Lake Tahoe Partition Lawyers

Lake Tahoe was originally inhabited by Washoe Native Americans. On February 14, 1844, Lieutenant John C. Fremont became the first European-American to discover this land. As a popular summer and winter destination with an abundance of rental properties and a growing residential population, disputes between co-owners can arise. Generally, a quality Lake Tahoe Attorneys 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?

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 Tahoe Partition Lawyer will be able to share information on this process with you.

What Are the Steps in a Partition Action?

Under the Partition of Real Property Act, the court instead appoints an appraiser to do the heavy lifting. The new statute states that the court “shall determine the fair market value of the property by ordering an appraisal.” (CCP § 874.316.) The court doesn’t have to be the one to order the appraisal, but this is only if all the co-owners agree to a different method of valuation.

If, however, an appraisal occurs, it shall be conducted by a disinterested third-party real estate appraiser licensed to determine the fair market value of properties. After the appraisal is conducted, parties may file objections to the value and can even offer additional evidence of value to the court.

After the valuation is complete, parties will be introduced to the key feature of the new statute: the buy-out option. If a co-owner requests a partition by sale, then the court will notify the other co-owners that they may buy all the interests of the cotenant that requested the partition. (CCP § 874.317.)

This is, essentially, a right of first refusal. The co-owners who don’t want the property sold now have the option to simply buy out the requesting party. Additionally, the buy-out price will be based on the property’s valuation, determined earlier in the litigation. And if one or more parties exercise the buy-out, then the court will reapportion ownership percentages based on the price paid. A top Lake Tahoe Partition lawyer will be familiar with the process.

Can You Recover Attorneys’ Fees in a Partition Action?

Code of Civil Procedure, section 874.010 states that “[t]he costs of partition include: (a) [r]easonable attorney’s fees incurred or paid by a party for the common benefit.”

Interestingly, the costs of partition can also include reasonable expenses necessarily incurred by a party for the common benefit in prosecuting or defending other actions or proceedings for the protection, confirmation, or perfection of title, setting the boundaries, or making a survey of the property. (CCP § 874.020.)

That attorney’s fees are considered “costs” associated with a partition action is important because Section 874.040 goes on to state the “court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable.” A knowledgeable Lake Tahoe Partition Attorney will be able to give you good advice on these issues.

What are claims for “contribution”?

Following the sale of the property, the referee will divide the proceeds of the sale among the parties in according to amounts expended for the “common benefit.”

When the sale is confirmed by the court, the court may enter an order about the proceeds of sale. Under the law, the sale proceeds must be applied in a defined order. Specifically, Code of Civil Procedure section 873.820 states that the sale proceeds go towards (a) payment of expenses of the sale, (b) payment of the other costs of partition, (c) payment of any liens on the property in priority, (d) and distribution of the remainder to the parties in proportion to their shares as determined by the court.

Generally, the last part of the priority list includes what is commonly known as an “accounting” or a determination of whether one party has contributed more than their fair share to the property in the form of taxes, improvements, or other benefits for the property. For example, if one party is a 50% owner of the property, but has paid all of the property taxes for the property, then that property owner will have a claim for the remaining 50% above their interest in the property. An experienced partition lawyer will be able to help a co-owner determine their claims to the proceeds and make these arguments to the court in an effective way. An experienced Lake Tahoe Partition Attorney will be intimately familiar with these matters.

A Partition Case Study: Johnson v. Johnson (2023)

Generally, an owner of real property that is owned by several persons concurrently or in successive estates may commence and maintain a partition action. (CCP § 872.210(a).) In a partition action, the court may enter an interlocutory judgment determining the interests of the parties in the property and order a partition. (CCP § 872.720.) The following paragraphs discuss how a court can decide an appeal to an interlocutory judgment in Johnson v. Johnson (2023) 2023 WL 2924828.

In Johnson, Curtis and Ross Johnson filed an action against Kent Johnson seeking to partition the Property. The three men were siblings who inherited the Property after their father died. Their father had a life estate, with the remainder to his issue. The trial court entered an interlocutory judgment, finding that each of the men had an undivided one-half interest in the Property which vested when their father died. The trial court also ordered the Property to be partitioned by sale rather than physical division because the Property was a single-family residence not amenable to physical division. Kent then appealed from the interlocutory judgment.

Generally, a trial court’s orders and judgments are presumed to be correct, and in appeal, the appellant must affirmatively show an error. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) In proving error, the appellant is required to provide meaningful legal analysis supported by cited authority and facts in the record to support his or her claim of error. In addition, the brief must “state each point under a separate heading or subheading summarizing the point,” and is not a mere technical requirement. (Cal. Rules of Court, rule 8.204(a)(1)(b). The California Third District Court of Appeal found that Kent’s arguments and headings contravened the requirements of the court, and although Kent was representing himself on appeal, the rules of appellate procedure were still applicable to him. (McComber v. Wells (1999) 72 Cal.App.4th 512, 522.)

Kent contended that the trial court lacked personal jurisdiction and that his rights the equal protection were violated because Curtis and Ross commenced and maintained the partition action without having title to the Property. Based on his contention that Curtis and Ross’s assertion of ownership was premature, he argued that Curtis and Ross fraudulently obtained the interlocutory judgment by asserting that they held title to the Property.

However, the Court of Appeal disagreed with Kent, finding that when a life tenant dies with designated remaindermen, the property interest terminates upon that life tenant’s death and passes to the remaindermen without the need to go through probate court, though the remaindermen must clear the life tenant from the title. (Prob. Code §§ 6660(b)(1), 13050(a)(1).) So, when his father died on December 19, 2016, the interest that Kent, Curtis, and Ross owned vested on that day. Further, the court found that the title was cleared as to their father’s interest since Curtis and Ross submitted an affidavit of death of the life tenant. Kent cited to evidence that in a separate proceeding in 2019 under the Probate Code section 248, the court decreed that the three brothers were the only issue under the decree and thus they each owned an undivided one-third interest in the Property.

However, the Court of Appeal held that Kent cited to no authority demonstrating that Curtis and Ross did not own any portion of the Property until the filing of this action. Additionally, Kent failed to show that the trial court erred in concluding that Curtis and Ross owned the Property before commencing the partition action.

Kent also contended that the trial court violated his equal protection right by not transferring the suit to probate court based on subject matter jurisdiction. Kent failed to cite the appropriate authorities to suggest that the partition action could have been transferred to probate court and that the trial court here lacked subject matter jurisdiction. As mentioned above, the Court of Appeal noted that “when a decedent holds property as a life tenant with designated remainderpersons, the property interest terminates on the decedent’s death and passes to the remainderpersons without the necessity of probate.” Further, the Court of Appeal found that probate proceedings are concerned with the administration of an estate. As such, if there is no property, then there is nothing to administer.

Kent argued the trial court lacked jurisdiction and violated his right to equal protection in entering the interlocutory judgment during pendency of his appeal in the related Probate Code section 248 proceeding. Kent argued that an automatic stay under Code of Civil Procedure section 916(a), can apply to proceedings in a different case from the one appealed. However, the Court of Appeal held that Kent failed to identify any case law applying a stay to a related case. The authorities Kent relied on only “discussed the effect of an appeal on trial proceedings in the same action and are thus inapplicable here.” (Cole v. Hammond (2019) 37 Cal.App.5th 912, 925.)

Further, the Supreme Court of California has noted that “an appeal does not stay proceedings on ‘ancillary or collateral matters which do not affect the judgment [or order] on appeal’ even though those proceedings may render the appeal moot.” (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189-190.) In the current case, the partition proceedings would have happened anyway regardless of the result of the appeal regarding the Probate Code section 248 order. The trial court had stated that it was obligated to determine the parties’ interests in the Property in the partition action and could make that determination based on the evidence presented at trial, without relying on the ownership determination under the Probate Code section 248 decree. As such, the Court of Appeal found that Kent failed to establish that any automatic stay applied to prevent the trial court from entering judgment on the partition action. Therefore, the Court of Appeal affirmed the trial court’s judgment.

How the Underwood Law Firm Can Help

A partition action is a forced sale of property by one of the co-owners under court supervision as part of the legal system. After filing the lawsuit, what happens next is usually the determination of the parties’ interests and the appointment of a referee and the sale of the property. Generally, during this stage, a party may move for an interlocutory judgment. As seen above, a party may appeal the judgement.

As there are various stages in the partition process, you may benefit from good legal advice on the topic if you are considering it as an option. If you find yourself contemplating a partition action, or faced with defending one, then please contact Underwood Law Firm, P.C. for an initial consultation.

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