Procedural Posture

Appellant heirs challenged the judgment of the Superior Court of Sacramento County (California), which ordered that all of the proceeds from a successful lawsuit brought by decedent and respondent should go to respondent.

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Prior to decedent’s death, decedent and respondent partners went into business together. The partners filed suit against the seller. The partners prevailed at trial, and judgment was entered in both their names. The parties were unable to agree to a division of the funds. During that time, decedent assigned his interest in the proceeds to his wife prior to his death, and when she died, the interest passed to appellants. Appellants filed a petition to establish wife’s estate’s claim to the funds. The trial court entered a judgment awarding all the funds to respondent because respondent financed the business and the partners had an oral agreement to share profits and losses equally, and the business had generated no profit. The court reversed and rendered a judgment that the funds be divided equally between respondent and appellants. The court held that there was a rebuttable presumption that a joint award was to be divided equally among the named parties. The court held that respondent could not rely on the oral agreement to split profits and losses because the statute of limitations for the enforcement of oral agreements was two years, pursuant to Cal. Civ. Proc. Code § 339(1).


The court reversed and rendered a judgment that proceeds from a lawsuit settlement be split evenly between the parties because there was a presumption that judgments in the name of multiple parties were to be split evenly between them and because the statute of limitations had expired on the time for respondent partner to assert any oral agreement against the deceased partner.