Judge: Gary Y. Tanaka, Case: 21TRCP00152, Date: 2022-10-12 Tentative Ruling
Case Number: 21TRCP00152 Hearing Date: October 12, 2022 Dept: B
LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT
Honorable Gary Y. Tanaka Wednesday, October 12, 2022
Department B Calendar No. 9
PROCEEDINGS
City of Torrance v. Adonis Ogbeni
21TRCP00152
Mark S. Adams’ Motion to Approve and Confirm Retention of Ervin Cohen & Jessup as General Counsel
Mark S. Adams’ Motion for Discharge of Receiver, Exoneration of Surety, and Order Directing Payment of Costs and Fees
City of Torrance’s Motion for Attorneys’ Fees and Costs
TENTATIVE RULING
Mark S. Adams’ Motion to Approve and Confirm Retention of Ervin Cohen & Jessup as General Counsel is granted
Mark S. Adams’ Motion for Discharge of Receiver, Exoneration of Surety, and Order Directing Payment of Costs and Fees is granted.
City of Torrance’s Motion for Attorneys’ Fees and Costs is granted.
Background
Petitioner City of Torrance filed its petition to appoint a Receiver to remedy substandard conditions on the subject property located at 917 Amapola Avenue, Torrance, CA 90501 (Assessor’s Parcel Number 7354-010-011) on May 17, 2021. (The Court notes that, while the Court’s docket only demonstrates that the Petition was “Received” rather than “Filed,” this appears to be the result of simply a clerical error.) On January 10, 2022, the Receiver, Mark S. Adams, was appointed.
Motion to Approve and Confirm Retention of Ervin Cohen & Jessup as General Counsel
Cal. Rules of Court, Rule 3.1180 states: “A receiver must not employ an attorney without the approval of the court. The application for approval to employ an attorney must be in writing and must state:
(1) The necessity for the employment;
(2) The name of the attorney whom the receiver proposes to employ; and
(3) That the attorney is not the attorney for, associated with, nor employed by an attorney for any party.”
The Receiver has set forth facts to meet the requirements of Rule 3.1180. The Receiver has stated the name of the attorney and has established that the attorney is needed in assisting the Receiver in the respondent’s bankruptcy action. (Decl., Mark S. Adams, ¶¶ 4-9.) The attorney has stated that he is not associated with or employed by an attorney for any other party. (Decl., Byron Z. Moldo, ¶ 4.)
Therefore, Receiver’s Motion to Approve and Confirm Retention of Ervin Cohen & Jessup as General Counsel is granted.
Motion for Order Discharging Receiver
A receivership terminates upon completion of the duties for which the receiver was appointed; or at any time, upon court order. Receivers 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.” Cal. Rules of Court, Rule 3.1184(a). “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.” Cal. Rules of Court, Rule 3.1184(d). These documents must be served on all parties to the action and to any others whom the receiver knows have a substantial, unsatisfied claim that will be affected by the order or stipulation. Cal. Rules of Court, Rule 3.1184.
Health & Saf. Code, § 17980.7(c)(9) states: “The receiver shall be discharged when the conditions cited in the notice of violation have been remedied in accordance with the court order or judgment and a complete accounting of all costs and repairs has been delivered to the court. Upon removal of the condition, the owner, the mortgagee, or any lienor of record may apply for the discharge of all moneys not used by the receiver for removal of the condition and all other costs authorized by this section.” Health & Saf. Code, § 17980.7(c)(15) states: “Upon the request of a receiver, a court may require the owner of the property to pay all unrecovered costs associated with the receivership in addition to any other remedy authorized by law.”
Receivers are entitled to compensation for their own services. Venza v. Venza (1951) 101 Cal.App.2d 678, 680. Typically, the costs of a receivership are paid from the property in the receivership estate. Andrade v. Andrade (1932) 216 Cal. 108, 110. Also, cities have a statutory right to be compensated for inspections, enforcement, court costs, and attorney’s fees. Health & Saf. Code, § 17980.7(d)(1). The court maintains broad discretion to resolve receivership estates. People v. Stark (2005) 131 Cal.App.4th 184, 202.
Receiver Mark S. Adams (“Receiver”) filed a noticed motion for discharge of receiver, exoneration of surety, and order for payment of costs and fees. The Receiver summarized all accounts, payments, and debts of the receivership. (Decl., Adams, Final Account and Report, ¶¶ 15-18.) As of September 12, 2022, the receivership has a cash balance of $11,410.27 remaining. (Id. at 18.)
The Receiver states that he has $93,357.07 in unpaid fees and advances and anticipates incurring an additional $10,000 in fees and costs to wind this matter down. Additionally, Ervin Cohen & Jessup LLP (“ECJ”) have $19,511.04 in unpaid fees and costs, and ECJ anticipates incurring an additional $5,075 in fees through discharge. Thus, the Receiver and his counsel have $127,943.11 in unpaid fees, costs, and advances. Receiver requests that the remaining $11,410.27 in the receivership account be used to pay off a part of that balance leaving a total of $116,532.84 unpaid.
Pursuant to Health & Saf. Code § 17980.7(c)(15), the Court is authorized to enter an order that respondent Adonis Ogbeni pay the costs and fees owed to the Receiver and his counsel. Receiver seeks such an order contending that the respondent was responsible for the Code violations that necessitated the appointment of the Receivership.
Respondent filed an opposition contending that the fees and costs were excessive and unreasonable. However, the Court has already approved the Receiver’s reports detailing his costs and fees through May 2022 and no timely objection was asserted for the costs and fees for June and July 2022. Pursuant to California Rules of Court, Rule 3.1183(b), Respondent had 10 days from the notice of the Monthly Accounting of Receivership Income, Expenses, and Interim Fees (“Interim Report and Accounting”) to object to Receiver's fees. Respondent failed to timely object and failed to demonstrate any good cause for the untimeliness. Respondent also argues that the retention of ECJ was unreasonable and unnecessary, and the attorneys’ fees charged by ECJ are excessive. As noted above, the Court determines that the retention of ECJ was necessary. In addition, the fees charged by ECJ have already been approved through July 2022. As to the fees incurred after this date, the Receiver has submitted an invoice and the amount sought for the month of August is reasonable. (Final Account, Ex. 2.)
Therefore, the motion for an order discharging the Receiver, settling all accounts, exonerating the surety, and requesting an order for payment of unpaid fees and costs is granted. Adonis Ogbeni is ordered to pay the outstanding balance of the Receivership fees and costs of $116,532.84.
Motion for Attorneys’ Fees and Costs
Health & Saf. Code 17980.7(c)(11) states: “The prevailing party in an action pursuant to this section shall be entitled to reasonable attorney's fees and court costs as may be fixed by the court.” Health & Saf. Code, § 17980.7(d)(1) states: “If the court finds that a building is in a condition which substantially endangers the health and safety of residents pursuant to Section 17980.6, upon the entry of any order or judgment, the court shall do all of the following: (1) Order the owner to pay all reasonable and actual costs of the enforcement agency including, but not limited to, inspection costs, investigation costs, enforcement costs, attorney fees or costs, and all costs of prosecution.”
“The trial court has “broad authority” to determine the amount of a reasonable attorneys’ fees. PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095. “[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” Id. [“California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys' fee award.”]. “The experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.” Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 (internal quotation omitted.)
Here, Petitioner is the prevailing party in this action. Petitioner was required to obtain an order to appoint a Receiver to remedy long-standing substandard and unpermitted conditions on the subject property. Thus, Petitioner is entitled to attorneys’ fees under the lodestar method based on the reasonable amount of time the attorney spent multiplied by a reasonable rate.
Plaintiffs request the following amount: $68,054.93. The Court finds that the amount sought, and time expended are reasonable considering the extensive litigation history in this action which has been thoroughly documented both in the instant motion and by the concurrent motion to discharge receivership. The Court finds that the hourly rates ranging from $270 to $330 per hour to be a reasonable rate for the community.
Therefore, Petitioner’s motion for attorneys’ fees and costs is granted. The amount of reasonable attorneys’ fees and costs are fixed in the sum of $68,054.93.
Petitioner is ordered to give notice of this ruling.