Norwalk Partition Lawyer

The City of Norwalk was first home to the Shoshonean Native American tribe and then later settled by the Spanish in the late 1760s. In its early days, Norwalk became known as a dairy center. Norwalk was incorporated on August 26, 1957, and is now home to over 100,000 residents. Today, Norwalk is one of the most fastest developing and growing cities in the United States. According to Redfin, In May 2023, Norwalk home prices were down 2.8% compared to last year, selling for a median price of $645K. On average, homes in Norwalk sell after 29 days on the market compared to 19 days last year. There were 30 homes sold in May this year, down from 42 last year. The city’s growing population with over 65% of housing units being owner-occupied suggests that many homes are jointly owned. As a result, residents of Norwalk may face disputes with co-owners.

Frequently, there are at least four common types of partitions actions for which a Norwalk 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?

Generally, partition is any division of real property between co-owners, where each co-owner obtains an ownership interest. A partition action is the forced sale of real property by a co-owner under the court’s supervision. Partition merely determines and allocates to the parties their respective interests in the property. (Cunha v. Hughes (1898) 122 Cal. 111.)

In the partitioning of property, the common interests in the property are segregated or terminated. (Summers v. Superior Court(Wan Fen Tan) 24 Cal.App.5th 138.) Partitions are generally favored by the and may occur by an agreement between the co-owners or by a judgment in an action. Typically, a partition may be made by either a physical division or sale of the property. in many modern transactions, a partition of the property by sale is preferable since often times, a division of the property will result in parcels that are not equal to the value of the whole property before the division. (Cummings v. Dessel (2017) 13 Cal.App.5th 589, 597.) Also, a “physical division may be impossible due to zoning regulations or may be highly impractical.” (Butte Creek Island Ranch v. Crim (1982) 136 Cal.App.3d 360, 365.) The best Norwalk Partition Lawyer will be able to share information on this process with you.

What Are the Steps in a Partition Action?

Generally, the first step in the partition lawsuit process is not a lawsuit, but an earnest attempt to resolve the matter informally, such as through a partition agreement. Only when it is clear that litigation is the only option, is it clear that a partition lawsuit is appropriate.

When it is clear that a partition lawsuit is necessary, then the process begins with the filing of a complaint in the county where the property is located. There are several technical requirements for the partition complaint, and many important steps that must be taken during the lawsuit to ensure that the process is managed effectively.

In a partition lawsuit, there are generally four different steps. First, the court determines each party’s ownership interests. Second, the court will decide on the manner of sale. Third, the court will order the property be sold. Fourth, the proceeds from the sale will be divided between the parties based on their relative contributions to the property.

While some may believe that inherited property cannot be partitioned, this is incorrect. Instead, when the property is owned as the result of an inheritance, there may be an additional step for an appraisal, and a right of first refusal, as provided by the Uniform Partition of Heirs Act. Under this act, where a co-tenant requests partition by sale, the law gives the non-partition owner the option to buy all of the interests of the co-tenants who requested the sale. A top Norwalk Partition lawyer will be familiar with the process.

Attorney’s Fees

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 Norwalk 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 Norwalk Partition Attorney will be intimately familiar with these matters.

A Partition Case Study: Lipscomb v. Girardi (2018)

A party to a partition action may be entitled to partition as a matter of right depending on their interest in the property. Partition as to concurrent interests in the property is a right unless barred by a valid waiver (CCP § 872.710(b)). Partition as to successive estates is allowed if it is in the best interests of the parties. (CCP § 872.710(c)). The following paragraphs discuss how the Court of Appeal determines whether a trial court erred in determining that a party did not waive their right to partition in Lipscomb v. Girardi (2018) 2018 WL 1127686.

In Lipscomb, Lee Lipscomb filed suit against Thomas Girardi, G & L Aviation (G & L), Girardi Kreese (G &K), 1122 Wilshire Partnership and 1126 Wilshire Partnership, alleging several causes of action: (1) partition of the 1122 Wilshire building and the parking license; (2) dissolution of the 1122 partnership; (3) declaratory relief; and (4) breach of fiduciary duty.

Girardi, for decades, owned the building at 1126 Wilshire Boulevard, through an entity known as 1126 Wilshire Partnership, where he operated his law firm, G & K. Around 1997-1998, a three-story building to the east, 1122 Wilshire Boulevard became available for purchase. The property included a rear parking lot with 28 parking spaces. Girardi wanted to buy the property to renovate it to be able to occupy the two side-by-side buildings, enabling his firm to expand.

The 1122 Wilshire Property was purchased for $1.1 million, with $100,000 down and a $1 million loan personally guaranteed by Girardi and Walter Lack. Title was taken in the name of G & L (a general partnership formed by Girardi and Lack) as 75% owner, and Lipscomb as 25% owner. G & L and Lipscomb formed a new general partnership called 1122 Wilshire Building Partnership to own and operate the building.

G & K extensively renovated the 1122 property in 1999, including creating an opening wall between 1122 Wilshire and 1126 Wilshire, so that employees of the firm could walk back and forth between the two buildings. The cost of the improvements was about $2.2 million, and was borne entirely by G & K. By 2000, the renovations were completed, and G & K expanded its offices into the 1122 building.

Before moving into the building, the partners of 1122 Wilshire Building Partnership contributed to the mortgage and other expenses in proportion to their ownership interests. After G & K took occupancy, it paid $10,000 in monthly rent, as well as utilities, taxes, and insurance. There was no written lease agreement and there was no defined time that the rental agreement would continue.

In 2005, G & L and Lipscomb sold the parking lots to a developer for $925,000. This enabled them to pay off the mortgage on the 1122 Wilshire Property and to distribute the remainder to themselves. The sellers also received the right to use 20 nearby parking spaces (the parking license) for a period of 10 years.

After the mortgage was paid off, G & K continued to pay $10,000 per month rent to the 1122 Wilshire Building Partnership for another 7 years. At trial, Girardi explained he continued paying the $10,000 rent because G & K was still receiving the benefit of the parking license. G & K ceased paying rent in mid-2012.

In June 2014 Lipscomb filed the suit. The Girardi defendants filed a cross-complaint against Lipscomb, asserting causes of action for (1) breach of contract; (2) breach of fiduciary duty; (3) bad faith; (4) declaratory relief; (5) quiet title to the 1122 Wilshire Building; (6) remove cloud on title; and (7) an accounting.

The parties requested a jury trial. On December 8, 2015, the trial court granted Lipscomb’s motion to sever trial of equitable claims and defenses from trial of the legal claims. There had been no trial of the remaining legal claims for breach of fiduciary duty and breach of contract. On December 18, 2015, the trial court granted summary adjudication in favor of Lipscomb on the Girardi defendants’ quiet title claims, and against G & K on its claims for damages and an accounting.

In March 2016, the equitable claims came on for trial. Subsequently, the trial court issued a statement of decision, which determined that Lipscomb owned an undivided 25 percent tenancy in common interest in the real property located at 1122 Wilshire. Absent a waiver, Lipscomb was entitled to partition. The court found that Lipscomb had not waived his right to partition.

The trial court ordered a partition by sale through a referee, with the sale proceeds allocated 75 percent to G & L and 25 percent to Lipscomb. Lipscomb was also entitled to credits against G & L’s interests: $301,165.25 for the fair rental value of 1122 Wilshire from August 1, 2012, through June 30, 2016, and a per die of $220.73 thereafter until the date of sale; and $92,400 for Lipscomb’s share of the value of the 10-year parking license. Thereafter, the trial court entered an interlocutory judgment for partition. The Girardi defendants appealed.

The Girardi defendants contended that the trial court erred in ruling that G & L lacked standing to oppose partition, the trial court erred in finding Lipscomb did not impliedly waive the right of partition, the trial court erred in refusing to consider their equitable arguments and in ruling that Lipscomb was entitled to partition “as a matter of right” regardless of the equities, the trial court erred in ordering a partition by sale rather than a partition in kind, and that the trial court erred in charging G & L for debts allegedly owed by G & K for unpaid rent and the value of the parking license.

The trial court ruled that G & L lacked standing to oppose partition because “Lack still holds a 50% partnership interest in G & L” and Girardi admittedly lacked Lack’s authorization to have G & L oppose partition. Further, while the trial court found that G & L lacked standing to oppose partition, the trial court considered the Girardi defendants’ extensive arguments in opposition before determining that partition was appropriate.

As to the waiver issue, the Court of Appeal agreed that the trial court erred in finding that Lipscomb did not impliedly waive the right to partition. Contrary to the trial court’s ruling, the Court of Appeal stated that waiver of partition was not limited to where property is purchased to guarantee a steam of monthly income through a written lease for a term of years.

Citing American Medical International, Inc. v. Feller (1976), the Court of Appeal clarifies that “situations in which the right of partition is [impliedly] waived are varied in application.” It found that California law was clear that the right of partition could be waived in multiple ways, including what was done in this case, acquiring property for a purpose that would be defeated by partition. The Court of Appeal also concluded that the error was prejudicial as the defendants had presented substantial evidence from which a trier of fact could have found an implied waiver of partition.

Even though the Court of Appeal’s finding required the judgment to be reversed, it also addressed the Girardi defendants’ other contentions. The Court found no abuse in the trial court’s rejection of a physical division of the property because after the revision to partition law in 1976, the court had discretion to order a partition by sale if it was more equitable.

Additionally, the Court of Appeal did not find merit in the contention that the trial court erred in refusing to consider the defendants’ equitable arguments in opposition to partition. The Court makes clear that this case was one where the parties’ interests were concurrent and not successive. As such, according to CCP § 872.710, partition as to concurrent interests shall be as of right unless barred by a valid waiver, and so the trial court properly ruled that Lipscomb was entitled to partition.

Lastly, the Court of Appeal did find that the trial court did err in ordering G & L to pay Lipscomb for G & K’s unpaid rent and parking because that finding was beyond the scope of the partition trial. The issue of damages for breach of a fiduciary duty should have been reserved for the legal phase of the proceedings, not the equitable one.

In the end, the Court of Appeal reversed the interlocutory judgment of partition and remanded the matter for further proceedings consistent with its opinion. The Girardi defendants were also able to recover their costs on appeal.

How the Underwood Law Firm Can Help

A court’s determination of ownership interests in a property depends on the facts and circumstances of each particular case. Factors such as agreements and who pays for certain expenses for the property can ultimately affect the outcome of a partition case. If you are considering partition as an option, or find yourself defending one, then you may benefit from good legal advice on the topic. Please contact Underwood Law Firm, P.C., for an initial consultation.

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