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Through this Newsletter, we seek to highlight new and interesting issues related to estate planning and probate litigation, and on occasion venture into topics perhaps not traditionally thought of as part of the probate litigation arena. This article speaks to one such issue—litigation of partition actions in New Hampshire.
Disputes over ownership of real estate often arise after property is inherited. Despite careful thought and appropriate estate planning, these fights still often come to pass when, for example, a parent leaves a valuable piece of real estate to several of his or her children. If these children own the property jointly (with equal or unequal interests), the use of the property, and whether and when the property should be sold, can require court intervention through a partition action.
Partition claims in New Hampshire are governed by statute, which provides that either the Superior Court or the Probate Division of the Circuit Court has jurisdiction and power to determine the property rights of those with an interest in real estate. In these actions, the court may use its broad "equitable" powers so that "complete justice may be done by means as are appropriate to the special circumstances and situation of each particular case." This broad and undefined power allows a court to take into consideration a whole host of factors (essentially any factor the court deems to be relevant) to (1) determine the interests of the parties in the property and (2) fashion a remedy that is reasonable.
When asked to determine the respective ownership interests of the parties, the court may consider factors such as the legal status of the property, contributions made to the acquisition, maintenance and improvement, contractual arrangements and other relevant facts. Perhaps contrary to popular belief, even if a deed lists two individuals as joint tenants, that alone does not necessarily mean each owner has a one-half interest. If one party has invested more into the property than the other or if there exists a separate agreement regarding the percentage of ownership, the court may consider those factors before it renders a judgment and divides the property.
Likewise, the court may be creative in how it might fashion a remedy. Generally, there is a presumption that the court will initially seek to physically divide the real estate in a manner consistent with the determined ownership interests. However, it is often the case that real estate cannot easily be divided in a way that makes sense. (How do you physically divide a house in two?) As such, whenever the property is so situated that dividing it to give each owner his or her share would cause "great prejudice or inconvenience," the court may instead render one of two remedies. The court may assign the whole property to one party and direct that he or she pay the others an amount the court deems fair and reasonable. In formulating this remedy, although perhaps not entirely clear from the statute, the court may even require a majority interest holder to transfer his or her interest to a minority owner.
Because of the potential difficulties in assigning the whole property to one party over the other, the "easier" remedy for a court may often be to order the "forced sale" of the property. Indeed, the court has the authority to force the parties to sell, with the proceeds to be distributed consistent with the court's determination of ownership interests. Any property owner seeking a partition remedy where the owners disagree on the use, must realize that the court may simply force all owners to sell.
Practitioners generally think of partition actions as cases to be heard by a judge, not a jury. However, the New Hampshire Supreme Court has made it clear that a party has an absolute right to a jury trial in partition actions. Whether the matter is initiated in the Probate Division (where there are no juries available) or in the Superior Court (where juries are available), if one party timely demands a jury, the matter will be tried in the Superior Court, and it is the jury, not a judge, that will be allowed to determine the interests of the parties and fashion the appropriate remedy. Such a scenario can result in tricky and perhaps frightening results. A judge will have the background and expertise to arrive at a reasonable and supportable end result. Can a jury--with no legal training and with little guidance from the court--actually step into this role normally reserved for a trained judge? Can a jury appropriately "balance the equities?" The answers certainly are not clear. But, at least one of our Supreme Court justices has offered the view that, despite the constitutional right to a jury trial in partition cases, the judge must still be allowed, and in fact has the obligation, to ensure that a jury's ruling is appropriate and equitable under the circumstances. As such, a judge should be able to modify any "inappropriate" or "inequitable" jury decision.
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The Devine, Millimet & Branch Probate Litigation Group offers this free periodic Newsletter to provide information regarding probate litigation news and other probate-related topics. If you have any questions about this e-mail, or if you know of others who may be interested in receiving these alerts, please contact us at probate@devinemillimet.com.
This is not a legal document nor is it intended to serve as legal advice or a legal opinion. Devine, Millimet & Branch, P.A. makes no representations that this is a complete or final description or procedure that would ensure legal compliance and does not intend that the reader should rely on it as such.
© Copyright 2012 Devine Millimet & Branch, Professional Association
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