When members of a family inherit property, it's often difficult to know what to do with it. Some members of the family may want to hold on to it as an investment, others may want to live in the family residence, while others just want to sell and move on. Other times, when several unrelated parties receive title to the property, there may be questions about the manner in which the title was acquired.
When several owners cannot agree on what to do with real estate, the law provides the option to force a sale of the property, known as a "partition." A partition action generally involves a two-step process of determining each party's interest and then appointing a referee to sell the property and award each party their share according to the determined interests.
A lesser-known aspect of a partition aspect is that it permits a party to challenge another party's share of ownership or ownership at all. In a partition action, the parties' interests may be put into issue, tried, and determined. (CCP § 872.610.) Once a party's title in the Property is in issue, the Court must try and determine the title issue. Under the law, "No partition can be made until the respective interests of all the parties have been ascertained and settled by a trial." This is because only one interlocutory decree is allowed, and the entry of two interlocutory decrees would violate the Code of Civil Procedure. This is also appropriate as "[i]t is well settled that litigation is not to be tried piecemeal and that the general rule is that there can be only one final judgment in an action."
Notably, the law permits "any party" to challenge another party's interests. "The interests of the parties, plaintiff as well as defendant, may be put in issue, tried, and determined." (CCP § 872.610 (emphasis added).) This is because the plaintiff's right to maintain a partition action depends on its owning a sufficient interest in the property. It is also because a partition action serves as a quiet title action. That is, when someone sues to obtain a partition, the person who issued may challenge their right to bring the suit altogether. That is, the party suing, the plaintiff, may walk away from the process with nothing to show for it.
This is especially significant as the partition law permits parties to the lawsuit to seek to recover their attorneys' fees and costs in the manner that the court sees fit, and the court may order a jury trial on title questions. As a result, when there is a question in a partition action about ownership, and the potential for paying another party's attorneys' fees and costs looms large, the lawsuit can end up becoming much more than anyone could have anticipated at the outset.
As a result, it is important for any party to a partition action to retain counsel at the earliest possible opportunity to ensure that their rights are protected.
Eli Underwood, Krogh & Decker, LLP, Business Attorneys (916) 498-9000 or www.kroghdecker.com/contact
