Does the appeal of an interlocutory judgment automatically stay the partition case?Does the appeal of an interlocutory judgment automatically stay the partition case?No. An appeal of an interlocutory judgment in a partition case is not stayed unless the appellant files an undertaking. (CCP §§ 917.4, 917.5.) Normally, appeals of court judgments result in an “automatic” stay that restrains the lower trial court from issuing any more orders until the appeal process is completed. There, are however, certain types of orders where this rule is inapplicable. Instead, if the appealing party wants to stay lower court proceedings, they must post a bond to the court called an “undertaking.” Interlocutory judgments of partition fall into this category because they are orders that dispose of real property. As such, in these situations, getting the right lawyers makes all the difference, whether you be a plaintiff or defendant. At Underwood Law Firm, our attorneys are well-versed on the myriad of procedural hurdles that can occur during a partition action. If you need a partition, we’re here to help.
An appellate stay refers to a “halting” of all lower court actions once a party has “perfected” an appeal. Put simply, if the court issues a final judgment or appealable order, and the losing party timely and properly files an appeal of that judgment or order, then that same issuing court can no longer make any other decrees until the appeal process is finished. What’s more is that this stay is both mandatory and automatic. The unambiguous language of Code of Civil Procedure Section 916 states, “the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby….” While this may seem unfair, particularly to the litigant who has spent months or even years obtaining relief, the logic behind this rule is sound. For example, suppose a managing general partner was trying to sell off partnership assets to line his own pockets. The partners obtain a temporary injunction against this action, but eventually lose. Without the automatic stay, it wouldn’t matter if the partners won at the appellate level, because the lower court could just terminate the temporary injunction and the managing partner would be free to indulge in fraudulent behavior. This is the type of situation the mandatory stay seeks to prevent: appellate reversal resulting in a “barren” victory. (URS Corp. v. Atkinson/Walsh Joint Venture (2017) 15 Cal.App.5th 872, 884.)
Despite the above, there are nonetheless situations in which the California Legislature has seen fit to abolish the automatic stay. Relevant here, if an order directs the person appealing to sell real property in their possession, or if a receiver is ordered to sell real property, then there is no automatic stay. (CCP §§ 917.4, 917.5.) Instead, if the appealing party wants to stay the case, they need to post an “undertaking.” The reason these statutes apply to partition actions is that interlocutory judgments of partition are, first, appealable as a matter of law. (CCP §§ 904.1 (a)(9); 872.720 (a).) And second, an interlocutory judgment orders the piece of property to be “partitioned,” e.g., sold by a partition referee. As such, because a third-party officer of the court is being ordered to sell property (usually in possession by one of the parties), either of these statutes might be invoked as exceptions to the automatic stay rule, given the particular circumstances of the case. The sale will proceed absent the undertaking.
The main reason an undertaking is required under Code of Civil Procedure Section 917.4 is actually to protect the non-appealing party (the “Respondent” in appellate parlance). Under the statute, the appealing party posts the undertaking to stay enforcement of the order, but that undertaking is only given on the promise that the appellant not commit waste on the property. If they do commit waste, or if they lose the appeal, then the undertaking is used to pay the Respondent damages for the waste as well as for the rental value of the property. (CCP § 917.4.) By means of example, suppose a defendant kicks out a co-owner plaintiff from the property (this is called an “ouster”). After being ousted, plaintiff sues for partition and obtains an interlocutory judgment to sell the house. Defendant, though, appeals and remains on the property. The appeal takes 8 months to even be heard. If the ordinary automatic stay rule was applicable, then plaintiff would have to watch hopelessly as defendant committed waste all over the property for months on end. He wouldn’t be able to go to the trial court and request an injunction because of the automatic stay. The requirement of the undertaking lessens the blow in this situation. Even if the defendant still committed waste, the undertaking would thereafter be used to compensate the plaintiff for the defendant’s damages. And if defendant’s appeal was unsuccessful, plaintiff would also recover damages in the form of the property’s rental value for the period of time that defendant remained on the property.
An undertaking is a form of bond. Specifically, it’s a promise by a third party called a “surety” to account for a person’s action. In this context, then, a surety (the appellant’s lawyer or bond service or friend) will promise to the court that the appellant will refrain from committing waste on the property. And in consideration of this promise, the surety will deposit with the court a set amount of money that may potentially all go the respondent if the appellant breaks his promise. As to how big the undertaking must be, the amount of bond is usually fixed by the trial court during the hearing on the appeal. (CCP § 921.)
If the appealing party forgets or is unable to post an undertaking, then the stay simply does not apply. As such, the trial court will be free to continue crafting orders and decrees even as the appeal is pending. (City of Riverside v. Horspool (2014) 223 Cal.App.4th 670, 682-683.)
Attempting to litigate a partition can be difficult enough on its own. Adding in the appeals process makes it even mor daunting. For the inexperienced litigant, the next steps might seem impossible to determine. Fortunately, the lawyers at the Underwood Law Firm specialize in partition actions and solving the difficult problems that can accompany them. If you have found yourself in one of these situations, then please do not hesitate to contact us today.
