Judge: Curtis A. Kin, Case: 24STCV33307, Date: 2025-04-17 Tentative Ruling

Case Number: 24STCV33307    Hearing Date: April 17, 2025    Dept: 86

MOTION FOR ORDER APPOINTING RECEIVER

Date:               4/17/25 (1:30 PM)

Case:               Morning Star LLC, et al. v. Sea Star Estates Homeowners Associations, et al. (24STCV33307)

TENTATIVE RULING:     

Plaintiff Morning Star LLC’s Motion for Order Appointing Receiver is GRANTED.

Plaintiff Morning Star LLC (hereinafter “plaintiff”) is owner of real property located at 6368 Sea Star Drive, Malibu California, which is located in the Sea Star Estates subdivision, subject to administration by defendant Sea Star Estates Homeowners Association (hereinafter “HOA”). (Nazemi Decl. ¶¶ 4-6 & Ex. 1 [HOA Bylaws].)  Plaintiff seeks appointment of a receiver for the HOA and issuance of a preliminary injunction in support thereof.  Plaintiff contends a receiver is necessary because, among other things: the current members of the HOA Board of Directors were not validly elected (Mtn. at 7, 10); the actions of the HOA Board are accordingly invalid and/or have been improper, including purported harassment of residents, excessive spending, and embezzlement (Mtn. at 8, 11-12); and the current and ongoing process for election of the HOA Board has been improper and requires oversight (Mtn. at 9, 10-11).

Defendants Hovsep Kouzouyan and Hedayat Ahmadpour agree with plaintiffs that appointment of a receiver for the HOA is necessary. (Kouzouyan/Ahmadpour Response at 2.)  They come to this conclusion for reasons different from that of the plaintiff, arguing: that plaintiffs have been the cause of disruption to the current and ongoing process for electing an HOA Board; that the property manager who handles financial matters for the HOA resigned effective April 4, 2025; and that the current HOA directors would like to resign but are awaiting appointment of a receiver or provisional director so the HOA “is not left rudderless.”  (Kouzouyan/Ahmadpour Response at 2.)  In sum, it is the position of these individual defendants that “[w]ithout directors and management, [the HOA] cannot operate or conduct an election, hence the need for the immediate appointment of a receiver.” (Kouzouyan/Ahmadpour Response at 2.)  The defendant HOA also shares this view, stating: “[F]or the reasons set forth in the Response of Defendants Hovsep Kouzouyan and Hedayat Ahamadpour [sic] to Plaintiffs’ Motion for Appointment of Receiver, a receiver is necessary for Sea Star Estatates Homowners Association.” (HOA Response at 3.)

The Court has authority to appoint a receiver pursuant to Code of Civil Procedure § 564(b), which includes circumstances “where necessary to preserve the property or rights of any party.” (CCP § 564(b)(9).)  Here, all parties agree that a valid HOA Board election must be held, but the parties are in conflict over how that election has and will be conducted to ensure fairness, validity, and compliance with the HOA Bylaws.  Given the recent resignation of the election inspector, Violet Embry, and the parties’ competing views concerning purported problems or irregularities with the current and ongoing election process, the Court finds in its discretion that appointment of a neutral, third-party receiver who is answerable to the Court will best protect the rights of the parties in connection with the HOA Board election under the circumstances.  Likewise, given plaintiffs’ contentions of purported HOA mismanagement, the recent resignation of the HOA property manager, and the desire of the defendant HOA Board members to resign and turn over HOA management to a receiver or other director, the Court additionally finds in its discretion that appointment of a receiver is necessary to preserve the HOA property and protect the interests and rights of the defendant members of the HOA.

Accordingly, the motion to appoint a receiver for the Sea Star Estates Homeowners Association is GRANTED. 

At the hearing, the parties should be prepared discuss whether the Court should sign the Proposed Order Appointing Receiver After Hearing and Preliminary Injunction, electronically received 3/18/25, in its current form or should make any edits, deletions, or amendments.

The parties should also be prepared to discuss which receiver the Court shall appoint and the process for so doing.  The Court is aware that plaintiff and defendants have respectively nominated Stephen Donnell and Lindsay F. Nielson, and have each objected to such nominations.  The Court contemplates continuing the hearing for the purpose of allowing the parties to meet and confer regarding a proposed order and mutually agreeable receiver and/or to each propose up to three nominees, with opportunity to object to the other side’s nominee(s).  In selecting a receiver, the Court shall give particular weight to experience operating a Homeowner’s Association and conducting elections (or similar management experience), as well as fees and costs, particularly in light of the HOA’s annual operating budget of approximately $96,000.