Khimani v. Ruppenthal. , 811 S.E.2d 448 ( 2018 )

SECOND DIVISION
MILLER, P. J.,
ANDREWS and SELF, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
February 22, 2018
In the Court of Appeals of Georgia
A18A0236. KHIMANI v. RUPPENTHAL.
ANDREWS, Judge.
Bob Ruppenthal, administrator of the estate of Salim Khimani (“Salim”),
petitioned for statutory partition of real property owned jointly by Salim, his brother
Mohammad Khimani (“Mohammad”), and his brother-in-law Sikandar Nathani
(“Sikandar”). Mohammad counterclaimed for equitable partition and an accounting,
asserting that he was entitled to contribution and set-off for significant sums he had
paid to maintain the property. Ruppenthal moved for summary judgment on the
contribution claim. The trial court granted the motion in part, and Mohammad
appeals. For reasons that follow, we reverse.
On appeal from the grant of summary judgment, we review the record de novo
“to determine whether there is a genuine issue of material fact and whether the
undisputed facts, viewed in the light most favorable to the nonmoving party, warrant
judgment as a matter of law.” Jones v. Kirk, 290 Ga. 220, 221 (719 SE2d 428) (2011)
(citation omitted). So viewed, the record shows that Mohammad, Salim, and Sikandar
acquired the property as tenants-in-common on February 12, 1998. In 2001, the three
men granted First Georgia Community Bank a security interest in the property to
secure a construction loan. Mohammad paid off the outstanding indebtedness in 2007
using funds received through a personal loan that he obtained from a different bank.
He also satisfied taxes owed on the property for multiple years.
Salim subsequently died, and in 2015, Ruppenthal, as executor of Salim’s
estate, filed a Complaint for Statutory Partition of the property. Claiming that Salim,
Mohammad, and Sikandar each held a one-third share, Ruppenthal requested that the
property be sold and the sale proceeds distributed between the parties “in accord with
their relative interests.” Mohammad counterclaimed for an equitable partition and
accounting, asserting that he was entitled to an increased share as a set-off from his
cotenants, given the money he spent on behalf of the property.
Ruppenthal moved for summary judgment as to expenditures made more than
four years prior to 2015, when Mohammad filed his counterclaim. According to
Ruppenthal, any claim for such amounts, including the loan satisfaction in 2007,
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subsequent interest payments on the personal loan Mohammad took out to satisfy the
construction loan on the property, and tax payments made through 2011, was barred
by the four-year limitation period in OCGA § 9-3-25. The trial court granted the
motion, and Mohammad appeals.1
Pursuant to OCGA § 9-3-25, “[a]ll actions upon open account, or for the breach
of any contract not under the hand of the party sought to be charged, or upon any
implied promise or undertaking shall be brought within four years after the right of
action accrues.” This limitation period applies to contribution claims by an obligor
who pays off a common debt and creates an “implied contract on [the] part [of a co-
obligor] to bear his share of the common burden.” Powell v. Powell, 171 Ga. 840, 840
(156 S.E. 677) (1931); see also Sherling v. Long, 122 Ga. 797, 799 (50 S.E. 935) (1905)
(“The period of limitation to an action for contribution is that fixed for an implied
contract.”). The cause of action for contribution generally accrues – and the four-year
statute of limitation commences – upon payment of the joint debt. See Powell, supra;
Sherling, supra.
1
The trial court denied Ruppenthal’s motion to the extent it sought summary
judgment regarding property tax payments made within four years of 2015. That
ruling is not at issue in this appeal.
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Citing these principals, the trial court found that OCGA § 9-3-25 precluded
Mohammad’s claim for expenditures made over four years before he filed his
counterclaim. This case, however, does not merely involve an implied promise to pay.
Mohammad sought an equitable partition of real property and an accounting of the
joint tenants’ interests. See OCGA § 44-6-140 (“Equity has jurisdiction in cases of
partition whenever the remedy at law is insufficient or peculiar circumstances render
the proceeding in equity more suitable and just.”). A court resolving such equitable
claim has “the authority to adjust the accounts or claims of the cotenants” based on
payments made to protect the property. Taylor v. Sharpe, 221 Ga. 282, 284 (1) (144
SE2d 390) (1965), disapproved of on other grounds by O’Connor v. Bielski, 288 Ga.
81, 83 n. 2 (2) (701 SE2d 856) (2010). In other words, the court may “make necessary
and equitable adjustments for improvements and expenditures made and paid for by
the respective parties.” Borum v. Deese, 196 Ga. 292, 295 (1) (26 SE2d 538) (1943).
Nothing in the statutory scheme governing equitable partition limits these
adjustments to payments made within four years of the request. See Ransom v.
Holman, 279 Ga. 63, 64 (1) (608 SE2d 600) (2005) (trial court properly exercised
equity jurisdiction over cotenant’s petition for partition and accounting, which
included claim that cotenant had paid all taxes and maintenance costs relating to the
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property since 1980). Rather, the court must “mold its decree to meet the general
justice and equity of each cotenant.” OCGA § 44-6-141. The trial court’s ruling does
not address the equities here.
Moreover, under OCGA § 44-6-122, if one party receives more than his fair
share of the rents or profits from jointly owned property, he is liable to his cotenants
for the overage. This liability creates an equitable lien in favor of the cotenants
against the profiting party’s property interest. See Bank of Tupelo v. Collier, 191 Ga.
852, 856 (2) (14 SE2d 59) (1941). The limitation period for recovering such overage
does not commence until the profiting party “begins to hold such surplus adversely
to the cotenant[s], and knowledge of that fact comes to the cotenant[s].” Chambers
v. Schall, 209 Ga. 18, 22 (4) (70 SE2d 463) (1952). Thus,
[i]n an equitable action for the partition of land and for an accounting,
the defense of laches raised by general demurrer is not well taken when
the pleaded facts show that the plaintiff, upon being informed that the
defendant, her cotenant, was asserting title to the property and refused
to account for the rents and profits, promptly instituted her action for
partition and accounting.
Ballenger v. Houston, 207 Ga. 438, 440-441 (62 SE2d 189) (1950).
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Mohammad does not claim that, at this point, Salim or his estate has received
an unfair share of rent or profits from the joint property. Our Supreme Court,
however, has applied the principles governing rent and profit “in favor of a tenant in
common who has expended money for the protection of the joint property by the
payment of taxes.” Collier v. Bank of Tupelo, 190 Ga. 598, 601 (3) (10 SE2d 62)
(1940). As the Court explained, a cotenant who pays such taxes “is entitled to a lien
against the interest of his cotenant for his share of the taxes paid.” Bank of Tupelo,
supra, 191 Ga. at 856 (2).
In Ruppenthal’s complaint, the estate asserted a full one-third interest in the
property and sale proceeds, despite the significant sums Mohammad personally
expended on behalf of the property in loan and tax payments. Mohammed timely
responded, raising his claim for contribution and set-off. Given these circumstances,
as well as the requirement that any equitable partition ruling meet the equities of each
cotenant, we find that the limitation period on Mohammad’s contribution request did
not commence until 2015, when Ruppenthal filed the estate’s complaint. See OCGA
§ 44-6-141; Bank of Tupelo, supra; Collier, supra. Accordingly, even if the four-year
statute of limitation in OCGA § 9-3-25 applies, Mohammad’s claim is not barred, and
the trial court erred in granting summary judgment to the estate.
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Judgment reversed. Miller, P. J., and Self, J., concur.
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