Wallace v. Daley – Accounting in California Partition Actions

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Wallace v. Daley (1990) 220 Cal.App. 3d 1028

Perhaps the most frequently cited case in all of California partition law is Wallace v. Daley (1990) 220 Cal.App. 3d 1028, which sets forth the general principle that every partition will include an accounting of offsets. The famous quote from Wallace v. Daley is that:

Every partition action includes a final accounting according to the principles of equity for both charges and credits upon each co-tenant’s interest. 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.

Wallace v. Daley (1990) 220 Cal.App. 3d 1028, 1035–36 (citing California Code of Civil Procedure § 872.140)

Wallace v. Daley (1990) 220 Cal.App. 3d 1028 cited Code of Civil Procedure § 872.140, which provides as follows:

The court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.

California Code of Civil Procedure § 872.140

In the context of this statute, one court explained that: “There is merit to the contention a plaintiff may be generally entitled to an accounting by requesting a partition.”[1]Finney v. Gomez (2003) 111 Cal. App. 4th 527, 539

Even further, another court noted that: “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

The bottom line is that parties in a partition action are entitled to request that the court divide the proceeds of sale in a manner that includes the uneven payments by parties for the mortgage, taxes, insurance, repairs, improvements, down payment, and any other matter through an accounting of offsets, also known as compensatory adjustments pursuant to Wallace v. Daley (1990) 220 Cal.App. 3d 1028, 1035–36.

References

References
1 Finney v. Gomez (2003) 111 Cal. App. 4th 527, 539
2 Demetris v. Demetris (1954) 125 Cal.App.2d 440, 445
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