Bakersfield Partition Lawyers

The City of Bakersfield was named after Thomas Baker, a lawyer and former colonel, who was attracted to the area during the California gold rush. In 1880, Bakersfield had a population of 801 residents. Today, Bakersfield is home to over 400,000 residents. Roughly 60% of the housing units in Bakersfield are owner-occupied which suggests that many of the homes are jointly owned. According to Redfin, in May 2023, Bakersfield home prices were down 1.2% compared to last year, selling for a median price of $395K. On average, homes in Bakersfield sell after 25 days on the market compared to 10 days last year. There were 374 homes sold in May this year, down from 435 last year. As such, residents of Bakersfield who own property may face disputes with co-owners. Generally, the best Bakersfield Partition Lawyers usually find partition action to be the best remedy for disputing co-owners in four broad categories:

• Investor-Developer co-ownership of property;
• Ex Romantic Partner co-ownership of property;
• Shared Family co-ownership of property; and
• Parent-Child co-ownership of property;

What Is a Partition Action in California?

Partitions are lawsuits that split up the property between multiple co-owners so that each can take their equity out of the home. The prototypical partition are between siblings, former romantic partners, or business partners. Both own parts of the property, but only one wants to end the relationship and take their money out. Partitions enable this to happen, usually ending with a court-ordered sale of the subject property. 

Basically, any person who is an owner of real estate can bring a partition action in California. Code of Civil Procedure section 872.710, subdivision (a), states “A partition action may be commenced and maintained by any…owner of…such property.” California Civil Code section 872.210 provides a property owner with the “absolute right to partition” absent a valid waiver. Thus, a partition action can be brought by anyone who no longer wants to own jointly owned real estate, other than spousal property.

Generally, a partition action cannot be stopped absent a valid waiver. The instances in which a court has found a valid waiver have generally involved some sort of written contract or adverse possession of property. As such, many parties try to stop a partition action through mediation, or a buy-out agreement. In most instances, the parties to a partition action can benefit from creative lawyering by those who are familiar with the different options for resolving real estate disputes. The best Bakersfield Partition Lawyer will be able to share information on this process with you.

What Are the Steps in a Partition Action?

Generally, the first step in the partition lawsuit process is not a lawsuit, but an earnest attempt to resolve the matter informally, such as through a partition agreement. Only when it is clear that litigation is the only option, is it clear that a partition lawsuit is appropriate.

When it is clear that a partition lawsuit is necessary, then the process begins with the filing of a complaint in the county where the property is located. There are several technical requirements for the partition complaint, and many important steps that must be taken during the lawsuit to ensure that the process is managed effectively.

In a partition lawsuit, there are generally four different steps. First, the court determines each party’s ownership interests. Second, the court will decide on the manner of sale. Third, the court will order the property be sold. Fourth, the proceeds from the sale will be divided between the parties based on their relative contributions to the property.

While some may believe that inherited property cannot be partitioned, this is incorrect. Instead, when the property is owned as the result of an inheritance, there may be an additional step for an appraisal, and a right of first refusal, as provided by the Uniform Partition of Heirs Act. Under this act, where a co-tenant requests partition by sale, the law gives the non-partition owner the option to buy all of the interests of the co-tenants who requested the sale. A top Bakersfield Partition lawyer will be familiar with the process.

Can You Mediate a Partition Action?

A partition action can always be resolved informally at any time prior to the first day of trial, or entry of judgment. In fact, in numerous instances, just filing the partition itself leads the other party to seek a resolution between them. We always encourage the parties to talk throughout every phase of the process, as that can lead to the best outcomes for everyone.

From our perspective, every piece of litigation is just part of a larger “negotiation.” In any negotiation, the party who has the best leverage is usually able to achieve a more favorable outcome. The lawsuit provides the client with more leverage because they have more options available to them than without the prospect of a resolution from a judge. As such, all that a lawsuit does is provide one party with more leverage in the negotiation about how to resolve the dispute. For this reason, the best way to informally resolve a dispute is to combine discussions with active litigation, so that the matter can be quickly resolved without unnecessary expense. Throughout the process, our attorneys are in touch with our clients about their options and the prospects for informal resolution through mediation or negotiation. A knowledgeable Bakersfield Partition Attorney will be able to give you good advice on these issues.

What Are Claims for “Contribution”?

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

A Partition Case Study: Kenco Investments, Inc. v. Marsh (2020)

A partition is a legal procedure in which the court shall segregate and terminate the common interests in a piece of real property. The court generally issues an interlocutory judgment that determines the interests of the parties, orders a partition, and the manner of partition. (CCP § 872.720(a)). Depending on the circumstances of the case, the court can order a partition by sale, or in kind. A partition in kind is when a property is physically divided. While a partition in kind is the preferred method of partition in California, many factors can make a partition in kind impractical or impossible. The following paragraphs discuss how the Court of Appeal determines whether a trial court erred in ordering a partition in sale in Kenco Investments, Inc. v. Marsh (2020) 2020 WL 3444435.

In Kenco Investments, Kenco brought an action against Martha Marsha, as trustee of the Joseph Haig Boyd Living Trust, to force the trust to sell its one-half ownership interest in an office complex to Kenco, who owned the other half. Kenco claimed a written partnership agreement between itself, and Joseph Haig Boyd compelled the Trust to allow Kenco to purchase the Trust’s ownership share.

In the 1970’s, Kenneth Boyd (Ken) and his father, Joseph Haig Boyd (J.H.), began a partnership known as J.H. Boyd & Son. In 1979, Ken formed a corporation named Kenco Investments, Inc. That year, Kenco and J.H. entered into a written partnership agreement for J.H. Boyd & Son.

The partnership engaged in real estate sales and loans. It also owned a parcel of property located in Kerman, on which sat four separate office buildings (A-D), each with multiple suites that were leased out with 22 parking spaces around the buildings, and an adjacent parking lot with 30 parking spaces (altogether, the Boyd building). Ken was involved in the design and development of the Boyd building and maintained an office in one of buildings for over 40 years. As of December 2017, the monthly rents for the Boyd building totaled about $18,000.

The four office buildings shared landscaping, a courtyard, and one bathroom in the “C” building. The buildings also shared a trash enclosure, a single set of utility lines, and a single sewer line. The buildings were not up to fire protection and Americans with Disabilities Act (ADA) codes.

According to Ken, J.H. was asked to retire from the real estate brokerage part of the partnership in 1990. Ken claimed that he paid J.H. around half-million dollars for J.H.’s share of the operation. That he and J.H. stopped working together and agreed to stop using the name J.H. Boyd and Son. Ken testified that he had two options when J.H. said he wanted to retire: (1) Kenco could buy the building from J.H., as provided in the Partnership agreement, or (2) they could keep the Partnership agreement open as to the Boyd building and J.H. could continue to share in the profits. J.H. did not sell his share in the building to Kenco.

In December 1990, J.H. and his wife executed a document entitled “Co-ownership and Management Agreement”. The co-ownership agreement stated that J.H. and Kenco were joint partners in J.H. Boyd and Son until December 31, 1990, and that because of the dissolution of the referenced partnership, it was agreed that the Boyd Building would be distributed from the partnership to the parties, each as to an undivided one-half interest.

Further, the agreement stated that Kenco would be responsible for managing the Boyd building and would receive 5 percent of the net rents received from tenants occupying the property. At trial, the co-ownership agreement presented did not have a signature for Kenco on it. Ken testified that he never signed the agreement and denied entering into it. Instead, he claimed that he and J.H. had an oral agreement for Kenco to manage the building.

On the same day J.H. had executed the co-ownership agreement, J.H. and Ken had executed a grant deed transferring the partnership’s interest in the Boyd building, one-half to J.H. and his wife, and one-half to Kenco. In May 1991, J.H. and his wife transferred their interest in the Boyd building to the trust, to which Ken was aware.

In 1991, Kenco started taking a monthly management fee of $950 for managing the Boyd building which he claimed at trial was part of the oral agreement. Ken conceded this fee was more than five percent of the net rents, as was stated in the co-ownership agreement. Martha was not aware of any writing that authorized Kenco to take management fees.

After 1990, no tax returns were prepared or filed for the Partnership. According to the certified public accountant for Ken, Kenco, and the Partnership, the Partnership stopped filing tax returns because the partners “agreed to disagree” and J.H. moved to another office.

In August 2015, Kenco filed a complaint against Martha, as trustee of the Trust stating a single cause of action for “equitable relief to enforce contract”. The operative first amended complaint alleged that Martha breached the partnership by refusing to sell the J.H. Boyd Trust’s interest in the Boyd building. Kenco sought an order compelling the sale of the Trust’s interest in the Boyd building to Kenco pursuant to the partnership agreement.

A trial on Kenco’s complaint was held over 2 days in February 2017. The trial court found Kenco failed to show the Partnership agreement continued to be in existence and the evidence established the partnership was dissolved. A written order was filed on May 3, 2017. A trial on Martha’s cross complaint, which sought a partition of the Boyd building by sale, was held over two days in December 2017.

On August 30, 2017, Ken sent a letter to Olivia Pimentel, the assistant city planner, asking how the Boyd building could be divided into two separate, equal parcels so that Kenco and the Trust could each receive a physical half of the property. Pimentel consulted with a planning consultant who determined that to split the property: (1) a parcel map would be required; (2) separate wet and dry utility services must be provided to the buildings within each new parcel, as shared services would not be allowed; and (3) the parking lot was too small to be divided as shown, but the new deed for each parcel could be written to include an undivided interest in the parking lot parcel, although it would not resolve other issues such as the shared trash enclosure and landscaping.

Ultimately, the trial court concluded that a partition by sale was the most equitable remedy. In its analysis, the court noted that there could not be an equitable division of the property. While an easement could cure the issue, the court could not force one owner to enter into an agreement with the other. The trial court also found that division was less equitable than a sale as the economic value of the land would be diminished through a physical division. Lastly, since the trial court found it was undisputed that Kenco took a $950 per month management fee for 26 years, and Martha requested an offset to her sale proceeds based on her 50 percent share of that amount, the court found Martha was entitled to the offset. The trial court made this conclusion because no specific agreement for the management fees was adduced at trial.

Neither party filed objection to the tentative ruling, and on April 18, 2018, a judgment on cross-complaint for partition was filed. Kenco appealed. First the Court of Appeal address the appeal from the May 3, 2017 order entered in the first phase of the trial. Martha filed a motion to dismiss the appeal as untimely and not separately appealable. The Court of Appeal found that the order was appealable because the court’s finding in the first part of the trial found that the parties were cotenants. This determination was a determination of the parties’ rights and interests in the property, which was then made appealable by the April 18, 2018 judgment of partition.

Kenco further contended that the trial court had erred in finding that the Partnership had dissolved because the Partnership agreement had expressly said that in order to voluntarily withdraw from the partnership, a partner had to provide written notice of an intent to withdraw. Martha pointed out that neither party requested a statement of decision, and therefore the Court of Appeal would need to presume the trial court made all the factual findings needed to support its judgment. The Court of Appeal noted that the trial court did not find the agreement had been modified, but rather that the Partnership had been dissolved by mutual agreement of the parties. This was evidenced by the co-ownership agreement, the grant deed, the cease of the name “J.H. Boyd and Son”, the management fee, and the lack of tax returns. Since the partnership was dissolved by mutual agreement, J.H. was not required to provide written notice.

Kenco then contended that the trial court erred in the phase two trial by ordering partition of the Boyd building by sale and ordering Kenco to reimburse to the Trust for the management fees. The Court of Appeal first responds to this appeal by defining the general principles regarding partition actions.

First, a co-owner of real or personal property may bring an action for partition (CCP § 872.210). When a court finds that a plaintiff is entitled to partition, it may make an interlocutory judgment that determines the interests of the parties in the property and orders the partition and manner of partition (CCP § 872.720(a)). To compel a sale, a party must show either: (1) a division into subparcels of equal value cannot be made, or (2) dividing the land would substantially diminish each party’s interest, such that each cotenant’s portion would be substantially less value than that received on a sale. (Butte Creek Island Ranch v. Crim, 186 Cal. Rptr. 252, 255–56 (Cal. App. 3d Dist. 1982)).

Applying the first test, the trial court found the property could not be divided equally because the adjacent parking lot could not be divided, which alone was enough to necessitate a partition by sale. This was also supported by substantial evidence. There was also no support for the contention that the trial court could have created an easement. This was enough for the Court of Appeal to find that the trial court did not abuse its discretion when it found the property could not be divided equally, and therefore the Court of Appeal did not address the other basis for the order.

Finally, as to the management fees, Kenco contended that the trial court lacked jurisdiction to order reimbursement because the cross-complaint did not allege Kenco had been taking unauthorized management fees. Kenco claimed that without the factual allegations concerning the claimed offset, its due process rights were violated because it did not have notice that Martha could attempt to obtain an offset for the management fees on the ground no agreement for such fees existed.

Contrary to this, however, the Court of Appeal concluded that Kenco did have actual notice of Martha’s offset claim well before trial, and therefore Kenco could not show prejudice from any failure to include allegations in the cross-complaint. In the first phase of the trial, Ken testified that Kenco had been taking monthly management fees and claimed it was authorized. He also testified that he and J.H. had agreed that for the work he was going to do $950 was reasonable and that his father never objected that. That it was something only Martha was objecting to. In this testimony, Ken confirmed he was aware that Martha was objecting to him taking a management fee. Therefore, Kenco knew that Martha was claiming the management fees and an offset and the trial court did not err in denying Kenco’s motion in limine and awarding such fees.

Ultimately, the Court of Appeal affirmed the May 3, 2017 and April 18, 2018 judgments and the costs on appeal were awarded to Martha.

How the Underwood Law Firm Can Help

A court’s determination of ownership interests in a property depends on the facts and circumstances of each particular case. Factors such as agreements and who pays for certain expenses for the property can ultimately affect the outcome of a partition case. If you are considering partition as an option, or find yourself defending one, then you may benefit from good legal advice on the topic. Please contact Underwood Law Firm, P.C., for an initial consultation.

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