Ramirez vs. Saldana Lomeli

Non-appearances: If nobody appears for the hearing and the court has not been notified that all parties submit on the tentative ruling, the court shall determine whether the matter is taken off calendar or the tentative ruling becomes the final ruling.

NO. CASE NAME MATTER

1:30 p.m.

1 Ramirez vs. Plaintiff Edith Ramirez’s Motion for: (1) Approval of Costs of Saldana Lomeli Partition, (2) Equitable Reimbursement, and (3) Order Directing Disbursement of Sale Proceeds is GRANTED in the manner set forth below.

General Standards

Partition actions are governed by Code Civ. Proc. § § 872.010 et seq. The court may determine all motions, reports, and accounts, and make any decrees or other orders necessary or incidental to carrying out the purposes of Code Civ. Proc. § 872.010 et seq. and to effectuating the court's decrees and orders. (Code Civ. Proc. § 872.120.) This provision is intended to give “the broadest possible statutory authority” for the court's jurisdiction in partition actions. (Law Rev. Com. Comment to §872.120.)

The court may “order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.” (Code Civ. Proc. § § 872.140.) This provision makes clear the court's authority to order compensatory adjustment for such items as common improvements, unaccounted rents and profits, and other matters for which contribution may be required. (Law Rev. Com. Comment to §872.140.)

The costs allowable in a partition action consist of all expenses determined to have been incurred “for the common benefit.” (Code Civ. Proc. § § 874.010(e) and Finney v. Gomez(2003) 111 C.A.4th 527, 548 [trial court abused discretion in awarding 100% of fees that plaintiff incurred in consulting bankruptcy attorney where there was no evidence that bankruptcy fees were for common benefit].

Code of Civil Procedure section 873.820 requires the proceeds to 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. (Code Civ. Proc., § 873.820.)

“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. 2

(d) The reasonable costs of a title report procured pursuant to [s]ection 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. (Code Civ. Proc., § 874.010; see Code Civ. Proc., § 874.020)

Costs are normally apportioned among the parties in proportion to their interests, but the court may make a different equitable arrangement, such as where costs are allowed for related litigation affecting less than all parties. (Code Civ. Proc. § 874.040, Stutz v. Davis(1981) 122 C.A.3d 1, 4, 6 [apportionment contrary to common benefit test inequitable], Finney v. Gomez, supra, 111 C.A.4th 547 [court should have divided costs in proportion to parties' ownership interest where no evidence that benefits of partition accrued to only one party or that parties had dissimilar interest in property].)

Apportioned costs may be ordered paid in whole or in part before judgment. (Code Civ. Proc. § 874.110(a).) The court may order payment by the parties or from the proceeds of a sale. (Code Civ. Proc. § 873.820.) The judgment need list only the costs that then remain unpaid. (Code Civ. Proc. § 874.110(b).) Costs are a lien, prior to all other kinds of liens, on the share of the party specified. (Code Civ. Proc. § 874.120.)

Plaintiff’s Request

There remains $272,964.61 in net proceeds from the sale after seller credits, liens, commissions, referee compensation, etc. Plaintiff proposes that the following be deducted from the

Plaintiff proposes that the court distribute the net proceeds in the following manner:

 Subtract the following from net proceeds:

o Common-Benefit Costs (Attorneys’ Fees and Disbursements): $38,378.78

o Plaintiff Reimbursement: $71,696.21, which consists of: ▪ Mortgage advances: $63,323.60 3

▪ Preservation Expenses: $8372.61

 Balance Left for 50/50 Division: $162,889.21. o Divide balance equally: ▪ Plaintiff (50%): $81,444.81 ▪ Defendant (50%): $81,444.81

o Apply defendant-surcharge to Defendant’s share: $15,853.23

 Add Plaintiff’s reimbursement and Defendant’s surcharge to Plaintiff’s distribution.

Plaintiff’s request would result in the following final proposed distribution:

 Plaintiff: $168,994.25, which consists of: o Plaintiff’s reimbursement: $71,696.21 o Plaintiff’s 50% residue share: $81,444.81 o Defendant surcharge: $15,853.23

 Defendant: $65,591.58, which consists of: o Defendant’s 50% residue share: $81,444.81 o Less Defendant surcharge: $65,591.58

The Court’s Final Distribution

The court, having reviewed the evidence and the record, and based on the legal authority set forth above, rules on Plaintiff’s request as follows:

A. Common Benefit Attorney’s Fees/Disbursements

The court will allow the common-benefit attorney’s fees of $35,438.00 and $2,940.78 of attorney disbursements sought by Plaintiff. (See Code Civ. Proc § 874.010 (costs of partition include reasonable attorney’s fees incurred or paid by the party for the common benefit).

The court finds that the fees generated were for the common benefit of both parties in advancing the partition sale. The court further finds that the attorneys’ fees sought are reasonable.

B. Plaintiff Reimbursement 4

Plaintiff seeks reimbursement of mortgage advances and expenses related to paint, repair materials, paint work, etc., that Plaintiff incurred to render the property marketable and sale-ready.

First, Plaintiff seeks reimbursement for $63,323.60 in mortgage advances. The court finds that Plaintiff is entitled to reimbursement of half the mortgage advances. Because Plaintiff is liable on the mortgage with Defendant, regardless of the parties’ relationship status and regardless of whether or not Plaintiff resided in the home, Plaintiff would legally be obligated to pay the debt to preserve Plaintiff’s interest in the property. As a matter of equity, Plaintiff and Defendant should be liable for 50% of the debt equally. Because Plaintiff advanced the full $63,323.60 in mortgage payments to preserve the property, Plaintiff should be reimbursed for the $31,661.80 that Plaintiff advanced of Defendant’s equitable share of the debt.

Second, Plaintiff seeks reimbursement for $8,372.61 in expenses that Plaintiff incurred to render the property marketable and saleready. For the same reasons set forth above (that expenses and benefits should be apportioned equally between Plaintiff and Defendant), the court finds that Plaintiff is entitled to reimbursement of half of these expenses—i.e. $4,186.305. Third, Plaintiff seeks reimbursement for $194.85 in minor marketability items. The court declines to award reimbursement for these costs to Plaintiff.

These reimbursements will be compensatory adjustments to Plaintiff’s share that the court will make after the division. (Code Civ. Proc. § 872.140 (court may order allowance, accounting, contribution, and other compensatory adjustment among the parties according to the principles of equity).

C. Defendant Surcharge

Plaintiff also seeks a surcharge from Defendant’s share of the proceeds for $15,163.23 in attorneys’ fees and disbursements that Plaintiff incurred, which were specific to obtaining a default judgment against Defendant (and not part of the common benefit). 5

Plaintiff also seeks a surcharge from Defendant’s share of $690 related to expenses for Defendant’s refusal to vacate the property.

Under Code of Civil Procedure section 874.040, the court has authority to apportion the costs incurred in a partition action based upon either the parties' interests in the property, or equitable considerations. (Lin v. Jeng (2012) 203 Cal.App.4th 1008, 1025). This authority under “section 874.040 permits the trial court to apportion attorney fees based upon equitable considerations.” (Id.)

Here, the court finds that based on equitable considerations, the attorneys’ fees and disbursements that Plaintiff incurred that were related to this action against Defendant, including fees to initiate this action, obtain default, enforce fees and costs, and proceed with this litigation to result in a partition by sale. Defendant’s conduct in defaulting, failing to cooperate, and not assisting with the sale process or the costs necessitated these expenses. Defendant failed to participate in this action and/or set forth any meritorious defense. The amount of fees that Plaintiff incurred related to this action, specific to Defendant’s conduct, is reasonable.

As such, the court will grant Plaintiff’s request for a $15,853.23 surcharge from Defendant’s share of the proceeds. (Code Civ. Proc. § 872.140).

D. Distribution

Based on the court’s ruling, the court orders the following distribution:

Balance of Proceeds for Division

 Net Proceeds: $272,964.61  Less Common-Benefit Attorneys’ Fees/Disbursements as Costs: $38,378.78  Balance to be Divided 50/50: $234,585.83

Division of Balance 50/50

 Plaintiff’s 50% Share: $117,292.92  Defendant’s 50% Share: $117,292.91

Compensatory Adjustments and Equitable Apportionment 6

Plaintiff

 Plaintiff’s 50% Share: $117,292.92  Plus Plaintiff’s Reimbursement: $35,848.10  Plus Defendant Surcharge: $15,853.23  Plaintiff’s Total Distribution: $168,994.25

Defendant

 Defendant’s 50% Share: $117,292.92  Less Plaintiff’s Reimbursement: $35,848.10  Less Defendant Surcharge: $15,853.23  Defendant’s Total Distribution: $65,591.58

E. Final Order

The court, therefore, orders the following:

 The court approves the amended closing statement and confirms net proceeds of $272,964.61 for distribution.

 The court allows common-benefit attorney’s fees and disbursements in the amount of $38,378.78 as costs of the partition.

 The court directs a final distribution of the sale proceeds in the amounts of $168,994.25 to Plaintiff and $65,591.58 based on the court’s authority to apportion, add compensatory adjustments, and take into account contributions as set forth above.

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