El Monte Partition Lawyers

The City of El Monte experienced the arrival of its first permanent residents in 1849, who came during the California Gold Rush. Originally, the city’s land was used to grow fruit orchards, walnut groves, hay, vegetable fields, and more. Today, El Monte is an urban community with homes, schools, parks, and businesses. According to Redfin, in May 2023, El Monte home prices were down 9.3% compared to last year, selling for a median price of $698K. On average, homes in El Monte sell after 31 days on the market compared to 18 days last year. There were 22 homes sold in May this year, down from 30 last year. As a town constantly developing residential units, commercial property, and industrial property, real estate owners may often face disputes with co-owners.

Generally, the best El Monte Partition Lawyers usually find partition action to be the best remedy for disputing co-owners in four broad categories:

• Split real estate dispute;
• Brother-Sister real estate dispute;
• Investor-Investor real estate dispute; and
• Significant other real estate dispute

What Is a Partition Action in California?

A partition action is an action brought by a co-owner of a piece of real property against another co-owner, seeking to divide the property according to the respective interests of the co-owners. In order to establish a right to a partition, a party must show that they have some ownership interest in the subject property. Under Code of Civil Procedure section 872.210, any owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate is owned by several persons concurrently or in successive estates may bring a partition action. (CCP § 872.210.) Therefore, a co-tenant has an absolute right to partition. (Formosa Corp. v. Rogers (1951), 108 Cal.App.2d 397.) At the Underwood Law Firm, our attorneys are more than familiar with partition actions and the step-by-step process of pursuing a partition.

Generally, a partition action cannot be stopped absent a valid waiver. Virtually universally, the instances in which a court has found a valid waiver have involved some sort of written contract or adverse possession of property. As such, many parties try to stop a partition action through mediation, or a buy-out agreement. In most instances, the parties to a partition action can benefit from creative lawyering by those who are familiar with the different options for resolving real estate disputes. The best El Monte Partition Lawyer will be able to share information on this process with you.

What Are the steps in a Partition Action?

Broadly, a partition action has only relatively simple steps. First, a party files a lawsuit to establish their rights to the property and desire to sell the property. Second, the court determines that the property should be sold, and appoints an appraiser to appraise the property and offer the other owner the opportunity to buy out the interest. Third, if the other fails to do so, then the Court appoints a “partition referee” (who is frequently a licensed Realtor) to sell the property, and they market and sell the property and deposits the proceeds into a trust account. Fourth, the court determines how much each party should receive from the proceeds, which should include addressing offsets and claims for contribution in an “accounting.” A top El Monte Partition lawyer will be familiar with the process.

Can You Mediate 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 El Monte Partition Attorney will be able to give you good advice on these issues.

What Are Claims for “Contribution”?

Before the sales proceeds are distributed among the parties, a court-ordered accounting will determine the charges and credits upon each co-owner’s interest. These credits are taken out of the net proceeds before the balance is divided equally. (Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal.App.2d 539 (“Nelson”).) 

“When a cotenant makes advances from his own pocket to preserve the common estate, his investment in the property increases by the entire amount advanced. Upon sale of the estate, he is entitled to his reimbursement before the balance is equally divided.” (Nelson, 230 Cal.App.2d, at p. 541, citing William v. Koyer (1914) 168 Cal.369.)

As such, a party to a partition action must produce and gather their evidence and make sure that it is presented to the court so they can receive full credit for the value that they have added to the property. While a party may have a right to these credits under the law, ultimately, they will not be counted unless they can be presented in the proper form. An experienced El Monte Partition Attorney will be intimately familiar with these matters.

A Partition Case Study: Roussos v. Roussos: (2021)

Legal authorities are essential in supporting a party’s case. This includes cases, statutes, and other sources of the law. Cases are especially important, as cases show how the law was previously applied, giving judges some peace of mind that they are following precedent.

Not all cases, however, are created equal. Some cases may contain holdings that are incredibly fact specific or niche. It is the party’s responsibility to ensure that not only do the case’s holdings line up, but that the case’s facts are also analogous.

What Led This Case to the Court of Appeal?

The properties at issue in Roussos v. Roussos (2021) Cal.App.Unpub. WL 345188, were owned by two trusts, the S.M.B. Investor Associates Irrevocable Trust (SMB Trust) and the O.F. Management Irrevocable Trust (OF Trust). (Id., at 1.) Harry and Ted Rousso were brothers and co-trustees of the two trusts. (Id.) Harry’s wife Christine, Ted’s wife Paula, and all their respective children were beneficiaries of the trusts. (Id.)

Harry and Ted also had management roles across multiple related companies. (Id.) Harry and Ted, as co-trustees of the SMB Trust, were the sole shareholders of Dazum Limited, which was the sole shareholder of Velnor Overseas Ltd., which was the sole shareholder of SMB Management. (Id.) SMB Management owned a one percent interest in SMB LP as the general partner, while Harry and Ted owned the remaining 99 percent as co-trustees of the OF Trust. (Id.)

As co-trustees of the OF Trust, Harry and Ted also were the sole shareholders of Fenbe, Ltd., which was the sole shareholder of Kelroad International, Inc., which was the sole shareholder of Liro Inc., which owned a one percent interest in OF LP as the general partner. (Id.) Harry and Ted owned the remaining 99 percent as co-trustees of the OF Trust. (Id.)

SMB LP, OF LP, and Liro owned six properties. (Id.) They were all governed by similar partnership agreements, which each had a provision stating that limited partners could not bring a partition action against the partnership. (Id.)

Ted and Harry began to have major disagreements over running their businesses. (Id., at 2.) In December 2012, Ted, Harry, Christine, and Paula all agreed to binding arbitration. (Id.) Ted and Harry, along with other people representing their companies, signed an arbitration agreement. (Id.)

Harry and Christine sought partition by sale of the properties as part of arbitration, while Ted and Paula sought partition by appraisal. (Id.) The parties also sought numerous other claims against each other. (Id.) At the arbitration, only Ted, Harry, Christine, and Paula were present with their counsel, and no one appeared on behalf of the businesses. (Id.)

On September 14, 2016, the arbitrator served a partition award to the parties. (Id.) The arbitrator found that Christine had standing to seek a partition because she had an interest in the properties as beneficiary of the trusts. (Id.) The arbitrator also ruled that partition by sale was the appropriate solution, and he struck the provisions in the partnership agreement containing waivers of partition. (Id.) The arbitrator also concluded that partition by appraisal was not legally possible since he could not force the trusts to sell their assets. (Id.)

On October 21, 2016, Harry and Christine petitioned to confirm the arbitration award. (Id., at 3.) Further arbitration happened on November 16, 2019. (Id.) Afterwards, the arbitrator issued a separate attorneys’ fees award, ordering SMB Management and Liro to pay the parties’ fees. (Id.) None of the parties objected to this fee award. (Id.)

On December 14, 2016, Harry and Christine filed a first amended petition to confirm the partition and fee awards. (Id.) Ted did not respond to this petition. (Id.)

On February 24, 2017, Ted and Paula’s estate petitioned to vacate an arbitration award in a different matter. (Id.) This petition had the arbitration agreement and fee award attached, but not the partition award. (Id.)

On May 22, 2017, Harry and Christine filed another amended petition and motion to confirm the partition and fee awards. (Id.) On June 21, 2017, Ted and Sophia (Ted and Paula’s daughter who was appointed to be the administrator of Paula’s estate) filed an opposition to this second amended petition and motion, where they made several jurisdictional and standing arguments. (Id.)

On January 12, 2018, the trial court granted the motion to confirm the partition and fee awards. (Id., at 4.) The trial court later entered judgment confirming the awards. (Id.) Ted appealed, and the Court of Appeal upheld the trial court’s judgment (Id.)

Roussos’ Holding: Analyzing Facts in Case law

Roussos is a cautionary tale of relying on legal authorities that do not help your case. Even if a case has a holding that seems beneficial for the party, the case must still be read carefully. Often, courts will limit holdings in cases to specific situations that may not apply to everyone.

First, the Court of Appeal found that Ted’s petition to vacate the arbitration awards was untimely. (Id.) Ted only served Harry and Christine by the deadline and failed to serve the businesses until after the deadline. (Id.) Additionally, the businesses were not represented at the trial court proceedings. (Id., at 5.) Since not all of the parties were present, the trial court could not vacate the award. (Id.)

The Court of Appeal also found that Ted and Sophia’s opposition was untimely, as it was filed more than 100 days after service of the fee award. (Id.) The petition also did not state any grounds for its opposition, only attaching the previous fee award. (Id.)

Ted relied on a case to argue that the 100-day deadline was stopped during the period that it was impossible or impractical for him to petition. (Id.) The Court of Appeal held that the case had very specific facts that were not analogous to Ted. (Id.)

Next, Ted used a different case to argue that he should have been relieved of the 100-day deadline. (Id., at 6.) Again, the Court of Appeal held that the facts of the case were not analogous to Ted, since in the case the party was deprived of the ability to participate in arbitration due to some outside fraud or mistake. (Id.) Ted was not deprived of the ability to arbitrate. (Id.)

Finally, Ted used a case to argue that he could still challenge the arbitrator’s right to make the awards even with his failure to properly petition. (Id.) Once again, the Court of Appeal found that the facts of the case were not analogous to Ted. (Id.) In the case Ted cited, the party was challenging the trial court’s jurisdiction to compel arbitration, while Ted had consented to the jurisdiction over arbitration. (Id.) The Court of Appeal rejected all of Ted’s arguments and affirmed the trial court’s judgment. (Id.)

Roussos is illustrative of how important carefully reading case law is to a party’s case. One cannot simply skip to the end and avoid reading the court’s reasoning on its holding. As Ted discovered, the facts of the case are just as important as the conclusion.

How Underwood Law Firm Can Help You

As seen in Roussos, careful reading of legal authorities is vital in litigation. It is not enough that the conclusion is beneficial, but the facts must be analogous as well. Otherwise, courts will not be willing to apply the case’s holding.

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 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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