Opinion ID: 1057218
Heading Depth: 1
Heading Rank: 2

Heading: Legal Standards Bearing on the Accounting

Text: ¶ 15. We turn now to defendant's claims relating directly to the trial court's accounting and award of $15,216.31 of the property value to plaintiff. Some of these claims are unfounded, but we agree that several errors in the accounting method and equitable allocation warrant reversal andin the case of the initial partition accountingreconsideration. We begin by outlining basic rules that govern the accounting between these cotenants, several of which were recently stated for the first time by this Court in Massey v. Hrostek, 2009 VT 70, 186 Vt. 211, 980 A.2d 768, decided after the trial court issued its decision in this matter. Absent a compelling alternative approach, once cotenancy is established, the partitioning court should split the property in half and then consider equitable factors in the following order. First, the court may determine the contributions of each party towards the actual expenses of the house, including mortgage, insurance, taxes, utilities, repairs, and improvements. These contributions can credit a party for payment of other expenses, but only where, by agreement with the other cotenants, the claiming party paid more than its pro-rata share of such other expenses in lieu of a pro-rata contribution to its shared obligation on the real property bills. [3] Second, the court should credit against contribution claims a rental value offset for any period of exclusion of a party ousted from the premises by the cotenants in possession. The court should next consider other equities cognizable in partition and then any allocation of costs and fees arising from partition.
¶ 16. Despite the presumption of equal contribution and equal interest, Massey, 2009 VT 70, ¶ 17, 186 Vt. 211, 980 A.2d 768, when one cotenant pays more than his or her share of property-related expenses, she or he is entitled to proportionate reimbursement, or credit, from the other tenants to reflect the proportionate burden of co-ownership. Id. ¶ 21. [4] In calculating any reimbursement due, the court must account for all of the property expenses paid by each party. These include not only the mortgage payments, but also the necessary utilities, taxes and insurance, and maintenance expenses towards the home. See Massey, 2009 VT 70, ¶ 22, 186 Vt. 211, 980 A.2d 768. ¶ 17. While there is no error in the trial court's finding that plaintiff contributed to some of the property expenses during 2002, the court must determine on remandat least generallythe object and amount of such contributions, arriving at a discrete figure separate and apart from any claims for offsets. To illustrate our concern here, the court found the parties' different levels of contributions only in the broadest terms during their cotenancy and then arrived at a fractional respective financial participation that does not comport with the findings. The court noted that defendant assumed responsibility for paying the mortgage at or near the time of closing and that after about a year plaintiff stopped contributing to household costs altogether. Yet the court reduced plaintiff's half-share by three-fifths, based, in part, on the court's conclusion that she helped with expenses during two out of the five yearsa conclusion inconsistent with its own finding and plaintiff's own acknowledgment that her contributions ceased sometime during the second year. [5] ¶ 18. Not appearing in the court's analysis is an accounting of what portion of contributions plaintiff and defendant each made to taxes, insurance, utilities, repairs and the like during the first and second years while plaintiff lived in the house, or a separate accounting of defendant's contribution after the RFA and parental rights orders that prevented plaintiff from residing at the home. While the accounting need not be precise, a ball-park estimate is insufficient. It may be that the evidence was too vague, but the party with the burden of proof on a particular claim of contribution or offset must bear the risk of failing to prove the necessary financial facts. Nor should the court's evaluation of contribution claims be conflated with its consideration of offsets. Assessment of offsets cannot be evaluated by the trial court or this Court without knowing at least the general proportion of each party's contribution to maintaining and preserving the property in the first place.
¶ 19. After assigning contribution credits, offset claims based on ouster should be evaluated. Ousted cotenants have a right to the rental value for the period of exclusion, but ouster requires an absolute finding by the trial court that a possessory tenant has asserted rights in conflict with his cotenants. 7 Powell, supra, § 50.03[1][b], at 50-16 to 50-17. The general presumption against ouster of a co-tenant can be overcome only by some overt and notorious act or acts of an unequivocal character, indicating an assertion of ownership of the entire premises to the exclusion of the right of the co-tenant. Ransom, 172 Vt. at 432, 782 A.2d at 1162 (quotation omitted); accord Scott v. Leonard, 119 Vt. 86, 102, 119 A.2d 691, 700 (1956) (requiring a notorious act indicating an assertion of ownership in the entire premises to overcome presumption against ouster between cotenants); accord Powell, supra, § 50.03[1][b], at 50-16 to 50-17 (to prove ouster, a tenant in possession must show acts inconsistent with, and exclusive of, the rights of the cotenants .... The acts of the cotenant claiming title ... must be in repudiation of the cotenancy ....); cf. Massey, 2009 VT 70, ¶ 24, 186 Vt. 211, 980 A.2d 768 (adopting as a rule that wrongful interference with use and enjoyment of premises by changing locks and security codes warrants finding plaintiff entitled to rental offsets). ¶ 20. Defendant argues that the trial court's reliance upon an element of ouster in support of part of its $6000 offsetting award was error. Plaintiff counters that defendant excluded her from the house after the RFA order expired by issuing the no-trespass notice, thus establishing her right to claim ouster rental value as a defensive setoff to defendant's claim for contribution costs. As appellant, defendant must show there is no credible evidence to support the trial court's conclusion. Siegel, 2007 VT 116, ¶ 5, 182 Vt. 623, 939 A.2d 1023. ¶ 21. Both parties agreed that plaintiff was excluded from the residence by defendant's notice against trespass, but defendant testified that the notice was necessary given plaintiff's history of trying to have him jailed when they were in contact and because of her breaking into the house twice to take his tools. The court concluded that the no-trespass notice presented an element of ouster and on that basis awarded plaintiff some indistinct part of $6,000 in additional equity. ¶ 22. It may be that the court considered defendant's version of the facts, but found it incredible, unpersuasive, or otherwise insufficient. If so, the court needs to explain why defendant's testimony failed to make a prima facie case for his point, or resolve its weight one way or the other. Also, the court's meaning in concluding that there was an element of ouster is not clear. If what plaintiff proved is something less than absolute ouster, then plaintiff did not meet her burden, and the court cannot award a rental offset. ¶ 23. There is left another critical ambiguity. The amount of the court's offset for ouster, within the additional award of $6,000, still bears no accounting relationship or nexus to any facts. Assuming plaintiff sustained her burden to overcome the presumption against ouster, the timing of the ouster was left unsettled by the court's findings, although the record may support a minimum time frame. The court observed that the evidence of when the no-trespass notice came about was unclear. Indeed, the record does not establish when, exactly, after the expiration of the RFA order, the no-trespass notice was sent. [6] Nevertheless, defendant testified that he issued the notice sometime past August 17 or 13[, 2004]. That's close to when it was, I guess. I really don't remember. Given defendant's reference to a particular month in 2004, it seems unlikely that he ultimately remembered no date whatsoever, as opposed to not remembering which day in the month of August 2004 it occurred. If, however, based on the testimony, the court is not satisfied, or cannot describe, that defendant's dispossession of plaintiff was accomplished by any particular time before the hearing, plaintiff's claim for rental offset must fail for inability to measure her ouster by any duration. If, on the other hand, the court can find from the testimony a time at which ouster of plaintiff was achieved, then it can calculate the rental value offset accordingly. [7]
¶ 24. Once contribution and ouster offset are reconciled, the court should consider other equitable claims. Here, defendant argues that the court erred in considering plaintiff's payment of other household expenses in the equities of partition, and defendant disputes the consideration of what the court characterized as his acquiescence to plaintiff's failure to abide by her agreement to bear an equal share of the realty expenses. Plaintiff responds that such a balancing is within the trial court's discretion and must be granted deference by this Court. ¶ 25. The court was incorrect to recognize an additional offset in plaintiff's favor based on her income being necessary to obtain the financing to purchase the property. The fact that plaintiff applied for and was a necessary cosigner with defendant on the mortgage application for financing may support the presumption that she owns an undivided one-half interest in the property, but lends nothing to her claim for additional equitable consideration. That the parties' financing was dependant upon plaintiff's co-signature favors plaintiff no more than defendant in the equitable adjustments to their underlying half-portions of the property proceeds. The evidence indicates that both parties' incomes were necessary to obtain the mortgages; neither party suggested, and the trial court did not find, that plaintiff was any more eligible or able to obtain financing sufficient to purchase the property alone than was defendant. Plaintiff neither contributed more, nor had more at risk, than defendant based on the bare fact that she applied for and was obliged on the mortgage to the same degree as defendant. Plaintiff established no reason for an additional share in the property's value due to her participation in the mortgage application and obligation. ¶ 26. Next we examine defendant's claim that the trial court improperly considered circumstances outside the scope of a partition action. The trial court has authority to consider all relevant circumstances in order to ensure a just outcome [in a] partition action, but must restrict itself to the contributions made to the real property. Begin, 2006 VT 130, ¶ 9, 181 Vt. 553, 915 A.2d 786. (quotation omitted). Defendant contends that plaintiff's purchases for the parties' children and payments to general expenses are not relevant to partition and that the court's consideration of those factors was error. We agree. ¶ 27. The court did not find that this plaintiff's expenditures on behalf of the children and payment of other expenses were an agreed-upon substitute for paying her share of the housing costs. Indeed, the court found that plaintiff continued these purchases for the children after she stopped contributing towards the house, indicating no additional financial burden in this regard in lieu of her house payments. The court also accounted for the children's SSI benefits, derived from plaintiff's disability and available to defendant for the family's overall expenses, as a contribution from plaintiff. Assuming the children's SSI should be considered at all, no evidence linked such payments to the real property costs after plaintiff quit paying towards the house. Crediting to plaintiff's account for her contributions to general domestic expenses is beyond the scope of the partition statute and is disallowed. See id. ¶ 28. It is unclear how defendant's so-called acquiescence to plaintiff's nonpayment, which we understand to mean his apparent lack of action to compel her to pay according to her agreement, would weigh in plaintiff's favor absent some known or reasonably anticipated change of position or other detrimental reliance on plaintiff's part. Consideration of such acquiescence alone, in the context of a domestic relationship, seems a difficult factor to parse in terms of competing equities. The import of defendant's acquiescence to plaintiff's nonpayment, as opposed to plaintiff's apparent acquiescence to defendant's denial of her cotenancy rights by his no-trespass letter, is not evident. The significance of this factor, if still weighed by the court on remand, bears explanation.
¶ 29. We turn finally to defendant's contention that the court erred in failing to award him costs under the partition statute, including fees for the property appraisal prepared for this litigation and the mediation the parties undertook before trial. The statute provides in relevant part that when a plaintiff in a partition case is determined to hold a smaller share than alleged in his complaint, the adverse party shall recover against him reasonable costs. 12 V.S.A. § 5170. In a case decided before § 5170 was enacted, we held that where no order regarding allocation of costs in a partition action was issued below, this Court will not make such an order. Houghton v. Sowles, 57 Vt. 635, 635 (1885). In any event, there is no question that plaintiff was found to hold what she claimed in her complaint: an undivided interest in certain lands and premises. The parties agreed that they held the realty as tenants in common. The trial court's finding that the parties originally acquired the property as equals was consistent with the presumption, not rebutted here, that tenants in common have equal title in the commonly owned property. That plaintiff may realize less than the full value of her undivided one-half interest results from equitable adjustments by the court pursuant to the partition action after title was acquired. Consequently, even if § 5170 supersedes the Houghton holding, there is still no statutory basis to award costs. ¶ 30. Defendant argues alternatively that the court erred by not offsetting plaintiff's portion of the equity by half of the mediation fee and the property appraisal cost. According to the record, the parties agreed to a specific split of the mediation fee below, and defendant's claim for a different allocation has therefore been waived. Regarding the cost of the appraisal, however, both parties' proposed findings and conclusions included a setoff of one-half the appraisal fee from plaintiff's share of the equity. It is typical for cotenants to allocate the costs and expenses of litigating partition according to their respective fractional shares. Powell, supra, § 50.07[3][e], at 50-46.1. Here, both parties arguably agreed that plaintiff should bear one-half of the cost of the appraisal. While allocating costs is a matter left to the discretion of the court, see, e.g., Bull, 170 Vt. at 463, 752 A.2d at 35 (reviewing such allocations only for abuse of discretion), the trial court here was silent on the matter and made no allocation at all. Absent some explanation, it appears that the court's discretion was entirely, and therefore erroneously, withheld. Quenneville v. Buttolph, 2003 VT 82, ¶ 11, 175 Vt. 444, 833 A.2d 1263 (reiterating that withholding discretion entirely constitutes an abuse of discretion). ¶ 31. On remand, defendant will also have an opportunity to request that the court review the figures used for the total equity in the property. Defendant's claim of mathematical or calendar error (or both) on that issue is properly directed to the trial court under Vermont Rule of Civil Procedure 60(a), which allows clerical mistakes or errors arising from oversight to be corrected at any time pursuant to a motion by one of the parties or on the court's own initiative. ¶ 32. Finally, plaintiff's motion to strike several of defendant's documents and portions of documents as outside of the record in the case is moot because we did not consider them. The trial court's holdings that plaintiff initially acquired an equal half-share as cotenant at the time of conveyance, that she ceased contributing to real estate expenses altogether in early 2003, and that defendant excluded her from the property by his letter of no-trespass, are affirmed. The court's awards of offsets for plaintiff's mortgage application and obligation, her contributions to children's clothing, overall expenses, and the application of the children's Supplemental Security Income to household expenses are reversed. The court's accounting for contribution of the parties is reversed and remanded for an accounting consistent with this decision. The court's award for ouster rental offset is reversed and remanded for a determination, based on the current record, of whether defendant's exclusion action was wrongful and, if so, for a calculation consistent with this decision, if the evidence is sufficient to discern duration and value. Defendant's claim for appraisal fee allocation is remanded to the court for an explicit determination.