Judge: Curtis A. Kin, Case: 18STCV07563, Date: 2023-10-05 Tentative Ruling

Hon. Curtis Kin The clerk for Department 82 may be reached at (213) 893-0530.

Case Number: 18STCV07563    Hearing Date: October 5, 2023    Dept: 82

MOTION FOR APPOINTMENT OF RECEIVER

Date:               10/5/23 (1:30 PM)

Case:               Alexander Javaheri et al. v. Parviz Abdi et al. (18STCV07563)

TENTATIVE RULING:

Defendants/Cross-Defendants Michael Khorshidi and Nejatolah Rabbanian’s Motion for Appointment of Receiver is DENIED.

Khorshidi and Rabbanian’s request for judicial notice as to Exhibits H, M-O, W, X, and Z-DD is GRANTED, pursuant to Evidence Code § 452(d).

Khorshidi and Rabbanian’s request for judicial notice as to Exhibits L, P, and V is GRANTED, but only the existence of the documents, not the truth of the matters asserted therein. (See Evid. Code § 452(d); Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564-69.)

Khorshidi and Rabbanian’s request for judicial notice as to Exhibit U is DENIED, as the Complaint filed in the matter of Mei Mei Cai v. 5th & LA, et al., LASC Case No. 21STCV02902 is not attached to the declaration of Scott E. Gizer, as required by Rule of Court 3.1306(c). Exhibit U attached to the Gizer declaration is an email.

Alexander Javaheri and David Javaheri’s request for judicial notice as to Exhibits 1-3 and 5-9 is GRANTED, pursuant to Evidence Code § 452(d).

The Javaheris’ request for judicial notice as to Exhibit 4 is GRANTED, but only the existence of the document, not the truth of the matters asserted therein. (See Evid. Code § 452(d); Sosinsky, 6 Cal.App.4th at 1564-69.)

All evidentiary objections are OVERRULED.

Defendants/Cross-Defendants Michael Khorshidi and Nejatolah Rabbanian (K&R) seek the appointment of a receiver to manage the joint venture known as 5^th and L.A., of which the parties to the instant action are partners or joint venturers. K&R contend that the managers of the joint venture, plaintiffs/cross-defendants Alexander Javaheri and David Javaheri, are mismanaging the joint venture and its assets by: (1) hiring a different property manager, Centers Business Management (“CBM”), than the one provided for in an arbitration award, with CBM refusing to  provide rent roll, eviction, and vacancy documentation to K&R (Khorshidi Decl. ¶¶ 4, 5; Rabbanian Decl. ¶¶ 4, 5); (2) entering into a contract with a waterproofing company without allowing K&R to obtain bids from other vendors (Khorshidi Decl. ¶ 6; Rabbanian Decl. ¶ 6); (3) engaging in litigation against the waterproofing company barred by res judicata (Gizer Decl. Ex. Q); (4) failing to provide joint venture documents to K&R (Khorshidi Decl. ¶ 8; Rabbanian Decl. ¶¶ 7, 15); (5) failing to maximize and/or misappropriating parking income at the joint venture (Khorshidi Decl. ¶¶ 7, 12; Rabbanian Decl. ¶¶ 8, 9, 11, 12); (6) mismanaging the joint venture and causing a reduction in the profit margin from 60.86% for 1996-2008 when K&R were managers to 31.07%  in 2021 (Khorshidi Decl. ¶¶ 14, 15; Rabbanian Decl. ¶¶ 13, 14); and (7) evicting reliable tenants (Soleymani Decl. ¶¶ 2-4) and employing personnel who are rude and unprofessional to prospective tenants (see generally Alvarado Decl.; Sedra Decl.).

Even taking all of K&R’s assertions as true, the Court still declines to appoint a receiver. A receiver should not be appointed unless absolutely essential, because no other remedy will suffice. (City & County of San Francisco v. Daley (1993) 16 Cal.App.4th 734, 745.) This is so because the appointment of a receiver is recognized as a drastic, time consuming, expensive and potentially unjust remedy to be used as a final resort.  (See Weil & Brown, Civ. Proc. Before Trial § 9:743 et seq.; see also Alhambra-Shumway Mines v. Alhambra Gold Mine Corp. (1953) 116 Cal.App.2d 869, 873.) “The appointment of a receiver is a drastic remedy and is one which should not be invoked unless there is an actual or threatened cessation or diminution of the business.” (In re Jamison Steel Corp. (1958) 158 Cal.App.2d 27, 35.) “It is established…that a court of equity has power to appoint a receiver of a going corporation upon a showing that there are such dissensions in its governing body as to create a virtual suspension of its business.” (Golden State Glass Corp. v. Superior Court of Los Angeles County (1939) 13 Cal.2d 384, 393.)

Thus, even if it were true that the Javaheris could be earning more income, either by increasing the price of parking on the joint venture property or increasing the number of tenants, the joint venture is still operational and profitable, albeit not as much as K&R would like. (Khorshidi Decl. ¶¶ 14, 15; Rabbanian Decl. ¶¶ 13, 14.) There is no showing here that the joint venture is at risk of ceasing operations or having its assets dissipate. The fact that K&R originally sought a receiver in June 2022 but withdrew the motion, only to file the motion in September 2023, suggests that any ongoing threat, danger, or harm to the joint venture posed by the Javaheris does not warrant the extreme remedy of placing it in receivership. (Gizer Decl. ¶ 19.)

To the extent that any mismanagement by the Javaheris causes harm to the appraisal value of the joint venture, which may affect the price at which K&R might sell their interest in the joint venture, K&R can assert a claim for such damages resulting from any lower buy-out price through their Cross-Complaint in the instant action. (K&R Cross-Compl. ¶¶ 26, 27; Prayer, First Cause of Action, ¶ 2.) Appointment of a receiver is not the appropriate remedy to mitigate against such claims of harm.

The motion is DENIED.