Help

As we’ve seen, whether a party bringing a partition action prevails can depend on the Court’s consideration of various factors. For partition actions involving commercial properties, the appointed partition referee’s economic analysis may play a critical role in the Court’s disposition by demonstrating whether the property in question can be divided into sub-parcels of equal value or whether dividing the land would substantially diminish each party's economic interest.

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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