Opinion
A148222
04-27-2018
TRACI PITTMAN, as Trustee, etc., et al., Plaintiffs and Appellants, v. KERRI VAU, Individually and as Trustee, etc., et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Mendocino County Super. Ct. No. SCUK CVG 11-57685)
This is an appeal by plaintiffs Traci Pittman and R. Frederick Caspersen, trustees of The Traci Pittman Trust (Pittman Trust), from an order denying Pittman's motion to join the post judgment motion by defendants Jack L. Cox (Cox), Debbie Harrison, and Kerri Vau, as an individual and trustee of the Vau trusts (Vau), to apportion their fees and costs in accordance with Code of Civil Procedure sections 874.010 and 874.040. This motion followed the settlement of the lawsuit filed by Pittman (plaintiff) and Caspersen, as trustees of The Pittman Trust, seeking the partition of a number of properties jointly owned by the parties and for accountings. The trial court denied plaintiff's motion, including her request for fees and costs incurred in the partition lawsuit, on the ground that "joinder is not the appropriate method to bring this request before the court." At the same time, the court allocated to Cox and Vau a total of $48,140.76 in attorney fees and costs based upon their proportionate ownership interest in the jointly held properties.
Unless otherwise stated, all statutory citations herein are to the Code of Civil Procedure.
On appeal, plaintiff contends that, notwithstanding the form of her motion, the trial court had a legal duty, which it neglected, to partition the costs and fees incurred by all parties for the common benefit of the partition, not just the costs and fees of the moving parties (Cox and Vau). According to plaintiff, the trial court thus reversibly erred when it denied her joinder motion on procedural grounds and, in doing so, refused to consider her evidence of the costs and fees she personally incurred for the common benefit when apportioning costs and fees to Cox and Vau. We conclude reversal and remand for further proceedings are indeed required for reasons set forth below.
FACTUAL AND PROCEDURAL BACKGROUND
Following the death of plaintiff's mother, Raynette Cox, on October 5, 2005, her will was received into probate, and letters of administration were issued to Tom Cariveaux. When Raynette Cox died, she owned a 50-percent interest in Nor-Cal Investments, Inc. (Nor-Cal) and numerous other property interests. Raynette Cox's surviving spouse, defendant Cox (plaintiff's father), owned the remaining 50-percent interest in these properties.
In setting forth the relevant factual and procedural background, we borrow from the succinct statement of facts in the trial court's February 5, 2016 "Ruling on Motion to Tax Costs."
In September 2009, Cariveaux, in his capacity as administrator of Raynette Cox's estate, entered into two agreements with Cox, one of which provided for Nor-Cal's dissolution and the other of which was a management agreement for assets in which the estate and Cox held separate, undivided interests.
On July 30, 2010, the final order of distribution was issued in the estate of Raynette Cox. The result was the creation of numerous trusts and tenancies in common among Cox; plaintiff, individually; and plaintiff and her sisters, Debbie Harrison and Vau, in their capacities as trustees. Cox retained operational control of the commonly owned agricultural properties, which he continued to farm.
On February 4, 2011, plaintiff filed this action seeking partition of the commonly held properties and for accountings. After a receiver was appointed, the parties entered into a settlement agreement of all partition claims in June 2012. This settlement agreement reserved for trial " 'all claims for accounting of past practices and financial activities,' " as well as the accounting and personal services claims. A bench trial on these reserved claims was held October 14, 2014.
Judgment in favor of Pittman in the amount of $43,785.40 was entered on April 28, 2015, and notice of entry of judgement was filed July 14, 2015. No notice of appeal was filed; however, on September 4, 2015, Cox and Vau filed a Notice of Motion for the Costs of Partition and Points and Authorities in Support pursuant to section 874.010, seeking recovery of their allocated share of the fees and costs of the partition based upon evidence of the fees and costs they incurred for the partition's common benefit. Plaintiff's joinder request, motion for apportionment and accompanying evidence followed on October 26, 2015, seeking allocation of partition fees and costs pursuant to section 874.040 based upon the fees and costs she separately incurred for the partition's common benefit.
Specifically, Cox and Vau claimed to have incurred $103,339.50 in fees and $9,169.17 in costs. They thus sought to recover $49,278.80 in fees and costs, which was based upon their calculation that plaintiff's proportionate interest in the partitioned properties was 56.2 percent, while Cox and Vau's was 43.8 percent. Plaintiff, in turn, claimed to have incurred $226,946.64 in combined fees and costs, and thus sought to recover $127,565.36 based upon her proportionate 56.2-percent share in the partitioned properties. As the trial court noted, this resulted in the unique circumstance that plaintiff, the nonmoving party, sought a net recovery of $79,423 in fees and costs against Cox and Vau.
On February 5, 2016, following a contested hearing, the trial court issued its "Ruling on Motion to Tax Costs," awarding Cox and Vau a total of $48,140.76 in combined fees and costs based upon their proportionate ownership interest in the partitioned properties of 43.8 percent, while denying plaintiff's request in full. In doing so, the trial court endorsed plaintiff's methodology for calculating her claimed fees and costs based upon her proportionate ownership interest of 56.2 percent, but nonetheless found "joinder is not the appropriate method to bring this request before the court." In particular, the trial court expressed concern that, in "the typical joinder request the identical relief is requested against a third party. In this situation, the net effect of the requested joinder is to request substantial relief against the moving party."
In an earlier filed tentative ruling, the trial court was, to the contrary, "inclined at this point to allocate the attorney fees and costs detailed by both parties by the percentage of property valuation. [Cox: 43.8% -- Pittman: 56.2%.]"
On April 13, 2016, the trial court entered a "Judgment #2 on Partition Action," awarding Cox and Vau $48,140.76 in costs and fees, plus prejudgment interest at a rate of seven percent per annum. Days later, on April 19, 2016, plaintiff filed a timely notice of appeal of the trial court's ruling.
DISCUSSION
Plaintiff contends the trial court erred in "failing to include the fees and costs [she] incurred for the common benefit in the apportionment" when granting Cox and Vau's motion and awarding them $48,140.76 in attorney fees and costs based upon their proportionate ownership interests in the jointly held properties. Plaintiff therefore asks this court to reverse the judgment for fees and costs and to remand the case with the instruction to the trial court to consider "all of the evidence presented by both sides" regarding fees and costs incurred for the common benefit of the partition.
"The standard of review on issues of attorney's fees and costs is abuse of discretion. 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." (Finney v. Gomez (2003) 111 Cal.App.4th 527, 545, fn. omitted (Finney).)
"A trial court can only award attorney's fees and costs based on contract or statute. Section 874.010, subdivisions (a) and (b), . . . states in partition actions the court may award 'reasonable attorney's fees incurred or paid by a party for the common benefit' and 'the fee and expenses of the referee.' Section 874.040, the companion to 874.010, states the court shall apportion the costs and fees of partition 'among the parties in proportion to their interests or make such other apportionment as may be equitable.' " (Finney v. Gomez, supra, 111 Cal.App.4th at p. 545, fn. omitted, italics added.)
Further, "the trial court may exercise its discretion in allocating fees, including setting the fee amounts and determining the appropriate allocation. . . . [I]n making these determinations the court should consider the fees incurred by defendants as well as plaintiff, and allocate them appropriately to the extent they are reasonable and incurred for the common benefit." (Orien v. Lutz (2017) 16 Cal.App.5th 957, 968, citing Forrest v. Elam (1979) 88 Cal.App.3d 164, 174 [affirming the trial court's fee award as a proper exercise of discretion where "[t]he reason behind the court's fee award decision is reasonable," while noting that "each case must stand on its own facts"].)
In applying this statutory framework, we agree, as an initial matter, with our appellate colleagues in the Second District, Division Four, there is "no ambiguity in the language of section 874.040. It simply states that the trial court must apportion the costs incurred in a partition action based upon either the parties' interests in the property, or equitable considerations. The statute's broad language does not limit the trial court's equitable discretion . . . ." (Lin v. Jeng (2012) 203 Cal.App.4th 1008, 1025 (Lin) [declining to follow Finney, supra, 111 Cal.App.4th 527, to the extent the Finney court imposed limits on the court's discretion to apportion costs based upon equitable considerations].) Thus, where, as here, the trial court apportions attorney fees based upon equitable considerations rather than the parties' proportionate property interests, "the abuse of discretion standard applies on review of that ruling. (Hartford Casualty Ins. Co. v. Travelers Indemnity Co. (2003) 110 Cal.App.4th 710, 724 .) In other words, the ruling must stand unless plaintiffs establish that the trial court exceeded the bounds of reason, resulting in a miscarriage of justice. (Denham v. Superior Court (1970) 2 Cal.3d 557, 566 [86 Cal.Rptr. 65, 468 P.2d 193].)" (Lin, supra, 203 Cal.App.4th at p. 1025 [affirming fee award decision where no abuse of discretion found].)
As noted above, the Lin court disagreed with Finney to the extent it suggested the trial court's discretion to apportion based upon equitable considerations was in any way limited. (See Finney, supra, 111 Cal.App.4th at pp. 547-548 [reversing and remanding where the record failed to support the trial court's decision to deviate from a proportional apportionment].) The Lin court explained its disagreement as follows: "In Finney, the appellate court stated that '[s]ection 874.040 has been consistently interpreted as giving courts only two options in apportioning the costs and fees of a partition action. The court may apportion the fees and costs based on the parties' respective interests in the property, or it may apportion the costs and fees based on some other equitable apportionment.' (Finney, supra, 111 Cal.App.4th at p. 545.) The court went on to state that the Law Revision Commission comments to section 874.040 set forth the only two circumstances under which a trial court may make an equitable apportionment—where the litigation arises among only some of the parties, or where the interest of the parties in all items, lots, or parcels of property is not identical. (111 Cal.App.4th at pp. 545-546.) We disagree with the Finney court's analysis. Although there is case law that supports a limitation on the trial court's ability to make an equitable apportionment, those cases were decided under a different version of the applicable statute." (Lin, supra, 203 Cal.App.4th at p. 1023.) We agree with the Lin court's analysis and conclusion based upon the unambiguous language of section 874.040. (See People v. Jacobs (2000) 78 Cal.App.4th 1444, 1450 ["Our first and most important responsibility in interpreting statutes is to consider the words employed; in the absence of ambiguity or conflict, the words employed by the Legislature control, and there is no need to search for indicia of legislative intent"].)
Returning to the case at hand, we first address a procedural matter—the fact that plaintiff's underlying motion was labeled a "joinder motion." According to Cox and Vau, this fact alone requires affirmance, as plaintiff had no right to file a joinder motion outside the 60-day mandatory statutory deadline for filing a motion once notice has been given that judgment was entered (which, in this case, occurred on July 6, 2015, over two months before plaintiff's motion was filed on October 26, 2015). (Cal. Rules of Court, rules 3.1702(b)(1), 8.104(a)(1)(B); see also Mason & Associates, Inc. v. Guarantee Sav. & Loan Assn. (1969) 269 Cal.App.2d 132, 133-134 [trial court loses jurisdiction after 60 days if losing party fails to file notice of appeal].) Cox and Vau also argue that, aside from the untimeliness of plaintiff's motion, there is no legal basis for permitting her to join their motion because her request for relief differs from theirs—to wit, plaintiff seeks recovery of the fees and costs that, according to her evidence, she personally incurred for the common benefit of the partition, rather than a share of the fees and costs incurred (and requested) by Cox and Vau.
We disagree with Cox and Vau's positions. For one, neither party has provided (nor have we found) authority for the proposition that joinder is appropriate only where the party seeking to join has requested identical relief as the moving party. To the contrary, the relevant inquiry appears to be whether the trial court decides joinder would be appropriate to determine the particular issue at hand and that the person to be joined as a party is necessary, or indispensable, for the court to resolve that issue. (See Cal. Rules of Court, rule 5.24(e)(2) ["The court may order that a person be joined as a party to the [family law] proceeding if the court finds that it would be appropriate to determine the particular issue in the proceeding and that the person to be joined as a party is either indispensable for the court to make an order about that issue or is necessary to the enforcement of any judgment rendered on that issue"].)
Further, while we acknowledge the trial court's comment when denying plaintiff's motion that "there is no governing statutory authority for the practice [of joinder in civil motions] and very little decisional law to give guidance to the court," we find useful a marital dissolution line of cases. Specifically, in Schnabel v. Superior Court (1994) 30 Cal.App.4th 758, 762-763 (Schnabel), the trial court denied the wife's motion to join in dissolution proceedings a close corporation in which the spouses jointly owned 30 percent of the stock and husband was employed as vice president. The reviewing court, in reversing, explained as follows: "Rules of court dealing with joinder are written in the permissive 'may' rather than the mandatory 'shall.' Hence . . . , joinder is not automatic. The standard of review is abuse of discretion. [¶] . . . [¶] On the other hand, the trial court's exercise of discretion must obviously be reasonable. In an extremely small number of cases joinder is the only reasonable alternative. This is such a case." (Ibid.) Thus, concluding that the trial court had abused its discretion in denying the joinder motion, our appellate colleagues in the Fourth District, Division Three, found particularly relevant the corporation's partisanship in favor of husband, which "made joinder necessary to enforce any family law judgment on the issue of community property . . . ." (Id. at pp. 763-764.)
Despite the factual differences, we find this reasoning persuasive in our case. The governing statute, section 874.040, commands the trial court to apportion the costs and fees of partition "among the parties in proportion to their interests or make such other apportionment as may be equitable." This simply cannot be accomplished in any meaningful way without plaintiff's involvement in these proceedings, making joinder in our case "the only reasonable alternative." (See Schnabel, supra, 30 Cal.App.4th at p. 763.)
In so concluding, we acknowledge the procedural irregularities, including the untimeliness, of plaintiff's motion and evidentiary submission. However, we do not find these irregularities fatal for several reasons. Firstly, it was the filing of Cox and Vau's motion that triggered plaintiff's belated response in the first place. As such, any claim by Cox and Vau of undue prejudice arising from trial court consideration of plaintiff's evidence rings hollow. And while Cox and Vau are correct that, generally speaking, motions must be filed within 60 days of notice of entry of judgment (Cal. Rules of Court, rules 3.1702(b)(1), 8.104(a)(1)(B)), the court was not without authority to consider her motion. (See Code Civ. Proc., § 872.610 ["The interests of the parties, plaintiff as well as defendant, may be put in issue, tried, and determined in the action"]; Cal. Rules of Court, rule 3.1702(d) ["For good cause, the trial judge may extend the time for filing a motion for attorney's fees in the absence of a stipulation or for a longer period than allowed by stipulation"].) Finally, as plaintiff notes, nothing in the language of section 874.040 limits recovery of partition costs or fees to the moving party or requires a noticed motion. Rather, as explained above, it requires the court to apportion the costs and fees of partition "among the parties in proportion to their interests or make such other apportionment as may be equitable." (§ 874.040.)
Thus, even assuming the trial court is appropriately concerned about allowing plaintiff a net recovery against Cox and Vau notwithstanding her initial failure to move for fees and costs, the fact remains that, based on the clear language of section 874.040, plaintiff's motion and evidence is entitled to consideration. (Lin, supra, 203 Cal.App.4th at p. 1022 [the court may apportion the fees and costs based on the parties' respective interests in the property, or it may apportion them based on some other equitable apportionment].) In this case, it does not appear from the record that plaintiff's evidence received the court's meaningful consideration.
Accordingly, we conclude the trial court abused its discretion in refusing to consider plaintiff's motion, much less award her any of the costs or fees she incurred for the common benefit, while at the same time awarding Cox and Vau all of their respective costs. We therefore reverse the order and remand to the trial court to reconsider the parties' motions and evidence in accordance with the opinions of this court set forth above.
DISPOSITION
The order is reversed, and the matter is remanded with instructions to the trial court to conduct further proceedings on the parties' apportionment motions in accordance with the opinions stated herein. Appellants are awarded costs on appeal.
The court hereby denies the parties' stipulation to augment the record on appeal filed on June 21, 2016. The stipulation seeks to augment the record with a document consisting of emails exchanged between counsel for the parties. However, there is no indication the document was lodged or filed in the trial court. As such, augmentation to include this document in our record would not be appropriate. (See Cal. Rules of Court, rule 8.155(a); Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3 [augmentation process does not allow party to supplement record with materials not before the court at the time of the challenged decision]; accord, People v. Pearson (1969) 70 Cal.2d 218, 221, fn. 1; In re Marriage of Forrest & Eaddy (2006) 144 Cal.App.4th 1202, 1209.) --------
/s/_________
Jenkins, J. We concur: /s/_________
Pollak, Acting P.J. /s/_________
Siggins, J.