Selasa, 08 Oktober 2013

Partition of Property: What Happens When A Lawsuit is Filed



What happens if you are required to file a lawsuit seeking partition?  I recently read a case that went into details of how a typical partition case unfolds in litigation.  The facts are from Martin v. Martin, B198405 (Cal. Ct. App. Apr. 23, 2008).

In the Martin case, "Thomas" and "Ruth" were ex-spouses that co-owned a commercial property. Through the years, they split the rental income.  After a number of years, Thomas wanted to sell the property.  Ruth did not.  Thomas was forced to sue her.  Here's how the case was litigated at the trial level:

On May 4, 2005, Thomas filed a complaint for partition against Ruth. The complaint sought a sale of the property, and a division of the net proceeds of the sale. On June 13, 2005, Ruth answered the complaint and alleged various affirmative defenses, including claims for credits and offsets in connection with alleged fraudulent misrepresentations made by Thomas.  
The superior court set the matter for a mandatory settlement conference (MSC). At the March 29, 2006 MSC, the parties orally agreed to sell the property and equally divide the net proceeds.  
On June 2, 2006, counsel appeared in superior court and represented that the parties had agreed on a broker to list and sell the property. The court issued an order appointing the broker. The court also set a trial date of October 23, 2006.
On August 21, 2006, the parties accepted an offer for the sale of the property. The parties executed a purchase agreement and escrow instructions.
The escrow instructions memorialized the parties' earlier agreement in principle to equally distribute the net sale proceeds without offsets.
Ruth was fighting Thomas on selling the property.  She forced Thomas to spend attorney fees and costs before she agreed to list the property.  I am sure that her attorney advised her that she was going to lose her case.  Regardless, she decided it was worth paying a lawyer to fight a losing case.  Perhaps she was acting out of vindictiveness.  Perhaps she and her attorney were using the lawsuit to negotiate more favorable terms for her benefit.  Unfortunately, this legal opinion does not explore the personal motivations of the ex-spouses.  

Ultimately, Ruth agreed to list the property for sale.  The cost of the sale of the property was greatly inflated because of the court and attorney fees.  

Ken Jorgensen, California Attorney
www.fresnolawgroup.com

Photo credit: http://www.flickr.com/photos/victoriapeckham/


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