Judge: Gregory Keosian, Case: 23STCV06335, Date: 2023-10-02 Tentative Ruling

Case Number: 23STCV06335    Hearing Date: October 2, 2023    Dept: 61

I.                   MOTION TO AUTHORIZE REFEREE’S EMPLOYMENT OF PROFESSIONALS

Subject to the limitations of this article, the court may:

(a) Authorize or approve contracts of the referee for the services and expenses of surveyors, engineers, appraisers, attorneys, real estate brokers, auctioneers, and others.

(b) Allow and direct payment of or reject claims under such contracts.

(c) Provide for the date of commencement of any lien provided by law or contract for such claims.

(Code Civ. Proc. § 873.110.)

Special rules apply to the referee’s employment of an attorney:

(a) The referee may employ an attorney only with the approval of the court pursuant to Section 873.110.

(b) The application for approval shall be in writing and shall include the name of the attorney whom the referee wishes to employ and the necessity for the employment.

(c) The attorney so employed may not be attorney for, or associated with or employed by an attorney for, any party to the action except with the written consent of all the parties to the action.

(d) Any claim for compensation for the attorney shall detail the services performed by the attorney.

(Code Civ. Proc. § 873.120.)

This court appointed Referee Stephen J. Donell (Referee) to oversee the sale of the property on June 29, 2023. Referee now seeks authorization of three separate professional employments under the above statute: the law firm Danning, Gill Israel & Krasnoff, LLP (Danning-Gill) as his general counsel, the firm Compass California, Inc. (Broker) as the broker for sale of the property; and the accounting firm SLBiggs, a Division of SingerLewak (SingerLewak) as an accountant. (Donell Decl. ¶ 4.) Referee also seeks a modification of his order of appointment permitting him to seek relief on an ex parte basis. (Motion at p. 8.)

Referee states that he requires the assistance of legal counsel to assist in the negotiation of the purchase and sale agreement and to provide additional reports to the court, among other legal services. (Donell Decl. ¶ 7.) Dunning-Gill is to maintain contemporaneous time records for all services it provides, with compensation for its services subject to court approval after written application for compensation upon notice. (Motion at p. 6.) Dunning-Gill has provided a schedule of hourly rates and expenses, and has agreed to cap rates in this matter at $675 per hour. (Shechtman Decl.¶ 7,  Exh. 6, 7.)

Referee seeks to employ Broker to assist in the marketing and sale of the company. (Donell Decl. ¶ 8.) The  Broker shall be compensated by a 5% commission of the purchase price of the property, currently listed at $2,399,000.00. (Lewis Decl. ¶¶ 4, 8, 10.)

Referee finally seeks to employ SingerLewak, and particularly SingerLewak partner Brian Landau, as CPA in connection with the financial analysis of the sale of the property and related tax issues. (Donell Decl. ¶ 9.) Landau provides a declaration identifying SingerLewak billing rates applicable to this case, and has agreed to cap rates at no more than $505 per hour. (Landau Decl. ¶¶ 8–9.)

The proposed authorizations of employment are statutorily compliant, supported by good cause, and are unopposed by the parties to this action. The motion is therefore GRANTED.

The motion is also GRANTED as to Referee’s proposed modification of his appointment order to allow him to seek modification of his instructions on an ex parte  basis. The court is statutorily permitted to “[i]nstruct the referee” (Code Civ. Proc. § 873.010, subd. (a)(2)), and the statute governing petitions for instructions states — in permissive rather than mandatory language — that the referee or any party “may, on noticed motion, petition the court for instructions concerning the referee’s duties under this title.” (Code Civ. Proc. § 873.070.) Accordingly, the referee may seek instructions permitting ex parte applications for instructions.

The motion is therefore GRANTED.