Judge: Helen Zukin, Case: 20SMCV01144, Date: 2022-07-26 Tentative Ruling

Case Number: 20SMCV01144    Hearing Date: July 26, 2022    Dept: 207

Background

This is an action between Plaintiff Patricia Bilotti (“Plaintiff”) against Defendant Robert Todd Sali (“Defendant”) for partition of real property, accounting, and monies had and received. Plaintiff brings this motion to apportion and distribute $295,917.85 to her from funds remaining following the parties’ stipulated sale of real property located at 642 Broadway Street, Venice, California, which previously owned by the parties as joint tenants. Pursuant to the parties’ stipulation, following the sale of the property on July 29, 2021, each party received an equal initial payment of $125,000 and the remaining proceeds, totaling $486,450, remained in escrow to be allocated between the parties at a later date.

Plaintiff’s motion is unopposed.

Legal Standard

Under Code Civ. Proc. § 873.820, the proceeds of sale for any property sold shall be applied in the following order:

(a)        Payment of the expenses of sale.

(b)       Payment of the other costs of partition in whole or in part or to secure any cost of partition later allowed.

(c)        Payment of any liens on the property in their order of priority except liens which under the terms of sale are to remain on the property.

(d)       Distribution of the residue among the parties in proportion to their shares as determined by the court.

Pursuant to Code Civ. Proc. § 874.010 the costs of partition include:

(a)        Reasonable attorney’s fees incurred or paid by a party for the common benefit.

(b)       The fee and expenses of the referee.

(c)        The compensation provided by contract for services of a surveyor or other person employed by the referee in the action.

(d)       The reasonable costs of a title report procured pursuant to Section 872.220 with interest thereon at the legal rate from the time of payment or, if paid before commencement of the action, from the time of commencement of the action.

(e)        Other disbursements or expenses determined by the court to have been incurred or paid for the common benefit.

In partition actions, generally an award of costs and fees should be proportionally divided based on the parties’ ownership interest in the property, balanced with other equitable considerations. (Finney v. Gomez (2003) 111 Cal.App.4th 527, 545-546.) By statute, the court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable. (C.C.P. § 874.040; see also Orien v. Lutz (2017) 16 Cal.App.5th 957 [fees incurred by a defendant to a partition action can be for the common benefit, and therefore allocable in part to the plaintiff, even though the defendant resists the partition].)

Analysis

Plaintiff moves to distribute certain of the sale proceeds of the property on the grounds that a party in a partition action may recover costs of partition in proportion to their interests which were incurred or paid by a party for the common benefit. (C.C.P. § 874.010.) The distributions sought by Plaintiff can be broadly divided into two categories: (1) expenses relating to the Broadway property and its sale, and (2) other expenses incurred by Plaintiff.

With regard to expenses incurred in connection with the Broadway property or its sale, Plaintiff seeks a total of $122,539.04, comprised of:

1.         $6,440.91 for the costs of removing Defendant’s personal belongings from the property in advance of the sale;

2.         $6,126.44 for Plaintiff’s one-half share of the $12,252.87 Plaintiff paid for improvements and landscaping for the property to prepare it for sale; and

3.         $109,971.70 for Plaintiff’s one-half share of the $219,943.39 incurred by Plaintiff in mortgage payments and property taxes from 2014 to the sale of the property in 2021.

The Court finds these amounts are reasonable and supported by the evidence submitted by Plaintiff. (Bilotti Decl. at ¶5a and Exs. 7A, 7B, 7C, 7D.) These funds are properly apportioned and distributed to Plaintiff as expenses relating to the sale of the property under Code Civ. Proc. § 873.820(a) and costs relating to the partition of the property which were incurred for the common benefit of Plaintiff and Defendant under Code Civ. Proc. § 874.010(e). Accordingly, the Court GRANTS Plaintiff’s request to distribute $122,539.04 to her for these expenses.

The remaining costs sought by Plaintiff are comprised of (1) costs relating to the care and education of the parties’ child, (2) attorney and mediator fees incurred by Defendant in prior, unrelated, divorce proceedings, which were advanced by Plaintiff, and (3) money Plaintiff advanced to Defendant for child support payments for Defendant’s other children from his prior marriage.

Plaintiff seeks disbursement of these funds as costs “incurred or paid for the common benefit” pursuant to Code Civ. Proc. § 874.010(e). However, Plaintiff has provided the Court with no authority demonstrating costs which are unrelated to the property or its partition can be deemed “costs of partition” under section 874.010(e). There is an admitted dearth of authority on the interpretation of the phrase “for the common benefit” as it is used in section 874.010(e). In Finney v. Gomez (2003) 111 Cal.App.4th 527, 548, the Court stated a general rule that “What constitutes ‘for the common benefit’ is to be determined based on the facts and circumstances of each particular case.” The Court in Orien v. Lutz (2017) 16 Cal.App.5th 957, 967 provided more specific guidance, holding “it is evident that the ‘common benefit’ in a partition action is the proper distribution of the ‘“respective shares and interests in said property by the ultimate judgment of the court.”’ [Citation].”

Code Civ. Proc. § 873.820(b) directs the Court to allocate sales proceeds to “Payment of the other costs of partition.” Code Civ. Proc. § 874.010(e) also speaks to the “costs of partition.” Code Civ. Proc. § 874.020 further provides “The costs of partition include reasonable expenses, including attorney’s fees, necessarily incurred by a party for the common benefit in prosecuting or defending other actions or other proceedings for the protection, confirmation, or perfection of title, setting the boundaries, or making a survey of the property.” Reading these statutory provisions in connection with the holding of Orien v. Lutz indicates that to be recoverable as a “cost of partition,” a cost must relate in some way to the property or the partition action.

While the Court is not unsympathetic to Plaintiff and has some discretion under Code Civ. Proc. § 874.040 to make an equitable apportionment of the costs of partition, this discretion is not unfettered, and the Court is not free to disregard the plain language of the statute which limits the allocation of sales proceeds to “costs of partition” rather than any expenses incurred for the benefit of the parties generally. Accordingly, the Court DENIES Plaintiff’s request for distribution and apportionment of $173,378.81 for these costs.

Conclusion

Plaintiff’s motion for distribution and apportionment is GRANTED in part and DENIED in part. Plaintiff’s request for distribution and apportionment of $122,539.04 for expenses incurred by Plaintiff in connection with the sale and maintenance of the Broadway property is GRANTED. Plaintiff’s motion is otherwise DENIED. Moving party to give notice.