Judge: Christian R. Gullon, Case: 22PSCV00883, Date: 2025-03-24 Tentative Ruling

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Case Number: 22PSCV00883    Hearing Date: March 24, 2025    Dept: O

Tentative Ruling

MOTION FOR BUYOUT PURSUANT TO THE UNIFORM PARTITION OF HEIRS PROPERTY ACT is TBD; whether Plaintiff is entitled to unpaid rent by Defendant has not been addressed.

Background

This is a real property case. Plaintiff EDWARD CHAPPELL (the father) alleges the following against Defendants LILLIAN CHAPPELL (“Lillian”)[1]and MARTIN CHAPPELL (the son): Plaintiff and Lillian were married, and Martin is their son. Defendant Martin resides with Plaintiff and is committing waste. Plaintiff seeks partition by sale because Defendants refuses to buy out Plaintiff's interest in the real property. (Complaint p. 3.)[2]

On August 18, 2022, Plaintiff filed the instant action for partition.

On October 12, 2022, Defendant Martin filed his answer.

On October 23, 2023, Defendant filed a MOTION TO APPOINT APPRAISER PURSUANT TO UNIFORM PARTITION OF HEIRS PROPERTY ACT AND TO APPOINT REFEREE TO DETERMINE OFFSETS AFTER THE APPRAISAL IS OBTAINED, which the court granted on 1/25/24.

On May 22, 2024, the parties filed a ‘Stipulation Regarding Referee’s Authority to Consider Offsets.’

On September 24, 2024, the court granted the Motion to Adopt Appraised Value filed by Defendant Martin. The appraisal value of the property was deemed $890,000. As requested by Defendant Martin, the signed order contained the following in addition to adopting the verified appraisal: “The ultimate buyout amount Martin shall pay to plaintiff Edward Chappell shall be 50% of the appraised value, adjusted by the ultimate findings regarding offsets and contributions to be ruled upon by this Court once the Court-appointed referee, Matthew Taylor, Esq., submits his recommendations thereon.” (9/25/24 Signed Order, ¶3.)

On November 8, 2024, Defendant Martin filed the instant motion.

On December 24, 2024, Plaintiff filed his opposition.

On January 6, 2025, Defendant filed his reply.

Discussion

Previously, Martin sought to buy out Plaintiff’s interest and have a referee appointed to determine offsets. On September 25, 2024, the court granted the appraisal value of $890,000. Now, in the instant motion, Defendant seeks that the court do the following:

1.     Adopt the September 24, 2024, Report and Recommendation of Partition Referee in Connection with Real Property Claims filed by Matthew L. Taylor, Esq.

2.     Set the purchase price for Plaintiff’s 50% interest in the Property as $303,505.83 as constituting 50% of the value of the Property adopted in the Court’s order dated September 24, 2024, less offsets against Plaintiff under the Referee’s report, pursuant to Code of Civil Procedure sections 874.317(b)-(c) and 872.140.[3]

3.     Defendant shall pay the referee fees in the amount of $5,940 directly to Matthew L. Taylor, Esq., within thirty (30) days of the entry of this Order.

4.     Appoint a third-party escrow company, Elia Fuentes of Lotus Escrow, as an agent of the Court to consummate the buyout transaction, including the recordation of the order described herein reallocating Plaintiff’s interest in the Property to Defendant only upon the escrow company holding the buyout funds in trust and issuing payment thereof to Plaintiff within twenty-four (24) hours of deposit with escrow (CCP § 874.317(e)).

5.     Require Plaintiff to vacate the Property, including removal of all of Plaintiff’s personal property, within thirty (30) days of receiving the buyout funds (CCP § 872.130). Should Plaintiff fail to comply, authorizing Defendant to obtain a writ of possession from the Clerk of the Court.

According to the Referee, The Net Offsets in favor of Defendant/the son was deemed to be -$141,494.17, calculated as follows: $2,970.00 deduction Plaintiff for 50% of the Referee's Fees; $24,538.49 Award to Defendant for Costs of Partition, $122,089.68 Award to Defendant for Property-Related Offsets,[4] and $8,104.00 Award to Plaintiff for Attorney’s Fees. Hence, the $303,505.83 Total Due from Defendant to Purchase Plaintiff's Interest in Property (appraised value minus Plaintiff’s 50% Interest in Property Before Offsets minus Net Offsets in Favor of Defendant. (See Motion, Ex. 2 [‘Report And Recommendation Of Partition Referee In Connection With Real Property Partition Claims’], starting at p. 17 of 57 of PDF for

Plaintiff takes issue with the Referee’s determination of Net Offsets in favor of Defendant. Specifically, the Referee determined that Plaintiff did not make any overpayments despite Plaintiff making the following claims (Report p. 10):

a.      Reimbursement of Costs for Mortgage, Utilities, Property Taxes, Insurance, and Repairs/Supplies

b.     Reimbursement for Attorney's Fees and Costs

c.      Offset for Ouster from the property

The court will address each issue in the order presented in Plaintiff’s opposition.

A.     Whether Plaintiff is Entitled to Reimbursement When He Purchased the Property in 1989? Brief Answer: No Because Plaintiff and Defendant Were Not Co-Tenants Until 2002, Co-Tenancy of Which (i.e., OWNERSHIP INTEREST) is a Requirement.

As framed by the Referee and as indicated in the opposition, the primary disagreement deals with the time period when the expenses were incurred. (Opp. pp. 2-3, Report pp. 11-17.) Plaintiff claims for expenses going back to when he and his wife Lillian originally purchased the property in 1989. In contract, Defendant claims that only expenses incurred AFTER Defendant acquired an ownership interest in June 2002 should be included in the claims period. According to the Report and otherwise undisputed by the parties, Martin had no ownership interest in the Subject Property prior to 2002; he was no more than a rental tenant in the Subject Property prior to owning an interest via the 4/11/02 grant deed recorded on 6/4/02 vesting title in the father, the wife, and son as joint tenants each with a 1/3 ownership interest. (Report p. 12.) Absent an ownership interest until June 2002, the Referee stated the following: “The partition statutes and law are clear that claims to reimbursement and accounting only arise between co-owners and for expenses that occurred during their period of co-ownership.” (Report pp. 12-13.) Of note, the Report states the Referee was able to locate one published case dealing with expenses incurred prior to the period of joint ownership between the parties to the partition action: Wallace v. Daley (1990) 20 Cal.App.3d 1039.

In Wallace, the original parties to the deed were the two defendants and plaintiff’s father (Podva), each who had an undivided 1/3 interest in the property as tenants in common. (Id. at p. 1031.) Podva suggested to defendants that they rent the residence to plaintiff. (Ibid.) In 1976, the parties entered into a written agreement. As tenants, the plaintiff made “numerous valuable improvements to the residence” including installing a septic tank, replacing the barn, and replacing the roof of the house. (Id. at p. 1032.) In 1983, the plaintiff’s father conveyed his 1/3 interest to the plaintiff as a tenant in common and plaintiff then ceased paying rent and continued to occupy the residence. (Id. at pp. 1032-1033.) As an owner, the plaintiff continued to make substantial improvements and additions; there was no evidence presented at trial that the plaintiff informed defendants she was going to make any improvements, never asked their permission to do so, or ever sought reimbursement from them. (Id. at p. 1033.) The trial court determined that the plaintiff had spent $11,661.87 on improvements and repairs and that said costs increased the property value by $75,000; the father’s repairs and improvements increased the value of the property by $20,000. (Id. at p. 1034.) On appeal, the defendants asserted that the plaintiff was not entitled to any credit for improvements she or her predecessor in interest made to the property prior to becoming a tenant in common. (Id. at p. 1035.) The appellate court partly agreed holding the plaintiff was “entitled to credit for improvements made by her predecessor in interest, but NOT for improvements SHE MADE to the property before or after acquiring Podva's INTEREST.” (Ibid, emphasis and capitalization added.) In making the latter determination (which appears to be of relevance here), the court articulated the following rule:

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. (Id at pp. 1035-1036, emphasis added.)[5] 

In Wallace, the appellate court focused on the fact that the “plaintiff's acquisition of a one-third interest in the property did not terminate the rental agreement or her obligations thereunder.” (Id. at p. 1039.) Consequently, “[w]here, in addition to being tenants-in-common, the relation of the parties to partition is, in fact, that of landlord and tenant, no improvement of all or any part of the common property, made by the tenant in possession in the character of an ordinary tenant, can, in the absence of a covenant covering the construction and cost of such improvement, constitute the basis of an enforceable claim for contribution on partition.” (Ibid.)

Similarly, here, Defendant and Plaintiff were NOT CO-TENANTS because the unequivocal evidence is that Defendant did not have an ownership interest until 2002. 

To the extent that Plaintiff relies upon Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal.App.2d 539 (Nelson), that is inapposite, or to the contrary, but supports Defendant’s position. In Nelson, the plaintiff had advanced $2,516.00 to pay taxes, insurance and trust deed payments to preserve the common property. (Id. at p. 539.)[6] The trial court found that plaintiff was entitled to a reimbursement for its contribution. As noted by the court, “[u]pon sale of the estate he is entitled to be reimbursed his entire advancement before the balance is equally divided.” (Id. at p. 541, emphasis added.)

Here, however, Plaintiff has shown no evidence of an advancement, i.e., understood to be a sum of money paid with mutual acknowledgment that one party is essentially “loaning” the other party money. Moreover, even in Nelson, the parties were co-owners at the time of the advancement as the advancement was made “to preserve the common property.” (Id. at p. 539.) Here, Plaintiff/father and Defendant/son were not co-owners at the time of Plaintiff’s contributions as Defendant was merely a tenant, i.e., had no ownership interest.

Therefore, the court agrees with the Referee’s suggestion that the court reject any claims for reimbursement made by Plaintiff arising prior to the period of common ownership starting in 2022; This would apply to claims for reimbursement of mortgage payments, property maintenance, taxes, insurance, and any other expense.

B.     Whether Plaintiff Has Been Ousted by Defendant? Brief Answer: No Because Plaintiff’s Papers Tacitly Acknowledge He is the Sole User and Possessor of the of the Property.

Plaintiff claims that he was ousted during periods of the time of common ownership and that he should receive the fair market rental value of the Subject Property for these time periods.

The rule of ouster is relatively simple: one cotenant cannot exclude another cotenant from possession. Each cotenant has the right to enter on and occupy the entire property; no cotenant has the right to exclude another cotenant from any portion of the property. (See generally Miller & Starr, Cal. Real Estate (4th ed.2024) §11:5.) The cotenant out of possession has the burden of proving an ouster. (Estate of Hughes (1992) 5 Cal.App.4th 1607, 1612-1616.)

Here, as noted by the Referee, Plaintiff has not met his burden to indicate that he was ousted. First, Plaintiff has not submitted a detailed declaration to substantiate rather conclusory claims that he was ousted. To the contrary, Plaintiff arguably ousted Defendant by locking Defendant’s room. And if Plaintiff did so in retaliation of Defendant doing so, Defendant did so because Plaintiff had entered Defendant’s room and stole documents, including tax returns and other items. (Martin Chappell Decl., ¶28.) Additionally, Defendant’s detailed declaration shows that “[s]ince 1990 and thus for the entire term of the parties’ co-ownership, [Defendant] [] spent an average of 200 nights away from the Property in hotels as [his] work requires a lot of travel” (Martin Chappel Decl., ¶4), suggesting that Defendant did not have the time to engage in the alleged conduct. Furthermore, Plaintiff, without citation to authority, argues that “Defendant’s most recent conduct of failing to pay the utilities for months without adequate notice to Plaintiff risking disconnection also constitutes an ouster.” (Opp. p. 3:22-23.) Defendant declares that Plaintiff has not contributed to the utilities since the end of 2011 (Reply p. 7:6-9),[7] which per Plaintiff’s reasoning, could also be construed as ouster.

Therefore, Plaintiff is not entitled to the fair market rent for the time he has been ousted from the Subject Property because he has not met his burden that Defendant claimed the whole property, denied the title of Plaintiff, or refused after proper demand to permit Plaintiff to enter.

C.    Whether Plaintiff is Entitled to the Fair Rental Value for Each Year that Defendant Occupied the Property From 1990-Present?[8] Brief Answer: TBD via supplemental briefing.

Plaintiff argues that from 1990-2002, Defendant did not contribute to expenses or pay rent of no more than $200 each month while Plaintiff paid all expenses, taxes, insurance and mortgage up until 2002.

Here, Plaintiff has not provided a legal analysis to support this claim and the Reply does not appear to address the point; neither does the Referee Report.

Therefore, the court CONTINUES the hearing for supplemental briefing on this issue.

D.    Attorney Fees

Plaintiff argues that Defendant should be responsible for his own attorney fees and a contribution to Plaintiff’s attorney fees may be made from Defendant’s share for requiring this action. (Opp. p. 5.)

As noted in Reply and as indicated in the Referee Report, the Referee already awarded Plaintiff his attorney fees.

E.     Whether Plaintiff is Entitled to Partition by Sale? Brief Answer: No.

This argument appears moot and Defendant invoked the Heirs Property Act entitling him to buy out Plaintiff’s interest, to which Plaintiff agreed. To the extent Plaintiff is arguing that Defendant is required to “communicate his ability to qualify for refinancing” to Plaintiff, Plaintiff has not provided legal authority to support this statement.

F.     Whether Defendant is Entitled to Claims for Offsets and Credits? Brief Answer: Yes.

The court adheres to the Referee’s report on this matter as the referee reached these conclusions after reviewing hundreds of pages of financial records and other documents regarding Defendant’s contributions to the Property, unlike Plaintiff who does not provide evidence to contradict Defendant’s records.