Arden-Arcade Partition Lawyers

Arden-Arcade, located in the heart of Sacramento County, is an unincorporated district specializing in commerce. It is east of the city of Sacramento and west of the community of Carmichael. According to Redfin, in June 2023, Arden-Arcade home prices were down 0.78% compared to last year, selling for a median price of $509K. On average, homes in Arden-Arcade sell after 8 days on the market compared to 9 days last year. There were 79 homes sold in June this year, down from 82 last year. When multiple property owners of property do not agree about whether to sell real estate, then a partition action helmed by an Arden-Arcade Partition Lawyer may be a good solution. Frequently, there are at least four common types of partitions actions for which a Arden-Arcade 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

What Is a Partition Action in California?

A partition lawsuit requires real estate to be sold regardless of the requests of the other title owners. The purpose of a partition action is to permanently end all disputes and remove all obstacles to the free enjoyment of land by one person. (McGillivray v. Evans (1864) 27 Cal.92.) These types of actions can be brought for all types of real estate from houses to farms to office buildings to apartment buildings. Similarly, partition actions are available all types of ownership situations from joint tenants to tenants-in-common to partnership property to property jointly owned by former spouses.

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 Arden-Arcade Partition Lawyer will be able to share information on this process with you.

What Are the Steps in a Partition Action?

Under the Partition of Real Property Act, the court instead appoints an appraiser to do the heavy lifting. The new statute states that the court “shall determine the fair market value of the property by ordering an appraisal.” (CCP § 874.316.) The court doesn’t have to be the one to order the appraisal, but this is only if all the co-owners agree to a different method of valuation.

If, however, an appraisal occurs, it shall be conducted by a disinterested third-party real estate appraiser licensed to determine the fair market value of properties. After the appraisal is conducted, parties may file objections to the value and can even offer additional evidence of value to the court.

After the valuation is complete, parties will be introduced to the key feature of the new statute: the buy-out option. If a co-owner requests a partition by sale, then the court will notify the other co-owners that they may buy all the interests of the cotenant that requested the partition. (CCP § 874.317.)

This is, essentially, a right of first refusal. The co-owners who don’t want the property sold now have the option to simply buy out the requesting party. Additionally, the buy-out price will be based on the property’s valuation, determined earlier in the litigation. And if one or more parties exercise the buy-out, then the court will reapportion ownership percentages based on the price paid.  A top Arden-Arcade Partition lawyer will be familiar with the process.

Can You Recover Attorneys’ Fees in a Partition Action?

Section 874.040 gives courts only two options in apportioning the costs and fees of partition: by ownership interest or by some other equitable apportionment. (see  Finney v. Gomez  (2003) 111 Cal.App.4th 527, 545 (Finney).)

Notably, appellate courts have found the statutory language of Section 874.040 to give courts broad and equitable discretion. (Lin v. Jeng  (2012) 203 Cal.App.4th 1008.)

This sentiment that the record must support the allocation of attorney’s fees in an amount greater than disclosed by title is echoed in  Stutz, where the appellate court held the trial court erred in apportioning 100% of the attorney’s fees and costs of a partition to the respondent. The appellate court recognized that trial courts are free to apportion fees and costs in an equitable manner yet held that the record must support such an arrangement in “any manner other than according to the respective interests of the parties in the property.” (Stutz, 122 Cal.App.3d 1, 5.)

For example, where a party refuses to simply resolve the issue where the other party was willing to sell, then a court has the authority to order a different amount of fees than disclosed by title. (Forrest v. Elam  (1979) 88 Cal.App.3d 164, 174.) In other words, the resistance to selling the property may be a factor that a court considers in awarding attorneys’ fees in a partition action. A knowledgeable Arden-Arcade Partition Attorney will be able to give you good advice on these issues.

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 Arden-Arcade Partition Attorney will be intimately familiar with these matters.

A Partition Case Study: Sykora v. DeMaria (2002): Shifting Targets in Litigation

In litigation, the main topics of the lawsuit are generally outlined in the plaintiff’s complaint and the defendant’s answer. Parties are usually able to have a good idea of what areas of law they need to research and cover in their arguments from these documents.

Oftentimes though, concepts from other areas of law can spill over. As litigation is a complex process and there are various areas of law, many legal fields overlap and even borrow legal principles from each other. It is vital for parties to always be prepared in those situations, no matter what field of law the lawsuit may pivot towards.

What Led This Case to the Court of Appeal?

The properties at issue in Sykora v. DeMaria (2002) Cal.App.Unpub. WL 31097692 were several mining claims on the side of the mountain. (Id., at 1.) The five mining claims involved in the lawsuit were named Big Seam, Red Ink, Black Dandy, Louise, and Moonshine. (Id.) Only Red Ink was greatly developed. (Id.)

John R. DeMaria owned all five mining claims, which he inherited from his father. (Id.) In 1964, John R. executed a deed of trust making his son, John F. DeMaria, a joint tenant in the Louise, Dandy, and Red Ink claims. (Id.)

In 1975, John R. leased Red Ink and Big Seam to Richard R. Sykora, a miner. (Id.) The lease was for five years and was later renewed for another five years. (Id .) Sykora mainly mined Red Ink and paid a ten percent royalty on his gold to the DeMarias. (Id.)

In 1982, John F. signed a quitclaim deed for the interests his father gave him in the three mining claims. (Id.) The quitclaim deed, however, was never recorded, and John F. continued to be listed as a co-owner on other documents. (Id.)

In 1986, Sykora signed another lease for ten years with the same terms as his other leases. (Id ., at 2.) John F. objected to the lease because he thought Sykora was cheating the DeMarias out of their rightful share of the gold. (Id.) John R. told John F. that if he didn’t sign the lease, John R. would record the quitclaim deed and cut his sons off from the mines. (Id.) John F. signed the ten-year lease rather than get cut off. (Id.)

Later, John R. hired an engineer, Donald Magorian, to improve the mining operation. (Id.) In August 1988, John R. and Sykora agreed on a 50-year lease for Big Seam and Red Ink with a ten percent royalty on all the minerals obtained from the mines. (Id.) John R. wanted a long-term lease because Sykora was going to make a big investment in the mines, and John R. also wanted a steady income for his wife, Mildred, and John F. after his death. (Id.)

John R. had Mildred type up and sign the 50-year lease for him under the power of attorney. (Id.) Before Sykora signed the lease, he asked John R. why John F.’s name was not on the lease. (Id.) John R. told Sykora that John F. had quitclaimed his interests and was no longer an owner. (Id.) After signing the lease, Sykora asked to see John F.’s quitclaim deed, which Mildred showed him. (Id.)

From 1987 to 1993, Sykora paid Magorian $1.3 million and put in his own money to build roads and drill tunnels into the rocks of the mines. (Id.) Sykora planned to use full-scale mining machinery over the course of the 50-year lease. (Id.)

In 1989, John R. and John F. executed a deed that changed the title on all five mining claims from joint tenants to tenants in common. (Id.) Additionally, Sykora allowed John F. to tunnel in Red Ink without paying royalties, at John R.’s request. (Id.)

In 1990, John R. died and left his interest in the five mining claims to Mildred. (Id .) In 1992, Mildred sold all of her interests to Sykora. (Id .) Afterwards, Sykora owned one-half of Big Seam and Red Ink, while John F. was leasing Sykora the other half. (Id.) Sykora halved the royalty payments to John F. down to five percent. (Id.)

The 1986 lease expired in 1996. (Id ., at 3.) John F., however, did not abandon the fifty-year lease Sykora signed with John R., and he in fact expected Sykora to comply with that lease. (Id.)

In June 1997, John F. leased his interest in the other three mining claims not covered by the fifty-year lease to Richard Slechta. (Id .) When Sykora found out, he sued John F. for partition of all five mining claims. (Id.) John F. cross-complained against Sykora, Mildred, and John R.’s estate, arguing that he was deprived of his rightful share of the royalties. (Id.)

In March 1998, John F. and his wife made a contract to sell their one-half interest in the mining claims to Red Ink Mining Company, LLC (RIM). (Id.) RIM filed an ex parte application to intervene in the partition lawsuit, but the application was denied. (Id.) RIM then sued John F. and Sykora for breach of contract, and this lawsuit was consolidated with the partition action. (Id.)

The trial court found John F.’s witnesses to be dishonest and held that Sykora did not improperly divert the gold while operating the mine. (Id.) The trial court also concluded that the 1982 quitclaim deed was invalid, and so John F. was still a co-owner of the mining claims. (Id.)

Furthermore, the trial court determined that the 50-year lease was valid even though John F. did not sign it, because John R. acted as John F.’s agent when he entered the lease. (Id.) Finally, the trial court held that a sale of all five mines was the only practical manner the property could be partitioned. (Id ., at 4.) The trial court also found Red Ink to be worth more than the other four mining claims combined. (Id.)

The trial court ordered the three mining claims not subject to the 50-year lease to be sold immediately. (Id.) As for Red Ink and Big Seam, the trial court ordered those claims to be sold at the end of the 50-year lease, of which there was 38 years left. (Id.) Sykora would be responsible for accounting and splitting the gold for the remaining duration of the lease. (Id.) RIM appealed the trial court’s decision, and the Court of Appeal reversed in part and affirmed in part. (Id.)

Sykora’ s Holding: Examining Evidence and Switching Focus

RIM contended that the 50-year lease was invalid. (Id.) RIM argued that an agent cannot enter into a lease for more than a year on behalf of a principal without written authorization from the principal. (Id.) The Court of Appeal found that, at the time of the 50-year lease’s execution, John R. was the sole owner of the Big Seam and so he did not need John F.’s authorization to lease it. (Id.) The Court of Appeal concluded that the 50-year lease was valid. (Id.)

The trial court also cited principles of equitable estoppel to support the 50-year lease’s validity. (Id.) The trial court held that, at the time, John R. had authority as managing co-owner to enter into leases on both his and his son’s behalf, which the Court of Appeal agreed was reasonable. (Id.)

Additionally, John F. failed to object to the 50-year lease between John R. and Sykora for nine years. (Id.) John F. even testified that he expected Sykora to pay him royalties and to do the paperwork required under the lease. (Id .) The Court of Appeal held this was sufficient evidence to support the trial court’s finding of equitable estoppel, which made the 50-year lease valid. (Id.)

RIM argued that the Court of Appeal could not use evidence of estoppel for its decision because the trial court did not make a finding of estoppel. (Id ., at 7.) In the trial court’s written findings, it mentioned estoppel, showing that the trial court was keeping estoppel in mind during the case. (Id.) The trial court also repeatedly highlighted Sykora’s reliance on John R.’s complete operational control over the mines, which would be a critical factor in determining estoppel. (Id.) The Court of Appeal concluded that the trial court sufficiently applied estoppel principles. (Id.)

RIM next argued that the 50-year lease was invalid because Sykora’s leasehold interest merged with his ownership interest when he bought Mildred’s one-half interest in the mines in 1992. (Id .) After Sykora bought Mildred’s interest, however, John F.’s one-half interest still existed. (Id.) This meant Sykora remained a lessee of John F.’s interest. (Id .) The Court of Appeal found that the sale did not eliminate Sykora’s leasehold interest. (Id.)

For Big Seam and Red Ink, the trial court delayed the sale until the lease expired to give Sykora more time to recover on his investment. (Id.) RIM argued this was erroneous. (Id.)

Under partition law in California, each cotenant has a right to partition. (Id ., at 9.) The Court of Appeal concluded that a 38-year delay for the sale would essentially deny a cotenant to the right to partition. (Id.) The Court of Appeal reversed the trial court’s judgment regarding the delay of the partition sale. (Id.)

Sykora shows how issues in litigation can move around on a dime. Here, the main issue at first glance appeared to be about the partition. Quickly though, the issue changed to the contract and then to equitable estoppel. Sykora illustrates how parties must stay on their toes when dealing with topics in litigation.

How Underwood Law Firm Can Help You

As seen in Sykora, the focus of a lawsuit can easily switch to something outside of the parties’ expectations. As litigation is a complex process, sometimes areas of law one would not expect may overlap with a party’s lawsuit. This is why parties must always be ready to dive into any area of law no matter the situation.

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.

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