Opinion
NOT TO BE PUBLISHED
Appeal from the Superior Court County of San Luis Obispo No. CV050180. Roger T. Picquet, Judge.
David P. Weilbacher for Defendant and Appellant.
Ogden & Fricks LLP, Roy E. Ogden, Sue Carrasco for Plaintiff and Respondent.
PERREN, J.
Kathryn A. Greenelsh appeals from a judgment ordering partition of real property by sale and division of the proceeds. She asserts the trial court abused its discretion by not allowing her to "put on her case" and that the court's decision is not supported by substantial evidence. We affirm.
FACTUAL AND PROCEDURAL HISTORY
Greenelsh holds a 45 percent interest in the Gamboni Ranch in San Luis Obispo County. Respondent Robert L. Johnson is the administrator of the estate of his brother, William Warren, which also holds a 45 percent interest in the ranch. Greenelsh and Johnson are siblings. The remaining 10 percent interest is held by a trust of which Greenelsh is the trustee.
In December 2003, Johnson filed a complaint for partition of the property by sale. (Code Civ. Proc., § 872.010 et seq.) On the first day of trial, counsel for the parties made opening statements. Greenelsh asserted there was no need to partition the ranch because she was willing to make a loan to Johnson. Thereafter, Johnson testified and was cross-examined by Greenelsh's counsel. Johnson said that he requested that the ranch be partitioned by sale for the benefit of their 92-year-old mother who was unable to use or maintain the property and needed money for living expenses.
The following day, the court announced that it was bound to consider a division in kind as the preferred method of partition but that any such division would be based on a report by a referee. The court ordered Johnson to ascertain whether there were any legal restrictions, e.g., local zoning laws, which would make in-kind division of the ranch impossible.
When trial resumed, the court announced that "the only real issue that the court has to decide initially is how that [partition] is going to happen, whether it is going to be by sale or in kind." The court stated it was not persuaded by Greenelsh's argument that partition could be avoided by a showing that it was unnecessary. The parties consented to the appointment of a referee by the court.
After the referee submitted his report opining that in-kind partition was not practical, the court noticed a hearing giving the parties an opportunity to comment on the report and the court's proposed order to partition by sale. Greenelsh submitted three sets of points and authorities objecting to the substance of the report and the proposed order and, again, arguing that partition was not necessary because she was willing to make a loan to Johnson or purchase his 45 percent interest in the ranch. Johnson proposed that the court adopt the findings in the report and order that the ranch be sold.
The trial court issued an order stating that "[t]he referee's recommendation that the property not be physically partitioned under its current configuration is accepted by the court." The court also concluded that Greenelsh was not entitled to a trial on the issue of whether a partition sale could be avoided due to alleged negative impacts on her resulting from partition by sale. On December 9, 2006, the court entered judgment consistent with its ruling and directed the referee to arrange for sale of the ranch.
On appeal, Greenelsh asserts the trial court abused its discretion by not allowing her to "put on her case" and that the court's ruling lacks evidentiary support.
DISCUSSION
The Partition Statutes
Parties with concurrent interests in property may obtain a partition of the property as a matter of right. (Code Civ. Proc., § 872.710, subd. (b).) Partition may be by division of the property in kind, by sale, or, if the parties agree, by appraisal. (§§ 873.210-873.970.) Section 872.820, subdivision (b) provides that the property shall be sold and the proceeds be divided among the parties when the court "determines that, under the circumstances, sale and division of the proceeds would be more equitable than division of the property."
All statutory references are to the Code of Civil Procedure.
Section 872.820 provides in its entirety: "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 his report."
Under prior law, there was a strong preference for partition in kind rather than by sale, and a party seeking partition by sale had the burden of establishing that a sale was necessary to avoid "great prejudice." (Butte Creek Island Ranch v. Crim (1982) 136 Cal.App.3d 360, 365 (Butte Creek); Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 757.) The 1976 enactment of sections 872.810 and 872.820, however, expanded the availability of partition by sale. (Butte Creek, at p. 365.) The statutes continue a preference for division in kind, but reduce the standard for allowing a sale from a showing that "great prejudice" would result from division in kind to a showing that division by sale would be "more equitable." (Ibid.) The Legislature recognized that "'[i]n 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. . . .'" (Ibid.)
Greenelsh Was Allowed to "Put on Her Case"
Greenelsh asserts that the court erred by failing to permit her to present testimony, including the testimony of an expert witness concerning the tax consequences of a partition by sale. She is mistaken. The trial court provided her with all the procedural rights granted by the partition statutes.
Sections 872.610 to 872.640 provide for a trial to ascertain the interests of the parties in the property. Here, the interests of the parties were not in contention.
Sections 872.710 to 872.830 provide for a trial to determine whether the plaintiff has the right to partition. Here, there was no contention and no evidence that Johnson waived the right to partition. Therefore, Johnson's right to partition was absolute. (§ 872.710, subd. (b).)
The only issue remaining after the parties' ownership interests and plaintiff's right to partition have been determined is whether the partition shall be in kind or by sale. (§§ 872.820-872.840.) Here, the trial court did precisely what the statute required by appointing a referee to provide a report and recommendation as to whether partition by sale would be more equitable than partition in kind. (§ 872.820, subd. (b).)
After the referee submitted his report, the trial court complied with the statutory requirement to provide the parties with a hearing and the opportunity to object to the report. (§ 873.290.) As noted above, Greenelsh took full advantage of this opportunity to be heard by submitting three sets of points and authorities, which fully set forth her position that partition was unnecessary and that partition by sale would have undesirable tax consequences. The court complied with the partition statutes. Greenelsh was not entitled to more.
No Abuse of Discretion Ordering Partition By Sale
On appeal, a judgment of partition may be set aside only for abuse of discretion. (See Richmond v. Dofflemyer, supra, 105 Cal.App.3d 745, 758.) Determining whether partition by sale would be more equitable than physical division is a factual question for the trial court; and where the evidence, even though conflicting, permits the court reasonably to conclude that partition by sale would be more equitable to the owners, that determination will not be disturbed on appeal. (See Formosa Corp. v. Rogers (1951) 108 Cal.App.2d 397, 412.)
Although a party seeking partition by sale has the burden of overcoming a "presumption" favoring division in kind, on appeal the trial court's ruling is presumed correct and the appellant has the burden of proving the order constituted an abuse of discretion. (Richmond v. Dofflemyer, supra, 105 Cal.App.3d 745, 757; Formosa Corp. v. Rogers, supra, 108 Cal.App.2d at pp. 411-412; see also Butte Creek, supra, 136 Cal.App.3d 360, 368-369.)
The referee submitted a lengthy and detailed report. The report indicates that the ranch is divided into five legal parcels varying in size from 8.75 to 200 acres. Two of the parcels have street frontage with developed access and improvements. One parcel has frontage on a county road, but no developed access. Another parcel may have some historical rights to an access, but would likely require some type of court action in order to establish the access. The last parcel does not have any road frontage or established access. The referee concluded that the ranch could not be physically partitioned under its current configuration by allocating individual parcels to the three owners according to their ownership interests. The referee recommended that the ranch be appraised and that an exchange of money occur to make the partition equitable to the respective interests of the owners.
The court's order states: "The referee's recommendation that the property not be physically partitioned under its current configuration is accepted by the court. The alternative approach for a formal subdivision or lot line adjustment so as to allow physical partition of the property is rejected by the Court as unduly expensive and time consuming. The other alternative of having the property appraised and to use the appraisal as a basis to establish an exchange of money between the parties is rejected by the Court as unduly expensive and time consuming. [¶] . . . [¶] In the present matter it was stipulated by the parties not to divide the property. Under that stipulation the only result possible is to permit partition by sale."
The trial court's order is entirely consistent with California authority. In Butte Creek, supra, 136 Cal.App.3d 360, 367, the court said: "There are two types of evidence which have been held sufficient to justify a partition sale of property rather than physical division. The first is evidence that the property is so situated that a division into subparcels of equal value cannot be made. [Citation.] . . . [¶] . . . [¶] The second type of evidence which supports a partition sale rather than physical division is economic evidence to the effect that, due to the particular situation of the land, the division of the land would substantially diminish the value of each party's interest."
Here, the referee determined that an equitable division in kind of the five widely disparate parcels to the three joint owners was not possible without expenditure of considerable time and money. The alternative suggested by the referee—partition by appraisal—was not possible because all parties had not given consent. (§ 873.910.)
The court did not abuse its discretion in ordering partition by sale. (See Richmond v. Dofflemyer, supra, 105 Cal.App.3d 745, 758 [section 872.840 "is explicit and gives the trial court the power to use its own sound discretion in determining whether under all of the facts and all of the evidence presented to it the property should be partitioned in kind or sold"].)
DISPOSITION
The judgment is affirmed. Costs are awarded to respondent.
We concur: YEGAN, Acting P.J., COFFEE, J.