Judge James C. Chalfant, Case Number: 24STCV13591, Date: 2025-01-09 Tentative Ruling

Defendant 4324 S. Vermont, LLC (“Vermont”) moves for an order to discharge the Receiver and terminate the Receivership in this case.

The court has read and considered the moving papers, opposition, and reply,^{^[1]} and renders the following tentative decision.

On May 30, 2024, Plaintiff Wilmington Savings Fund Society, as Trustee for Residential Mortgage Aggregation Trust (“Wilmington”) filed the Complaint against Defendants Vermont and Ganahl Lumber Co. (“Ganahl”), alleging causes of action for judicial foreclosure, appointment of receiver, and injunctive relief. The Complaint alleges in pertinent part as follows.

On or about February 1, 2022, Wilmington’s predecessor-in-interest, Patch Lending, LLC, dba Patch of Land (“Lender”) agreed to lend Vermont the principal amount of $4,852,500.00 as evidenced by a Loan and Security Agreement dated February 1, 2022 and a Supplemental Addendum dated June 23, 2023 (the “Loan Agreement”).

In connection with the Loan Agreement, Vermont executed a Secured Note wherein Vermont agreed to repay the Loan, plus interest (the “Note”). Vermont also executed a Deed of Trust, Assignment of Leases and Rents, Fixture Filing, and Security Agreement, which was recorded on February 9, 2022, in the Official Records of Los Angeles County (the “DOT”) wherein Vermont pledged all of its right, title and interest in the real property commonly known as 4324 S. Vermont Avenue, Los Angeles, California 90037 and other property described therein.

Wilmington is the present holder and owner of the Loan, Note and Deed of Trust, as evidenced by (i) an Assignment of Deed of Trust whereby Lender assigned its interest to Churchill Funding I, LLC (“Churchill”), which was recorded on June 7, 2022 in the Official Records of Los Angeles County; and (ii) an Assignment of Security Instruments whereby Churchill assigned its interest to Wilmington, which was recorded in the Official Records of Los Angeles County on June 23, 2023, together with a Corrective Assignment of Security Instruments dated March 8, 2024, recorded in the Official Records of Los Angeles County on March 8, 2024, wherein Churchill assigned the DOT to Wilmington.

Vermont was required to repay the Loan in full by September 1, 2023 (“Maturity Date”). Notwithstanding its agreement to do so, Vermont failed to repay the Loan in full by the Maturity Date.

On or about September 6, 2023, Wilmington and Vermont entered into a Construction Loan Extension and Deferment Agreement (“Deferment Agreement”), whereby Vermont acknowledged that its failure to repay the Loan in full by the Maturity Date constituted an event of default under the Loan Documents, and Wilmington agreed to temporarily forbear from exercising its rights and remedies under the Loan Documents. Pursuant to the Deferment Agreement, the Maturity Date under the Loan Documents was extended to December 1, 2023 (the “Extended Maturity Date”). (The Loan Agreement, the Note, the Deed of Trust, the assignments, and the Deferment Agreement are collectively referred to as the “Loan Documents.”)

Vermont failed to repay the Loan in full by the Extended Maturity Date. Under the Loan Documents, the failure to make all payments as and when due constitutes an Event of Default.

On March 27, 2024, Wilmington commenced non-judicial foreclosure proceedings by recording a Notice of Default and Election to Sell under Deed of Trust (“NOD”), which was duly recorded on March 28, 2024, in the Official Records of Los Angeles County.

The construction project that is the subject of the Loan Documents (the “Project”) is a multi-story, 16-unit apartment building in Los Angeles County. Wilmington is informed and believes, and on that basis alleges, that the Project is only 80 to 85% complete and was abandoned by the Vermont in or around February 2024.

As evidenced by Vermont’s inability to make payments in furtherance of its obligations (i.e., Loan payments, insurance payments, and tax payments) and the voluntary bankruptcy petition filed by Vermont’s principal, Jose Gonzalez (“Gonzalez”), Vermont’s financial condition has suffered a materially adverse change. Wilmington is informed and believes and thereupon alleges that Vermont is insolvent or at immediate risk of insolvency. As a result of the foregoing, Wilmington has been damaged in a sum of no less than $4,747,375.68 as of May 29, 2024, plus accruing interest, default interest, late charges and costs, attorney fees and costs, and any other fees and amounts owed pursuant to the Loan Documents. Interest continues to accrue at a daily amount of $1,848.53.

On June 21, 2024, the court appointed the Receiver on Wilmington’s ex parte application.

On October 17, 2024, the court denied Vermont’s ex parte application to discharge the Receivership.

CCP section 564(b) provides that the court has authority to appoint a receiver in any of the following circumstances: (1) in an action by a vendor to vacate a fraudulent purchase of property, or by a creditor to subject any property or fund to the creditor's claim, or between partners or others jointly owning or interested in any property or fund, on the application of the plaintiff, or of any party whose right to or interest in the property or fund, or the proceeds thereof, is probable, and where it is shown that the property or fund is in danger of being lost, removed, or materially injured; (2) in an action by a secured lender for the foreclosure of a deed of trust or mortgage and sale of property upon which there is a lien under a deed of trust or mortgage, where it appears that the property is in danger of being lost, removed, or materially injured, or that the condition of the deed of trust or mortgage has not been performed, and that the property is probably insufficient to discharge the deed of trust or mortgage debt; (3) after judgment, to carry the judgment into effect; (4) after judgment, to dispose of the property according to the judgment, or to preserve it during the pendency of an appeal, or pursuant to the Enforcement of Judgments Law Title 9 (commencing with CCP §680.010), or after sale of real property pursuant to a decree of foreclosure, during the redemption period, to collect, expend, and disburse rents as directed by the court or otherwise provided by law; (5) where a corporation has been dissolved, as provided in Section 565; (6) where a corporation is insolvent, or in imminent danger of insolvency, or has forfeited its corporate rights; (7) in an action of unlawful detainer; (8) at the request of the Public Utilities Commission pursuant to Section 855 or 5259.5 of the Public Utilities Code; (9) in all other cases where necessary to preserve the property or rights of any party; (10) at the request of the Office of Statewide Health Planning and Development, or the Attorney General, pursuant to Section 129173 of the Health and Safety Code; (11) in an action by a secured lender for specific performance of an assignment of rents provision in a deed of trust, mortgage, or separate assignment document. The appointment may be continued after entry of a judgment for specific performance if appropriate to protect, operate, or maintain real property encumbered by a deed of trust or mortgage or to collect rents therefrom while a pending nonjudicial foreclosure under power of sale in a deed of trust or mortgage is being completed; (12) in a case brought by an assignee under an assignment of leases, rents, issues, or profits pursuant to subdivision (g) of Section 2938 of the Civil Code.

The appointment of a receiver is a drastic remedy to be utilized only in “exceptional cases.” As such, a receiver should not be appointed unless absolutely essential and because no other remedy will serve its purpose. City & County of San Francisco v. Daley, (1993) 16 Cal.App.4th 734, 744. A plaintiff who seeks appointment of a receiver of certain property, under CCP section 564(b)(1), has the burden to establish by a preponderance of the evidence that plaintiff has a joint interest with defendant in the property, that the property is in danger of being lost, removed or materially injured and that plaintiff's right to possession is probable. Alhambra-Shumway Mines, Inc. v. Alhambra Gold Mine Corp., (1953) 116 Cal.App.2d 869, 873.

Whenever a receiver is appointed on an ex parte basis, the matter must be made returnable on an order to show cause (“OSC”) why the appointment should not be confirmed. The OSC must be returnable no earlier than 15 days, and no later than 22 days, from the date the order was issued. CRC 3.1176(a).

Vermont has worked on development of the real property at 4324 S. Vermont Avenue as a "ground-up" construction project (the “Project”) for the past two and a half years. Thompson Decl., ¶4. The project is 85% complete, and Vermont believes it can finish the Project according to the terms of its contract within eight months. Thompson Decl., ¶4.

At the inception of the Project, former Vermont CEO Gonzalez, paid $1,200,000 to acquire the land and as a 20% deposit to receive the "Construction Loan" in the amount of $4,852,500 to build the Project. Thompson Decl., ¶6. Gonzalez became unexpectedly ill with life threatening health issues and is now forced to do dialysis treatment twice a week just to stay alive. Thompson Decl., ¶5. Due to these unforeseen health issues, Gonzalez has been unable to work and manage the construction progress and Jeff Thompson (“Thompson”) has replaced him as CEO of Vermont. Thompson Decl., ¶5.

To date, Vermont has only received $3,737,736.11 of the original S4,852,500 Construction Loan. Thompson Decl., ¶9. Plaintiff refuses to release the remaining $l,114,763.89 of the Construction Loan and have prevented Vermont from completing the Project. Thompson Decl., ¶10.

Vermont has requested an 8-month extension of time to complete the Project. Thompson Decl., ¶12. Vermont is not asking for any more draw funds, rather only the time to complete the remaining fifteen (l5%) and refinance the Plaintiff’s loan for payoff. Thompson Decl., ¶15.

When completed, the property will be valued at $8,000,000 or more. Thompson Decl., ¶16. The completed building will be able to generate at least $62,640 in monthly revenue, which is more than sufficient to refinance and pay off Plaintiff’s loan. Thompson Decl., ¶16.

Vermont’s counsel prepared two letters making settlement offers which purported to resolve all of the outstanding issues in the case, including discharging the receiver and allowing Vermont to perform on the project. Adli Decl., ¶3. Wilmington has been unwilling to discuss the possibility of curing the alleged breach or of discharging the Receiver. Adli Decl., ¶5. All of Vermont’s attempts to discuss these issues have been unsuccessful as Wilmington will not budge on any of these issues, most notably discharging the Receiver. Adli Decl., ¶5.

In the Loan Agreement, Lender Patch Lending, Wilmington’s predecessor-in-interest, agreed to lend Vermont the principal amount of $4,852,500. Garuccio Decl., ¶4, Ex. 1. In the Note dated February 1, 2022, Vermont agreed to repay the Loan in the principal amount of $4,852,500, plus interest. Garuccio Decl., ¶4, Ex. 2.

The DOT, dated February 1, 2022, was recorded on February 9, 2022, in the Official Records of Los Angeles County as Document No. 20220160367. Garuccio Decl., ¶4, Ex. 3.

The Assignment of Deed of Trust, recorded on June 7, 2022 in the Official Records of Los Angeles County as Document No. 20220607412 assigned Lender’s interest in the DOT to Churchill. Garuccio Decl., ¶4, Ex. 4. The Assignment of Security Instruments, recorded on June 23, 2023 in the Official Records of Los Angeles County as Document No. 20230410739, together with the Corrective Assignment of Security Instruments recorded in the Official Records of Los Angeles County on March 8, 2024 as Instrument No. 20240156463, assigned the DOT from Churchill to Wilmington. Garuccio Decl., ¶4, Ex. 5.

Pursuant to the Loan Documents, Vermont was required to repay the Loan by making consecutive monthly interest payments beginning on April 1, 2022, and continuing each month thereafter, with all remaining principal and interest due on September 1, 2023 (the “Maturity Date”). Garuccio Decl., ¶6. The last payment made by Vermont under the Loan was on April 1, 2023. Garuccio Decl., ¶7. Vermont failed to make the May 2023 payment and failed to repay the Loan in full by the Maturity Date. Garuccio Decl., ¶7.

In the Deferment Agreement, Vermont acknowledged that its failure to repay the Loan in full by the Maturity Date constituted an Event of Default under the Loan Documents and wilmington agreed to temporarily forbear from exercising its rights and remedies under the Loan Documents. Garuccio Decl., ¶8, Ex. 6. The Maturity Date was extended until the Extended Maturity Date of December 1, 2023. Garuccio Decl., ¶8, Ex. 6.

Vermont failed to repay the Loan by the Extended Maturity Date. Garuccio Decl., ¶9. The failure to make the payment constitutes an Event of Default under the Loan Documents. Garuccio Decl., ¶9.

On March 27, 2024, Wilmington commenced non-judicial foreclosure proceedings by causing a NOD to be recorded on March 28, 2024, in the Official Records of Los Angeles County as Document No. 20240200103. Garuccio Decl., ¶10, Ex. 7.

The Property had been declared tax defaulted for failure to pay 2022 taxes, and the redemption amount, as of May 21, 2024, was $29,000.49, with monthly penalties in the amount of $338.94. Garuccio Decl., ¶11. Vermont also has not paid Installment 1 of 2023-2024 property taxes in the amount of at least $8,665.86 and Installment 2 of 2023-2024 property taxes in the amount of $8,675.85. Garuccio Decl., ¶11. As of May 21, 2024, tax liens against the Property totaled at least $46,342.20, with monthly penalties continuing to accrue. Garuccio Decl., ¶11, Ex. 8.

The Project is a multi-story, 16-unit apartment building. Garuccio Decl., ¶12. Wilmington is informed and believes that, at the time this action was commenced, the Project was approximately 80 to 85% complete and had been abandoned by Vermont in February 2024, as Vermont had failed to respond to multiple inquiries since February 2024. Garuccio Decl., ¶12. Failure to maintain the Property and promptly perform all repairs necessary to preserve the Property’s value constitutes Events of Default under the Loan Documents. Garuccio Decl., ¶12.

Plaintiff is informed and believes that Vermont failed to pay the insurance premiums for the Property. Garuccio Decl., ¶13. As such, Vermont’s insurance for the Property lapsed on or around March 15, 2024, and Vermont has not reinstated its insurance policy. Garuccio Decl., ¶13. Failure to insure the Property in accordance with the Loan Documents constitutes an Event of Default. Garuccio Decl., ¶13.

On or about December 6, 2022, Defendant Ganahl recorded a mechanic’s lien against the Property, as Document No. 20221138908. Garuccio Decl., ¶14, Ex. 9. Wilmington is informed and believes that on or about March 1, 2023, Ganahl filed a lawsuit against Vermont and Gonzalez, for breach of contract, common counts, and foreclosure of mechanics’ lien in LASC 23STCV04490. Garuccio Decl., ¶15. Ganahl thereafter recorded a lis pendens against the Property. Garuccio Decl., ¶15.

Gregory Seifert (“Seifert”) and MDW Holding, LLC (“MDW”) also recorded a lis pendens against the Property, recorded in the Official Records of Los Angeles County as Document No. 20230701460. Garuccio Decl., ¶16. Based on the allegations set forth in a complaint on file in LASC 23STCV24953, Wilmington is informed and believes that Seifert and MDW allege that Vermont used a loan by Seifert and MDW to improve the Property instead of the real property that was collateral for their loan. Garuccio Decl., ¶16.

On or about November 11, 2023, Gonzalez filed a voluntary petition for individual bankruptcy in the United States Bankruptcy Court for the Central District of California, Case No. 2:23-bk-17372-BR. Garuccio Decl., ¶18. This constitutes a material adverse change in Vermont’s financial condition. Garuccio Decl., ¶18. Such an event constitutes an Event of Default under the Loan Documents. Garuccio Decl., ¶18.

As a result of the foregoing, Lender has been damaged in a sum of no less than $4,747,375.68 as of May 29, 2024, plus continually accruing interest, default interest, late charges and costs, attorneys’ fees and costs, and any other fees and amounts owed pursuant to the Loan Documents. Garuccio Decl., ¶21.

In or around April 2024, Wilmington commissioned an independent Broker Opinion of Value from a commercial real estate services firm, Lee & Associates, which was prepared by Matthew C. Sullivan. Garuccio Decl., ¶19. The firm found the Property valued at $4.7M-$5M. Garuccio Decl., ¶19. It appears that the value of the Property may likely be insufficient to pay the outstanding indebtedness. Garuccio Decl., ¶20.

Wilmington filed the Complaint on May 30, 2024. Still Decl., ¶2. On June 11, 2024, Wilmington filed an ex parte application for appointment of a receiver. Still Decl., ¶3. Email notice was provided to Vermont’s counsel in another lawsuit concerning a lis pendens on the Property. Still Decl., ¶4. Email notice also was given to Gonzalez, the owner of the membership interests in Vermont, and, until recently, Defendant’s agent for service of process. Still Decl., ¶6, Ex. 1.

There was no opposition to the ex parte application. Still Decl., ¶7. On June 21, 2024, the court appointed the Receiver and set an OSC to confirm the appointment. Still Decl., ¶8. Wilmington was ordered to post a bond, which it did, and personally to serve Vermont with the OSC, supporting papers, and the Summons and Complaint. Still Decl., ¶8.

In accordance therewith, Wilmington began to undertake service efforts, initially through a private process server, Nationwide Legal, LLC. Still Decl., ¶9, Ex. 2. Wilmington discovered that Vermont’s address on file with the Secretary of State had been abandoned. Still Decl., ¶9, Ex. 2. Wilmington then retained the services of Transwest Investigations, Inc. (“TWI”) to locate and personally serve Gonzalez on behalf of Vermont. Still Decl., ¶10. TWI located Gonzalez’s residence and, on June 22, 2024, was able to effectuate personal service of the Summons, Complaint, OSC, and moving papers on Vermont through Gonzalez as its agent for service of process and managing member at 9365 Gallatin Road, Downey, CA. Still Decl., ¶10, Ex. 3.

The OSC confirming the Receiver’s appointment was heard on July 23, 2024. There was no opposition and on July 29, 2024, the court entered its Order Confirming Appointment of Receiver and Preliminary Injunction. Still Decl., ¶12. Notice of entry of the order was duly served on Vermont. Still Decl., ¶12.

On December 20, 2024, Wilmington accessed the California Secretary of State website and searched for Vermont. Still Decl., ¶15. Vermont’s most recent Statement of Information shows that it has amended its agent for service of process to be Thompson. Still Decl., ¶15, Ex. 4-5.

Defendant Vermont moves to terminate the Receivership, discharge the Receiver, and stop the sale of the Property on the grounds that (1) Wilmington has not properly posted a bond as required by CCP section 566(b), (2) although Wilmington claims Vermont has defaulted on the Loan, it ignores the fact that over $1 million was not disbursed, (3) Wilmington intentionally failed to serve Vermont properly, inequitably moved for appointment of a receiver, and Vermont has never had the opportunity for counsel to argue that a receivership is not necessary, and (4) Vermont is ready, willing, and able to complete the Project. None of these arguments is well taken.

Vermont argues that Wilmington obfuscates the fact that the Loan was never completely disbursed. The Loan amount was $4,852,500, but only $3,737,000 was disbursed. Yet, Wilmington maintains that it is owed in excess of $4,959,000. Even if it is assumed that these numbers are completely accurate and do not offend usury laws or lending requirements, it is inexplicable that Vermont can be found to be in default on a loan which has not been fully disbursed. Mot. at 5.

This argument is untenable. Lender agreed to lend Vermont the principal amount of $4,852,500. Garuccio Decl., ¶4, Ex. 1. In the Note dated February 1, 2022, Vermont agreed to repay the Loan in the principal amount of $4,852,500, plus interest. Garuccio Decl., ¶4, Ex. 2. Pursuant to the Loan Documents, Vermont was required to repay the Loan by making consecutive monthly interest payments beginning on April 1, 2022, and continuing each month thereafter, with all remaining principal and interest due on the Maturity Date of September 1, 2023. Garuccio Decl., ¶6. Vermont failed to make the May 2023 payment and failed to repay the Loan in full by the Maturity Date. Garuccio Decl., ¶7.

As Wilmington argues (Opp. at 11) the Loan was not fully disbursed because Vermont abandoned the Project. Vermont failed to complete the Project (or refinance the Loan) within the time contemplated by the Loan Documents, despite an extension of the Maturity Date. This was a default. The fact that the Loan was not entirely disbursed has no bearing on Vermont’s default for failure to repay the Loan because Vermont makes no showing that any undisbursed Loan proceeds should have been disbursed.^{^[3]} In fact, the evidence shows that Vermont abandoned the Project in February 2024. Garuccio Decl., ¶12.

Vermont argues that, while it was diligently working on the Project, CEO Gonzalez had a very serious kidney illness due to diabetes that rendered him unable to work and required dialysis treatment twice a week. This unexpected illness led to issues with Vermont’s performance. Mot. at 6.

The ex parte application to appoint a receiver was not served on Vermont but was improperly served on Gonzales’ personal bankruptcy attorney. The service was improper. Wilmington did not serve Vermont at its registered location for service but instead served Gonzalez’ personal bankruptcy attorney. Id. That attorney never represented Vermont. Wilmington never served the lawyer for Vermont or any officer of Vermont. Wilmington was aware of Gonzalez’ bankruptcy and should have known that serving his bankruptcy lawyer would not constitute valid service. Mot. at 6.

Gonzalez was later served with the OSC, but this was done at his own home at a time when he was essentially incapacitated. Wilmington knew or at least should have known that Gonzalez was severely ill and that he was too incapacitated to read or respond. This is evidence of sharp behavior by Wilmington to get a receiver appointed when Gonzalez was at his most vulnerable. Tellingly, Wilmington made no effort to serve Gonzalez’ partners or any lawyer that has represented Vermont. Mot. at 6-7.

Due to these improprieties in service, Vermont has never been afforded a meaningful opportunity to contest the appointment of the Receivership and has not had an attorney to represent its interests. General principles of law and equity mandate that it should be afforded the opportunity to “have his day in court” and explain why the Receivership is not necessary. California law and equity principles favor adjudication on the merits and avoidance of decisions that are based on mistake, surprise or inadvertence. See generally Aldrich v. San Fernando Valley Lumber Co., (1985) 170 Cal.App.3d 725 (“It is the policy of the law to favor a hearing on the merits whenever possible… [t]his policy disapproves a party who ‘attempts to take advantage of the mistake, surprise, inadvertence, or neglect of his adversary…”). It is patently unfair for a party to take advantage of another’s inability to defend itself. Mot. at 8.

Vermont is incorrect. First, email notice of the June 21, 2024 ex parte application was provided both to Vermont’s counsel in another lawsuit concerning a lis pendens on the Property (Still Decl., ¶4) and to Gonzalez, who was the owner of the membership interests in Vermont and its then agent for service of process. Still Decl., ¶6, Ex. 1. No more was required for the ex parte hearing.

After Wilmington discovered that Vermont’s address on file with the Secretary of State had been abandoned, notice of the July 23, 2023 OSC hearing re: confirmation of the Receiver’s appointment was given to Gonzalez through personal service of all pertinent papers at his home. Still Decl., ¶¶ 9-10, Exs. 2-3. Notice of entry of the order confirming the Receiver’s appointment subsequently was duly served on Vermont. Still Decl., ¶12.

As for Vermont’s claim that Wilmington committed a sharp practice by taking advantage of Gonzalez’ illness to obtain appointment of a receiver, Vermont had ample notice to prepare an opposition to the OSC confirming the appointment and did not do so. Vermont’s argument that Wilmington knew or should have known about Gonzalez’ illness is unsupported by any evidence of Gonzalez’ illness or that dialysis two days a week prevented him from retaining counsel to defend Vermont or asking his partners to do the same. Wilmington also points out that Vermont has waited three months after filing its Answer to contest the Receivership. Opp. at 12. Vermont’s failure to explain this delay is an implicit admission that it is appropriate.

Notice of Wilmington’s ex parte application for appointment of a receiver and service of the papers for the OSC were properly made and did not constitute an inequitable practice.

Vermont notes that CCP section 566(b) and CRC 3.1178 require that, when a receiver is appointed on an ex parte basis, the plaintiff must post a bond for all damages the defendant may sustain in case the plaintiff shall have procured the appointment wrongfully, maliciously, or without sufficient cause. Wilmington posted a bond of only $1500, which Vermont describes as miniscule and the Receivership should be discharged. Mot. at 3-4.

Although Wilmington relies on the wrong statute^{^[4]}, the court issued the $1500 amount of the ex parte bond on the basis that the ex parte application was unopposed. If Vermont believes the amount is too low, it should have sought a bond increase. It cannot obtain discharge of the Receivership on the ground that the bond is too low.

4. Vermont Has Not Shown That It is Ready, Willing, and Able to Pay the Loan

Vermont admits that there was a slight delay in performance due to an unforeseen illness, but now it is ready, willing and able to complete the Project. Vermont retained an attorney in late August of 2024 and that attorney reached out to Wilmington to discuss alternative forms of resolution. However, Wilmington has been unwilling to even discuss resolution. Mot. at 9.

Vermont’s new CEO Thompson has had no contact with either Wilmington or the Receiver. He proposes the following: (1). Thompson would like a walk-through to view the Project and the work that remains; (2). He has the funding and construction partners to complete the Project; (3) Thompson and his partners are not asking for any more draw funds, only time to complete the remaining 15% of the Project and refinance the Loan for payoff; (4) He seeks a re-negotiated reinstatement agreement and a reasonable time period to complete the Project; (5) Vermont has offered to make the monthly payments during this time. Unfortunately, Wilmington has been unwilling to discuss these matters, presumably because it seeks to sell the building and make a financial windfall. Mot. at 9-10.

The court always is interested in settlement of the lawsuits before it, but there is no legal basis to compel Wilmington to settle. Vermont is in default on the Loan and the Receiver was properly appointed to sell the Property. The Receiver has a purchase agreement with a buyer to sell the Property for $4.5 million. Vermont does not show that it is ready, willing, and able to pay off the Loan – as opposed to completing the Project – which is the only ground on which it legally could ask the court to terminate the Receivership and prevent the Receiver from selling the Property.^{^[5]}

Defendant Vermont’s motion to terminate the Receivership, discharge the Receiver, and stop the sale of the Property is denied.

^{^[1]} Both counsel generally failed to comply with the Presiding Judge’s First Amended General Order re: Electronic Filing by providing courtesy copies of their papers. Counsel are admonished to lodge courtesy copies of their papers in all future matters in this court.

^{^[2]} The court has ruled on Wilmington’s written evidentiary objections. The clerk is directed to scan and electronically file the court’s rulings.

^{^[3]} Wilmington argues (without evidence) that it funded the Loan in accordance with the Loan Documents. Vermont would submit draw requests to Wilmington for the purpose of funding the construction. After reviewing the draw request and utilizing the services of a third-party inspector, Wilmington would approve the draw request in full or in part, in accordance with the Loan Documents. Wilmington funded all of the draw requests that were approved by the third-party inspector. Opp. at 11.

^{^[4]} Wilmington argues that Vermont’s objection is untimely under CCP section 529(a), which requires an objection to an injunction bond be made within five days after service of the injunction. Opp. at 10. There are three bonds required for an ex parte appointment of a receiver: the receiver’s bond under CCP section 567(b), the applicant’s bond for ex parte appointment under CCP section 566(b), and the supporting preliminary injunction bond under CCP section 529. CRC 3.1178. Vermont is complaining about the ex parte appointment bond under CCP section 566(b), not the preliminary injunction bond under CCP section 529.

^{^[5]} The court need not address Wilmington’s remaining argument that Vermont’s motion is an untimely motion to reconsider. Opp at 14-15.