Yes. In California, you have a right to recover attorney’s fees by statute. But that doesn’t mean that you can recover 100% of your fees, even in uncontested partitions. Courts will employ numerous equitable considerations in awarding costs, and the complexities of prolonged litigation may render some expenditures on your attorney unrecoverable. The focus of this blog post will therefore be those common issues that arise when attempting to recoup your costs.
The Authority for Awarding Attorney’s Fees in Partition Actions
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.”
Thus, provided the fees are associated with the “common benefit” they are recoverable in proportion to your interest in the property.
What is the Meaning of “For the Common Benefit?”
Perhaps the most important limitation on recovering your attorney’s fees is that they must be “for the common benefit.” (CCP § 847.010.) Yet, this crucial phrase is undefined in the code, just as it was in the predecessor statute. Courts across the state have therefore needed to fill the void.
Courts have found that the “purpose of the statute is to divide the costs of the legal services among the parties benefitted by the result of the proceeding.” (Stutz v. Davis (1981) 122 Cal.App.3d 1, 4 (Stutz).) Put another way, “it is evident that the ‘common benefit’ in a partition action is the proper distribution of the ‘respective shares and interests in said property by the ultimate judgment of the court.’” (Orien v. Lutz (2017) 16 Cal.App.5th 957 (Orien).) But what if another party contests the action, and states your interest in the property is less than what you claim it to be?
In litigating claims to title, these costs may be considered to be for the common benefit. For instance, as one court put it, “[t]he presence and litigation of controversial issues between all parties does not preclude the allowance of attorney’s fees for services connected with such issues…” (Forrest v. Elam (1979) 88 Cal.App.3d 164, 174 (Forrest).)
What about attorney’s fees associated with accounting? There, too, the court can opt to award fees in proportion to interest. “The presence and litigation of controversial issues between all parties does not preclude the allowance of attorney’s fees for services connected with such issues…” (Regaldo v. Regaldo (1961) 198 Cal.App.2d 549, 551, italics added.)
How Does a Court Determine which Attorneys’ Fees are for the Common Benefit?
Generally, a court will determine what is for the common benefit based on whether the expenses furthered the purpose of the partition lawsuit. (Elbert, Limited v. Federated Income Properties (1953) 120 Cal.App.2d 194.)
The statute places the burden of the expenses for legal services on those parties sharing the benefits realized from those services. (Stewart v. Abernathy (1944) 62 Cal.App.2d 429.) In other words, the courts attempt to apportion the cost of legal services among those persons who actually benefit from the partition action. (Stutz, 122 Cal.App.3d 1.)
As such, a court will have to make a factual determination based on the unique situation presented in every case. (People v. Kiihoa (1960) 53 Cal.2d 748; Stewart, 62 Cal.App.2d 429; Williams v. Wells Fargo Bank & Union Trust Co. (1943) 56 Cal.App.2d 645.)
For example, one court determined that a plaintiff sibling’s partition action was for the common benefit even though the defendant siblings did not want to partition the properties. (Orien, 16 Cal.App.5th at 965.)
In another case, the California Supreme Court rejected a defendant’s contention that the services performed by the plaintiff’s counsel were not for the common benefit, because “the more just and equitable rule to be applied…would require a proper division of the expenditures entailed in the maintenance of such actions for the common benefit among those who shall have been found to be entitled to their respective shares and interests in said property by the ultimate judgment of the court, regardless of whether or not there had arisen and been litigated controversies.” (Capuccio v. Caire (1932) 215 Cal. 518, 528-529.)
Can a partition plaintiff always recover all of their attorneys’ fees?
The answer depends on the record that the plaintiff’s attorney places before the court. 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 with broad and equitable discretion. (Lin v. Jeng (2012) 203 Cal.App.4th 1008.)
This sentiment that the record must support the allocation of attorneys’ 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 refused 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.
How can the attorneys at Underwood Law assist you?
Lawsuits are expensive. Partition actions, in particular, can see protracted battles over ownership interest and property value. Recouping costs in these situations is crucial, and the attorneys at Underwood Law Firm are here to help. If you are concerned about the costs of partitioning your property, or if you just have questions, please do not hesitate to contact our office.