Superior Court Ruling Illustrates Importance of Timing in Partition Actions

With the pandemic going into its second year, it is putting stress on relationships, both business and personal ones. This is especially true regarding individuals who own real estate together and no longer want to be associated with each other. That is why we are seeing more and more partition actions, also known as real estate divorces, being filed nowadays.

In Quarello v. Clinger, 2021 Pa. Super. Unpub. LEXIS 666 (Mar. 10, 2021), the Pennsylvania Superior Court recently upheld a trial court’s ruling in a partition action between parties that were romantically involved but never married.

In Quarello, John W. Quarello and Kathryn M. Clinger originally jointly financed the property they owned together in Altoona, Pennsylvania, the opinion said.

They subsequently refinanced the mortgage loan, such that Clinger remained on the mortgage and the deed to the property under the new mortgage loan but only Quarello remained personally liable under the mortgage loan.

When their relationship deteriorated, Quarello vacated the property and Clinger maintained exclusive possession of the property with their daughter, all the while with Clinger making payments due under the mortgage loan as well as the costs and expenses with the property, the opinion said.

She was even forced to subject herself to bankruptcy proceedings in order to forestall an attempted foreclosure of the mortgage when Quarello refused to make payments due under the mortgage loan, the opinion said.

Over a decade later, after Quarello paid the balance of the mortgage loan, he filed a partition action against Clinger in the Blair County Common Pleas Court.

In response, Clinger argued that Quarello abandoned any interest he had in the property and should be barred by the doctrine of laches and due to his unclean hands.

The trial court granted partition of the property and awarded Clinger an undivided 100% ownership interest and refused to order her to make any payment to him in consideration for him transferring his interest in the property to her.

Quarello appealed the trial court’s ruling to the Pennsylvania Superior Court on several grounds.

He first argued that the trial court erred when it failed to limit Clinger’s request for recovery and owelty pursuant to the six-year statute of limitations.

Specifically, Quarello stated that Clinger should only be credited for payments she made on account of the property from six years from the commencement of the partition action, thus stopping her from collecting several additional years of such payments.

Although the Superior Court in Clinger agreed that 42 Pa. C.S. Section 5527(b) sets forth the relevant limitation periods of six years, it nonetheless held that no legal or equitable relief was warranted under the circumstances because Quarello’s partition action was barred by the doctrine of laches.

In Pennsylvania, in order for the doctrine of laches to bar the prosecution of a claim, the defendant must demonstrate the following elements: “a delay arising from the plaintiff’s failure to exercise due diligence; and prejudice to the defendant resulting from the delay.”

In analyzing the situation, the Superior Court in Quarello highlighted that, for approximately 12 years before the filing of his filing of the complaint in the partition action, Quarello made no financial contributions whatsoever towards the mortgage, property taxes, or maintenance of the property.

According to the Superior Court, this delay in asserting his property rights constituted sufficient delay for purposes of the doctrine of laches.

Furthermore, the Superior Court determined that Clinger demonstrated sufficient prejudice to establish a claim under the doctrine of laches. Because of Quarello’s repudiation of his financial obligations to the property, she was forced to petition for bankruptcy in order to avoid foreclosure of the mortgage when he refused to make payments due under the mortgage loan.

In the Superior Court’s estimation, if Quarello promptly asserted a claim for partition, Clinger would have avoided seeking bankruptcy protection under the circumstances.

The Superior Court in Quarello next addressed his argument that he should not have been obligated to reimburse Clinger for any property taxes she paid while she was in exclusive possession of the property.

In making this argument, he noted that, in Pennsylvania, a property owner is not generally entitled to reimbursement for property taxes paid voluntarily on behalf of the other property owner.

The Superior Court in Quarello found that, since the parties were obligated under the terms and conditions of the mortgage loan to pay the property taxes due on account of the property, for all intents and purposes, such payment was not voluntarily made and she was, thus, entitled to credit in the partition action for the property taxes she so paid on his behalf.

The Superior Court in Quarello also addressed his assertion that the trial court erred when it awarded owelty to Clinger for repairs and improvements she made to the property during her time of exclusive possession of the property.

In Pennsylvania, a property owner will be compensated for such property repairs and improvements, so long as “they are made in good faith and are of a necessary substantial nature, materially enhancing the value of the common property.”

At trial, Clinger testified and provided documentation illustrating proof of payment for the following repairs and improvements made to the property—a repair of the sewer, a new roof, replacement of a water line, a new sidewalk, front steps and a railing, and the removal of a tree struck by lightning.

The Superior Court indicated that it did not detect any abuse of discretion on the part of the trial court in determining that these property repairs and improvements were made in good faith and necessary to preserve and enhance the value of the property.

Finally, the Superior court in Quarello concluded that the trial court did not err when it failed to award him owelty for the fair rental value of the property during the time Clinger was in exclusive possession of it.

In Pennsylvania, the fair rental value of the property may be recovered in a partition action if the complaining property owner is not in possession of the property and the other property owner occupies exclusive possession of it.

As a result of Quarello’s minimal financial contributions to the property over the years, the Superior Court in Quarello determined that his request for reimbursement for the fair rental value of the property should be barred by the doctrine of laches.

Even if it was not so barred by the doctrine of laches, the Superior Court agreed with the trial court that the testimony regarding the property’s fair market value was “not convincing, seemed speculative and was based on inaccurate information.”

Lessons Learned

The opinion recently issued by the Superior Court in Quarello highlights the importance of pursuing redress with the courts, especially partition actions, in a timely manner. If Quarello initiated a partition action as soon as he vacated from the property, it is likely he would have had a viable claim in consideration for his property interest.

—Clementa Amazan, an associate at Nochumson P.C., is the co-author of this article.

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