Long term leasehold interests are subject to both statutory and equitable partition in a case seeking to divide property of unmarried cohabitants.

Wynkoop v. Stratthaus. 2016 VT 5 (filed January 15, 2016)

DOOLEY, J. The parties to this appeal are co-lessees in a thirty-year ground lease for a ten-acre parcel of land The parties constructed improvements on the land and shared the parcel as unmarried cohabitants Upon termination of their relationship, plaintiff sought partition the property under 12 V.S.A. § 5161 and compensation for ouster under 12 V.S.A. § 4765. Defendant appeals the trial court's property division and compensation to plaintiff. We reverse in part and affirm in part.

On appeal, defendant claims the leasehold is not real property subject to partition under 12 V.S.A. § 5161; and that the court erred in calculating the parties' contributions to the project; We affirm the trial court's judgment with respect to the applicability of the partition statute to the leasehold. We reverse and remand for the court to correct errors in its calculation of the parties' respective contributions and to value the property and determine the partition remedy.

All, or virtually all, decisions that have considered the question before us have held that partition is available for leasehold interests. Based on our own analysis, as well as the precedents from other jurisdictions, we hold that plaintiff could seek partition under 12 V.S.A. § 5161.

There is, however, an alternative remedy applicable to the situation in which plaintiff is left. Partition is both an action at law, pursuant to the statute, and a remedy in equity that came to us as part of the English legal system a court could partition a leasehold interest under the court's equitable powers, In applying partition then, we have relied on equitable partition and not the action at law known as statutory partition. While there may be multiple reasons for proceeding this way in particular cases, the overall rationale applicable to property division for unmarried partners in marriage-like relationships is that we must consider all relevant circumstances to ensure that complete justice is done.

Thus, even if § 5161 did not apply because the parties have a leasehold interest and not ownership in fee, we would hold that partition in equity is the proper remedy.

Equitable partition can follow its own flexible procedures, and the court is not bound by those in the statute, including the use of commissioners. We conclude that appointment of commissioners is particularly inappropriate and unnecessary in a case like this because they add cost to the process, the value of the property is relatively small, and the role of the commissioners is very limited. Thus, we conclude that in this case the trial court should value the property and not refer valuation to commissioners. Once the court has valued the property, it should determine and order the partition remedy, either by assigning the property to plaintiff with a pay-off to defendant or sale of the property with distribution of the proceeds according to the percentage shares of the parties. If a sale is ordered, the court may appoint commissioners to sell the property.

In summary, we hold that he superior court has jurisdiction over this case based on the common leasehold interest of the parties. This case is appropriately an equitable partition case to be adjudicated under the equitable principles and procedures of a normal civil case.  The superior court should proceed to fashion a remedy without use of commissioners except, if necessary, for purposes of sale of the property.

EATON, J., concurring. I agree with the majority's conclusion that equitable partition, in addition to statutory partition, is part of the law of Vermont and that in reaching an equitable division of the parties' property, the court could employ equitable partition under the facts of this case. In my view, 12 V.S.A. § 5161 does not apply in this instance, making equitable partition available and appropriate.

Because the majority relies upon equitable partition, the historical overview of statutory partition is largely unnecessary to the result. I am also not convinced that statutory partition is available in this case, and to the extent the majority holds that statutory partition provided any authority for the court to partition the leasehold interest, I disagree

Partition, whether employed under the statutory framework, or as a part of the court's equitable powers, is cumbersome, potentially expensive, and time-consuming. Using it with every division of a leasehold interest that comes before the court in a divorce or civil proceeding among unmarried cohabitants, would be unwise and unworkable. In long-term lease situations, however, or those where valuation of the leasehold is particularly difficult, it should be one of the tools available to the trial court, in its discretion, in discharging its obligation to divide the parties' property in an equitable manner.

I concur with the outcome reached by the majority, and agree with its analysis of the issues, except as to the applicability of 12 V.S.A. § 5161