Judge Christian R. Gullon, Case Number: 23PSCV01562, Date: 2024-02-05 Tentative Ruling

Judge: Christian R. Gullon, Case: 23PSCV01562, Date: 2024-02-05 Tentative Ruling

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Counsel may submit on the tentative rulings by calling the clerk in Dept. O at 909-802-1126 before 8:30 the morning of the hearing. Submission on the tentative does not bind the court to adopt the tentative ruling at the hearing should the opposing party appear and convince the court of further modification during oral argument.

The Tentative Ruling is not an invitation, nor an opportunity, to file any further documents relative to the hearing in question. No such filing will be considered by the Court in the absence of permission first obtained following ex-parte application therefore.

PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR INTERLOCUTORY JUDGMENT OF PARTITION AND APPOINTMENT OF REFEREE is GRANTED. Plaintiff and Defendants are to equally bear the costs of the partition (each owing one third of the cost).

This is a real property case. Plaintiff JIA HUI LU (“Plaintiff” or “Jia”) alleges the following against her parents Defendants YUK YEE FUNG (“Yuk”) and JI ZHONG LU (“Ji”): In 2016, a deed transferred the subject property to Plaintiff and Defendants wherein each owned a 33% interest in the subject property as joint tenants. In 2020, a deed of trust (DOT) as recorded against the property listing all the parties as borrowers. Plaintiff moved out in 2021, and between 2016 to 2020, Plaintiff paid more than Plaintiff’s fractional 33% share of the monthly mortgage expense. Plaintiff seeks partition of the property.

On May 24, 2023, Plaintiff filed a verified complaint for partition by sale of real property.

On July 6, 2023, Plaintiff filed a Notice Of Recording Of Pendency Of Action Pursuant To Ccp § 405.20 (Lis Pendens).

On November 27, 2023, the parties filed a stipulation setting aside Defendants’ default.

On December 20, 2023, Defendants made three filings: (1) their answer, (2) their opposition to the instant motion, and (3) a cross-complaint against Plaintiff asserting the following COAs:

The governing statute for partition is section 872.720. Subdivision (a) declares that “[i]f the court finds that the plaintiff is entitled to partition, it shall make an interlocutory judgment that determines the interests of the parties in the property and orders the partition of the property.” (§ 872.720, subd. (a).) The order of partition “shall order that the property be divided among the parties in accordance with their interests as determined in the interlocutory judgment.” (§ 872.810.) “The manner of partition may be ‘in kind’—i.e., physical division of the property [citation] according to the parties’ interests as determined in the interlocutory judgment. [Citations.] Alternatively, if the parties agree or the court concludes it ‘would be more equitable,’ the court may order the property sold and the proceeds divided among the parties.”

The judgment of partition is left to the discretion of the trial court and the determination of whether partition by sale is more equitable than physical division requires a factual inquiry by the court and when the evidence, even though conflicting, permits the court to reasonably conclude partition by sale would be more equitable to the owners such decision should be upheld absent an abuse of discretion. (See Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 758-59, 765-66.)

As observed by the Summers’ court, a trial court is to make two determinations:

2. The manner of partition—i.e., a physical division or sale of the property. (Summers, supra, 24 Cal.App.5th at p. 143.)

In satisfying these elements, a trial must “resolve” the parties’ interests. (Id. at p. 144 [“We conclude that the trial court lacked the authority to order the sale of the property before it determined the parties’ respective ownership interests.”].)[1]

In her motion, Plaintiff explains that on November 30, 2016, a grant deed transferred the Property to Plaintiff and Defendants as joint tenants each with 1/3 interest. Consequently, Plaintiff has an ownership interest in the property. As a joint tenant, Plaintiff may seek entry of an interlocutory judgment of partition by sale. (Motion p. 6, quoting 4 Miller & Starr, Cal. Real Est. (4th ed.2020) § 11:14 [“Each cotenant has an ‘absolute’ right to partition the common property.”]; see also p. 6, quoting Bacon v. Wahrhaftig (1950) 97 Cal.App.2d 599, 603 [“If the party seeking partition is shown to be a tenant in common, and as such entitled to the possession of the land sought to be partitioned, the right is absolute.”].)

In Opposition, Defendants aver that despite the deed, Plaintiff does not have an ownership interest. Effectively, Defendants’ opposition requires the trial court to make an evidentiary finding to resolve the parties’ ownerships interests prior to ordering a partition.

According to Defendant’s cross-complaint and opposition to the instant motion, Defendants dispute Plaintiff’s ownership interest based on the following:

- “Plaintiff became the initial title holder in name only due to the need for her better credit rating merely to facilitate the purchase of the property and obtain financing due to Defendants poorer credit rating” (Opp. p. 4:16-20)

- “Plaintiff paid no monies toward the purchase of the property and has paid no monies toward the mortgage or maintenance of the property” (Opp. p. 4:20-21)

- “[T]he parties [] agreed that Plaintiffs name was on title merely to facilitate the purchase and not to reflect any ownership interest in the property.” (Opp. p. 4:21-24)

- Since the purchase of the family home in 2016, Defendants have paid “all property taxes, mortgage payments, insurance, utilities, maintenance, and repair costs of the property.” (Opp. p. 6 of 15 [Fung Decl]

But, as noted by Plaintiff in Reply, there are numerous problems with the explanation(s).

Preliminarily, Evidence Code 662 provides that “The owner of the legal title to property is presumed to be the owner of full beneficial title. This presumption may be rebutted only by clear and convincing proof.” (Evid. Code § 662.) “Clear and convincing evidence requires a finding of high probability. […] [It requires] that the evidence be so clear as to leave no substantial doubt; sufficiently strong to command the unhesitating assent of every reasonable mind.” (Reply p. 5, quoting Nevarrez v. San Marino Skilled Nursing & Wellness Centre, LLC (2013) 221 Cal.App.4th 102, 112.)

Here, for one, however, Defendants rely primarily on oral agreements between the parties; any such agreement would be barred by the statute of frauds. (See Reply pp. 9-10, citing Code of Civil Procedure § 1971 [writing requirement] and Civil Code § 1624(a) [real property contract invalid unless in writing]; see also Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1502 [“An agreement for the sale of real property or an interest in real property comes within the statute of frauds.”].)

Next, Defendants’ evidence is unclear. For example, Defendants proclaim that they made all mortgage payments, citing to Exhibit D. But Exhibit D (Opp. p. 11 of 15 of PDF) is a mortgage statement that does not indicate who made those payments.

To the extent Defendants’ evidence is Yu Yee Fung’s declaration (made under penalty of perjury) that the parents made all the mortgage payments, Plaintiff provides evidence otherwise. Plaintiff attaches two checks (one dated 4/4/18 for: ‘April Mortgage’ in the amount of $1,500 and other dated 2/18/2017 for: ‘house’ in the amount of $1,700). In fact, according to Plaintiff’s declaration (signed under penalty of perjury) she made consecutive monthly payments towards the mortgage from February 2017 to November 2021 totaling $70,569.49. (Reply p. 12 of 14 of PDF.)[2] Thus, Defendants’ proclamation that they have made all payments is, seemingly, untruthful. Even if not all of Plaintiff’s payments were towards the mortgage, “[c]redits 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.” (Reply p. 9, quoting Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035-1036.)

Therefore, as Defendants have failed to meet their burden to rebut the presumption that Plaintiff is presumed to have an interest in the Property as a joint tenant with her parents/Defendants as evidenced by the grant deed, the court determines that each party is holds a 1/3 interest in the property.

“Partition in kind is favored in law and in the absence of proof to the contrary the presumption in favor of in kind division will prevail. A forced sale is strongly disfavored.” (Butte, supra, 136 Cal.App.3d 360, 365.) As the Butte court explained:

There are two types of evidence which have been held sufficiently to justify a partition sale of property rather than physical division. The first is evidence that the property is so situated that a division into subparcels of equal value cannot be made. [citation omitted] . . . In order to meet this test the party desiring partition sale must show that the land cannot be divided equally. [citation omitted] . . . The second type of evidence which supports a partition sale rather than physical division is economic evidence to the effect that, due to the particular situation of the land, the division of the land would substantially diminish the value of each party’s interest . . . This is a purely economic test. If plaintiff, who demands that the land be sold, can receive a portion of the land through physical division and that portion could be sold for a sum equal to the amount it could realize through sale of the entire parcel then as a matter of law no economic prejudice can be shown.

Here, the property is a single-family residence in a suburban lot rather than a large parcel that could be divided into individual plots. With that, it is impractical to physically divide the single-family residence between the three co-tenants.

Therefore, Plaintiff has made a sufficient showing for partition by sale. The opposition does not address the point.

“The court shall appoint a referee to divide or sell the property as ordered by the court.” (Code. Civ. Proc. § 873.010(a).) In appointing a referee: “The court may: … Instruct the referee [and] Fix the reasonable compensation for the services of the referee and provide for payment of the referee’s reasonable expenses….” (Code. Civ. Proc. § 873.010(b)(2)-(3).)

Here, Plaintiff seeks the appointment of Attorney Matthew L. Taylor to act as the referee in this case. Taylor has served as a receiver in dozens of cases and served as in-house counsel for a receiver for 8 years before starting his own law practice. Taylor estimates that the total cost of most partitions is approximately $14,000, considerably less than will be paid to the realtor.

Accordingly, as Taylor is well-qualified to handle the referee action in this case involving single-family residence in the region of his practice as a lawyer and referee, the court takes no issue with his appointment.

The referee shall report to the court and to the parties as to the sale proceedings and shall present to the court a proposed order of distribution of the proceeds of sale. The proposed order shall specify in detail all payments then due to third parties in connection with the sale of the Property.

Before the proceeds are distributed to the co-owners, the costs of partition must be paid. (Code Civ. Proc. §§ 873.820(b), 873.820(d).) Such costs include reasonable attorney’s fees and the referee’s fees. actions Section 874.040 states the court shall apportion the costs and fees of partition “among the parties in proportion to their interests or make such other apportionment as may be equitable.” (Motion p. 13, citing Finney v. Gomez (2003) 111 Cal.App.4th 527, 545.) Thus, “the court may apportion the fees and costs based on the parties' respective interests in the property, or it may apportion the costs and fees based on some other equitable apportionment.” (Ibid.) That said, a trial court should normally apportion the costs on the parties' interest in ownership. (Stutz v. Davis (1981) 122 Cal.App.3d 1, 5.)

Plaintiff requests the costs should be placed on Defendants for their non-cooperation. (Motion p. 14.) But Plaintiff misconstrues what is equitable in this context. “Where litigation for the common benefit arises among only some of the parties, or where the interest of the parties in all items, lots, or parcels of property are not identical, the court may segregate the costs of partition to the extent practicable and apportion a part among particular parties only.” (Finney, supra, 111 Cal.App.4th at p. 545-546, citing California Law Revision Commission comment, 17A West's Annotated Code (1980 ed.) following section 874.040, page 586, emphasis added.)

Here, as the litigation for the common benefit arises among arguably one party (Plaintiff), it would be inequitable to allocate costs on Defendants and none of Plaintiff. Second, Plaintiff has not offered illuminating facts as to Defendants’ purported lack of cooperation. The mere fact of filing an untimely answer does not illustrate lack of cooperation. Even turning to Plaintiff’s citation to a Cummings v. Cummings (Cal. Ct. App., Nov. 23, 2016, No. H040710) 2016 WL 7077611 (which Plaintiff acknowledges is uncitable because it is an unpublished opinion), those facts undermine Plaintiff’s request. There the court imposed the cost of the partition entirely on the appellant because of the appellant’s “intransigent refusal to cooperate in fashioning a viable alternative solution to the conflict, along with his unwarranted resistance to discovery by respondents . . . In his control the property was poorly maintained, and was filled with, and appeared to be filled with, belongings from a hoarder. Photographic evidence of the “deplorable” condition of the property was adduced at trial, with rat feces in several locations among the accumulated “stuff” appellant kept there. Plaintiffs' efforts to remove and destroy the “debris and junk” there were “thwarted by [appellant,] who has refused to part with much of his ‘stuff. . . . he admitted at trial that he did not want to sell his Sacramento homes to buy his sisters' interests, nor had he tried to qualify for financing toward that end . . . Appellant even defied the court's order to vacate the property within 30 days, causing yet more hearings—and more attorney fees—on the resulting writ of possession.” (Id. at pp. 3-4, emphasis added.) In short, there, the appellant did anything and everything he could to ensure the property could not be sold. Here, absent any of those facts, the court declines to deviate from the rule that “costs should be awarded in proportion to the litigant's interest in the property.” (Finney, supra, at p. 546.)

Therefore, Plaintiff and Defendants are to equally bear the costs of the partition (each owing one third of the cost). The Opposition does not address this point.

Based on the foregoing, the motion is granted. The court shall retain jurisdiction of this matter to confirm the sale of the Property and to issue whatever additional orders may be required to carry out the partition of the Property.

[1] Despite Defendants’ contention in opposition that Summers stands for the proposition that a plaintiff’s ownership interest must be “undisputed” (Opp. p. 4:16-17 [“Plaintiff has failed to assert or show that the Plaintiffs ownership interest is undisputed”], Summers contains no such language. Rather, Summers requires a trial court to solve or resolve the parties’ respective percentage of ownership.

[2] To the extent that there is a dispute as the truthfulness of the parties’ statements, though both signed under the penalty of perjury, that could be resolved by submission of each payment Plaintiff made to her mother via direct deposit, direct transfer, or by check. (Reply p. 12 of 14 of PDF.) To the extent that Defendants would argue that payments from Plaintiff to the mother/Defendants were for non-real property related costs, the totality of the circumstances would indicate otherwise as why else would Plaintiff send her mom checks in the amount of a mortgage, every month (when a mortgage is due), and denoted for "mortgage."