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.
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.
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.
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.