Code of Civil Procedure (CCP) Section 873.730 – Hearing on Motion
Code of Civil Procedure section 873.730 outlines the procedure and grounds for hearings on motions to confirm or set aside partition sales. This statute is immensely important, as it definitively provides the statutory grounds for attempting to set aside a partition sale. If a party’s objection to confirmation does not fit within the statute, it will likely not be considered by the court.
Code of Civil Procedure section 873.730 states:
- At the hearing, the court shall examine the report and witnesses in relation to the report.
- The court may confirm the sale notwithstanding a variance from the prescribed terms of sale if to do so will be beneficial to the parties and will not result in substantial prejudice to persons interested in the sale.
- The court may vacate the sale and direct that a new sale be made if it determines any of the following:
- The proceedings were unfair or notice of sale was not properly given. If there is no finding at the hearing of unfairness or improper notice, the sale may thereafter not be attacked on such grounds.
- The sale price is disproportionate to the value of the property.
- It appears that a new sale will yield a sum that exceeds the sale price by at least 10 percent on the first ten thousand dollars ($10,000) and five percent on the amount in excess thereof, determined after a reasonable allowance for the expenses of a new sale.
“Shawn” and “Julie” are an unmarried couple who want to start a life together. They find a nice home in Los Angeles and buy it as joint tenants. They move in and start their new life together.
Unfortunately, Shawn and Julie’s relationship doesn’t work out, and they break up. They cannot agree on what to do with the property. Shawn wants to sell all the property and move on with his life, so he sues for partition by sale.
Eventually, the court orders the property sold and the sale proceeds distributed. The court concludes that the property will be sold at a private sale and assigns a referee to sell it. The referee negotiates a purchase agreement with a buyer and submits a report to the court. Shawn’s partition attorney files a motion with the court to have the sale confirmed.
Pursuant to CCP § 873.730, the court listens to all testimony and then determines that the proposed sale is in the best interests of all parties. The court confirms the sale, which allows the sales proceeds to be held in trust for the parties.Law Revision Commission Comments (CCP § 873.730)
Section 873.730 continues the fourth sentence of former Section 784 with the exceptions noted below. Unlike the former section, subdivision (b) expressly authorizes confirmation of a sale that varies from the published terms. Subdivision (c) makes each ground for vacating a sale independently sufficient. The provision for notice of resale is found in Section 873.640. The l0-percent formula of former Section 784 is replaced by a 10-5 percent formula derived from Probate Code Section 785. Where a credit sale is returned to the court for confirmation, the judge must determine whether the credit bidder is responsible before confirming the sale. See Section 873.740 (increased offers by “responsible” bidder). Agents’ commissions on the sale, if any, are fixed by the court. See Section 873.745.Assembly Committee Comment
Like almost every other partition statute, section 873.730 does not include an “official” Assembly Committee Comment from the California Legislature. But this is primarily due to the Legislature’s overall endorsement and adoption of the Law Revision Commission suggestions when it passed the new partition statutes in 1976.
In fact, the introduction to Assembly Bill 1671 (the bill that contained the new partition laws) states that the Revision Commission’s recommendations “reflect the intent of the Assembly Committee… in approving the various provisions of Assembly Bill 1671.” This signals that the intent of the Legislature was substantially in line with that of the Revision Commission.
As to the comment here, it notes that there are substantial differences between section 873.730 and its predecessor statute, former section 784. The relevant portion of former section 784 read:
“Upon the hearing, the court must examine the return and report and witnesses in relation to the same, and if the proceedings were unfair, or the sum bid disproportionate to the value, and if it appears that a sum exceeding such bid at least 10 percent, exclusive of the expenses of a new sale, may be obtained, the court may vacate the sale and direct another to be had, of which notice must be given, and the sale conducted in all respects as if no previous sale had taken place.”
If it isn’t evident, this former version of the statute was worded poorly. For example, some litigants interpreted its provisions as not allowing the court to accept an increased bid unless there was a previous showing of unfairness or disproportionality. (Parker v. Owen (1950) 96 Cal.App.2d 78, 80.) This forced the Courts to step in and clarify that such a preliminary showing was not, in fact, necessary. (Estate of Naftzger (1944) 24 Cal.2d 595, 599-600.)
Thankfully, this discrepancy was eliminated with section 873.730. As the Revision Commission clearly stated, “Subdivision (c) makes each ground for vacating a sale independently sufficient.”
That being said, there are still some ambiguities; namely, the code does not define the term “unfair.” This is troublesome, as it opens the door to parties objecting to confirmation with all sorts of arguments on how and why the sale may have been “unfair” without any sort of legal standards for interpretation. It is likely that all a court has to go on in these situations is the equitable maxim that “a court of equity has broad powers and comparatively unlimited discretion to do equity without being bound by any strict rules of procedure.” (Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 765.)Contact Us
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 thinking of filing for partition, in the middle of litigating a partition action, or just have any questions, please do not hesitate to reach out to our office.