Once co-owners start presenting evidence to a partition referee, the partition trial has begun, and the plaintiff can no longer dismiss the case and start over. In Gray v. Superior Court (1997) 52 Cal.App.4th 165, 173, the Court of Appeal held “that trial has actually commenced, thus cutting off a plaintiff’s right to voluntary dismissal, when the parties appear and present evidence before a referee in a partition proceeding.” A co-owner who loses at the referee hearing cannot wipe it out and try again.
That makes the referee hearing one of the most important days in a partition. Our guides to partition referees, whether a referee is necessary, and referee reports on offsets and accounting cover how referees work. This post covers the case that decides what happens once a referee starts hearing evidence.
Why Gray v. Superior Court Matters
- The referee hearing is the start of trial. A partition trial begins “once evidentiary proceedings are begun before a referee,” even though the referee’s report is only a recommendation. (Gray, at p. 171.)
- No do-over after a bad recommendation. Letting the plaintiff dismiss “in the wake of an unfavorable referee’s recommendation would work an injustice.” (Gray, at p. 173.)
- Objections go to the court, not to a new lawsuit. A party unhappy with the report can ask the court to modify or set it aside under Code of Civil Procedure section 873.290. A dismissal would sidestep that process. (Gray, at p. 173.)
- Sale or division is the main question at trial. Deciding between a sale and a physical division “is the primary determination to be made at trial.” (Gray, at p. 171.)
- A defendant’s answer can ask for relief too. Under Code of Civil Procedure section 872.430, a defendant can request affirmative relief in the answer, without a cross-complaint, and that request was a second reason the dismissal failed. (Gray, at pp. 173–174.)
The Facts: A Family Trust Ranch, a Referee, and a Dismissal 15 Days Later
The property was the Graywood Ranch in Sonoma County, the asset of the Gertrude Katherine Gray Trust. The trust ended when Ms. Gray died, and the ranch was to go to the three beneficiaries, but it was never distributed. Lendal Gray was one beneficiary. Dennis Hunter had acquired half of another beneficiary’s interest. The owners appeared to hold the ranch in common. (Gray, at p. 168.)
Hunter filed for partition by sale in April 1995. Gray’s answer asked that the ranch not be sold and that he be allotted 37 percent of the title, which amounted to a request for a partition in kind. The owners could not agree, so in October 1995 they stipulated to a referee under Code of Civil Procedure section 872.820 to recommend whether the ranch should be divided or sold. (Gray, at pp. 168–169.)
The referee held a two-day evidentiary hearing in April 1996, with seven witnesses, five of them experts. On May 15, 1996, he sent the court an eight-page recommendation: divide the ranch, do not sell it. Fifteen days later, Hunter dismissed his complaint without prejudice. Gray had spent almost $30,000 in attorney’s fees, over $21,000 in witness fees, and almost $1,000 more in costs preparing for the hearing. (Gray, at pp. 169–170.)
Gray moved to vacate the dismissal. The trial court denied the motion because the referee’s recommendation was only advisory, though the judge said the tactic “kind of sticks in my throat a little bit.” Gray petitioned the Court of Appeal. (Gray, at p. 170.)
How the Court of Appeal Decided the Case
Trial Begins When Evidence Goes to the Referee
A plaintiff can dismiss without prejudice only “before the actual commencement of trial.” (See Gray, at p. 171; Code Civ. Proc., § 581, subd. (b)(1).) The question was whether a referee hearing counts. The court explained that the referee is the court’s first examiner of the facts, and the court then accepts, modifies, or sets aside the referee’s findings. (Gray, at p. 171.) It concluded:
“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.”
Gray v. Superior Court (1997) 52 Cal.App.4th 165, 171
Fairness Rules Out a Second Try
The court compared the case to decisions that stopped plaintiffs from dismissing after losing at arbitration, after the defendant had made its showing for summary judgment, or after a ruling that disposed of the case. The common thread was fairness: once the parties have put their facts before a fact-finder, it is unfair to let the plaintiff dismiss and refile. Here, the parties spent two days before the referee with seven witnesses. “Doubtless had real party prevailed before the referee, he would not have dismissed his complaint.” (Gray, at pp. 171–173.)
The court added that the dismissal undercut the partition statutes. A party dissatisfied with a referee’s report can move to modify or set it aside, and the court can order a new report or appoint a new referee under CCP 873.290’s rules on confirming or setting aside a referee’s report. Dismissing the case to escape the report “circumvents this statutory scheme.” (Gray, at p. 173.)
The Answer Had Already Asked for Affirmative Relief
As a second, independent ground, the court held the dismissal was improper because Gray’s answer twice asked for 37 percent of the title, which was a request for affirmative relief. The partition statutes allow that request in the answer, without a cross-complaint, under CCP 872.430’s rule on claims in the answer. Hunter’s argument that Gray needed a cross-complaint was, in the court’s word, “specious.” (Gray, at pp. 168, fn. 2, 173–174.) Our guide to the scope of a partition action explains why many cross-complaints are not needed.
The Result
The Court of Appeal issued a writ of mandate directing the trial court to vacate the dismissal and reinstate the partition complaint, and awarded Gray his costs. (Gray, at p. 174.) That put the case, and the referee’s recommendation, back before the trial court.
Gray v. Superior Court Today
Gray is now a leading case on when a plaintiff loses the right to dismiss, in partition and beyond. In Groth Bros. Oldsmobile, Inc. v. Gallagher (2002) 97 Cal.App.4th 60, 71–73, the Court of Appeal relied on Gray in holding that a plaintiff could not dismiss to escape a tentative ruling sustaining a demurrer without leave to amend, because allowing it would make a mockery of the tentative ruling procedure. In Law Offices of Andrew L. Ellis v. Yang (2009) 178 Cal.App.4th 869, 877–878, the court cited Gray for the rule that the statute’s definition of when trial begins is “illustrative rather than exclusive,” and listed Gray among the cases that cut off the right to dismiss.
Courts have also marked where Gray stops. In Kyle v. Carmon (1999) 71 Cal.App.4th 901, 910, the Court of Appeal held that a hearing on an anti-SLAPP motion (a motion to strike a lawsuit aimed at free speech, short for “strategic lawsuit against public participation”) is not a trial, because the court does not weigh the evidence. A partition referee is different: “The referee does weigh the evidence as a trier of fact.” (Kyle, at p. 910.)
For partition, the rule has not changed: once evidence goes to the referee, the trial has begun. Any challenge to the report goes to the court under CCP 873.290’s rules on confirming or setting aside a referee’s report, and our guide to partition referees covers how they are chosen and paid.
What Gray v. Superior Court Means for California Co-Owners
- Treat the referee hearing as your trial. Bring the appraisals, expert testimony, and records you would bring to court. Our guide to the evidence a referee needs for offsets covers the money side.
- Make the case for a sale with evidence. Under CCP 872.820, the court orders a sale when it is more equitable than dividing the property. Butte Creek Island Ranch v. Crim and Sting v. Beckham show the evidence that wins a sale, and our guide to partition by sale vs. in kind explains the standard.
- Challenge a bad report the right way. The fix for a report you disagree with is a motion to the court under CCP 873.290, not a dismissal. Our page on CCP 873.280’s rules on the referee’s report covers the report itself.
- Choose the referee with care. The referee’s recommendation carries real weight. See our stipulation and order appointing a partition referee and our guide to using a Realtor as the referee.
- Trust and inherited property is partitioned the same way. The Graywood Ranch was a family trust asset that never got distributed. Our guide to forcing the sale of an inherited house covers the same situation for a family home.
Headed to a Referee Hearing? Get Ready for Trial
Under Gray, the referee hearing is not a dress rehearsal. A partition action moves from the complaint through the referee’s report to an interlocutory judgment and a sale, and the evidence you put in front of the referee shapes every step after it.
Talkov Law can help. With 12 full-time partition attorneys and experience in over 650 partition actions throughout California, our team handles every step, from the complaint through the partition sale and the final distribution of proceeds. Call (877) PARTITION (727-8484) today or contact us online to get started.
