Partitions of Spousal Property with Third Parties (Fam. Code § 2021)

underwood-partition-spousal-property-third-parties-300x300Family Code section 2021 provides that a court “may order that a person who claims an interest in the proceeding be joined as a party” to nullity, dissolution, and legal separation proceedings. (Fam.C. § 2021(a).) An interested third party may wish to join a family law proceeding, or an existing party may want to join the interested individual. An existing party may request that the court join the third party if the third party possesses or claims to own property that the court has jurisdiction over in the proceeding. (Cal. Rules of Court 5.24(c)(1).) Additionally, a third party may request to be joined if they have been served a temporary restraining order that affects their ability to use property they possess or claim to own. 

When will courts order joinder in Family Law?

When a claimant has a property interest at stake and is requested to be joined, the court has the discretion to decide whether the claimant will be joined as a party. (Schnabel v. Superior Court (1994) 30 Cal.App.4th 758, 762-63.) In other words, the court is allowed to deny a request for joinder even if the individual seeking it has a legitimate interest in the proceeding. This is called a “permissive” joinder. Joinders are mandatory only when the party sought to be joined has or claims physical custody or visitation of a minor child involved in the family law proceeding. (Cal. Rules of Court 5.24(e)(1).)

How do courts decide whether to order a “permissive” joinder?

In deciding whether to join a third party, the court will consider whether the joinder is appropriate and necessary for the court to rule on the issues of the proceeding. (Cal. Rules of Court 5.24(e)(2).) The court will take into account whether the joinder will significantly delay the proceeding, require more parties to be joined, confuse the issues before the court, or complicate the proceeding in any way. 

When is joinder proper in marital proceedings?

In marital proceedings where property is being divided by a court, joinder of third parties may be necessary when those third parties co-own or have an interest in property owned by the spouses. For example, a Trust holding the trust deed on a residence owned by two spouses is an appropriate third party to be joined to the community property distribution proceeding. (Glade v. Glade (1995) 38 Cal.App.4th 1441, 1455.) The court in Glade confirmed that a family law court may order the sale of community property, even though the original parties initiated the proceeding to divorce. Family members of spouses involved in a dissolution proceeding who are alleged to hold title to community property at stake in the proceeding are also a third party appropriate for joinder. (In re Marriage of Davis (1977) 68 Cal.App.3d 294, 297.) 

However, family members of a spouse who passes away while a dissolution case is ongoing cannot be joined as third parties even though they might have an interest in the divorce proceedings. (see In re Marriage of Williams (1980) 101 Cal.App.3d 507, 511.) Once a spouse dies, the marriage is effectively dissolved, and any interest the family members had in the marital proceedings terminates. 

How is a third party joined to a family law proceeding?

If one of the existing parties wants to join a third party, they can file a “Notice of Motion and Declaration for Joinder” (form FL-371) with the court to join the third party. (Cal. Rules of Court 5.24(d).) They must notify the opposing party. A third party who wishes to be joined must also file form FL-371 with the court and serve it on the parties. This can be done at any time during the proceeding, but if the joinder is “permissive,” a court may be more likely to reject it if it is filed late in the case because it might unduly delay the case’s resolution. 

The motion must describe the third party’s interest in the proceeding and what the third party (or one of the existing parties) hopes to obtain by joining the third party. The third party is the “claimant.” Whether a motion is filed by a party or by the claimant themselves, it must be accompanied by a pleading that details the legal claim being brought by or against the claimant. (Cal. Rules of Court 5.24(d)(1).) Once the motion is filed, a date must be set for a hearing to take place within the next 30 days.

If one party opposes the joining of the third party, it can file a declaration in response to the joinder application. If the opposing party doesn’t file this declaration, the court will presume that it consented to the joinder request.

When is joinder proper in a partition?

Family Code section 2650 permits a court to divide the interests of formerly married parties, but notably fails to extend jurisdiction for third parties. (see Fam. Code § 2650, Law Rev. Comm’n Comment, 23 Cal.L.Rev.Comm’n Reports 1 (1993).) 

Interestingly, Section 2650 is not a grant of “exclusive” jurisdiction. The statute states that “in a proceeding for division of the community estate, the court has jurisdiction at the request of either party.” That is, jurisdiction in Family Court is optional. That is, Section 2650 appears to provide concurrent jurisdiction upon request. This means that the proper venue for the partition of spousal property could be in either the Family Court, or the Superior Court. 

As such, when the interests of the third party comprises a larger share of the estate, such as in a limited partnership situation, then trial courts should probably refrain from extending jurisdiction to matters to which the Superior Court is best suited because extensive third party joinder and litigation would undoubtedly require an undue consumption of time. (Family Law Rutter § 8:908.) 

What is an Example?

Two spouses own an investment property, and in their dissolution court proceeding, the property is considered community property. There is also a third-party co-owner of the property. Because the third-party co-owner has a significant interest in the property, they should be allowed to join the dissolution proceeding to make sure the division of the couple’s community property happens with the co-owner’s partial ownership in mind. As long as the court finds that joining the co-owner wouldn’t unnecessarily complicate or prolong the dissolution proceeding, a petition to join the co-owner would likely be successful. 

How can the Underwood Law Firm, P.C. assist you

If you own property where partition becomes necessary, our attorneys are here to help. The division of real estate interests can be complicated and messy. Being aware of all your legal options is critical – it is important that you do not accidentally sign away your property rights. Knowledgeable counsel from the experienced attorneys at Underwood Law Firm, P.C. can help you preserve your rights to a piece of real estate when those rights are involved in a family law action.

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