Code of Civil Procedure (CCP) Section 873.910 – Agreement of Parties to Partition by Appraisal
Code of Civil Procedure section 873.910 is an incredibly important statute because it authorizes a brand new method of partition to accompany partition by sale and partition in kind: partition by appraisal.
Code of Civil Procedure section 873.910 states:
When the interests of all parties are undisputed or have been adjudicated, the parties may agree upon a partition by appraisal pursuant to this chapter.What is an Example?
“Shawn” and “Julie” are siblings who inherit a farm from their grandfather. Eventually, the siblings feud over management of the farm and Shawn sues to partition the property by sale.
During the initial stages of the lawsuit, the parties can’t agree to the ownership percentages. Julie insists that she’s a 75 percent owner based on representations from her grandfather. Shawn argues that the parties own the property in equal shares.
Eventually, Julie agrees that the partition should go through. In order to utilize the partition by appraisal method, they will need to resolve the true ownership interests of the parties, otherwise, their partition by appraisal agreement will be invalid under section 873.920.
Law Revision Commission Comments (CCP § 873.910)
Section 873.910 and the other sections in this chapter are new. The purpose of this chapter is to provide an alternative method of partition for coowners who agree to use this method. A guardian ad litem may be appointed to represent contingent interests and may agree to the procedure under this chapter on their behalf. A statutory procedure based upon appraisal by a referee, with court supervision, may in some situations serve the interests of parties who find themselves in disagreement since an acquisition method does not involve the same tax consequences as a partition sale. See 3 J. Rabkin & M. Johnson, Federal Income, Gift and Estate Taxation § 43.01 (1975).
Although the same result can be accomplished by an agreement to arbitrate, the authority of the court under this chapter is much broader than in case of arbitration (see Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure).Assembly Committee Comment
As is the case for many of the partition statutes, section 873.910 does not include an “official” Assembly Committee Comment from the California Legislature. But this is the norm. And that’s because the Legislature endorsed an overall 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 demonstrates that the intent of the Legislature was essentially in line with that of the Revision Commission.
That said, even though there is no “comment” under the statute, the Legislature still discussed this provision and those that follow under Chapter 7. Prior to the passage of the Assembly Bill 1671, partition by appraisal did not exist. Parties would have had to come to an independent agreement/settlement regarding disposition of the subject property.
In the Enrolled Bill Memorandum to then California Governor Edmund G. Brown, Jr., the Legislature stated:
“Assembly Bill 1671 authorizes a new mode of partition in addition to division or sale – partition by appraisal. If all the parties agree, the interests of one or more parties will be acquired by the other parties at an appraised value. This device will enable some of the parties to retain their ownership of the property and avoid unwanted tax liability.”
This sentiment expressed by the Legislature was largely the same as that of the Revision Commission when it recommended this method partition be created. In its Revision Commission Report, it stated:
“There are situations where physical division is inequitable or impossible, and sale will result in an unwanted tax liability or in loss of property which one of the owners desires to keep. As an alternative in such situations, the Commission recommends that a third manner of partition be authorized – partition by appraisal.
Under the Commission’s proposal, if all the parties agree, a referee will appraise the property, and any of the parties may acquire the interests of the others at their appraised value. This manner of partition will be an expeditious and effective means of terminating the differences among the co-owners, while at the same time allowing one to retain the property without the expense of sale and without the imposition of undesired tax liability.”
These justifications for this statute are more than a historical footnote. They demonstrate clear legislative intent against the backdrop of large-scale changes to the partition laws in California.
As to the statute in particular, though, it does more than simply act as a Title or Chapter introduction in a set of statutes. In the same language that creates partition by appraisal, the statute also places an incredibly important limitation: the interests of the parties must be “undisputed,” or “adjudicated.” (Cummings v. Dessel (2017) 13 Cal.App.5th 589, 598.)
As such, even where the parties agree that partition by appraisal is the best option, they cannot actually invoke its provisions until their ownership interests have been sorted out, either via agreement or judicial resolution.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 a partition, are already in the midst of a partition suit, or just have any questions, please do not hesitate to reach out to our office.