From the July, 2004 issue of The Title Insurance Law Newsletter
Bethel v. Brazil, 2004 WL 1327691 (Cal.App. 2 Dist.) (unpublished).
Although partition "in kind" is favored, when property is not easily divided between the common owners, a division would hurt the value of the component parts, and only one parcel has access to a public road, the better means of partition is to sell the whole and split the proceeds between the owners, according to a California court.
Lee and Sandra Brazil owned the 610 acre Lopez Ranch near Arroyo Grande, made up of five unequal, contiguous parcels. Ken Glick held a note and trust deed on the property. The Brazils defaulted and lost the property. They got an option to buy it back, then enlisted Barbara Bethel, a developer, to become their partner in purchasing the property. Escrow closed, but the partners soon discovered that they had different goals. Bethel sued to partition the property.
Bethel sought a partition sale of the property. The Brazils argued that the land should be divided between them instead, referred to as partition in kind. The court agreed with Bethel, in part because it found that the Brazils had not treated Bethel fairly, and also because a division of the land was not practical. The Bethels appealed.
The higher court agreed that the property should be sold. It noted that, "as a rule, the law favors partition in kind," but section 872.820 of the California statutes permits a sale of the property where the court deems it "more equitable." The court noted several factors militating for a sale of the entire parcel: the land was suitable for division into numerous residential lots, but the development would take considerable cooperation, time and money; the existing five lots could not be divided in a way to correspond with the Bethel and Brazil ownership interests; only one parcel fronted on a road, and thus complicated access rights would have to be granted as part of a split; and internal access routes would have to be redone as well. Thus, it found that partition in kind was not practical, and ordered the sale of the whole.
The case is interesting in that it fleshes out the factors to be considered in determining the appropriate remedy when partition is sought, a subject rarely addressed.
