Judge: Curtis A. Kin, Case: 23STCV23848, Date: 2024-08-14 Tentative Ruling
Case Number: 23STCV23848 Hearing Date: August 14, 2024 Dept: 86
MOTION FOR ORDER APPROVING RECEIVER’S FINAL REPORT AND
ACCOUNTING
Date: 8/14/24
(1:30 PM)
Case: Ladder Capital
Realty III LLC v. Missouri Villas, LLC et al. (23STCV23848)
TENTATIVE RULING:
Plaintiff Ladder Capital Realty III LLC and Receiver Chris
Neilson’s Motion for Order Approving Receiver’s Final Report and Accounting; Approving
Final Fees and Costs of Receiver and His Professionals; Terminating
Receivership, Discharging Receivership and Exonerating Receiver’s Bond; and
Approving Disposition of Remaining Receivership Funds is CONTINUED.
Plaintiff and Receiver move for an order: (1) approving
Receiver’s Final Report and Accounting;
(2) approving Receiver’s fees and expenses in the amount of
$20,736.47; (3) terminating the receivership; (4) discharging Receiver; (5)
exonerating Receiver’s surety bond; (6) enjoining and restraining all persons
and entities from commencing or prosecuting any action or proceeding against
Receiver on account of any debts, claims or obligations of the receivership
estate; (7) discharging and releasing Receiver and the staff, employees,
contractors, attorneys and professionals retained by him from any and all
claims in connection with the receivership or receivership estate; (8)
declaring Receiver not liable to any person or entity in any manner for any
outstanding obligations of the parties to this action; (9) reserving exclusive
jurisdiction to the Court over any claim that may be asserted against Receiver relating
to the receivership; and (10) approving the payment of all remaining receivership
funds to plaintiff’s assignee, LOMM, LLC, after Receiver pays all expenses of
the receivership estate, including final fees and expenses of Receiver.
I.
BACKGROUND AND PROCEDURAL HISTORY
On September 29, 2023, plaintiff Ladder Capital Realty III
LLC filed a Verified Complaint against defendants Missouri Villas, LLC and
NMSLUXE11665, LLC for specific performance for appointment of a receiver and
injunctive relief.
On October 6, 2023, the Court granted plaintiff’s ex parte
application for appointment of a receiver and temporary restraining order.
On October 11, 2023, Receiver filed an undertaking for
himself in the amount of $50,000.
On October 13, 2023, plaintiff filed an ex parte bond in the
amount of $1,500 and a bond for the temporary restraining order in the amount
of $1,500.
On October 26, 2023, the Court heard an order to show cause
re: appointment of a receiver. The Court confirmed the appointment of Receiver
as specified in the ex parte order appointing receiver and granted a
preliminary injunction ordering defendant to turn over the specified real
properties to Receiver and enjoining defendants from disposing of or
encumbering the specified real properties.
On November 1, 2023, plaintiff filed an injunction bond in
the amount of $1,500.
On May 16, 2024, plaintiff and Receiver filed and served the
instant motion. No opposition has been received.
II.
APPLICABLE LAW
In order to terminate and discharge the receivership,
Receiver must prepare, serve, and file (by noticed motion or stipulation of all
parties) a final account and report, a request for discharge, and a request for
exoneration of the receiver's surety. (Rule of Court 3.1184(a).) Notice must be
provided to every person or entity known to the receiver to have a substantial,
unsatisfied claim that will be affected by the order, “whether or not the
person or entity is a party to the action or has appeared in it.” (Rule of
Court 3.1184(c).) “If any allowance of compensation for the receiver or for an
attorney employed by the receiver is claimed in an account, it must state in
detail what services have been performed by the receiver or the attorney and
whether previous allowances have been made to the receiver or attorney and the
amounts.” (Rule of Court 3.1184(d).)
III.
ANALYSIS
A.
Notice
According to the proof of service attached to the moving
papers, plaintiff served the moving papers on defendants. However, plaintiff gives
no indication that notice was provided to every person or entity known to the
receiver to have a substantial, unsatisfied claim that will be affected by the
order, as required by Rule of Court 3.1184(c). Plaintiff provides an averment
that after a non-judicial foreclosure sale, $4,988,391.00 remains. (Mersel
Decl. ¶¶ 14, 15.) Plaintiff also claims in its motion papers that “to the best
off the Receiver’s knowledge, no other person or entity has a substantial,
unsatisfied claim that will be affected by the Motion” (Mtn. at 5), but
provides no evidence in support of that assertion, including any averment by
the Receiver. Based on this record, it
is unclear whether there are any additional creditors who are owed money who
have not been notified.
B.
Merits
Receiver provides a Final Receiver Report. (Neilson Decl. ¶
2 & Ex. A.) However, Receiver provides no details regarding what services were
performed. Receiver provides financial statements from Moss Management Services
(“Moss”), but it is unclear who Moss Management is and how it contributed to
the management of the receivership estate. The Court previously ordered a
motion to approve the final report and account to contain a “declaration or
declarations…stating what was done during the receivership” and a “summary of
the receivership accounting, which shall include (i) the total revenues
received, (ii) the total expenditures identified and enumerated by major
categories, (iii) the net amount of any surplus or deficit, and (iv) evidence
of necessary supporting facts.” (10/6/24 Ex Parte Order at ¶ 24(d)(1-2).) This was not done.
By no later than 8/22/24, plaintiff is ordered to provide a
supplemental declaration or declarations containing the information ordered in
paragraph 24 of the 10/6/24 Ex Parte Order. Plaintiff and/or Receiver may refer
to the Final Receiver Report with citation to page number(s). However, plaintiff
and/or Receiver must summarize the portions of the Final Receiver Report that
relate to the information sought in paragraph 24; plaintiff and/or Receiver
cannot rely on the report alone.
The supplemental declaration must also address whether
notice, including of the continued hearing date indicated below, was provided
to every person or entity known to the receiver to have a substantial,
unsatisfied claim that will be affected by the order.
IV.
CONCLUSION
The motion is CONTINUED to 9/10/24 at 1:30 PM in Department
86 (Stanley Mosk Courthouse).