Judge Mark A. Young, Case 22SMCV00677 2023-03-09 Tentative Ruling

Judge: Mark A. Young, Case: 22SMCV00677, Date: 2023-03-09 Tentative Ruling

Case Number: 22SMCV00677 Hearing Date: March 9, 2023 Dept: M

CASE NAME: Krupp, et al., v. Norris, et al.

CASE NO.: 22SMCV00677

MOTION: Motion for Summary Adjudication

HEARING DATE: 3/7/2023

Legal Standard

A party may move for summary judgment in any action or proceeding if it is contended the action has no merit or that there is no defense to the action or proceeding. (CCP, § 437c(a).) “The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (CCP, § 437c(f)(1).) If a party seeks summary adjudication as an alternative to a request for summary judgment, the request must be clearly made in the notice of the motion. (Gonzales v. Superior Court (1987) 189 Cal.App.3d 1542, 1544.) “[A] party may move for summary adjudication of a legal issue or a claim for damages other than punitive damages that does not completely dispose of a cause of action, affirmative defense, or issue of duty pursuant to” subdivision (t). (CCP, § 437c(t).)

To prevail, the evidence submitted must show there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (CCP, § 437c(c).) The motion cannot succeed unless the evidence leaves no room for conflicting inferences as to material facts; the court has no power to weigh one inference against another or against other evidence. (Murillo v. Rite Stuff Food Inc. (1998) 65 Cal.App.4th 833, 841.) In determining whether the facts give rise to a triable issue of material fact, “[a]ll doubts as to whether any material, triable, issues of fact exist are to be resolved in favor of the party opposing summary judgment…” (Gold v. Weissman (2004) 114 Cal.App.4th 1195, 1198-99.) “In other words, the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences there from must be accepted as true.” (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 179.) However, if adjudication is otherwise proper the motion “may not be denied on grounds of credibility,” except when a material fact is the witness’s state of mind and “that fact is sought to be established solely by the [witness’s] affirmation thereof.” (CCP, § 437c(e).)

Once the moving party has met their burden, the burden shifts to the opposing party “to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.” (CCP § 437c(p)(1).) “[T]here is no obligation on the opposing party... to establish anything by affidavit unless and until the moving party has by affidavit stated facts establishing every element... necessary to sustain a judgment in his favor.” (Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 468.)

“The pleadings play a key role in a summary judgment motion. The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues and to frame the outer measure of materiality in a summary judgment proceeding.” (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493, quotations and citations omitted.) “Accordingly, the burden of a defendant moving for summary judgment only requires that he or she negate plaintiff's theories of liability as alleged in the complaint; that is, a moving party need not refute liability on some theoretical possibility not included in the pleadings.” (Ibid.)

EVIDENTIARY ISSUES

Plaintiffs’ objections to the declaration of Michael Norris:

Global Objection is denied.

Objections 1, 16, 17, 19-35, and 56-57 are SUSTAINED. All other objections are OVERRULED.

Plaintiffs’ objections to the declaration of Nicholas Barton are SUSTAINED as objection nos. 6, 11, and 12, and otherwise OVERRULED.

Plaintiffs’ request for judicial notice is GRANTED.

Analysis

Plaintiffs Jeffrey David Krupp and Karen Elizabeth Krupp move for summary adjudication on their partition cause of action. Plaintiffs also seek an Order appointing Stephen J. Donell as petition referee to (i) effect the sale of the Property, and (ii) manage the Property, including management of all financial matters related to the Property, from the appointment date until final distribution of the sale proceeds. Plaintiffs assert that a sale would be more equitable, because the property derives its economic value from a multi-family commercial building, including common areas, which cannot be feasibly divided into separate parcels.

Requirements for Partition by Sale

“A partition action may be commenced and maintained by any of the following persons: (1) A coowner of personal property. (2) An owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate therein is owned by several persons concurrently or in successive estates.” (CCP § 872.210(a).) “The court shall order that the property be divided among the parties in accordance with their interests in the property as determined in the interlocutory judgment.” (CCP § 872.810.)

“Notwithstanding¿Section 872.810, the court shall order that the property be sold and the proceeds be divided among the parties in accordance with their interests in the property as determined in the interlocutory judgment in the following situations: (a) The parties agree to such relief, by their pleadings or otherwise. (b) The court determines that, under the circumstances, sale and division of the proceeds would be more equitable than division of the property. For the purpose of making the determination, the court may appoint a referee and take into account [the referee’s] report.” (CCP § 872.820.2.)

The co-owner of a property has “an absolute right to partition unless barred by a valid waiver.” (LEG Investments v. Boxler (2010) 183 Cal.App.4th 484, 493.) Under the prior law, the party seeking partition by sale as opposed to partition in kind had the burden to establish sale was necessary to avoid “great prejudice.” (Butte Creek Island Ranch v. Crim (1982) 136 Cal.App.3d 360, 365.) The enactment of sections 872.810 and 872.820 expanded the availability of partition by sale. While the statutes continued the preference for partition in kind, the standard was reduced from a burden to show “great prejudice” to a showing that partition by sale would be “more equitable.” (Id.; Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 754.) “In ¿many modern transactions, sale of the property is preferable to physical division since the value of the divided parcels frequently will not equal the value of the whole parcel before division. Moreover, physical division may be impossible due to zoning restrictions or may be highly impractical, particularly in the case of urban property.” (Butte Creek, supra, 136 Cal.App.3d at 365.) The burden of proof remains on the party seeking partition by sale instead of partition in kind, as partition in kind remains favored by the law.

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. (Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 758-59, 765-66; Formosa Corp. v. Rogers (1951) 108 Cal.App.2d 397, 411-12 [abuse of discretion standard applied under former law].) This is because “a partition suit is in equity” and “a court of equity has broad powers and comparatively unlimited discretion to apply.” (Richmond, supra, 105 Cal.App.3d at 758; Cunningham v. Frymire (1958) 160 Cal.App.2d 726, 729 [trial court’s decision will not be disturbed “if there is any substantial evidence” in support and an appellate court will not weigh questions of fact determined by the trial court in a partition action].)

There are generally two types of evidence recognized to support a partition by sale. The first type of evidence that justifies partition by sale instead of partition is kind is that the property is so situated that a division into sub-parcels of equal value cannot be made. (Butt Creek, supra, 136 Cal.App.3d at 366.) This is not established by evidence that a portion of the property is not equal to the whole, as that is always true in a partition action. Nor is it established by evidence that the land is not “fungible” or uniform in character. Such showing is made by evidence that the land cannot be divided equally. (Id.) To illustrate, when the major value of the land consists of a water well, and without the well the land would have little value, physical division of the land would have required an award of the subparcel with the well to one party. This would result in prejudice to the party that did not receive the well. (Id.) Another example is when the land was small lot which included structures located in such a way to preclude equal partition in kind. (Id., citing Sing v. Beckham (1949) 94 Cal.App.3d 823; Priddel v. Shankie (1945) 69 Cal.App.2d 319.)

The second type of evidence that justifies partition by sale instead of partition in kind is economic evidence which shows that, due to the particular situation of the land, division of the land would substantially diminish the value of each party’s interest. (Butte Creek, supra, 136 Cal.App.3d at 367.) “The generally accepted test in this regard is whether a partition in kind would result in a cotenant receiving a portion of the land which would be worth materially less than the share of the money which could be obtained through sale of the land as a whole.” (Id.) “This is a purely economic test.” (Id.) “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.” (Id.) It is a manifest inequity to oust an unwilling cotenant from the land when no economic detriment is suffered. (Id.) An example would include when a movie studio had been developed in such a unique manner that physical division would result in damage to the aggregate value of the land in the amount of $1,500,000.00. (Id.)

Discussion

The Complaint alleges that Plaintiffs are the Trustees of the 26 27 Venice Enterprises Trust dated January 22, 1992. (Compl., ¶ 1.) Defendants Michael K. Norris and Dewi R. Norris are the Trustees of the Norris Family Living Trust, dated June 13, 2003. (Compl., ¶ 2.) The Trusts are co-owners of the real property described as 11627 Mayfield Avenue, Los Angeles, California 90049 (the "Property"). (Compl., ¶ 6.) The parties each own an undivided 50% interest in the property. (Compl., ¶¶ 8-9.) The property is a multi-family commercial property, with common areas servicing multiple units. (Compl., ¶ 10.) The complaint alleges that partition by sale is more equitable than partition in kind because the Property contains commons areas, and multiple units, which cannot be physically divided. (Compl., ¶¶ 10-11.)

Plaintiffs assert that title to the Property is not in dispute, as Plaintiffs and Defendants hold the Property as tenants in common. In 2009, Plaintiffs became the legal owners of an undivided one-half interest in the Property. (UMF 3.) In 2011, Defendants became the legal owners of an undivided one-half interest in the Property. (UMF 4.) Plaintiffs and Defendants hold the Property as tenants in common. (UMF 5.) The parties own the share of the Property in fee simple. (UMF 6-7.) Plaintiffs posit that there is no dispute that the legal, fee ownership of the Property is held by the Norris Family Trust and the Krupp Family Trust, each with an undivided 50% interest.

The Property is in an urban residential setting. (UMF 8.) The Property is a multi-family commercial property, with a common area servicing multiple units, a single assessor parcel number, and single legal description. (UMF 8.) The Property’s main value lies in its use as a multi-family commercial property, which cannot be divided. (UMF 8.) On July 22, 2022, Plaintiffs recorded a Notice of Pendency of Action. (UMF 9.)

This evidence meets Plaintiffs’ initial burden to demonstrate entitlement to an interlocutory judgment on this partition cause. Plaintiffs demonstrate the co-ownership of the Property. Further, the facts that the Property is in an urban, residential setting and that it derives its value from a multi-family commercial property, with common area servicing multiple units, renders partition in kind unfeasible. Accordingly, the sale and division of the proceeds would be more equitable than the physical division of the Property.

Defendant Michael Norris (hereinafter, “Michael”) opposes the instant motion on the grounds that Plaintiff cannot establish title as alleged in the Complaint and established by the moving evidence. Defendant argues Plaintiffs cannot establish that Dewi Norris (hereinafter, “Dewi”) has any right to Michael’s separate property interest in the 50% of the Subject Property. Michael asserts that Dewi does not have any equitable interest in the Property as alleged in paragraphs 2, 6, and 9 of the complaint. Apparently, Defendant recently entered into a stipulation with Dewi in family court and executed a trust transfer deed. (See Def. Exs. 12-14.) Michael therefore is now both the sole legal and equitable owner of the 50% interest in the Property as Trustee of the Mayfield Court Trust (MCT), rather than the NFT. Michael reasons that the motion would necessarily fail since the 50% interest is no longer currently held by “both” Defendants as “co-trustees” of the Norris Family Trust. Michael concedes that if Plaintiffs “amend their Complaint and MSJ solely to reflect same, Defendant Michael Norris will not oppose the amended MSJ.” (Opp. at p. 3.)

To sum, during the pendency of this action, following the Lis Pendens filed by Plaintiffs, and after this motion for summary adjudication was brought, Defendants transferred their interest in the Property from the NFT to Michael K. Norris, Trustee of the MCT. Michael now reasons that this has manufactured a dispute of fact. Strictly speaking, the Court agrees that this manufactured dispute precludes summary adjudication. Per Defendants’ stipulation in their Orange County Family Law Action, and per their respective Trust Transfer Deeds, only Michael Norris as Trustee of MCT, has current legal title to the relevant 50% interest in the Property. (See UMFs 4, 5, 7.)

In reply, Plaintiffs observe that, due to the lis pendens and Defendants’ actual knowledge of this suit, the MCT would be bound by any judgment which may be rendered in this partition action. However, this does not mean that this motion should still be granted on the noticed terms. The pleadings, motion, undisputed facts, and requested interlocutory judgment noticed do not match the true state of ownership of the property. As summary adjudication motions are strictly construed, summary adjudication on the partition should be denied.

That said, the Court views this as a bad-faith delay tactic. Michael’s evidence demonstrates that there is no true dispute of fact concerning the title and ownership. In fact, following Defendants’ transfer, Michael has defeated his previous defense to this action—that the family law and probate issues regarding the characterization of his separate property required staying this action. Further, Michael no longer opposes summary judgment once the pleadings are corrected. The Court must also note the timing of this transfer. It was only after the Court rejected Michael’s argument that Defendants transferred the interest from one trust to another.

Accordingly, Plaintiffs’ motion is DENIED.

However, as stated the Court believes that Michael has engaged in a bad faith tactic designed to delay the proceedings or needlessly increase the cost of litigation in violation of Code of Civil Procedure section 128.7(b)(1). The Court sets an OSC re imposition of sanctions for April 7, 2023, at 9:00 a.m. Defendant Michael Norris may file any opposition to the OSC by March 24, 2023. Plaintiffs may file a position paper re this OSC by April 3, 2023.

The Court is also considering taking the following action after hearing from the parties at the March 8, 2023, hearing. The Court, on its own motion, grants judgment on the pleadings against the complaint, because the complaint does not state facts sufficient to constitute a cause of action against Defendants. The Court will allow Plaintiffs five days leave to amend. Defendants must file an answer within five days of the amended complaint being filed.

The Court is also considering bifurcating the trial on the issue of partition by sale, and advance that trial to April 7, 2023 at 9:00 a.m., pursuant to Code of Civil Procedure section 128. A final status conference for that trial shall be April 3, 2023, at 9:00 a.m.