In Morrison v. Smolarick, a January 28, 2022 opinion from the Florida Second District Court of Appeal, the appellate court clarified the distinction between credits and damages in a Florida partition action and determined that an award of money damages in lieu of a credit against the proceeds of a partition sale are not permitted under Florida law.
The Facts Of Morrison v. Smolarick
Megan and Timothy owned a home as joint tenants with the right of survivorship.
Timothy filed a partition complaint. He asked that the court order a private sale of the property and hold the proceeds in escrow pending a judicial determination of the interests of the parties to the proceeds. See Fla. Stat. § 64.061 (Commissioners; special magistrate) and § 64.071 (sale where nondivisible).
The court ordered the sale of the property and appointed a special master to effectuate the sale. The court also ordered each party to pay half of any fees required by the special master. This order constituted a final order of partition because it directed the sale of the property.
The property sold at a price below the amount owed on the mortgage resulting in zero net profit from the sale. Thus, there were no funds to be deposited into the registry of the court and divided among the parties. The parties were ordered to pay the deficit in addition to the special master’s fees and costs.
Even though there were no funds left to be divided after sale (because there was no profit), Timothy noticed the case for trial, at which he anticipated that the court would determine the amount of reimbursable expenses that he was entitled to recover. Megan objected and argued that a trial was not necessary because there were no funds to distribute, and that because Timothy’s complaint only sought partition, he was not entitled to a money judgment reimbursing him for the expenses.
The trial court went forward with the trial and entered a money judgment in favor of Timothy in an amount representing reimbursable expenses he paid when the parties were co-owners.
Megan appealed, arguing that neither chapter 64 nor the case law applying it authorize entry of a money judgment where only partition is sought and the partition sale resulted in zero proceeds.
What Is a Florida Partition Action?
We have written about partition actions in Florida before: See Partition Actions in Florida and Partition Action Solves Jointly Owned Property Disputes. Partition often comes up in the probate context when family members or others who never wanted to own property together suddenly inherit real property after the death of a loved one. One person may want to keep the property, while others want to sell it. Hence, the partition action.
As explained by the Florida appellate court:
A partition action commences a legal proceeding to divide cotenants’ interests in a real property. See Condrey v. Condrey, 92 So. 2d 423, 426 (Fla. 1957) (noting that partition actions are a matter of right), superseded by statute on other grounds as stated in Durand v. Durand, 16 So. 3d 982, 984 (Fla. 4th DCA 2009); see also Green v. Green, 16 So. 3d 298, 301 (Fla. 1st DCA 2009) (explaining that partition proceedings are equitable in nature). Partition is achieved by ordering the physical division of the property or, if indivisible, by sale after which the proceeds are divided. § 64.061(4) (providing that where property is indivisible, the court may order it sold); § 64.071(1) (“[T]he court may order the land to be sold . . . by the commissioners or the clerk and the money arising from such sale paid into the court to be divided among the parties in proportion to their interest.”).
The Proceeds Of a Partition Sale Are Divided By the Court
After the sale of the property, “the court impounds the fund consisting of the proceeds of sale and conducts proceedings to establish the credits due to the parties and to determine the final amount awarded to each.” McFall v. Trubey, 992 So. 2d 867, 870 (Fla. 2d DCA 2008).
“[A] cotenant paying obligations of the property is entitled to a credit from the proceeds of the sale for the other cotenant’s proportionate share of those expenses.” Biondo v. Powers, 743 So. 2d 161, 164 (Fla. 4th DCA 1999).
Does the Florida Partition Statute Provide For Money Damages In Lieu Of a Credit Against the Proceeds Of Sale?
No. The partition law of Florida does not allow for money damages in lieu of a credit against the proceeds of the sale. As stated by the Florida appellate court:
Neither the statute nor the case law provides for an award of money damages in lieu of a credit against the proceeds of the sale. Nor would it be consistent with the nature of the remedy of partition—either the property is divided or, if it cannot be divided, the funds from its sale are divided. As this court explained in McFall, 992 So. 2d at 870, the amounts sought after a partition sale are not “damages” but rather are simply “credits” to be awarded in the allocation of the fund.
The Florida appellate court reversed and remanded for the trial court to vacate the judgment awarding damages in the partition action.