In Lin v. Jeng, 2012 DJDAR 2498 (2012), the California Court of Appeal for the Second Appellate District rendered a fee award based on equitable principles in a partition action involving a real estate dispute between family members.
The plaintiffs filed a partition action against other family members, alleging that they owned an undivided 85 percent interest in a residence. The plaintiffs alleged that the defendants owned an undivided 15 percent interest in the house. The plaintiffs failed to name other family members as defendants who likely also had a property interest in the home.
The plaintiffs prayed for a sale of the home and a division of the proceeds. The other family members, who were not named as parties, filed a complaint in intervention, alleging that they also owned a property interest in the home. The trial court ruled that the plaintiffs were trustees of the property and that the intervenor parties owned the property as the beneficiaries of the trust.
After receiving the favorable ruling from the trial court on a bench trial, the defendants and the intervenors moved for attorney fees. The plaintiffs also filed their own fee petition. The trial court only granted the motion for fees filed by the defendants and the intervenors, apportioning the award of fees between them. The plaintiffs argued that the court erred in its application of Code of Civil Procedure Section 874.040, which governs the award of costs and fees in a partition action. An appeal was pursued by the plaintiffs.
The court of appeal affirmed the ruling of the lower court. The court of appeal focused on the provisions of C.C.P. § 874.040.
Pursuant to that statute, the trial court must apportion the costs of partition among the parties based on their ownership interests or as required by equity. On appeal, the plaintiffs argued a “common benefit” theory, arguing the fee award should be apportioned amongst all of the parties.
The court of appeal disagreed and concluded that the trial court did not exceed its authority by awarding fees only to the defendants and the intervenors.
The court pointed to the fact that the plaintiffs had actual knowledge that they were not entitled to an 85 percent share of the home. The court of appeal also specifically noted that the plaintiffs failed to name the siblings in the complaint, forcing them to intervene. Thus, the sole award of attorney fees to the defendants and the intervenor siblings was justified based on equitable considerations.