Opinion
C053166
5-1-2007
MARTIN A. VASQUEZ, Plaintiff and Respondent, v. MARIA J. SILVA, Defendant and Appellant.
NOT TO BE PUBLISHED
Plaintiff Martin Vasquez brought this action to partition real property to which he and his sister, defendant Maria Silva, held title as joint tenants. The defendant appeals from the final judgment. She contends that the court either erroneously disregarded a judicial admission in the complaint that she had a one-half interest in the property or impermissibly reopened this issue after the entry of the interlocutory judgment (Code Civ. Proc., § 872.720) and used incorrect methodology to evaluate the extent of her interest in the property. We shall affirm as modified.
Hereafter, undesignated section references are to the Code of Civil Procedure.
BACKGROUND
The facts are not disputed (indeed, the parties cite to the facts in each others trial briefs). In 1998, the plaintiff bought the subject property in Colusa with his wife. The purchase price was $117,500, on which they made an $11,750 down payment. Upon their divorce shortly afterward, the plaintiffs wife transferred her interest in the property to him. The plaintiff executed a deed in October 1999 transferring the property to himself and the defendant as joint tenants. The deed was recorded November 1. The defendant did not provide any consideration for the transfer of the interest to her. The intent was to preserve the value of the property for the plaintiffs children.
Through October 1999, the plaintiff made payments totaling $ 15,300 (dollar figures will be rounded to the nearest hundred). In October 1999, the plaintiff made a payment of $22,400 in additional principal. Thereafter, he made payments of $3,800 on the mortgage through April 2000. At that time, he experienced financial difficulties. He made an oral agreement with the defendant under which he surrendered the property, and she was to manage it with their sister Martha, collecting rents and paying expenses. (The defendant made up the difference each month when the rent did not cover all expenses.) The plaintiff vacated the property in May 2000. The plaintiff and defendant discussed a transfer of his interest in the property to her and their sister Martha, but did not reduce anything to writing. The defendant obtained an equity loan in October 2002 with their sister Martha. The plaintiff retained $ 20,000 of the proceeds, and the defendant retained $5,000. The parties made primarily interest-only payments (the principal being reduced only $300).
This was in connection with a refinancing of his mortgage. Apparently the payments he had been making did not reduce the principal significantly, as the new loan was for $ 84,000 even after his payment of additional principal.
The plaintiff commenced the present action in June 2004. He alleged that he and the defendant were co-owners of the property, each with a 50 percent interest. In her answer, the defendant denied these allegations, asserting that she and their sister Martha each held an undivided one-half interest in the property "pursuant to an agreement between the parties" and the plaintiff held nothing other than legal title to the property.
In its March 2005 interlocutory judgment, the trial court found that the parties did not have an enforceable oral agreement for the transfer of their interests in the Colusa property (and in any event had not fulfilled any of the terms that they may have discussed). It declared that title to the property was "in the names of MARTIN A. VASQUEZ and MARIA G. SILVA" (without any specification of the exact nature of each partys interest). The court ordered the sale of the property, with the proceeds to be distributed after an accounting. The parties were able to sell the property in October 2005 with net proceeds of $128,900, held in a trust account of the plaintiffs attorney.
Following a trial, the court issued its final judgment. It determined that the parties were tenants in common, the contrary recital in the deed notwithstanding. It accepted the plaintiffs methodology for determining the interest of the parties, based on their contributions. It awarded 88 percent (rounded) of the net proceeds to the plaintiff (from which it debited a proportional amount of out-of-pocket expenses) and 12 percent (less expenses) to the defendant. It concluded the defendant was not entitled to any imputed rent for the period in which the plaintiff occupied the property exclusively, nor was the defendant entitled to any credit for her management of the property because she had allowed her daughter to live there for a below market-rate rent. The amounts to the parties were $ 112,200 to the plaintiff and $16,700 to the defendant.
DISCUSSION
I
The defendant contends the complaints allegation that each party held a 50 percent interest in the property was a judicial admission that the trial court was not entitled to disregard. This demonstrates a misapprehension of the rules of pleading.
A judicial admission in a complaint is an allegation that the answer admits, which results in a conclusive concession of the truth of the matter and removes it entirely from the issues at trial (such that it would be reversible error to make any contrary findings). (1 Witkin, Cal. Evidence (4th ed. 2000) Hearsay, § 97, p. 799; County of Los Angeles v. Beverley (1954) 126 Cal.App.2d 89, 92.)
The pleadings in the present matter did not result in any judicial admissions on the issue of the extent of the interest of the parties in the property. The defendant specifically denied the complaints allegations that each party had a 50 percent interest. To the extent that the defendant then alleged that she and her sister each had a 50 percent interest in the property, this was new matter. By statute, any new matter in an answer is deemed controverted. (5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 1010, p. 464.) As a result, nothing foreclosed the trial court from determining the extent of the interests of the parties based on the evidence.
II
The defendant next suggests that the trial court could not address the issue of the form and extent of the interests in the property once it filed its interlocutory judgment; consequently, the court should have sustained her objections at the hearing to anything other than an equal apportionment between the parties. The basis for this claim is not entirely clear.
Under the statute, once the court finds that a plaintiff is entitled to partition, "it shall make an interlocutory judgment that determines the interests of the parties in the property and orders the partition of the property and, unless it is to be later determined, the manner of partition." (§ 872.720; see § 872.810 [court shall order division in accordance with interests in property "as determined in the interlocutory judgment"].) A failure to make an adjudication of the extent of the interest of the parties is a basis for reversal in an appeal from the interlocutory judgment pursuant to section 904.1, subdivision (a)(9). (Stoffer v. Verhellen (1925) 195 Cal. 317.) If a party does not appeal from the interlocutory judgment, then it is conclusive on all issues actually addressed in it. (Oliver v. Sperry (1934) 220 Cal. 327, 329-330; Pista v. Resetar (1928) 205 Cal. 197, 199.)
Though the Legislature substantially reorganized the statutes governing partition in 1976, the intent was to reflect current law except where expressly noted otherwise, and therefore older authority retains its vitality. (Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 753 (Richmond).)
Therefore, if the interlocutory judgment had determined the nature and extent of the interests of the present parties, the court would not have had the power to revisit the issue in the final judgment. However, the interlocutory judgment simply declared that title to the property was "vested in the names" of the parties without further definition. As a result, it was an omitted issue, which the defendant could have challenged by way of appeal, but did not, apparently interpreting the interlocutory judgment as including a finding that the title of record was the correct extent of their interests.
Her trial brief for the second hearing in this matter begins with the assertion that the remainder of the proceeds, after the allocation of debts and expenses, should "be divided equally between the parties," later asserts that the interlocutory judgment determined "that Plaintiff and Defendant were joint owners of the subject real property," and thereafter premises her arguments on her status as a joint tenant.
The defendant, in her trial brief and on appeal, seems to equate this failure to make a finding contrary to the record title as an irrevocable confirmation of record title. We do not agree.
Partition is an equitable action, and consequently a trial court has broad discretion to fashion relief without being bound under strict rules of procedure. (Richmond, supra, 105 Cal.App.3d at p. 766.) Therefore, it is not necessary to determine every aspect of the form and extent of the interests in the property in the interlocutory judgment. (Id. at pp. 763-764; Grant v. Murphy (1897) 116 Cal. 427 [may enter interlocutory judgment without awaiting probate determination of interests of heirs of original property owner].) Here, the court simply rejected the efforts to interpose agreements contrary to record title, but did not choose at that time to exercise its power to go behind the title of record and determine the actual interests of the title holders. (Cosler v. Norwood (1950) 97 Cal.App.2d 665, 666.) We do not find any abuse of discretion in proceeding in this manner, as it was not essential to adjudicate the interests at that time because the property was to be sold and the proceeds preserved in a trust account.
III
We therefore come to the actual crux of the defendants appeal. She contends that it is impermissible to apportion the interests of the parties according to their contributions to the purchase of the property unless there is an enforceable agreement to that effect. She also contests the manner in which the court applied the various contributions of the parties and the proceeds of the equity loan.
In an action for partition, record title is not conclusive; it is merely one item of evidence a court considers in addition to any express agreement of the parties regarding their interests in the property or a different understanding of their interests that the court can infer from the parties conduct. (Kershman v. Kershman (1961) 192 Cal.App.2d 23, 26 (Kershman).) Among the inferential bases for finding an apportionment of interests other than equal is unequal contributions toward the purchase of the property. (Milian v. De Leon (1986) 181 Cal.App.3d 1185, 1196 (Milian).) Neither Kershman nor Milian hold that an express agreement is the sine qua non for apportioning the interests in a property differently than in record title. Similarly, Demetris v. Demetris (1954) 125 Cal.App.2d 440 (Demetris) relied on the evidence of an oral agreement of the parties to convert a joint tenancy of record to a tenancy in common (id. at p. 442), but does not at any point suggest this is the only manner in which a court can disregard record title.
The other case that the defendant cites in this connection is simply inapposite: Southern Adjustment Bureau v. Nelson (1964) 230 Cal.App.2d 539 (Nelson) takes as a given that the tenants in common had equal interests in the property before discussing the proper manner for calculating reimbursement.
In the interlocutory judgment, the present trial court had concluded that there was neither an enforceable nor an executed agreement to divest the plaintiff of his interest in the property and vest it in the defendant and his other sister. The defendant emphasizes this finding as preventing an unequal distribution. That finding, however, is irrelevant to the issue of the manner in which the plaintiff and defendant treated the nature of their interests between themselves. The trial court properly could conclude that the parties actually intended some species of tenancy in common, given the undisputed concern of the parties to preserve the property for the benefit of the plaintiffs children (which a joint tenancy with the defendant would not accomplish). Moreover, the plaintiff was the only party to contribute funds toward purchase of the property; the defendants contributions were only for mortgage payments and expenses. The absence of an express oral or written agreement to this effect is not determinative. We therefore reject this argument.
In this, the defendant may have received a windfall, in that her net contributions toward the mortgage were considered in toto to be contributions for the purchase of the property, rather than being reimbursable to the extent they represented only payment of interest on the loan to preserve the property from foreclosure (akin to the payment of taxes and insurance). However, this was the theory of trial (and was applied to the defendants mortgage payments as well), and we do not have any cause to reopen the question.
This leaves the math. Under Kershman, a court first apportions the interests in proportion to their respective contributions toward purchase before it considers any claims for reimbursement (id. at pp. 29-30; see Milian, supra, 181 Cal.App.3d at p. 1194) and before it adjusts the shares of the proceeds for any withdrawal of equity from the property (Demetris, supra, 125 Cal.App.2d at p. 443). The defendant contends that the trial court did not respect these principles. However, she merely leaps to the bottom line, asserting in conclusory form that a proper computation of the figures in the exhibits on which the trial court relied (which appear in the plaintiffs trial brief) results in an allocation of $47,600 to her and $81,300 to the plaintiff from the net sale proceeds of $128,900. While the defendant is correct that the court erred in its methodology in one respect, we cannot derive anything approaching her totals.
It appears that the exhibit apportioning the interests of the parties transgressed the rules in Kershman and Demetris, in that it deducted from their contributions the respective net amounts of equity the parties had withdrawn from the property before determining their pro rata shares. If we add back the net equity withdrawn as calculated in the exhibits, the defendants net contributions toward the mortgage payments in excess of the rents received are $8,687.45, and the plaintiffs contributions are $55,595.49. This would result in a 13.51 percent interest for the defendant, and 86.49 percent for the plaintiff.
The plaintiff withdrew $20,000 and made payments of $ 2,322.82; the defendant withdrew $5,000 and made payments of $ 1,416. As earlier noted, only approximately $300 of these payments went toward principal reduction. (For this portion of the opinion, we make use of the exact rather than rounded figures.) Again, we do not have any occasion to countermand the theory of the case, under which the parties were given equity credit for interest payments.
The mortgage payments were $47,037.45, offset by $38,350 in rents received.
Adding the net amount of the equity loan (as calculated in the exhibit) back to the net sales proceeds in the exhibit (the amount of which reflects payment of the liens for the two loans), we now start with $ 150,119.97 in proceeds. Applying these percentages to the net sale proceeds, their respective shares start at $20,281.21 for the defendant and $129,838.76 for the plaintiff. Now we deduct the net equity withdrawals from the exhibit ($3,584 for the defendant and $17,677.18 for the plaintiff), leaving the respective amounts of $16,697.21 and $112,161.58.
We do not know the actual amount paid on sale of the property to satisfy the lien securing this loan.
Applying the revised ownership percentages to each partys share of other expenses of upkeep (which total $ 4,667.46), the defendants share is $630.58 and the plaintiffs is $4,036.88, which requires an equalizing credit and debit of $1,285.97 to adjust their respective actual disbursements. This results in a net total of $17,983.18 in sales proceeds for the defendant and $110,875.61 for the plaintiff. We will amend the judgment accordingly.
DISPOSITION
The judgment is modified to award $110,875.61 from the sales proceeds to the plaintiff and $17,983.18 to the defendant. As modified, the judgment is affirmed. Neither party shall recover costs of appeal.
We concur:
HULL, J.
CANTIL-SAKAUYE, J.