Reasonable attorney’s fees in a contested partition action can be incurred for the common benefit and allocated among the co-owners—even when one owner opposes the partition. In Orien v. Lutz (2017) 16 Cal.App.5th 957, 966–968, the Court of Appeal explained that resolving contested issues can benefit all owners by determining and distributing their proper shares. Opposition alone does not defeat the common benefit. The court must determine which fees are reasonable and incurred for that benefit, then apportion them according to ownership interests or another equitable allocation.
Why Orien v. Lutz Matters
Co-owners who are sued for partition often assume that if they fight, the co-owner who filed will be stuck paying for the lawyers. Orien says otherwise. Under Code of Civil Procedure section 874.010, reasonable attorney’s fees “incurred or paid by a party for the common benefit” are a cost of partition, and section 874.040 divides those costs by ownership share unless another split is fairer. Orien holds that a fight does not change that:
- Fees in a contested partition can still be for the common benefit, and the defendants’ reasonable fees can be shared too.
- The court can still shift fees onto a co-owner who presses a position of limited merit or runs up unreasonable fees.
- A typical fee clause in a co-owners’ agreement does not turn a partition into a contract case where the winner takes all.
Along with Finney v. Gomez and Lin v. Jeng, it is one of the main cases on attorney’s fees in a California partition action.
The Facts: Three Siblings, Two Houses, and a Settlement Agreement
In 2003, a mother gave two homes to her three children, Stara Orien, Mista Lutz, and Russell Howells, each with a one-third interest as tenants in common. In 2006, they signed a settlement agreement to end a probate dispute. It said they could sell the homes if they all agreed, but that this “shall not prevent any one or more of the parties from filing a partition action.” A separate clause gave the “prevailing party” its attorney’s fees in any lawsuit to enforce the agreement or prevent its breach. (Orien, at p. 960.)
In 2013, Orien filed for partition by sale and won an interlocutory judgment, the first-phase order under section 872.720. The trial court then treated her case as one to enforce the settlement agreement and ordered Lutz and Howells to pay all of her fees under the contract’s fee clause. They appealed. (Orien, at pp. 959–961.)
How the Court of Appeal Reached Its Decision
Fighting the Partition Does Not Change the Common Benefit
Lutz and Howells argued that fees spent on a partition they opposed could not benefit them, since they wanted to keep the homes. The court disagreed:
“We disagree that fees incurred by plaintiffs in contested proceedings cannot be for the common benefit, but agree that reasonable fees incurred for the common benefit by defendants to a partition action may also be allocated among the parties.”
Orien, at p. 966
A partition settles each owner’s share and divides the property accordingly, and that is a benefit to everyone. “The fact that a party resists the partition does not change this.” (Orien, at p. 967.)
The Court Can Still Shift Fees for Bad Positions
Sharing is the starting point, not the end. A court may find that fees spent “advocat[ing] a position of limited merit” are not for the common benefit and should fall on the co-owner who pressed it. It can also refuse to share unreasonable fees, or, as a matter of fairness under section 874.040, make a party pay its own fees. (Orien, at p. 968.) The court pointed to Lin v. Jeng (2012) 203 Cal.App.4th 1008, where a co-owner who tried to keep her siblings from their rightful shares had to bear her own fees.
The Contract Fee Clause Did Not Apply
Orien’s right to partition came from the statute, not the agreement. “A co-owner of property has an absolute right to partition unless barred by a valid waiver.” (Orien, at p. 962, quoting LEG Investments v. Boxler (2010) 183 Cal.App.4th 484, 493.) The agreement’s “shall not prevent” language simply preserved that existing right. And the fee clause reached only lawsuits to enforce the agreement or prevent its breach: “Because a partition action accomplishes neither of these things, the attorney fee provision cannot be interpreted to extend to it.” (Orien, at p. 965.)
Advice for Anyone Drafting a Co-Ownership Agreement
The court explained why the “shall not prevent” language was still worth including. Because co-owners can waive partition by contract, it said, “the wise drafter of an agreement among co-owners of property will include language making clear no such waiver is intended.” (Orien, at p. 963.) Otherwise, other provisions might later be read as an implied waiver of the right to partition.
The Court of Appeal reversed the order making Lutz and Howells pay all of Orien’s fees. On remand, the trial court was to decide the reasonable fees of both sides incurred for the common benefit and divide them under the partition statutes. (Orien, at pp. 968–969.) The order for partition by sale was not challenged.
What Orien v. Lutz Means for California Co-Owners
- Fighting a partition does not shift the fees onto the co-owner who filed. Reasonable fees for the common benefit are usually shared and paid from the sale proceeds. See who pays for a partition action.
- A co-owner who presses weak positions or runs up costs may end up paying more. See recovering partition attorney’s fees against an uncooperative co-owner.
- A standard prevailing-party fee clause usually does not cover a partition action.
- Any co-ownership or settlement agreement should say plainly that the right to partition is not waived. See did I accidentally waive my right to partition.
Protect Your Right to Partition and Your Fees
If you share inherited property with siblings, an agreement among you rarely stands in the way of a sale, and their resistance does not leave you paying for everything. When you are ready, you can file a partition lawsuit.
Talkov Law can help. With 12 full-time partition attorneys and experience in over 650 partition actions throughout California, our team handles every step of the process, from reviewing your co-ownership agreement through the sale and the final division of proceeds and fees. Call (877) PARTITION (727-8484) today or contact us online to get started.
