Judge: Gail Killefer, Case: 23STCV11948, Date: 2025-06-02 Tentative Ruling
Case Number: 23STCV11948 Hearing Date: June 2, 2025 Dept: 37
HEARING DATE: Monday, June 2, 2025
CASE NUMBER: 23STCV11948
CASE NAME: Rhonda Relf v. Paul David Relf, et al.
TRIAL DATE: TBD
PROOF OF SERVICE: OK
PROCEEDING: RE: Smith Defendants’
Affirmative Defenses
smith Defendants’ trial brief: 21
February 2025
Plaintiff Opposing Brief: 7
March 2025
Cross-Defendant RELF Opposing Brief: 7
March 2025
SMITH DEFENDANTS’ Reply Brief: 21
March 2025
TENTATIVE: The
Smith Defendants have failed to show that they have valid affirmative defenses
that bar partition of the Property.
Background
On
May 26, 2023, Rhona Relf (“Plaintiff”) filed this action for accounting and
partition by sale of real property located at 1840 West 205th Street, Torrance,
CA (the “Property”). The operative Second Amended Complaint (“SAC”), filed
March 12, 2024, names Paul David Relf
(“Relf”); Andrew Martin Smith individually and as Trustee of the Andew
M. Smith and Victoria L. Smith Revocable Trust Dated 03/07/07, Vicky Smith aka
Victora L. Smith, individually and as Trustee of the Andrew M. Smith and
Victoria L. Smith Revocable Trust Dated 03/07/07 (collectively “Smith
Defendants”); Brandon Martin Smith and All Persons Unknown Claiming Any
Interest in the Real Property Described in the Complaint Named as Does 1 to 20.
On
July 1, 2024, Defendant Relf filed a Cross-Complaint against Plaintiff and the Defendants
named in the SAC, also asserting two causes of action for accounting and
partition by sale.
The
Parties agreed to have the court consider the consider the validity of the
Smith Defendants’ affirmative defenses.
I. Legal Standard
“Waiver is an affirmative defense
for which the party asserting the defense bears the burden of proof.” (Stafford
v. Attending Staff Assn. of LAC + USC Medical Center (2019) 41 Cal.App.5th
629, 639; see Evid. Code, § 500 [“Except as otherwise provided by law, a party
has the burden of proof as to each fact the existence or nonexistence of which
is essential to the claim for relief or defense that he is asserting”].)
II. Request for Judicial Notice
The court may take judicial notice of “official acts of the
legislative, executive, and judicial departments of the United States and of
any state of the United States,” “[r]ecords of (1) any court of this state or
(2) any court of record of the United States or of any state of the United
States,” and “[f]acts and propositions that are not reasonably subject to
dispute and are capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy.” (Evid. Code, § 452, subds. (c),
(d), and (h).) “Taking judicial notice of a document is not the same as
accepting the truth of its contents or accepting a particular interpretation of
its meaning.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184
Cal.App.3d 369, 374.)
Cross-Complainant Relf requests judicial notice of the following:
Exhibit
A: A true and correct copy of the
Settlement And Mutual Release Agreement, February 2016, which was admitted
as Exhibit 201 in the trial of the case of Paul David Relf v. Andrew Martin
Smith, et al., Los Angeles County Superior Court, Case No. 18STCV10378.
Exhibit
B: A true and correct copy of the
Judgment in the case of Paul David Relf v. Andrew Martin Smith, et al.,
Los Angeles County Superior Court, Case No. 18STCV10378, filed on July 19,
2024.
Exhibit
C: A true and correct copy of the
Statement of Decision On Trial in the case of Paul David Relf v. Andrew
Martin Smith, et al., Los Angeles County Superior Court, Case No.
18STCV10378, filed on June 25, 2024.
Exhibit
D: A true and correct copy of the
Grant Deed for the property located at 1840 West 205th Street, Torrance,
California, recorded on February 12, 2001, as Document No. 01 0225852.
Exhibit
E: A true and correct copy of the
Trust Transfer Grant Deed for the property located at 1840 West 205th
Street, Torrance, California, recorded on June 30, 2008, as Document No.
20081162244.
Exhibit
F: A true and correct copy of a
portion of the Deposition of Andrew Martin Smith (January 9, 2025) in this
matter, Page 9, Line 13, to Page 11, Line 16.
Cross-Complainant Relf’s request for judicial notice is granted.
III. Evidentiary Objections
Cross-Complainant submitted the following evidentiary objections:
Objections to the Declaration of Andrew M. Smith
Objection
Nos. 1 and 2 based on lack of relevance are overruled.
Objection
No. 3 is sustained due to hearsay.
Objections to the Declaration of Joe August
Objection Nos. 1
and 2 are overruled.
Objections to the Declaration of Britton Shuford
The
court strikes the Britton Shuford declaration as it was not signed under
penalty of perjury and is inadmissible. (CCP § 2015.5; ViaView, Inc. v. Retzlaff (2016) 1 Cal.App.5th 198, 217.)
Objections to the Declaration of Angelo Hayzakes
Objection
Nos. 1 and 2 are sustained as the declarant fails to show he is qualified to
testify to the costs of transporting equipment, and no estimate is attached.
IV. Discussion
A. Procedural
History and Factual Summary
i. Viper Technologies and the Acquisition
of the Property
Defendant/Cross-Complainant
Paul David Relf (“Relf”) and Defendant/Cross-Defendant Andrew Martin Smith
(“Smith”) were business associates who founded Viper Technologies, Inc. (“Viper
Technologies”) in 1996, a machining business. (Declaration of Paul David Relf
filed 03/07/2025 (“Relf Decl.”) ¶ 4.) Plaintiff is the former wife of Relf
until 2011. (Declaration of Rhonda Relf (“Plaintiff Decl.”), attached to 3/7/2025
Plaintiff’s Brief at p. 8:5-6.) Plaintiff asserts that she never worked for
Viper. (Plaintiff Decl. at Brief p. 8:5-16.)
In
2001, Relf and Smith purchased the real property, a commercial building,
located at 1840 West 205th Street, Torrance, California (“the Property”). (Relf
Decl., ¶ 4; RJN Ex. D [2001 Grant Deed]; Declaration of Andrew M. Smith filed
on 02/21/2025 (“Smith Decl.) ¶ 2.)
Relf
asserts that the Property was purchased at the advice of their business
accountant to offset rising rental rates and to reduce personal taxes resulting
in the Property being granted as follows:
Andrew M. Smith and
Victoria L. Smith, husband and wife, as community property, as to an undivided
50%; Paul D. Relf and Rhonda Relf, husband and wife, as community property, as
to an undivided 50% interest; all as tenants in common . . .
(Relf Decl., ¶¶ 6, 7;
RJN Ex. D.)
Defendant
Smith asserts that the Property was acquired to serve as the operational base
for Viper Technologies as the Property offered certain advantages such as
accommodating Viper’s large and specialized machinery, isolated location,
storage and compressor placement, as well as the fact “it offered tax
advantages and eliminated leasing risks; and it provided access to requisite
electrical capacity.” (Smith Decl., ¶ 2.)
Plaintiff
asserts she was not involved in selecting the Property and had no involvement
in its purchase except as the spouse of Relf. (Plaintiff Decl. at Brief p.
8:17-18.) “The matter was handled entirely by Paul Relf and Andrew Smith, and I
basically agreed with their proposal to buy the property. There was never any
agreement to hold the property for a certain number of years.” (Id. at
p. 8:19-21.) Plaintiff asserts Relf received Viper in their marriage
dissolution. (Id. at p. 8:27-28.)
Smith
asserts that a loan was secured from Wells Fargo “with unanimous agreement that
Viper would assume sole responsibility for repayment.” (Smith, Decl., ¶ 3.)
Relf asserts that Viper paid about $7,800 in rent into a joint Wells Fargo
account from which the mortgage, property taxes, and other expenses were paid.
(Relf Decl., ¶ 8.) Smith asserts that Viper has paid the mortgage since 2001,
and an outstanding balance of $80,243.08 remains as of November 5, 2024. (Smith
Decl., ¶ 3; Ex. 1.1.)
In
2003, Relf and Smith formed Morpheus Prototypes, LLC (“Morpheus”), which
conducted work akin to Viper Technologies on the Property until 2016 and paid a
proportional share of the rent directly into the Wells Fargo account for the
mortgage and other expenses. (Relf Decl., ¶ 10, Smith Decl., ¶ 7.) Relf asserts that Viper Technologies was
never given any guaranty for its continued occupation of the Property and that
from 2001 to 2016, there was no written lease for the occupation of the
Property by Viper. (Relf Decl., ¶ 9.)
ii. The Parties Enter into A Settlement
Agreement in 2016
A
dispute arose between Relf and Smith, resulting in Relf filing a lawsuit on
March 19, 2015, entitled Paul David Relf v. Andrew Martin Smith, et al.
(LASC Case No. BC576062). (Relf Decl., ¶ 11.) The lawsuit was settled by the
parties entering into a Settlement and Mutual Release Agreement (the
“Settlement Agreement”) on February 22, 2016, executed by Plaintiff, Relf,
Smith and Victoria Smith. (Relf Decl., ¶ 11; Smith Decl., ¶ 8, Ex. 1.2
[Settlement Agreement]; Plaintiff Decl. at Brief p. 8:23-24, Ex. 3 [Settlement
Agreement]; RJN Ex. A [Settlement Agreement]; Declaration of Gordon J.
Zuiderweg (“Zuiderweg Decl.”) ¶ 2, Ex. A [Settlement Agreement].)
The
Settlement Agreement states in relevant part:
settlement and mutual release agreement
[
. . . ]
recitals
[
. . . ]
C. The
Parties desire to fully, finally, and completely resolve all disputes as among
themselves, including all claims and demands in the Action pursuant to the
terms and conditions hereinafter set forth. Nothing contained in this
Agreement, nor any consideration given pursuant to it, shall constitute or be
deemed an admission of any act, omission, liability, or damages of any party.
terms of Agreement
it
is hereby stipulated and agreed, by and between the
Parties hereto and by their respective counsel, to the following:
1. Consideration.
1.1 Viper. The Parties agree that Viper
will be transferred solely to Smith’s name, as of April 1, 2016 . . . Smith
shall pay Relf $220,000 by April 1, 2016 for this transfer . . .
2. Real
Property.
2.1 Smith, along with Vicky Smith, Relf, and
Rhoda Relf, own certain real property located at 1840 West 205th Street,
Torrance, California (“Real Property”). As part of the Cross-Complaint, Smith
seeks partition of the Real Property.
2.2 Liens on Real Property. . .
2.3 Smith Buys Relf Out. Smith and
Relf will jointly pay for an appraisal of the Real Property and building
located thereon. There is an outstanding loan against the Real Property and the
difference between the appraised value and the loan shall be called the Equity.
One-half of the equity amount will be paid by Smith to Paul Relf and Rhonda
Relf in equal sums to each. Smith shall cause these monies to be paid, either
by re-financing the property, purchasing the Real Property himself or selling
the Real Property to third person(s). Rhonda Relf and Paul Relf shall cooperate
in any required efforts necessary to effect this transaction. Rhonda Relf and
Paul Relf shall relinquish any right, title, or interest and waive any claims
they might have against Smith in connection with this Real Property. These
payments shall be made as soon as practicable, with all parties actively
cooperating to make this happen.
3. Non-Admission of Liability or Wrongdoing. This
Agreement affects the settlement of claims which are contested and denied.
Nothing herein shall be construed as an admission by any Party of any liability
of any kind to the to the other Party or Parties except as created or
referenced herein.
4. Mutual Releases.
[ . . . ]
6. No Admission of Liability. All claims and
contentions are disputed. This Agreement and the negotiations leading to it are
not intended to be, nor shall they at any time be deemed, construed or treated
in any respect as, an admission of liability by any person or entity for any
purpose.
7. Consultation with Counsel. The Parties, and each
of them represent and declare that they carefully read this Agreement and know
the contents of, and have had the advice of counsel regarding same, and that
they sign the same freely and voluntarily.
[ . . . ]
10. Individuals
Authorized. Those individuals who are signing this
Agreement below on behalf of entities represent that they are, respectively,
duly authorized to sign on behalf of such entities and to bind such entities
fully to each and all of the obligations set forth in this Agreement.
11. Miscellaneous. This Agreement contains and
expresses the entire Agreement of the parties hereto with respect to the
matters covered by this Agreement and supersedes all negotiations, prior
discussions, and preliminary agreements. If any portion of this Agreement or
the applications thereof is held invalid, the invalidity shall not effect other
provisions or applications of the Agreement which can be given effect without
the invalid provisions or applications and to this end the provision of this
Agreement are declared to be severable. Each party to this Agreement agrees to
and shall take such further action, and execute and deliver such additional
documents as may be reasonably required to effectuate the terms and conditions
of this Agreement. This Agreement may be execute in any number of counterparts
with the same effect as if all Parties had signed the same document . . .
(Settlement
Agreement.)
The
Parties do not dispute that the Settlement Agreement gave Smith sole ownership
of Viper Technologies. (Smith Decl., ¶ 9.) Smith asserts that Relf did leave
the Property and operated Morpheus elsewhere and has not inquired nor sought
access to the Property. (Ibid.)
Smith
further asserts that he diligently pursued the appraisal outlined in the
Settlement Agreement, but that Relf’s noncooperation resulted in an inability
to reach a consensus regarding the sale of the Property. (Id. ¶ 11.)
Instead, in 2016, Smith commissioned his own appraisal which valued the
Property at approximately $1.6 million, offered Plaintiff and Relf half of that
equity, about $600,000 to Relf and Plaintiff since 2016. (Id. ¶ 12.)
iii. The 2018 Action and Statement of Decision
(“SOD”)
On
December 31, 2018, Relf filed a second action related to the Parties’
performance of the Settlement Agreement, entitled Paul David Relf v. Andrew
Martin Smith, et al. (LASC Case No. 18STCV10378). (Relf Decl. ¶ 12.) Smith
filed a Cross-Complaint in that action, and the matter was tried in June and
July of 2023. (Id.)
On
June 25, 2024, Judge Robert B. Broadbelt III issued a Statement of Decision on
Trial (“SOD”). (Plaintiff Decl. at Brief Ex. 2 [SOD]; RJN Ex. C [SOD].) In the
SOD, the court found that Relf failed to meet his burden of proving Smith
breached the Settlement Agreement as to sections 1.1, 1.1.4, 1.1.3, 1.2.7, and
1.2.6 of the Settlement Agreement. (SOD at pp. 2:10-7:15.)Thus, the court found
in favor of Smith and against Relf as to Relf’s first cause of action for
breach of contract. (Id. at p. 7:16-17.)
As
to the second cause of action for partition, the court found that Relf failed
to prove he had the right to partition the Property because he failed to join
all Defendants who had an interest in the Property, specifically Plaintiff,
Victoria Smith and Andrew and Victoria Smith as Trustees of the Andew M. Smith
and Victoria L. Smith Revocable Trust dated March 7, 2007. (SOD at pp. 7:18-8:16.) Accordingly, on the
Relf’s partition action, the court found against Relf and in favor of Smith. (Id.
at p. 8:17-18.)
As
to Smith and Vicky Smith’s Cross-Complaint, the court found against the Smiths
as to the first cause of action for breach of contract and in favor of David
Relf and Rhonda Relf. (SOD at pp. 8:19-13:28.) The court found that Smith had
failed to pay Relf $220,000 as required by section 1.1 of the Settlement
Agreement. (Id. at pp. 9:16-10:6.) The court also found that sections
1.1, 1.2.4, and 1.2.6 did not impose any obligation on Rhonda Relf such that
she could not have breached those provisions, and that the Smiths had failed to
show the Relfs breached sections 1.1, 1.2.4 and 1.2.6 of the Settlement
Agreement. (Id. at pp. 10:7-11:14.)
As
to the appraisal requirement in section 2.3 of the Settlement Agreement, the
court found that the Smiths failed to show that the Relfs breached section 2.3
by failing to cooperate in the appraisal process and transfer of the Property.
(SOD at pp. 12:13-15, 13:24-26.) Although the Smiths’ attorney offered to
purchase Relf’s interest in the Property for $223,578, the sum was not based on
the procedure set forth in the Settlement Agreement. (Id. at p.
13:7-19.) “Smith never asked Relf to pay for an appraisal or consulted with
Relf about selecting an appraiser.” (Id. at p. 13:20-21.) “Smith did not
submit an appraisal report to Rhonda Relf, did not offer her any money, and did
not make a demand that Rhonda Relf sign a deed to Smith or ask her about
signing a deed or transferring the property.” (Id. at p. 13:21-13.)
Therefore, the court found against the Smiths and in favor of the Relfs as to
the Smiths’ breach of contract claim. (Id. at p. 13:27-28.)
On
May 26, 2023, Rhonda Relf (“Plaintiff”) filed this action for partition of the
Property by sale and accounting. Plaintiff asserts that despite agreeing to
sell her 25% interest in the Property, the Smiths failed to perform, as
confirmed by the SOD. (Plaintiff Decl. at Brief p. 9:3-8.) Plaintiff states she
has wanted to be bought out of her 25% interest for years and does not care if
the Smiths buy out her interest at a fair and reasonable price. (Id. at
p. 9:11-15.) Plaintiff asserts that Viper does not pay rent, but does pay the
mortgage, taxes, and insurance, which amount to less than the fair rental value
of the Property. (Id. at p. 9:18-20.) Plaintiff attaches an appraisal
from Alan Fradkin, indicating that the fair rental value of the Property is
$11,890.00 per month. (Id. at p. 9:23-35, Ex. 4 [Plaintiff’s Rental
Appraisal]; see also Declaration of Alan Fradkin at Plaintiff’s Brief p. 11.)
Plaintiff asserts that if the Smiths cannot pay fair market value, then the
Property should be listed for sale, and the Smiths or anyone else can submit an
offer, with the best offer being accepted. (Id. at p. 10:3-5.)
Cross-Complainant
Relf similarly requests partition of the Property by sale and an accounting.
(See Relf Brief filed 03/07/2025.) Relf similarly asserts that the Property has
a fair market rental value of $16,000 per month and that Viper Technologies has
significantly benefited by only paying $7,800 in the Wells Fargo account. (Relf
Decl., ¶ 16.)
B. The
Smiths Defendants’ Affirmative Defense to the Partition Action
In
their opening brief, “[t]he Smiths present two primary grounds for reversal:
waiver of partition and unfairness.” (02/21/2025 Smith Brief at p. 5:23-35.)
The court now addresses these two affirmative defenses and deems the other
affirmative defenses raised in their Answer waived.
i. Waiver of the Right to Seek Partition
“‘Partition
is a remedy much favored by the law.’” (LEG Investments v. Boxler (2010)
183 Cal.App.4th 484, 493.) A property owner “has an absolute right to partition
unless barred by a valid waiver.” (Ibid; CCP, § 872.710(b).) That waiver
can be express or implied. (Ibid.) Whether Plaintiff waived her right to
partition presents a question of fact. (Long Beach Unified Sch. Dist. v.
State of California (1990) 225 Cal.App.3d 155, 171.)
The
Smith Defendants assert that waiver exists because the Property was purchased
for Viper, Viper funded all expenses, the Parties intended Viper to use the
Property long term, and the 2016
Settlement Agreement provided for the purchase of the Property to Andrew
Smith. Courts have found that a waiver may be implied where parties invested in
property that is subject to a long-term lease, acquired for the purpose of
long-term investment income.
For
example, in American Medical International, Inc. v. Feller (1976) 59
Cal.App.3d 1008 (Feller), purchased small undivided interests in
property with understanding that there was a long-term lease providing steady
income. (Id. at p. 1016-1017.) “In the case at bench, the undivided
interests were created with the understanding that partition would be precluded
until the 20-year lease on the hospital terminates, to wit, in 1980.” (Id.
at p. 1021.) In Pine v. Tiedt (1965) 232 Cal.App.2d 733 (Pine),
an implied waiver to partition existed because the investment property was
subject to a long-term lease providing investment income and “[t]o permit
partition would frustrate the very purpose for which the land was acquired by
the investors and for which it is now being used. (Id. at p. 740.)
Similarly, in Thomas v. Witte
(1963) 214 Cal.App.2d 322 (Thomas), the cotenants had a long-term lease
and an operating agreement wherein they agreed to develop the property over
time until the agreement was terminated. (Id. at p. 320.)
The
cases relied upon by the Smith Defendants do not support the finding that an
implied or express waiver to partition exists between Plaintiff and the other
Parties to this action.
First,
the Smith Defendants fail to produce any admissible evidence showing that
Plaintiff was part of the joint venture with Relf and the Smith Defendants to
establish and run Viper Technologies for the joint benefit of all the Parties.
The Wells Fargo account, properly established in 2001, only bears the names of
Smith and Relf. (Smith Decl., ¶ 3, Ex. 1.1.) Smith does not allege or show that
Plaintiff has access to or is the owner of the Wells Fargo account. Smith does
not negate Plaintiff’s assertion that she never worked for or was involved with
Viper, and that Viper was established only jointly between Relf and Smith as
co-owners. (Plaintiff Decl. at Brief p. 8:9-16.) Plaintiff further asserts that
after the divorce, Relf kept all his interest in Viper Technologies. (Id.
at p. 8:26-28.) Lastly, the Smith Defendants failed to show that the Plaintiff
has received rent or another financial benefit from Viper’s continued operation
of its business on the Property.
The
court finds that the Smith Defendants have failed to show that Plaintiff was
part of a plan or agreed to a joint venture to continue to operate Viper
Technologies into perpetuity or until Smith’s retirement. (Smith Decl., ¶ 19.)
Second,
Plaintiff expressly dispels the existence of any agreement to hold the property
for a certain number of years. (Plaintiff Decl. at Brief p. 8:21,) The Feller,
Pine, and Thomas cases all had written leases and or agreements
reflecting the parties' intent to maintain the property for a certain duration
and purpose. Here, the Smith Defendants do not negate the fact that there is no
lease permitting Viper to use the Property for a certain duration. The Smith
Defendants fail to show that Plaintiff orally agreed to lease the Property to
Viper into perpetuity or until Smith's retirement. Moreover, any such argument
would be barred by the statute of frauds.
Third,
the Smith Defendants fail to show that the Settlement Agreement constitutes a
waiver of Plaintiff’s right to seek partition. The court found that Smiths had
breached section 2.3 of the Settlement Agreement because they had failed to
submit an appraisal to Plaintiff, had failed to offer her money for the
Property, or demand that the Plaintiff sign a deed transferring the Property.
(SOD at p. 13:20-23.) As the Smith Defendants breached of the Settlement
Agreement, Plaintiff is excused from having to perform under the Settlement
Agreement. (See Gold Mining & Water Co. v. Swinerton (1943) 23
Cal.2d 19, 33; Coughlin v. Blair (1953) 41 Cal.2d 587, 603 [“Parties who
have totally breached a contract cannot force performance on the injured
parties.”]; Lortz v. Connell (1969) 273 Cal.App.2d 286, 290 [“If he
prevents or makes impossible the performance or happening of a condition
precedent, the condition is excused.”].)
Moreover,
the Smith Defendants fail to show how the Settlement Agreement shows that
Plaintiff agreed to the Smiths’ continued use of the Property to operate Viper
Technologies into perpetuity or until Smith’s retirement, with them purchasing
the Property at fair market value. The Settlement Agreement required that any
payments for the purchase of the Property be made “as soon as practicable” and
not at the discretion of the Smith Defendants. (Settlement Agreement at p. 4.)
Therefore,
the court finds that the Smith Defendants have failed to show that Plaintiff
has waived her right to seek partition of the Property.
ii Unfairness of Partition
Although
the action of partition is of statutory origin in this state, it is nonetheless
an equitable proceeding and subject to the principles of fairness. (Elbert,
Limited v. Federated Income Properties (1953) 120 Cal.App.2d 194, 200; Wallace
v. Daley (1990) 220 Cal.App.3d 1028, 1035 (Wallace).
While the Smith Defendants cite Feller, supra, 59
Cal.App.3d 1008 and Heber v. Yaeger (1967) 251 Cal.App.2d 258 (Yaeger),
the Smith Defendants fail to explain how these cases support their assertion
that partition would be unfair in this action. As stated above, the Smith
Defendants fail to show that Plaintiff agreed that Viper Technologies would
continue to operate its business at the Property into perpetuity. Moreover, the
Settlement Agreement gave the Smith Defendants the opportunity to purchase the
Property, and it was their failure to abide by its terms that resulted in the
Plaintiff filing this action seeking partition. Thus, it was the Smith Defendants'
own inaction that caused them to forfeit any right to demand the Property be
sold to them. “The policy behind a partition action is
to permanently end all disputes about property and to remove all obstructions
to its free enjoyment.” (LEG Investments v. Boxler (2010) 183
Cal.App.4th 484, 497.)
The Smith Defendants further argue that partition would be unfair
because the Smiths have made significant investments in the Property and Viper
has been solely responsible for expenses, including the mortgage, resulting in
the Property increasing in value while Plaintiff has made no contributions.
(Declaration of Cindy Belle Smith filed 02/21/20225, ¶¶ 7-9; Smith Decl., ¶
15.) Relf disputes the fact that the Property has been specially adapted to
Viper Technologies’ business and that moving the equipment would be about
$302,000. (Relf Decl., ¶¶ 14, 15.)
Partition cannot be denied when simply “because it will result in
financial loss to the contentant.” (Feller, supra, 59 Cal.App.3d
at p 1013; De Roulet v. Mitchel
(1945) 70 Cal.App.2d 120, 124 [accord].) As Relf points out that Viper
Technologies is not an owner or cotenant to the Property, and any harm suffered
by Viper does not outweigh Relf and Plaintiff’s rights to seek partition. (Relf
Brief at pp. 7:20-8:6.) The Smith Defendants also fail
to explain how an accounting will not sufficiently compensate the Parties for
the improvements made on the Property.
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, supra, 220 Cal.App.3d at pp. 1035-1036.)
While the Smith Defendants assert that even before 2016, Viper
Technologies shouldered all expenses for the Property, the Smith Defendants
fail to show that Viper’s monthly expenses exceed the Property’s fair monthly
rental value, which is a benefit of which Plaintiff has been deprived.
Moreover, the Smith Defendants do not address the fact that Viper has continued
to operate on the Property in 2016 and has continued to earn a profit, while
depriving Plaintiff of any financial benefit she is entitled to as the 25%
owner of the Property.
On reply, Smith asserts that as the sole shareholder of Viper
Technologies, any contributions to the Property made by Viper should be
attributed to him. (Smith Reply Brief filed on 03/21/2025 at p. 5:9-11.)
Applying the same logic, it would mean that any profits Smith derived from
operating Viper should be attributed to him and accounted for. The Smith
Defendants further assert that Viper Technologies will incur relocation costs. However, the Smith Defendants have been on
notice since 2016 that the Property needed to be sold and have failed to cite
any case law showing that they are entitled to reimbursement for relocation
costs given that Viper Technologies has continued to profit on the Property
without compensation to the other owners. (Smith Decl., ¶ 17.)
Therefore, the court finds that the Smith Defendants have failed
to show that partition of the Property by sale would be unfair.
Lastly, neither Plaintiff nor Relf opposes partition by appraisal,
which would give the Smith Defendants the opportunity to purchase the Property
at a fair price and allow Viper Technologies to continue to reside on the
Property. (Plaintiff’s Brief at p. 7:1-3; Smith Brief at pp. 8:28-9:2.)
Conclusion
The Smith Defendants have failed to show that they have valid affirmative
defenses that bar partition of the Property.