Code of Civil Procedure 873.850 – Continuance of Action Between Parties if Proceeds Not Allocated; Determination (Partition Actions)

California Code of Civil Procedure 873.850 is the California partition statute that allows the court to allocate the proceeds of sale through an accounting of offsets, inclusions, and other claims between the parties. The statute provides that:

When the proceeds of the sale belonging to persons who are parties to the action, whether known or unknown, have not been allocated among such parties, the action may be continued as between such parties, for the determination of their respective claims thereto, which must be ascertained and adjudged by the court. Further testimony may be taken in court, or by a referee, at the discretion of the court, and the court may, if necessary, require such parties to present the facts or law in controversy, by pleadings, as in an original action.

California Code of Civil Procedure 873.850

This allowance of respective claims between the parties in Section 873.850 follows the requirement that, following the ordinary costs of sale, “The proceeds of sale for any property sold shall” result in a “Distribution of the residue among the parties in proportion to their shares as determined by the court.”^[1]California Code of Civil Procedure 873.820(d); see California Code of Civil Procedure 873.810

For example: “Where one cotenant has paid more than his proportion of the purchase price of the land, he is entitled on partition to an accounting therefor.” ^[2]Demetris v. Demetris (1954) 125 Cal.App. 2d 440, 445

Examples of such credits “include expenditures in excess of the co-tenant’s fractional share for necessary repairs, improvements that enhance the value of the property, taxes, payments of principal and interest on mortgages, and other liens, insurance for the common benefit, and protection and preservation of title.”^[3]Wallace v. Daley (1990) 220 Cal.App. 3d 1028, 1035–36 (citing California Code of Civil Procedure § 872.140)

However, there may be limits to the rights of offset. As one treatise explains: “In a suit for partition, it is a general rule that all equities and conflicting claims existing between the parties and arising out of their relation to the property to be partitioned may be adjusted.”^[4]48 Cal. Jur. 3d Partition § 14 (citing Demetris v. Demetris (1954) 125 Cal.App. 2d 440, 444-45)

Referee’s Report on Offsets

This statute also gives the trial court jurisdiction to resolve claims for compensatory adjustments
after completion of the sale of the real property. Further, the trial court has discretion to assign
the matter to the referee to gather evidence and make a recommendation, or the court may
conduct further proceedings including taking further testimony on these subjects. Moreover, the
court, in all cases, order allowance, accounting, contribution, or other compensatory adjustment
among the parties according to the principles of equity. (C.C.P. § 872.140.)

Moreover, a referee’s report is an important to assist the court in evidentiary gathering and the
fact-finding process to support the court as a part of the trial. As stated by the California Court of
Appeal: “The court may appoint a referee to make a report on the facts and circumstances of the case, and make a recommendation to the court on precisely this primary determination. ([CCP] § 872.820, subd. (b).) Although his or her report and recommendation is advisory, the referee clearly serves as the initial examiner of the facts, and perhaps the law, in a partition action, under the aegis of the appointing court. The referee’s determinations are either accepted by the court, modified, or set aside. ([CCP] §873.290, subd. (b).) Given the general role of referees as preliminary examiners of fact, we have no difficulty in concluding that trial in a partition action has commenced once evidentiary proceedings are begun before a referee. Despite the fact that the partition referee’s report was not in itself dispositive or tantamount to a final judgment, the trial proceedings began when the parties appeared before the referee to present their evidence.” ^[5]Gray v. Superior Court (1997) 52 Cal.App.4th 165, 171. In all, the report may be used in the Courts final determination of the issues.

Contact an Experienced Partition Attorney in California

If you want to end your co-ownership relationship, but your co-owner won’t agree, a partition action is your only option. Our knowledgeable partition lawyers have years of experience ending co-ownership disputes and can help you unlock the equity in your property. For a free, 15-minute consultation with an experienced partition attorney at Talkov Law, call (844) 4-TALKOV (825568), email us at info(at)talkovlaw.com, or fill out a contact form online. Contact Talkov Law today to find out how you can pay nothing today and have your legal fees paid from the proceeds of sale of your property!