Berkeley Partition Lawyers

Berkeley, located on the northeastern shore of San Francisco Bay, in Alameda County was originally founded as a tourist destination from the Rancho San Antonio land grant in 1820. Berkeley is a city of renters, which can lead to issues involving the accounting for rents when co-owners decide to sell jointly owned property, which is known as a partition action. In that instance, an owner out of possession may compel his or her cotenant in possession to account for rents and profits received by him or her from third persons when aided by an experienced Berkley Partition Lawyer. Generally, Berkeley Partition Attorneys usually find partition action to be the best remedy for disputing joint owners in four broad categories:

  • Parent-Child shared tenants in common in real estate; 
  • Brother-Sister shared tenants in common in real estate; 
  • Investor-Investor shared tenants in common in real estate; and 
  • Significant others shared tenants in common in real estate;
What Is a Partition Action in California?

A partition action occurs when there are two or more title holders to a piece of property, and these title holders are unable to reach an agreement on splitting the subject property. Typically, a litigant brings a partition action to have the court force the sale of or split the subject property. Therefore, when a piece of personal property is concurrently owned by several people, one of the owners may bring a partition action to have the court divide the subject property. In the past, California courts have partitioned not only real estate but also, shares of stock, cash, and businesses.

Generally, an action for partition can be brought forth by a co-owner of real property and a co-owner of personal property. Notably, a court can partition not only real property or real estate but also personal property of any kind. (CCP § 872.230(a).) The best Berkeley 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 Berkeley Partition lawyer will be familiar with the process.

Can You Recover Your 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 Berkeley Partition Attorney will be able to give you good advice on these issues.

What Are Claims for “Contribution”?

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 Berkeley Partition Attorney will be intimately familiar with these matters.

A Partition Case Study: Land Value Holdings, LLC v. Miller (2020)

For many cases, the appellate court gives parties another chance to argue their cases. Parties on appeal, however, are restrained in what they can argue before the appellate court. For one, the evidence is limited to the record at trial. Additionally, parties could even forfeit certain issues if they were not raised at the trial level.

Arguments that are unconvincing at trial are unlikely to be any more convincing in front of an appellate court. Parties must be determined to do the proper legal research to find convincing legal authorities to make their cases. If the legal argument is weak or even just average, appellate courts are likely to side with the trial court’s judgment.

The property at issue inLand Value Holdings, LLC v. Miller, Cal.App.Unpub. WL 5587361 (2020), was a residential property in Berkeley. (Id., at 1.) The original owner of the property was Richard Garrett, until he died in 1987 and passed the property on to his niece Clara Laguins for her life. (Id.) Garrett’s will also stated that when Laguins died, the property would be divided between six other of Garrett’s nieces and nephews. (Id.)

Laguins died in 2009, and at that time none of the original six family members were alive. (Id.) The property passed down to their descendants, who eventually became parties in the lawsuit. (Id., at 2.) In 2013, Land Value Holdings (LVH) sued the family members, claiming that the property was to be sold for unpaid taxes at an auction. (Id.) LVH sought quiet title and ejectment. (Id.) This basically meant LVH claimed that they were entitled to a right to the property over the defendants. (Id.)

Around 2014, LVH entered an agreement regarding the property with Harold Richards, who was Clara Laguins’ alleged heir. (Id.) In 2015, LVH entered various settlement agreements regarding the property with descendants of the nieces and nephews named in the will. (Id.) The family members agreed to assign their rights in the property to LVH in exchange for payment, and contingent upon sale of the property. (Id.) LVH then sought a partition.

The trial court found that the defendants were entitled to an interest in the property based on the plain language of the will. (Id.) The trial court also found that LVH’s assignment of rights was valid, which gave LVH a 41.66 percent ownership interest in the property. (Id.)

LVH also sought reimbursement of back taxes, arguing it was owed for maintaining and preserving the property. (Id.) The trial court rejected this reimbursement. (Id., at 3.)

In April 2017, the trial court issued an interlocutory judgment for partition by sale and ordered a referee to supervise the sale. (Id., at 4.) The trial court issued its final judgment in January 2018, dividing the proceeds of the sale among the parties and awarding attorney fees. (Id.) LVH motioned for additional attorney fees, which was denied. (Id.) Miller and McKnight, two of the defendants, filed an ex parte application to disburse some of the fees and costs, which the trial court granted. (Id.) LVH appealed the trial court’s decision, and the Court of Appeal affirmed the trial court’s judgment. (Id.)

Land Value Holdings is a cautionary tale of how troubles at the trial level can escalate at the appellate level. Parties can make decisions at trial that will come around to haunt them on appeal. Additionally, if a party does not make a convincing argument for an issue at trial, it is unlikely that the same argument will change an appellate court’s mind.

LVH first argued that it is entitled to reimbursement for the property taxes they paid because they were a lienholder at the time of the payments. (Id.) The evidence, however, suggested that LVH was a volunteer rather than a lienholder or owner at the time. (Id.) The Court of Appeal rejected this argument. (Id.)

LVH also contended that the trial court had no authority to reinterpret Richard Garett’s will. (Id., at 5.) Unfortunately, LVH had no legal argument for this contention, and so the Court of Appeal declined to even consider this issue. (Id.)

LVH then argued that it should be awarded additional attorney fees starting in May 2013 because the fees were for the common benefit of the parties. (Id., at 6.) LVH’s first complaint for quiet title and ejectment was in May 2013, but LVH did not assert a partition claim until June 2016. (Id.) The trial court had awarded LVH attorney fees incurred starting in April 2016, as the fees afterwards would be considered for the common benefit since they were incurred after the parties first pleaded or responded to a partition. (Id.) The Court of Appeal upheld the trial court’s ruling. (Id.)

LVH also argued that it should be awarded the full attorney fees incurred from August 2017 to January 2018, which the trial court had denied. (Id., at 7.) The trial court originally denied these fees because LVH had failed to show how these attorney fees were for the common benefit of the parties. (Id.) The Court of Appeal agreed with the trial court’s reasoning and conclusion. (Id., at 8.)

Next, LVH argued that the trial court should not have awarded attorney fees to the defendants, arguing that the defendants did not work for the common benefit. (Id.) The Court of Appeal held that, even for disputed claims in a partition action, there can still be fees incurred for the common benefit. (Id.) The Court of Appeal upheld the trial court’s award of attorney fees to the defendants. (Id.)

LVH then claimed that the trial court erred because the final judgment did not first apply the proceeds of the partition sale to the payment of attorney fees. (Id., at 9.) LVH used a statute of how payments should be made to argue that the trial court went out of order. (Id.) LVH argued that the order cannot be changed, though LVH had no legal authority to back this claim. (Id.) The Court of Appeal held that, since LVH did not bring up this issue at the trial court when the sales proceeds were being distributed, LVH waived this alleged error. (Id.)

Finally, LVH argued that Miller and McKnight’s ex parte application to disburse funds should not have been granted because the trial court did not have jurisdiction. (Id.) The Court of Appeal, however, did not understand LVH’s reasoning, as LVH’s arguments were contradictory and unclear. (Id., at 10.) The Court of Appeal upheld the trial court’s granting of the ex parte application. (Id.)

Land Value Holdings demonstrates how important having coherent and applicable legal arguments are in a proceeding. Though an appeal might give a party a second chance at life, it is fully the party’s responsibility to take advantage of that chance. Appellate courts are generally hesitant to overturn trial courts, so it is up to the party to make a compelling case for why the verdict should change.

Land Value Holdings also shows how weak trial court arguments transfer to even weaker appellate court arguments. For many of the issues raised on appeal, LVH failed to even provide proper evidence or legal authority at the trial level. This doomed LVH’s odds at both the trial court and on appeal.

How Underwood Law Firm Can Help

As seen in Land Value Holdings, partitions law is a complex area of law full of considerations like attorney fees and partition sales distributions. It is important for parties to understand the evidence and legal authorities that support their case and argue against legal authorities that may be less helpful. Being well-prepared at the trial level would translate well into arguing on appeal, as long as the legal arguments are compelling.

Here at Underwood Law, 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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