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Delgado v. Pagnillo

A-2131-05T3 (N.J. Super. App. Div. 2006) (Unpublished)

DEEDS; PARTITION — Because tenants-in-common should know that a dispute over the property might result in partition and a subsequent valuation, the underlying public policies involved are not sufficient to warrant application of the clear and convincing burden of proof; instead, the burden of proof is by a preponderance of the evidence.

Two tenants-in-common disputed the terms of their co-ownership of a house. They were both grantees on the deed to the house. The primary borrower claimed that her friend, the other tenant-in-common, had taken part in the purchase in order to help her get a mortgage. She asserted that her friend was actually a tenant who paid her $300 a month to use the basement of the house for storage. She also stated that her friend agreed that, after two years, she would convey her interest in the house to her so that the mortgage could be refinanced and that her friend’s name they would be taken off the deed. In response, the friend claimed that the two of them agreed that then would each have equal ownership of the house. The friend refused to transfer title unless she was paid half of the property’s equity. A suit followed.

The lower court found that while the friend was a co-owner of the property, she did not contribute to the purchase or maintenance of the house, nor did she live in it. It concluded that she was on the deed only as an accommodation, and that her interest in the property was nominal. It partitioned the home and ordered the friend to convey her interest to the actual owner in exchange for $5,000.

The friend appealed, contesting the lower court’s valuation of her interest and its dismissal of her claim that she had been illegally locked her out of the house. The Appellate Division affirmed the lower court’s decision, finding that the clear and convincing burden of proof is inapplicable when determining the method of partition and the valuation of the co-tenants’ interests in the property. Because tenants-in-common should know that a dispute over the property might result in partition and a subsequent valuation, the Court found that the underlying public policies involved were not sufficient to warrant the clear and convincing burden of proof. Therefore, in order to rebut the presumption of equal ownership, the actual owner merely had to call the presumption into question by presenting a genuine issue of fact. Once the presumption was rebutted, the valuation decision only had to be supported by a preponderance of the evidence.

The Court agreed with the lower court’s finding that the record supported the conclusion that the actual owner maintained the house, with the only contribution from her friend being the monthly payment for basement storage. The Court found that the record, which included various invoices and checks, supported the lower court’s conclusion by a preponderance of the evidence, and the friend offered no persuasive arguments for reversing the decision.

With regard to the friend’s argument that the lower court erred in dismissing her lockout claim, the Court found that dismissal was proper because of her failure to establish damages. It further stated that since the she was a non-resident, and since she had not made a demand for possession in writing, the friend was not entitled to damages for the lockout. Because the Court found no basis for reversal, it affirmed the lower court’s decision.


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