Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County No. RIC405998. Paulette D. Barkley, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.)
Mohammed Haider and Mary Haider, in pro. per., for Defendants and Appellants.
Reid & Hellyer, Daniel E. Katz and Michael G. Kerbs for Plaintiffs and Respondents.
OPINION
King, J.
I. INTRODUCTION
Plaintiff Christina Akmakjian, as trustee of a trust, held an 85 percent interest in an apartment building. Defendants Mohammed and Mary Haider owned the remaining 15 percent interest. After a partition sale of the property, the referee appointed to manage and sell the property moved for approval of his final accounting and plan for distribution. He proposed to credit the parties with income and proceeds in proportion to their interests, but charge them for the costs of the partition on a 50-50 basis. Defendants argued that allocating income and expenses differently was incorrect and inequitable. The court rejected the argument and approved of the referee’s final accounting and authorized him to make the proposed distributions. Defendants appealed.
In addition to being a named plaintiff in her capacity as trustee, Christina Akmakjian is separately named as a plaintiff in her individual capacity. So is her husband, Jack Akmakjian. As we noted in our prior nonpublished decision in this case, the individuals, in their capacity as such, do not appear to be proper plaintiffs in this action because they did not hold any interest in the property. (Akmakjian v. Haider (Feb. 25, 2008, E041762) [nonpub. opn.] at p. 2, fn. 1, citing Code Civ. Proc., § 872.230, subd. (b) [complaint must allege the plaintiff’s interest in the property].) Although it does not appear that the Akmakjians in their individual capacities have been dismissed from the case, we will nevertheless use the term plaintiff to refer only to Christina Akmakjian in her capacity as trustee.
We agree with defendants. The general rule provided by statute requires that the costs of partition be apportioned according to each parties’ interest in the partitioned property. (Code Civ. Proc., § 874.040.) Although a trial court has discretion to depart from this rule when doing so is “equitable, ” such discretion must be supported by substantial evidence in the record. Here, there is none. Accordingly, we will modify the court’s order to require that costs be apportioned in proportion to the parties’ interests in the property and affirm as modified.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
II. FACTUAL SUMMARY AND PROCEDURAL HISTORY
Plaintiff and defendants held undivided interests in an apartment building. When disputes arose between them, plaintiff sued defendants to partition the property. The court determined that plaintiff held an 85 percent interest in the building and defendants owned the remaining 15 percent interest. The court also appointed a referee to manage and sell the property and to perform an accounting. The referee did both.
We affirmed this determination in Akmakjian v. Haider, supra, E041762.
In July 2009, defendants filed a motion to invalidate the sale and terminate the referee on grounds, among others, that the referee committed “auction fraud” and was biased against defendants. Defendants relied in part on evidence that the referee proposed to charge the parties equally for his fees. In support of this argument, defendants submitted evidence that they had informed the referee that because they own 15 percent of the property, they are “responsible only for 15% of the receiver[’s] fee[, ] not 50%.” In response, the referee told defendants: “As far as my fees are concerned, I think 50-50 is appropriate.” He did not explain why he believed this allocation was appropriate.
In response to defendants’ motion to invalidate the sale, the referee sought and obtained leave to employ counsel. Defendants’ motion to invalidate the sale was thereafter heard and denied.
In September 2009, the referee filed a motion for, among other orders, an order approving his final accounting and proposed distribution to the parties. The final accounting shows plaintiff receiving credit for 85 percent of the operating cash flow from the apartment building and the sale proceeds before deducting sales commission and closing costs; defendants are credited with the remaining 15 percent. The referee, however, charged each side equally for the sales commission and closing costs associated with the sale, his fee, and his legal fees. No explanation for the different allocations of income and expenses is given in any of the papers submitted in support of the motion.
The referee’s motion was set for hearing on November 30, 2009. On Wednesday, November 25, 2009, defendants (appearing in propria persona) filed and served an opposition to the motion. Defendants pointed out that the referee “distributed the income from the property between the parties such that he has given 85 percent of the income to [plaintiff] and 15 percent to [defendants], but has distributed the property’s expenses equally, 50-50, to the parties.” This “inequitable distribution of incomes and expenses, ” defendants argued, “needs to be corrected....” Defendants did not cite to any legal authority. They relied primarily upon an e-mail sent to them by plaintiff’s counsel, which states: “With regard to the amount owed on the property, any interest of the parties is in the net equity of the property, which is the remainder when all the costs have been paid, including the auctioneer, the receiver, and the mortgage. Once all the costs are deducted – just as they would be deducted in a non-auction sale – the parties split the remainder based on their ownership share. Included in this would be any income proceeds from the rents being held by [the referee].”
Defendants titled their opposition, “Defendants’ Reply to Final Accounts Submited [sic] by the Court Receiver on Partition and Sale.”
At the hearing on the referee’s motion, the referee’s counsel provided no explanation for the referee’s allocation of costs. He informed the court that the issue was “really a matter between the defendant[s] and plaintiff.” Counsel for plaintiff objected to the defendants’ opposition as untimely, but offered no justification for the different treatment of income and expenses. The court noted counsel’s objection, but stated she had considered defendants’ opposition. The court granted the motion without giving reasons therefor. Defendants’ appealed.
III. ANALYSIS
Section 874.010 defines the costs of partition to include reasonable attorney fees incurred for the common benefit, the referee’s fee and expenses, and other specified costs and disbursements. Although plaintiff asserts defendants are “responsible” for the referee’s legal fees because the fees were incurred only after defendants sought to invalidate the sale of the property, she does not appear to dispute that the fees were incurred for the common benefit of the parties for purposes of this statute.
Section 874.040 provides: “Except as otherwise provided in this article, 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.” Under this statute, “a trial court ordinarily should apportion the fees and costs based on the parties’ proportion of interest in the property, making the equitable apportionment option the exception rather than the rule.” (Finney v. Gomez (2003) 111 Cal.App.4th 527, 546, citing Stutz v. Davis (1981) 122 Cal.App.3d 1, 4.)
The initial clause in this statute is inapplicable because no other provision in the relevant article provides for a different apportionment of costs.
The referee’s accounting is irreconcilable with the general rule under section 874.040. The referee expressly allocated costs equally between the parties even though plaintiff’s and defendants’ interests are 85 percent and 15 percent, respectively. In order for the court to properly approve the referee’s accounting, therefore, the approval must be based on the final clause of the statute, which permits the trial court to “make such other apportionment as may be equitable.” (§ 874.040.)
The court did not provide its reasons for its decision. We will, however, uphold the judgment if it is correct on any theory of law applicable to the case. (Belair v. Riverside County Flood Control Dist. (1988) 47 Cal.3d 550, 568.) If we presume that the court approved of the referee’s allocation of costs under the equitable apportionment exception, the determination is reviewed for an abuse of discretion. (Finney v. Gomez, supra, 111 Cal.App.4th at p. 545.) Under this standard, the “trial court’s decision will only be disturbed when there is no substantial evidence to support the trial court’s findings or when there has been a miscarriage of justice. If the trial court has made no findings, the reviewing court will infer all findings necessary to support the judgment and then examine the record to see if the findings are based on substantial evidence.” (Ibid., fns. omitted.)
Here, there is no substantial evidence to support a 50-50 split of the sales commission, closing costs, referee fees, or legal fees. Indeed, plaintiff points to no evidence to support a departure from the ordinary rule of allocating costs in proportion to the parties’ interests. Nor can any explanation for the referee’s allocation of costs be found in any of the papers and arguments in the record or in plaintiff’s brief on appeal. Although the referee informed defendants at one point that he believed an equal allocation of costs was “appropriate, ” the basis for this belief was never disclosed.
Plaintiff points to two cases for the proposition that courts have applied the equitable apportionment clause “to allow for apportionment not in proportion to the parties’ interests.” In the two cases, however, the Court of Appeal actually reversed the trial courts’ approval of cost allocations that varied from the parties’ interests in the property. (See Finney v. Gomez, supra, 111 Cal.App.4th at pp. 548-550 [court abused its discretion in awarding fees and costs out of proportion with the parties’ interests]; Stutz v. Davis, supra, 122 Cal.App.3d at p. 5 [“there is nothing in the record... to support an apportionment in any manner other than according to the respective interest of the parties in the property”].) The cited cases support defendants’ position, not plaintiff’s.
Southern Cal. Title Clearing Co. v. Laws (1969) 2 Cal.App.3d 586 is also cited by plaintiff. It too does not help her. In that case, one party held a five-sixth interest in certain property and the other party held the remaining one-sixth interest. (Id. at p. 588.) An interlocutory judgment was entered declaring that the plaintiff was entitled to a partition of the property. (Ibid.) A second interlocutory judgment was entered directing the sale of the property and the appointment of a referee. (Ibid.) After discussing other issues, the Court of Appeal addressed an argument by the plaintiff that it was entitled to costs and fees. (Id. at pp. 590-591.) The court held that the argument was premature: “Such costs and fees as plaintiff may be entitled to recover, if any, should be determined when the final decree of partition is made.” (Ibid.) The court went on to state: “The interlocutory judgment does contain language directing that the proceeds of the sale, after payment of costs of sale, shall be divided five-sixths to plaintiff and one-sixth to defendant Laws. We interpret this to be no more than a declaration of the respective interests of the parties in the property. That judgment does not preclude such apportionment of costs and counsel’s fees as may be appropriate under [predecessor to section 874.040] as a part of the final judgment.” (Id. at p. 591.)
Southern Cal. Title Clearing Co. merely indicates that equitable apportionment of costs is possible. Because the trial court had not yet approved of any apportionment of fees and costs in that case as of the time of the interlocutory judgments, the propriety of any allocation was not before the court. The case provides no meaningful guidance on the question presented here.
Plaintiff contends we should not consider defendants’ argument because defendants did not refer the trial court to section 874.040. Therefore, plaintiff argues, defendants are barred by the rule that generally precludes review of matters presented for the first time on appeal and by the doctrine of invited error. We reject these arguments.
As plaintiff asserts, matters not presented below will generally not be considered on appeal. (See, e.g., Franz v. Board of Medical Quality Assurance (1982) 31 Cal.3d 124, 143.) However, here, defendants unambiguously argued below that the referee’s allocation of costs was incorrect and inequitable. Although defendants, who appear to have prepared their opposition papers without the benefit of counsel, did not provide a citation to section 874.040, the propriety of the referee’s apportionment of costs was squarely before the trial court, and the issue may be considered on appeal.
Although plaintiff points out that defendants’ opposition was not timely filed, she does not assert this procedural defect as a ground for affirming the court’s order. (See People v. Schnabel (2007) 150 Cal.App.4th 83, 84, fn. 1 [court will address only arguments reflected in the headings and subheadings of a party’s brief].)
Under the doctrine of invited error, “‘[w]here a party by his conduct induces the commission of error, he is estopped from asserting it as a ground for reversal....’” (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403.) The purpose of the doctrine “is to prevent a party from misleading the trial court and then profiting therefrom in the appellate court.” (Ibid.) The doctrine does not apply when a party may “have induced the commission of error, but did not in fact mislead the trial court in any way....” (Ibid.) This doctrine does not apply here. There is nothing in the record to suggest that these defendants did anything to mislead the court or induce an erroneous ruling. We therefore reject this argument.
Because there is no substantial evidence to support a departure from the ordinary rule that costs in a partition action be apportioned according to each parties’ interest in the property, the court erred in approving the referee’s final report. The error was clearly prejudicial. According to the referee’s accounting, the sum of the costs to which he applied a 50-50 split was $166,800.20, each party being charged $83,400.10. If, however, these costs had been apportioned in proportion to the parties’ interests, defendants would be charged with 15 percent of the costs, or $25,020.03, and plaintiff charged with 85 percent of the costs, or $141,780.17. Defendants were thus overcharged by $58,380.07, and plaintiff undercharged the same amount.
This is the sum of closing costs ($71,800.20), referee fees ($65,000), and attorney fees ($30,000).
Because the referee appears to have previously distributed $485,829.09 to plaintiff, the correction will result in a negative balance due to plaintiff of -$20,226.26. The court must, therefore, order plaintiff to return such sum to the referee.
The error is cured by simply applying the correct percentages to the numbers provided by the referee. No new factual findings or discretionary decisions are required by the trial court. Accordingly, we will modify the court’s order to correct the error. (See § 906.)
IV. DISPOSITION
The court’s November 30, 2009, order granting the referee’s motion for, among other orders, an order approving his final accounting and proposed distribution to the parties is modified as follows. The second paragraph of the order, which reads “IT IS HEREBY ORDERED that the Referee’s final accounting attached to the Declaration of Steven M. Speier as Exhibit B is approved and that the Referee is authorized to make the distributions to the parties as set forth therein” is deleted. The following is inserted in it place: “IT IS HEREBY ORDERED that the Referee’s final accounting attached to the Declaration of Steven M. Speier as Exhibit B is modified such that the closing costs (in the amount of $71,800.20), the referee’s fee (in the amount of $65,000), and the legal fees (in the amount of $30,000) shall be apportioned 85 percent to plaintiff and 15 percent to defendants. The amount of distributions due to the parties as stated in said Exhibit B are adjusted to reflect these modifications such that plaintiff’s distribution due (of $38,153.81) is reduced by $58,380.07 (to a revised -$20,226.26) and defendants’ distribution due (of $11,419.37) is increased by $58,380.07 (to a revised $69,799.44). Because plaintiff’s balance due is a negative number, she is ordered to return the sum of $20,226.26 to the Referee. The Referee is authorized to make the revised distribution due to the defendants.”
As modified, the court’s order is affirmed. Defendants shall recover their costs on appeal.
We concur: Richli Acting P.J., Miller J.