How To Recover Attorney’s Fees in a Partition Action
Co-ownership of real estate in California can be expensive when one co-owner, known in the law as a co-tenant, does not cooperate in the sale of the property. This often occurs when the uncooperative co-tenant is enjoying the benefits of a property without contributing to the expenses of the property. When a partition action (lawsuit) is filed, California courts are empowered to partition the property by sale, whereby the property will be sold to the highest bidder. Sometimes the highest bidder is a third-party, while other times the highest bidder is one of the co-owners.
In connection with the sale, the court will enter a judgment as to how the proceeds of sale are to be distributed. Code Civ. Proc. § 873.810. Notably, before the proceeds are distributed to the co-owners, the costs of partition must be paid. Code Civ. Proc. § 873.820(b). In turn, the cost of partition include “Reasonable attorney’s fees incurred or paid by a party for the common benefit.” Code Civ. Proc. § 874.010(a). While generally “the court shall apportion the costs of partition among the parties in proportion to their interests,” the court may “make such other apportionment as may be equitable.” Code Civ. Proc. § 874.040. In other words, the court can order attorney’s fees to be recouped entirely by the plaintiff who paid an attorney to file the partition action from the net proceeds that would have been distributed to the uncooperative defendant.
Can a Co-Owner Recover All Attorneys’ Fees in a Partition Action?
Many co-owners wish to recover 100% of their attorney’s fees in a partition action, and understandably so.
As a secondary source on California law explains: “The fees must be apportioned among the parties in proportion to their interests, unless the court determines that some other apportionment is more equitable. (C.C.P. 874.040.) (See Finney v. Gomez (2003) 111 C.A.4th 527, 545, 3 C.R.3d 604 [trial court abused discretion in awarding 100% of fees incurred in partition action to plaintiff; fees should have been divided in proportion to parties’ ownership interest in property; additional fees that plaintiff incurred in consulting bankruptcy attorney should not have been awarded at all without evidence that they were for common benefit]; Lin v. Jeng (2012) 203 C.A.4th 1008, 1022, 138 C.R.3d 84 [trial court properly apportioned attorneys’ fees to place entire liability for plaintiff’s fees on plaintiff, rather than apportioning them among her siblings according to their interests; C.C.P. 874.040 permits trial court to apportion based on equitable considerations, which here included finding that plaintiff manipulated process to deprive siblings of their fair share]; Orien v. Lutz (2017) 16 C.A.5th 957, 965, 224 C.R.3d 736 [fees incurred for common benefit by either party in contested partition proceeding may be allocated among parties].)” Partition Actions., 7 Witkin, Cal. Proc. 6th Judgm (2022) § 229; see In re Flynn, 297 B.R. 599, 605–06 (B.A.P. 9th Cir. 2003), rev’d and remanded on other grounds, 418 F.3d 1005 (9th Cir. 2005).
“[T]he ‘common benefit’ in a partition action is the proper distribution of the respective shares and interests in said property by the ultimate judgment of the court. This sometimes will require that ‘controversies’ be ‘litigated’ to correctly determine those shares and interests, but this ultimately can be for the common benefit as well. The fact that a party resists the partition does not change this…. The presence and litigation of controversial issues between all the parties does not preclude the allowance of attorney’s fees for services connected with such issues where such services are found to be for the common benefit of the parties… We note that while the presence of contested issues does not bar the allocation of fees in partition actions, defendants are nonetheless protected from plaintiffs who bring unfounded claims or otherwise drive up costs unnecessarily, just as plaintiffs are protected from unscrupulous defendants. Sections 874.010 and 874.040 provide numerous avenues for trial courts to adjust the allocation of costs if, for example, fees are incurred for purposes that unduly exacerbate the dispute or do not provide a common benefit to all parties. For instance, under section 874.010 a court may find that fees incurred “advocat[ing] a position of limited merit” are not for the common benefit and should be borne by the party “pressing” such “spurious matters.'” Orien v. Lutz (2017) 16 Cal.App.5th 957, 967–968.
Thus, it is “proper to reduce fees to plaintiff who presented ‘a time consuming and meritless contention that he should receive some amount greater than that to which he was legally entitled’ Or, a court may achieve a similar result through an exercise of its equitable discretion under section 874.040 and require a party to bear its own fees…A court also can adjust the allocation of fees incurred by a party to the extent they are not “reasonable” as required by section 874.010, subdivision (a).” Orien v. Lutz (2017) 16 Cal.App.5th 957, 967–968.
The cases have repeatedly clarified that a deviation from the normal apportionment in proportion to the interests of the parties “must be supported by substantial evidence in the record.” Charco Ventures v. Sandoval, No. C060305, 2010 WL 227647, 2010 Cal. App. Unpub. LEXIS 448, *22 (Cal. App. 3d Dist. Jan. 22, 2010); see Finney v. Gomez (2003) 111 Cal.App.4th 527, 545; Stutz v. Davis (1981) 122 Cal.App.3d 1, 5. “The statute’s broad language does not limit the trial court’s equitable discretion . . . .” Lin v. Jeng (2012) 203 Cal.App.4th 1008, 1025.
Note that while recovering all attorney’s fees is possible, the vast majority of partitions result in settlement whereby parties agree to pay their own partition attorney’s fees. While the law books are filled with interest cases about recovery of attorney’s fees, most co-owners find themselves preferring an outcome that ends a case sooner, rather than later.
The Trick to Recovering Attorney’s Fees in a Partition: Document the Non-Cooperation
Plaintiffs seeking to recover attorney’s fees should document the record that the partition action was filed due to the lack of cooperation of the co-tenant. Plaintiffs should provide this information to the court. As such, the court’s ruling can specify the basis of the equitable apportionment of attorney’s fees. Indeed, if a partition action is filed solely because a co-tenant refuses to cooperate in employing a real estate broker to list and sell the property just as the court will do, how could the partition action be for the benefit of anyone other than the uncooperative co-tenant? Apparently, the co-tenant believes their rights were not being protected outside of court.
Such lack of cooperation is all too common. To the extent the uncooperative co-tenant does not appear or otherwise raise legitimate issues in the partition action, courts should consider assessing the fees entirely against those who forced their co-tenants into litigation to reach the same goal that could have been reached without the involvement of attorneys.
If you own property as a tenant-in-common or joint-tenant in California, contact a California partition attorney to discuss your rights.
Keep in mind that all of this information likely does not apply to property a married couple owns as joint tenants. A divorce attorney can assist you in selling jointly owned property in a divorce.
Update: Court Agrees that Partition Attorney’s Fees Can be Recovered for Refusal to Cooperate
UPDATE on May 15, 2017: On November 23, 2016, the California Court of Appeal found that “[t]he evidence presented at trial was more than sufficient to support the court’s decision to impose the cost burden entirely on appellant” where the co-owner “opposed the partition by sale” and “resisted the effort . . . to sell the property so that they could receive the financial benefit of the sale.” Cummings v. Cummings, No. H040710, 2016 WL 7077611, at *4 (Cal. Ct. App. Nov. 23, 2016) (unpublished). This opinion supports the notion that a court order of partition may burden uncooperative co-owners with the costs of partition, including attorney’s fees and court costs.
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