IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Tehama)
March 22, 2011
CATHERINE GUTTIERREZ, PLAINTIFF AND APPELLANT,
TOM GUTTIERREZ ET AL., DEFENDANTS AND RESPONDENTS.
(Super. Ct. No. 59734)
The opinion of the court was delivered by: Robie ,j.
Guttierrez v. Guttierrez
NOT TO BE PUBLISHED
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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
Plaintiff Catherine Guttierrez appeals from the interlocutory judgment entered in this action she brought against her former husband and his parents to partition the parties' interests in a Red Bluff office building. She contends the trial court abused its discretion by: (1) adjudicating reimbursements between spouses after the family law court had expressly retained jurisdiction over that issue in a pending dissolution action; (2) ordering terms on which one party might buy out the interest of another, even though the parties had not agreed to such a sale; (3) offsetting wholly from her individual share (rather than from each party's pro-rata share) amounts she owed for unpaid rent on her office in the building; and (4) awarding her former in-laws attorney fees and costs.
We find no abuse of discretion in the trial court's exercising jurisdiction in the partition, but we agree that the court abused its discretion in ordering that partition could be accomplished by one party buying out another's interest in the amount determined by an appraisal, in offsetting the unpaid rent wholly against plaintiff's interest, and in charging to plaintiff all of the costs associated with the accountant's work. We shall reverse and remand.
Catherine and Tom married in 1993.*fn1 Sometime after 2005, they separated and Tom initiated dissolution proceedings in Tehama County Superior Court (case No. 57975).
While the dissolution action was pending, Catherine filed the instant action against Tom and his parents, the Guttierrezes, seeking partition in kind or by sale as to three properties, and for imposition of a constructive trust as to two others. All parcels are located in Red Bluff. As to the sole property at issue in this appeal -- a commercial building located at 910 Main Street -- Catherine alleged she and Tom collectively own a 61 percent interest in the property, while the Guttierrezes together own the remaining 39 percent.
Tom filed a general denial to the complaint and raised various affirmative defenses. The Guttierrezes did the same.
While the partition action was pending, a trial was conducted in the dissolution action that included the issue of property division. The court's ruling in the dissolution action gave Tom four of the five properties which Catherine sought to divide in the partition action; two were awarded to him as his separate property and two others were confirmed to be his separate property.
As to the sole remaining property Catherine sought to partition -- 910 Main Street -- the trial court in the dissolution action ruled that it "has been stipulated for sale with the proceeds to be distributed equally with the Court reserving jurisdiction over the terms and conditions of the sale and the division of the net proceeds." In addition, the court noted, Catherine "has unilaterally chosen not to pay some or all rents on the All State business location of an undeterminable amount. . . . That issue is properly subject to the Partition Action that is pending between the parties and [Tom]'s parents. [Tom and Catherine] would have the Court essentially negate that debt in its decision. However, the Court does not have jurisdiction over any interest that the other partners would have on said property."
The partition action proceeded to trial on October 20, 2009. Counsel for the Guttierrezes submitted a trial brief*fn2 in which they argued the "910 Main Street property . . . has been ordered listed for sale with the [dissolution] court reserving jurisdiction over the terms and conditions of the sale and the division of the net proceeds; without a finding as to the parties['] respective interest[s] in said property. [¶] [The Guttierrezes] allege that the respective interests of the parties are 39% to [the Guttierrezes] and 30.5% each to Tom and Catherine Guttierrez. [¶] It is [the Guttierrezes] desire to buy out [Catherine]'s interest in said property based on a sale price of $675,000. [¶] Said property has been on the market for a period of time and due to the present economic stagnation is not moving. These defendants contend that the fair market value of said property is $675,000 and that [Catherine]'s net interest in said property at that sales price is $9,223 based on the Balance Sheet attached hereto as Exhibit A."
At trial, Catherine represented herself; the other parties were represented by counsel. Catherine requested a continuance on the ground "910 Main Street . . . is in front of the [dissolution] judge and there is a request about that property going in front of the judge" in that action. Tom and his parents objected, and the court denied her request for a continuance of the partition trial on the ground no proper motion had been made.
At trial, Margaret testified she and Michael collectively contributed $245,178 toward the down payment for the property's purchase; Catherine and Tom together contributed $102,980. There was no "ongoing rental agreement" that Catherine would pay rent on her office at 910 Main Street "because it was a family thing[,]" but at some point Margaret learned Catherine was "going to pay [$]1500." In addition, Margaret testified Catherine left unpaid a $1,500 bill for janitorial services when she ultimately vacated the space.
In January 2009, the 910 Main Street property was listed for sale for $1.2 million. It did not sell, and the listing real estate agent testified at trial the fair market value of the property was then about $586,000.
A bank appraiser testified he had appraised 910 Main Street in August 2009 using two methods: one yielded a value of $573,000, the other yielded a value of $577,000.
An accountant hired by the Guttierrezes testified he had been asked to prepare a schedule of uncollected rent on the suite at 910 Main Street formerly occupied by Catherine. Margaret paid the accountant $8,400 for his work. He summarized the accounting records maintained by Margaret and testified Catherine had failed to pay $39,700 in rent for that office: she paid no rent for a period in February 2006, had paid $1,500 per month between May 2006 and August 2007, and had paid no rent between September 2007 and August 2009, after which she vacated the office.*fn3
In response to this anticipated evidence, Catherine attempted to show the Guttierrezes themselves never paid rent to Tom and Catherine for their use of other property: for example, the Guttierrezes had lived from 2001 to 2006 in what had been Catherine and Tom's marital residence and paid no rent.
In her closing brief, Catherine asked that the court order the 910 Main Street property sold and the net sales proceeds divided "among the owners as evidenced by the Deed to the property."
The Guttierrezes argued in their closing brief that Catherine "owes rent due to the community ownership of the property in the sum of $39,700" and "advanced expenses to the community ownership in the sum of $1550," and that they incurred $8,400 in accountant fees "to fight the allegations of misappropriation of funds and uncollected rents for Catherine." They also sought to recover from Catherine their attorney fees of $11,000 and accountant costs of $8,400 in "defend[ing] a suit filed in bad faith for . . . frivolous reasons," arguing that "[t]his entire litigation was unnecessary" because all issues "could [have been] resolved in the dissolution matter" and Catherine filed the action only "to get information from the Guttierrezes about financial information to help her file her taxes and apply for college loans for her children."
The court adopted nearly in its entirety the findings and order prepared by the Guttierrezes, making the following findings of fact and order as to the 910 Main Street property:
"1. The property is owned jointly by the parties hereto with 61% interest being held by the plaintiff (hereinafter referred to as 'Catherine') and the defendant Thomas Guttierrez (hereinafter referred to as 'Thomas') and 39% being held jointly by Michael and Margaret Guttierrez who will be treated as one entity for the purposes of this judgment (hereinafter referred to as 'The Guttierrezes');
"2. That the fair market value of said property is $586,000[.]
"3. That each party came in with an initial investment to purchase the property, for which they are entitled reimbursement, in the following sums:
"a. Thomas: $51,445
"b. Catherine: $51,445
"c. The Guttierrezes: $245,178
"4. That Catherine owes rent due to the community ownership of the property in the sum of $39,700[.]
"5. That Catherine owes advanced expenses to the community ownership in the sum of $1500[.]
"6. That the liens and closing costs involved in the sale of said property amount to $343,983.
"Based on said set of facts the Court makes the following ruling:
"1. The property is partitioned between the parties in the following ownership interest manner:
"a. Thomas: 30.5%
"b. Catherine: 30.5%
"c. The Guttierrezes: 39%
"2. The property is to be valued at the sum of $586,000 for the purposes of distribution[.]
"3. The net value of the property is set at $242,017[.]
"4. Each party shall receive reimbursement for their initial investment in the following sums:
"a. Thomas: $51,445
"b. Catherine: $51,445
"c. The Guttierrezes: $245,178
"5. From Catherine's reimbursement due shall be deducted the sum of $41,250 due the community which makes her share due for reimbursement $10,195.
"6. The sum of $41,250 is added back into the net value of the property of $242,017 making the net value of $283,267, to be distributed among the parties, prior to reimbursements[.]
"7. Reimbursements are now due each party as follows:
"a. Thomas: $51,445 (16.8% of total reimbursements due)
"b. Catherine: $10,195 (3.2% of total reimbursements due)
"c. The Guttierrezes: $245,178 (80% of total reimbursements due)
"d. Total reimbursement due are $306,818
"8. Each party shall be reimbursed from the total net value of the property of $283,267 according to the above percentages as follows:
"a. Thomas: $47,084
"b. Catherine: $8,968
"c. The Guttierrezes: $224,213
"9. The above distribution results in a net loss to each party of their original investment and the court orders that should the house [sic] be sold the distribution of the net proceeds of the parties up to a net profit of $306,818 be divided by the percentages indicated in number 7 above. If net proceeds exceed $306,818 then the parties shall share in said excess profit over $306,818 by the percentages indicated in Item No. 1 above[.]
"10. In the alternative, the Court will order that any party may buy out the other parties' interests in said property by paying the other parties the sums indicated in Item 8 above."
The court also ordered Catherine to pay the Guttierrezes $3,472 in attorney fees and $8,400 in costs.
I The Appeal Is Timely
The Guttierrezes contend Catherine's appeal is untimely and must be dismissed. They are mistaken.
As relevant here, California Rules of Court, rule 8.104(a), provides: "[a] notice of appeal must be filed on or before the earliest of: [¶] (1) 60 days after the superior court clerk serves the party filing the notice of appeal with a document entitled 'Notice of Entry' of judgment or a file-stamped copy of the judgment, showing the date either was served; [¶] (2) 60 days after the party filing the notice of appeal serves or is served by a party with a document entitled 'Notice of Entry' of judgment or a file-stamped copy of the judgment, accompanied by proof of service; or [¶] (3) 180 days after entry of judgment."
With these rules in mind, we note the court entered the judgment on December 21, 2009. Counsel for the Guttierrezes assert that "[o]n December 29, 2009, [he] mailed [Catherine] a filed-stamped copy of the Judgment and Proof of Service by Mail." If the proof of service indeed so indicated, then Catherine would have been required to file her notice of appeal no later than 60 days after December 29, 2009; that is, by February 27, 2010, (see California Rules of Court, rule 8.104(a)(2)), and her notice of appeal (filed on May 28, 2010) would have been too late.
But the proof of service does not show that the Guttierrezes' counsel mailed the proof of service on December 29, 2009. It instead shows the attorney's sworn statement that the "Judgment" was served on December 19, 2009. But a copy of a judgment entered on December 21 cannot have been served on December 19, and a proof of service dated before the entry of judgment cannot be "proof" of its service.*fn4 The proof of service is invalid.
Because the record does not show that Catherine was served with a copy of the judgment accompanied by a valid proof of service, she had 180 days after entry of the judgment. (See California Rules of Court, rule 8.104(a)(3).) Her appeal is timely.
II Partition And The Standard Of Review
The term "'partition'" means "'the procedure for segregating and terminating common interests in the same parcel of property.' [Citations.]" (14859 Moorpark Homeowner's Assn. v. VRT Corp. (1998) 63 Cal.App.4th 1396, 1404-1405.) A partition action may be commenced and maintained by an owner of real property where such property is owned by several persons concurrently. (Code Civ. Proc.,*fn5 § 872.210, subd. (a)(2).)
The statutes governing partition are set forth at section 872.010 et seq. "However, although the action of partition is of statutory origin in this state, it is nonetheless an equitable proceeding. [Citations.]" (Elbert, Ltd. v. Federated etc. Properties (1953) 120 Cal.App.2d 194, 200.)
"'Partition is a remedy much favored by the law. The original purpose of partition was to permit cotenants to avoid the inconvenience and dissension arising from sharing joint possession of land. An additional reason to favor partition is the policy of facilitating transmission of title, thereby avoiding unreasonable restraints on the use and enjoyment of property.'" (LEG Investments v. Boxler (2010) 183 Cal.App.4th 484, 493.)
"If the court finds that the 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, subd. (a).) An interlocutory judgment of partition is appealable pursuant to section 904.1, subdivision (a)(9). Following sale or division of the property, the trial court enters a final judgment stating the binding effect of any conveyances. (§ 874.210; 12 Witkin, Summary of Cal. Law (10th ed. 2005) Real Property, § 84, at p. 133.)*fn6
In a partition action, the proper standard of review is abuse of discretion. (Zarrahy v. Zarrahy (1988) 205 Cal.App.3d 1, 4-5 [action to partition community property left unadjudicated by the dissolution decree is an independent proceeding in equity and trial court's decision cannot be disturbed absent an abuse of discretion]; Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 766 ["It must be remembered that a partition suit is in equity. [Citation.] A court of equity has broad powers and comparatively unlimited discretion to do equity without being bound by any strict rules of procedure"].)
"'"[U]nless a clear case of abuse is shown and unless there has been a miscarriage of justice a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power."'" (Blank v. Kirwan (1985) 39 Cal.3d 311, 331 quoting Denham v. Superior Court (1970) 2 Cal.3d 557, 566.) "'[T]he showing on appeal is wholly insufficient if it presents a state of facts . . . which . . . merely affords an opportunity for a difference of opinion.'" (In re Marriage of Varner (1997) 55 Cal.App.4th 128, 138.) The burden is on the party complaining to establish an abuse of discretion. (Blank, at p. 331.)
III Abuses Of Discretion
A The Partition Versus The Dissolution Action
We consider first Catherine's contention the trial court abused its discretion in "issu[ing] a judgment that superceded the retained jurisdiction of the Family Law proceedings of In re Gutierrez v. Gutierrez."
We assume Catherine is referring to the principle of "priority jurisdiction," which holds that "'"where a proceeding has been . . . assigned for hearing and determination to one department of the superior court by the presiding judge . . . and the proceeding . . . has not been finally disposed of . . . it is beyond the jurisdictional authority of another department of the same court to interfere with the exercise of the power of the department to which the proceeding has been so assigned . . . . If such were not the law, conflicting adjudications of the same subject-matter by different departments of the one court would bring about an anomalous situation and doubtless lead to much confusion. [Citation.]" . . .' [Citations.]" (Glade v. Glade (1995) 38 Cal.App.4th 1441, 1449-1450.) "'One department of the superior court cannot enjoin, restrain, or otherwise interfere with the judicial act of another department of the superior court. Even between superior courts of different counties, having coequal jurisdiction over a matter, the first court of equal dignity to assume and exercise jurisdiction over a matter acquires exclusive jurisdiction. [Citations.] [¶] A judgment rendered in one department of the superior court is binding on that matter upon all other departments until such time as the judgment is overturned. [Citation.] . . . ' [Citations.]" (Id. at p. 1450.)
This principle flows from the concept that "[e]ven though a superior court is divided into branches or departments, pursuant to California Constitution, article VI, section 4, there is only one superior court in a county and jurisdiction is therefore vested in that court, not in any particular judge or department. Whether sitting separately or together, the judges hold but one and the same court. [Citation.] Because a superior court is but one tribunal, '[a]n order made in one department during the progress of a cause can neither be ignored nor overlooked in another department . . . .' (Citation.]" (Glade v. Glade, supra, 38 Cal.App.4th at p. 1449.)
Here, the court in the dissolution action determined that Catherine and Tom should divide equally their collective share of the 910 Main Street property. The partition court followed that finding; it did not "'enjoin, restrain or otherwise interfere with the judicial act of another department.'" (Cf. Glade v. Glade, supra, 38 Cal.App.4th at p. 1450.) More to the point, the court in the dissolution expressly declined to exercise jurisdiction over the question of what interest the Guttierrezes might own in the 910 Main Street property and whether they might be entitled to offsets from Catherine for unpaid rent on her office in that building. The court in the dissolution action stated it "does not have jurisdiction over any interest that the other parties would have on said property," and that, the issue of what interests are held by third parties, as well as whether (and in what amount) Catherine owed rent on the 910 Main Street office where she once operated her insurance business "is properly subject to the Partition Action that is pending between the parties and [Tom]'s parents."
As we have noted, a partition action is the appropriate forum for dividing real property interests when, as here, property is jointly owned by several persons concurrently. (§ 872.210, subd. (a)(2).)*fn7 Under the circumstances, and in view of the fact that the court in the dissolution action declined to exercise jurisdiction over the partition of the 910 Main Street property, Catherine has not shown that the partition court abused its discretion in adjudicating those issues.
B Partition By Appraisal
As an "alternative" to selling the property and dividing the sale proceeds, the trial court ordered that "any party may buy out the other parties' interests in said property by paying the other parties the sums" representing their share of the "net value of the property." The "net value" upon which the court relied was a calculation based upon the "fair market value" of the property, based upon the real estate agent's testimony, minus liens and estimated closing costs.
Catherine contends the court abused its discretion in so ordering. We agree.
An alternative to a division or sale of real property subject to a partition action is an agreed partition by appraisal, under which one or more parties acquire the interests of the others at their appraised value. (§ 873.910; 12 Witkin, supra, § 82 at pp. 130-131.) The parties must make a written agreement, filed with the court, that (among other things) identifies the acquiring parties, the date for appraisal, and the persons acceptable as referees/appraisers. (12 Witkin, supra, § 82 at pp. 130-131; §§ 873.920, 873.940.)
The "alternative" ordered by the court here does not comply with the statutory requirements for a partition by appraisal. There was no agreement among the parties here, and the procedure contemplated by the court's order does not involve the fair market value of the property being determined by appraisal. Moreover, we do not see how the court's imposing this alternative absent an agreement by the parties can be justified as an exercise of its equity jurisdiction. Its action was thus an abuse of discretion.
C Deducting Entirety Of Unpaid Rent From Catherine's Share
The trial court found Catherine left her rented office at the 910 Main Street property owing "to the community ownership" $39,700 in rent and $1,550 in expenses for unpaid janitorial services. It deducted the sum of those unpaid obligations -- $41,250 -- from the amount it determined was Catherine's share of the "net value" of the property.
Catherine does not take issue with the court's finding as to the amounts owed in unpaid rent and expenses. Rather, she contends the court abused its discretion in deducting the entire obligation from her share. In her view, the obligation should be deducted from the amounts owed to each party according to their percentage interest in the property.
We agree. The rent and janitorial expense, if paid, would have constituted income to the property, to which we presume -- absent any evidence in this record to the contrary -- the owners would have been entitled according to their percentage interests.
Accordingly, only 30.5 percent of $41,250, or $12,581.25, should be deducted from any amount due Catherine from the sale of the property. Tom, by virtue of his 30.5 percent interest, is entitled to an adjustment in his favor of $12,581.25. The Guttierrezes collectively should receive an adjustment in their favor of 39 percent of $41,250 or $16,087.50.*fn8
D Attorney Fees And Costs
Section 874.010 defines the costs of partition to include reasonable attorney fees incurred for the common benefit, as well as "[o]ther disbursements of expenses determined by the court to have been incurred or paid for the common benefit."
(§ 840.010, subds. (a), (e).) The court may order the costs of partition paid prior to entry of judgment. (§ 874.110, subd. (a).)
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.)
We review awards of attorney fees and costs for abuse of discretion. However, an abuse of discretion is established where it is shown there is no substantial evidence to support the trial court's findings or where the trial court's action violates the applicable law. (Finney v. Gomez, supra, 111 Cal.App.4th at p. 545.) It is the burden of the party challenging attorney fee and cost awards to show an abuse of discretion. (See Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 556.)
Here, the court implicitly found that the attorney fees incurred by the Guttierrezes were incurred for the common benefit. (§ 874.010, subd. (a).) Catherine has shown no misapplication of section 874.010, and nothing in the court's implicit finding suggests error. It is well settled that fees incurred in litigation of disputed claims in a partition action does not preclude a finding of common benefit warranting an award of attorney fees under section 874.010. (See Watson v. Sutro (1894) 103 Cal. 169, 170-171; Capuccio v. Caire (1932) 215 Cal. 518, 528-529; Riley v. Turpin (1960) 53 Cal.2d 598, 602-603.) Moreover, the trial court's order that Catherine pay $3,472 of the $11,383 in attorney fees incurred by the Guttierrezes in connection with the partition action is consistent with the general rule under section 874.040: the court allocated to Catherine 30.5 percent of the attorney fees, which corresponds to her ownership interest in the property partitioned.
The court's order that Catherine pay all of the costs associated with the accountant hired by the Guttierrezes, however, does not apportion that cost among the parties in proportion to their interests; accordingly, the court's imposition of that cost 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 decided to allocate all of the accountant 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 substantial evidence to support the court's implicit finding that the accountant provided a common benefit, but no substantial evidence to support charging the entirety of his fee as a cost to Catherine. The accountant was called to testify by Tom's counsel: he testified he had been given "the bank statements and Margaret's records and deposit slips" for the 910 Main Street property and asked to prepare two documents: a summary "accounting of the cash flows in and out for the three properties that the Guttierrez family had" and "[a] schedule of uncollected rent on one unit." He also prepared a listing of total income and total expenses for the period and a document similar to a computerized check register. In response to questioning by the Guttierrezes' attorney, the accountant testified that "part of the reason [I was] retained in this is because of accusations of misappropriation of funds" by an unnamed party or parties; he found none. Posttrial briefs contain no declarations or other evidence supporting the accountant's fee or its allocation. In their respondents' brief, the Guttierrezes point to no evidence supporting a departure from the ordinary rule of allocating costs in proportion to the parties' interests.
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 party's interest in the property, the court erred charging all of the $8,400 in costs to Catherine, and the error was clearly prejudicial. (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"].) If, instead, this cost had been properly apportioned in proportion to the parties' interests, Catherine would have been charged 30.5 percent of the $8,400 accountant cost, or $2,562.
The court's judgment is reversed and the matter remanded to the trial court for further proceedings consistent with this opinion. Catherine shall recover her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3).)
NICHOLSON, Acting P. J. DUARTE ,J.