Francisco Sanchez, Individually and on behalf of Unnamed Partnership between Francisco Sanchez and Norma Rivera, v. Norma Rivera

Francisco Sanchez, Individually and on behalf of Unnamed Partnership between Francisco Sanchez and Norma Rivera, v. Norma Rivera

 

Civil Action-Property Law-Partition-Jointly Owned Real Estate-Exceptions to Report and Recommendation of the Partition Master-Credit-Payment of Taxes and Expenses-Fair Rental Value-Reopening of the Record-Failure to Present Evidence

 

The parties purchased a property titled in the names of Francisco Sanchez (“Plaintiff”) and Norma Rivera (“Defendant”), where they resided until Plaintiff left the property in 2016 when their romantic relationship ended.  The mortgage obligation had been satisfied prior to the separation.  Plaintiff filed an action seeking partition of the property.  Following proceedings by a Master in Partition, Defendant filed Exceptions to the Report and Recommendation adopted by the Court declining to award her credit for expenses she paid to maintain the property while she lived there after Plaintiff had left the property and awarding Plaintiff credit for fair rental value.

 

1. Partition is a possessory action designed to give to each joint owner the possession to which he or she is entitled.

 

2. Absent an abuse of discretion or an error of law, the court is bound to accept the findings of the partition master, particularly where the findings largely are dependent upon the credibility of witnesses.

 

3. Pa.R.C.P. Rule 1570(5) provides that a master in a partition action may make a finding of the credit that should be allowed or charge that should be made in favor or against any party because of use and occupancy of the property, taxes, rent or other amounts paid, services rendered, liabilities incurred or benefits derived therefrom.

 

4. A party is entitled to a credit for paying a disproportionate share of taxes for jointly owned property only if he or she legally is obligated to do so.

 

5. Since Defendant was not legally obligated to pay Plaintiff’s share of the taxes, the Master appropriately determined that the payments were voluntary warranting no credit.

 

6. Where a cotenant improves the common property, equity will compensate that cotenant for such improvements provided they are made in good faith and are of a necessary and substantial nature, materially enhancing the value of the common property.

 

7. Since Defendant failed to produce any evidence of the nature of improvements made to the property or the cost of the same, the Master was unable to award credit for improvements made to the property.

 

8. A case may be reopened to allow additional evidence if it was omitted by accident, inadvertence or a mistake as to its necessity.

 

9. When addressing exceptions to a partition master’s report, the court may exercise its discretion to open the matter for additional testimony or to dispose of the issue on the record before the court.

 

10. A party permitted to enter evidence after it had rested should not be allowed to start anew and to make out its entire case-in-chief.

 

11. The record will not be reopened for provision of evidence regarding expenses paid by Defendant following Plaintiff’s vacation of the property where no explanation has been offered for the omission of the evidence and the record does not establish that the evidence was omitted due to accident, inadvertence or mistake.

 

12. Fair rental credit may be granted in a partition action when an owner is dispossessed of his or her interest in the property.

 

13. The Master did not err or abuse his discretion in awarding fair rental credit to Plaintiff even if Plaintiff voluntarily left the property without exclusion by Defendant and Defendant asserts that Plaintiff told her when he left the property that he did not want anything from the residence at the property.

 

L.C.C.C.P. No. 2018-00867, Opinion by John C. Tylwalk, President Judge, November 14, 2022.

 

 

 

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

PENNSYLVANIA

 

CIVIL DIVISION

 

FRANCISCO SANCHEZ,                           :         NO. 2018-00867

Individually and on behalf of              :

Unnamed Partnership between           :

Francisco Sanchez and                       :

Norma Rivera,                                   :

Plaintiff                          :

:

1. :

:

NORMA RIVERA,                                     :

Defendant                      :

 

ORDER OF COURT

 

AND NOW, this 14th day of November, 2022, upon consideration of Defendant’s Exceptions to the Report of the Master, the Briefs submitted by the parties, and after Oral Argument, it is hereby Ordered as follows:

1. Defendant’s Exception to the Master’s failure to award a credit for amounts paid for expenses of the property located at 625 East Mifflin Street in the City of Lebanon after June 2016 is OVERRULED.
2. Defendant’s request to reopen the record for the submission of evidence regarding the amounts paid for the property located at 625 Mifflin Street in the City of Lebanon is DENIED.
3. Defendant’s Exception to the award of fair rental credit to Plaintiff is OVERRULED.
4. The provisions of the Master’s Report are affirmed.

BY THE COURT:

 

_________________________, P.J.

JOHN C. TYLWALK

 

JCT/jah

 

Cc:  Heather Eggert, Esquire

       Colleen Gallo, Esquire

       Judith Huber, Esquire/Law Clerk

 

 

 

 

 

 

 

 

 

 

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

PENNSYLVANIA

 

CIVIL DIVISION

 

FRANCISCO SANCHEZ,                           :         NO. 2018-00867

Individually and on behalf of              :

Unnamed Partnership between           :

Francisco Sanchez and                       :

Norma Rivera,                                   :

Plaintiff                          :

:

1. :

:

NORMA RIVERA,                                     :

Defendant                      :

 

OPINION, TYLWALK, P.J., NOVEMBER 14, 2022.

 

The parties began a romantic relationship in 1976 but were never married.  They have four children who are now adults.  During their relationship, they purchased several residential properties, including one located at 625 East Mifflin Street in the City of Lebanon (“the property”).  The property was purchased in both parties’ names and they resided there until their relationship ended in 2016 when Plaintiff moved out of the residence.  The mortgage on the property was satisfied in 2010.

Plaintiff filed this action seeking partition of the property.[1] Jon Arnold, Esquire was appointed Master (“Master”).  The Master conducted a hearing on November 2, 2021 and filed his report on March 21, 2022.  The Master found that after Plaintiff left the residence in June 2016, Defendant continued to reside there.  Defendant testified that after June of 2016, she paid all expenses necessary for the home. This was confirmed by Plaintiff.  Defendant claimed that Plaintiff told her that he wanted nothing from the home when he left.  No details of the expenses and no evidence of the dollar amounts paid by Defendant for these items were presented at the hearing.  The Master found that these were voluntary payments made by Defendant, as a co-tenant, for which she was not entitled to a credit.

The Master determined that each party had a fifty percent share in the property and recommended that Defendant should be given the option to buy out Plaintiff’s share.  The parties stipulated that the fair market value of the property was $210,000 and the fair rental value was $1,250 per month.  The Master calculated that Defendant had exclusive possession of the property for 64 months and determined the fair rental value for that time period to be $80,000.00.  He awarded a credit to Plaintiff for his one-half share of $40,000.  If Defendant elected to buy Plaintiff’s fifty percent share, she would pay one-half the value of the property plus the $40,000 to Plaintiff less one-half of the transfer tax and other fees and charges within 90 days of the entry of the Order adopting the Master’s recommendation.  If she did not elect to buy the home, the property was to be listed for sale with Plaintiff getting his $40,000 and the remaining net proceeds would be divided equally.

Defendant has filed Exceptions to the Master’s Report, assigning error to the failure to award her a credit for the payment of the expenses for the property after June 2016 and asking to have the record reopened for the submission of evidence of those amounts.  She also assigns error to the Master’s award of the credit for fair rental value to Plaintiff.

Partition of real property is governed by the Rules of Civil Procedure. Partition is a possessory action; its purpose and effect being to give to each joint owner the possession to which he or she is entitled. It is an adversary action and its proceedings are compulsory. Bernstein v. Sherman, 902 A.2d 1276, 1278 (Pa. Super. Ct. 2006). The general rule is that each joint owner of real estate has an absolute right to partition the property. Marchetti v. Karpowich, 667 A.2d 724, 727(Pa Super. 1995).   Absent an abuse of discretion or an error of law, the trial court is bound to accept the findings of the master, particularly where the findings are largely dependent upon the credibility of the witnesses. Werner v. Werner, 573 A.2d 1119, 1121(Pa. Super. 1990).

Defendant claims that she was entitled to a credit for the amounts she paid for the property after Plaintiff moved out in 2016 pursuant to the Rules of Civil Procedure regarding partition actions.  Under Rule 1570(5), a Master may make a finding of “the credit which should be allowed, or the charge which should be made, in favor of or against any party because of use and occupancy of the property, taxes, rent or other amounts paid, services rendered, liabilities incurred or benefits derived in connection therewith or therefrom.”  Pa.R.C.P. No. 1570(5).

The Master cited  Bednar v. Bednar, 688 A.2d 1200 (Pa. Super. 1997) as authority for his determination that Defendant’s payments were voluntary and  would not be entitled to a credit.  In Bednar, it was held that a party is entitled to a credit for paying a disproportionate share of taxes for jointly owned property only if he is legally obligated to do so.  The court noted that pursuant to 72 P.S. §5511.12, a co-tenant is not legally obligated for another co-tenant’s share of the taxes and that any such payments made are considered to have been made voluntarily:

 

• 5511.12.  Payment of taxes by joint-tenants, etc.

Any joint tenant, tenant in common, or coparcener of real property shall have the right to pay his proportionate part of the amount of taxes due thereon. It shall be the duty of the tax collector to receive and receipt for the same. The interest of any such joint tenant, tenant in common, or coparcener, shall not be affected by any proceeding or sale to enforce payment of taxes on the other interests in said land.

 

72 P.S. §5511.12.  Since Defendant was not legally obligated for Plaintiff’s share of the taxes, the Master correctly determined that such payments were voluntary and that no credit was warranted.

In Bednar, the court also noted that in a partition action, co-tenants may be held liable to other co-tenants for repairs and other expenses which are necessary to preserve the premises for the benefit of all co-tenants:

As a general rule, where a cotenant places improvements on the common property, equity will take this fact into consideration on partition and will in some way compensate him for such improvements, provided they are made in good faith and are of a necessary and substantial nature, materially enhancing the value of the common property.

 

Bednar, 688 A.2d at 1205.

At the Master’s hearing, both parties acknowledged that Defendant paid all expenses for the property after Plaintiff moved out in June 2016.   However, Defendant failed to produce any evidence of the nature of or dollar amounts of those expenses.  Without such evidence, the Master could not determine whether the amounts expended by Defendant were necessary for the preservation and/or upkeep of the property and whether they were for the common benefit of both Defendant and Plaintiffs as co-tenants.  Thus, it was appropriate for the Master to deny this credit.

Defendant requests that we direct that the record be reopened for a period of sixty days so that she may submit evidence of these expenses.  A trial court has discretion to reopen a case for the taking of additional testimony.  In re J.E.F., 409 A.2d 1165, 1166 (Pa. 1979).  When addressing exceptions to a master’s report in partition proceedings, the court may exercise its discretion in opening up the matter for additional testimony or may elect to dispose of it on the record before the court.  Manstein v. Manstein, 369 Pa. 252, 85 A.2d 150 (1952).

A case may be reopened to allow additional evidence if it was omitted by accident, inadvertence or a mistake as to its necessity.  Id.  However, a court should not permit a case to be reopened except for proper cause shown. 8 Standard Pennsylvania Practice 2d §48:37, citing Seabord Container Corp. v. Rothschild, 58 A.2d 800 (Pa. 1948). A case may be reopened where it is in the interest of a more accurate adjudication or where an honest purpose would be justly served without unfair disadvantage.  8 Standard Pennsylvania Practice 2d §48:37, citing Pocono Mountain Charter School, Inc. v. Pocono Mountain School District, 88 A.3d 275 (Pa. Commw. 2014).  A party permitted to enter evidence after it had rested should not be allowed to start anew and make out its entire case-in-chief.  8  Standard Pennsylvania Practice 2d §48:37, citing Beaumont v ETL Services, Inc., 761 A.2d 166 (Pa. Super. 2000).

We decline to reopen the record here.  Defendant has offered no explanation for the omission of evidence regarding the expenses incurred after Plaintiff moved away from the property and  there is nothing in the record to indicate that this evidence was omitted due to accident, inadvertence or mistake.  The mortgage on the property was satisfied prior to Plaintiff’s departure in June 2016.  Defendant did not testify as to the nature of these expenses or whether any were connected to improvements or repairs which were necessary for the preservation of the property and/or benefited the interests of both Defendant and Plaintiff as co-tenants.  Without such information, we cannot say that Defendant has established proper cause to justify reopening the record now that the Master has already made his determination.  There is nothing to indicate that the submission of any additional evidence would result in a more accurate adjudication of this issue.

Moreover, we note that the Master’s hearing was originally scheduled for October 25, 2021 but was rescheduled for November 2, 2021 at Defendant’s request.   The notice of the rescheduled hearing indicated that “you may attend and cross examine the witnesses produced, and produce witnesses on your behalf, relative to the partition of the real estate.”  (Notice of Rescheduled Master’s Hearing entered October 26, 2021)  Defendant was afforded ample time and notice to prepare for the hearing and has failed to establish sufficient justification for us to reopen this issue and delay the conclusion of this matter by remanding to the Master at this juncture.  Thus, we will overrule this Exception.

Defendant also contends that the Master erred in awarding Plaintiff a credit for fair rental value of the property to Plaintiff.  She argues that there is nothing to suggest that Plaintiff was wrongfully excluded from the property as he left voluntarily.  She further claims that when Plaintiff was leaving, he told her that he did not want anything at all from the house.

We will also overrule this Exception as we find that the Master did not err in awarding Plaintiff a credit for fair rental value.  A fair rental credit may be granted in a partition action when an owner is dispossessed of his interest in property pursuant to 68 P.S. §101. Grubbs v. Dembeck, 418 A.2d 447 (Pa. Super. 1980).

 

 

• 101. Co-tenants not in possession may recover share of rental; procedure in case of partition

In all cases in which any real estate is now or shall be hereafter held by two or more persons as tenants in common, and one or more of said tenants shall have been or shall hereafter be in possession of said real estate, it shall be lawful for any one or more of said tenants in common, not in possession, to sue for and recover from such tenants in possession his or their proportionate part of the rental value of said real estate for the time such real estate shall have been in possession as aforesaid; and in case of partition of such real estate held in common as aforesaid, the parties in possession shall have deducted from their distributive shares of said real estate the rental value thereof to which their co-tenant or tenants are entitled.

 

68 P.S. §101.

 

Section 101 provides that a co-tenant is entitled to rent for the time another co-tenant is in exclusive possession of jointly owned property.  Defendant’s beliefs as to Plaintiff’s intentions do not abrogate Plaintiff’s right and there is no requirement for a co-tenant to have been wrongfully out of possession for him to be entitled to a portion of the property’s fair rental value.

For these reasons, we will overrule Defendant’s Exceptions and affirm the provisions of the Master’s Report.

 

[1] The Complaint alleged that the parties had entered an oral agreement whereby they would operate a partnership selling and renting out real property.  Plaintiff originally requested partition of five properties and bank accounts which were alleged to be partnership assets.  In the Order of June 10, 2021, the Court appointed Arnold as the Master for partition of two properties which were jointly-owned.  The Court deferred proceedings on Plantiff’s claims for unjust enrichment with regard to the other assets, which were titled in Defendant’s name alone, pending determination of the partition proceeding.  By the time of the Master’s hearing, only partition of the East Mifflin Street property was at issue.