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Lake Forest Partition Lawyers

The city of Lake Forest was originally known as El Toro from 1863. Although the city was only incorporated in 1991, Lake Forest has a long history and started out as an agricultural area. Today, over 70% of housing units are owner-occupied. According to Redfin, in June 2023, Lake Forest home prices were up 6.2% compared to last year, selling for a median price of $1.2M. On average, homes in Lake Forest sell after 31 days on the market compared to 28 days last year. There were 74 homes sold in June this year, down from 106 last year. Lake Forest residents who own real estate may face disputes with co-owners. Frequently, there are at least four common types of partitions actions for which a Lake Forest Partition Attorney can provide sound counsel: 

  • Investor-Investor shared ownership of property;
  • Boyfriend-Girlfriend share ownership of property;
  • Brother-Sister shared ownership of property; and
  • Parent-child shared ownership of property
What Is a Partition Action in California?

Partitions are lawsuits that split up the property between multiple co-owners so that each can take their equity out of the home. The prototypical partition are between siblings, former romantic partners, or business partners. Both own parts of the property, but only one wants to end the relationship and take their money out. Partitions enable this to happen, usually ending with a court-ordered sale of the subject property.

Basically, any person who is an owner of real estate can bring a partition action in California. Code of Civil Procedure section 872.710, subdivision (a), states "A partition action may be commenced and maintained by any…owner of…such property." California Civil Code section 872.210 provides a property owner with the "absolute right to partition" absent a valid waiver. Thus, a partition action can be brought by anyone who no longer wants to own jointly owned real estate, other than spousal property. 

Generally, a partition action cannot be stopped absent a valid waiver. The instances in which a court has found a valid waiver have generally 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 Lake Forest Partition Lawyer will be able to share information on this process with you.

What Are the Steps in a Partition Action?

First, a partition action is filed. A partition action can be filed if one co-owner of real property or a piece of real estate wishes to sell the property or piece of real estate in question but the other co-owners or co-tenants do not wish to sell their ownership rights.

Second, the court may appoint a court referee to oversee the sale of the property in question. The sales procedure includes that all parties agree to the terms and conditions of the sale in writing. If the parties can not agree, as partition actions are usually very contested issues, then the referee that the court appointed may recommend terms and conditions to the court. Then the court will hold a hearing to decide whether or not to accept those terms and conditions.

Third, in California, the property’s value will be appraised via a third party or another property appraisal with no ties to any of the parties. While this is not required in all states, it is recommended to make sure that all parties are on the same metaphorical page as to the potential sale proceeds of the property in question.

Fourth, the referee will conduct the sale in the method most agreeable to all of the party’s goals. This can be via a public auction or a private sale. Regardless of the specific method of partition by sale, the court will determine if the sale was “fair.” If it is decided that the property’s sale proceeds had a lack of proper notice, the sale amount is not within reasonable the value of the property, or if the proceeds were unfair- the court would rule that the property will be up for sale again.

Lastly, the court will order that the proceeds of the sale, minus any court litigated or approved offsets or costs, will be distributed equitably amongst all of the co-owners or people with interest in the property. A top Lake Forest Partition lawyer will be familiar with the process. 

Can You Mediate a Partition Action? 

A partition action can always be resolved informally at any time prior to the first day of trial, or entry of judgment. In fact, in numerous instances, just filing the partition itself leads the other party to seek a resolution between them. We always encourage the parties to talk throughout every phase of the process, as that can lead to the best outcomes for everyone.

From our perspective, every piece of litigation is just part of a larger “negotiation.” In any negotiation, the party who has the best leverage is usually able to achieve a more favorable outcome. The lawsuit provides the client with more leverage because they have more options available to them than without the prospect of a resolution from a judge. As such, all that a lawsuit does is provide one party with more leverage in the negotiation about how to resolve the dispute. For this reason, the best way to informally resolve a dispute is to combine discussions with active litigation, so that the matter can be quickly resolved without unnecessary expense. Throughout the process, our attorneys are in touch with our clients about their options and the prospects for informal resolution through mediation or negotiation. A knowledgeable Lake Forest 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 Lake Forest Partition Attorney will be intimately familiar with these matters. 

A Partition Case Study: Ashley v. Chinen(2002): Sufficiency of Evidence

The sufficiency of evidence is a vital aspect of litigation that is the crux of many lawsuits. In many instances, having sufficient evidence is actually a legal necessity. If a party does not have sufficient evidence, then the case may be lost at the outset. 

Deciding whether evidence is sufficient can be challenging, even for experienced judges and attorneys. There are many factors that parties must juggle in this determination. Different types of lawsuits can also have different legal standards for what constitutes sufficient evidence, further complicating matters.

What Led This Case to the Court of Appeal?

The property at issue in Ashley v. Chinen (2002) Cal.App.Unpub. WL 520187 was a single-family home. (Id., at 1.) Russell Chinen and Donna Marie Ashley bought the home for $115,000 together as an unmarried couple and took the title as joint tenants. (Id.) Chinen and Ashley each paid half of the $6,700 down payment. (Id.) They borrowed $108,300 secured by a 30-year trust deed on the property. (Id.

From May 1983 through April 1986, Chinen and Ashley lived on the property. (Id.) They paid all of the trust deed installments, which were divided equally between them, from their joint bank account. (Id.) Additionally, they filed separate income tax returns where they each claimed deductions for one-half of the interest paid. (Id.

In April 1986, Chinen moved out of the property and stopped paying any of the trust deed installments or expenses on the property. (Id.) Ashley stayed on the property and paid for everything. (Id.

In May 1998, Ashley sued Chinen for partition of the property. (Id.) Ashley and Chinen agreed to sell the property and deposit the sale proceeds into an account which would be distributed by the trial court’s order or from the parties’ own agreement. (Id.)

The property was eventually sold for $219,900. (Id.) The principal balance of the trust deed, interest, and other expenses were first paid off for a total amount of $89,740.37. (Id.) The net sale proceeds remaining were $109,422.04. (Id.)

Next, the trial court held hearings to determine the distribution of the net sale proceeds. (Id.) Ashley and Chinen each testified as to what they believed they should receive from the sale proceeds. (Id.)

Ashley argued that she should receive a $19,265 reimbursement out of the sale proceeds for the expenses she incurred, aside from the down payment and trust deed principal payments. (Id.) Further, Ashley argued that she paid for all of the trust deed principal reduction while Chinen only paid for one-half of the down payment. (Id.) Due to this, Ashley argued that she should receive 86.7 percent of the remaining sale proceeds while Chinen would receive 13.3 percent. (Id.) Chinen agreed that Ashley should be reimbursed, but he argued that he should receive one-half of the remaining sale proceeds. (Id.) 

The trial court sided with Ashley, distributing 13.3 percent of the sale proceeds to Chinen and 86.7 percent of the sale proceeds to Ashley after Ashley’s reimbursement. (Id.) The trial court entered judgment for partition and distribution in accordance with this finding. (Id., at 3.) Additionally, the trial court ordered Chinen to pay Ashley $1,500 for attorney’s fees. (Id.) Chinen appealed, and the Court of Appeal reversed the trial court’s judgment. (Id.

Ashley’s Holding: Sufficient Evidence is Necessary

Chinen had two main arguments. (Id.) First, Chinen argued that there was insufficient evidence for the trial court’s distribution of sale proceeds where Ashley received 86.7 percent and Chinen received 13.3 percent. (Id.) Second, Chinen further claimed that there was no substantial evidence he and Ashley had an agreement where their one-half joint tenant interests would be affected by Ashley’s payments after Chinen moved out of the property. (Id.

Under California law for partitions by sale, a cotenant has a right to reimbursement upon another cotenant’s payment of mortgage installments before the sales proceeds are divided among the owners. (Id., at 4.) Furthermore, this right to reimbursement extends to when a cotenant pays charges such as trust deed payments against the property. (Id., at 5.)

Additionally, a cotenant’s ownership interest in the property does not increase just because that cotenant paid for all the mortgage installments. (Id.) The Court of Appeal held that the trial court’s final accounting was erroneous because the trial court did not include the down payment and trust deed principal payments when calculating the reimbursement. (Id., at 6.) The trial court instead used the differing amounts of those payments to change the percentage ownership interests in the property, which the Court of Appeal concluded was improper. (Id.)

Next was Chinen’s argument that the evidence did not support an inference that he and Ashley intended to change their original one-half interests in the property. (Id.) Chinen did not pay any expenses for the property after he moved out in 1986 and Chinen wrote a letter to Ashley in 1993 confirming that he was not paying for any of the mortgage installments. (Id.) The trial court used this evidence to conclude the parties’ conduct supported an inference that Chinen and Ashley intended to alter their one-half interests. (Id.

The Court of Appeal disagreed with the trial court and ruled that there was insufficient evidence to support this inference. (Id., at 7.) The Court of Appeal wrote: 

“Although Ashley paid non-principal expenses (i.e., mortgage interest, property taxes, insurance, repairs, and improvements) totaling $220,850 after Chinen moved out in April 1986, she paid, at most, only $18,560 toward reduction of the mortgage's principal balance. Although her principal payments were relatively minor in comparison to her payment of other amounts regarding the Property, she relies on those principal payments, and Chinen's nonpayment of principal after April 1986, to support her theory of an implied agreement or understanding that would leverage her original one-half interest into a much greater 86.7 percent interest in the Property that had greatly appreciated in value from 1983 through 1999. We cannot accept that theory because it cannot be reasonably inferred from Chinen's and Ashley's conduct that they impliedly agreed to such an alteration to their original one-half joint tenancy interests.” (Id.

The Court of Appeal ruled that Ashley was entitled to reimbursement, not an increased share of the sale proceeds. (Id.

The trial court also cited the parties’ credibility as a factor in its decision, since the trial court did not find Chinen’s testimony to be credible. (Id., at 8.) Though the Court of Appeal accepted the trial court’s conclusion on credibility, the Court of Appeal still held that there was insufficient evidence to support the trial court’s findings. (Id.) The Court of Appeal reversed and remanded the trial court’s judgment. (Id.

Ashley shows how vital the sufficiency of evidence is in litigation. Additionally, it is a difficult balancing act in determining whether the evidence is sufficient, and even courts can make mistakes in this process.

Ashley demonstrates how challenging it can be when deciding whether evidence is sufficient or not. In these situations, it is the parties’ responsibility to understand the legal standards for the evidence at issue and make arguments accordingly.

How Underwood Law Firm Can Help You

As seen in Ashley, determining the sufficiency of evidence is a complex act where two different judges can come to opposite conclusions. Even with such a difficult process, it is a critical aspect of litigation that parties must recognize. It is also crucial for parties to research the differing legal standards for sufficient evidence depending on the issue at hand.

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. 

Learn more here.

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