Judge John J. Kralik, Case 21BBCV00708 2023-02-24 Tentative Ruling

On August 6, 2021, Plaintiffs FB Ventura Blvd. LLC and 12251 Ventura Boulevard LLC (“Plaintiffs”) filed a complaint for partition of real property located at 12251 Ventura Boulevard, Studio City, California (“Subject Property”). Plaintiffs and Defendant 12251 Ventura Blvd. LLC (“Defendant”) were each the owner of a 1/3 undivided interest in the Subject Property as tenants in common.

Plaintiffs alleged that they desired to sell the Subject Property, but Defendant would not cooperate with a sale. Thus, Plaintiffs sought a partition of the entire fee simple interest in the Subject Property and a partition by sale.

On October 19, 2021, the Court signed the Stipulation and Interlocutory Judgment—Sale of Real Property. The Court approved the parties’ stipulation to sell the property and divide the proceeds in accordance with their respective interests in the Subject Property. Howard Grobstein of Grobstein Teeple, LLP was appointed as the referee with the authority to sell the Subject Property at a public auction to the highest bidder for cash, or by a private sale in the event that the referee determined a private sale would be most beneficial to the parties. The Court ordered the referee to report to the Court after making a sale of the Subject Property and, upon confirmation of the sale by the Court and payment of the purchase price, the referee would be authorized and directed to execute and deliver a deed of the Subject Property sold to the purchaser. The proceeds of the sale of the Subject Property are to be applied as follows: (a) to pay direct expenses connected with the sale of the Subject Property; (b) to pay the fees and disbursements of the referee; and (c) the residue to be divided as follows: 1/3 to Plaintiff FB Ventura Blvd. LLC, 1/3 to Plaintiff 12251 Ventura Boulevard LLC, and 1/3 to Defendant 12251 Ventura Blvd. LLC. (Grobstein Decl. at Ex. 1.)

On June 6, 2022, the Court signed the Amended Stipulation and Order Regarding Form of Bid. This Order stated: “The Parties, or any of them, may submit an offer with a combination of a “credit bid” equal to each of their respective ownership interests in the Property and a cash amount that is at least equal to all liens on the property at 12251 Ventura Boulevard, Studio City, California, Assessor’s Parcel Number 2367-017-003 (“Property”) plus 150% of all fees and costs of the Referee and 110% of the costs of sale (including without limitation, commissions, escrow, title insurance and transfer taxes), as estimated by the Referee at the time the offer is received by the Referee.” (Grobstein Decl. at Ex. 2.)

On October 7, 2022, the Court granted Partition Referee Howard Grobstein’s motion for order granting confirmation of the sale of real property pursuant to CCP § 873.710 et seq. and Probate Code § 10308 and for approval of the report.

On November 1, 2022, the parties filed a Stipulation Regarding Proceeds of Sale Payable to Defendant, stating that after the close of escrow, instead of the residue of the cash balance being paid to the Partition Referee, or a payment directly to Defendant, the residue shall be paid by escrow directly to Defendant’s qualified intermediary, Investment Property Exchange Services, Inc.

On December 1, 2022, the parties filed a Stipulation re: Sale stating that because Plaintiffs are already each 1/3 owners of the property, the grant deed shall convey only the 1/3 of the interest held by Defendant, and Plaintiffs shall each retain their existing 1/3 interest in the property.

On December 15, 2022, the Court signed the Order Confirming the Sale of Real Property pursuant to CCP § 873 et seq. and Probate Code § 10308 and approving Partition Referee’s Report of Sale.

On January 20, 2023, Partition Referee Howard Grobstein (“Mr. Grobstein” or “Petition Referee”) filed the Final Report and Declaration of Howard Grobstein, Partition Referee, re: Report of Sale of Real Property Pursuant to CCP § 873.640 and Probate Code, § 10308.

On February 6, 2023, Mr. Grobstein filed a motion for issuance of order approving Partition Referee’s Final Report and Accounting.

CCP § 873.060 states: “The referee may perform any acts necessary to exercise the authority conferred by this title or by order of the court.”

(a) The court shall appoint a referee to divide or sell the property as ordered by the court.

(3) Fix the reasonable compensation for the services of the referee and provide for payment of the referee's reasonable expenses.

(5) Require the filing of interim or final accounts of the referee, settle the accounts of the referee, and discharge the referee.

CCP § 873.720 states that a purchase, referee, or any party may move the court to confirm or set aside the sale.

Mr. Grobstein moves for an order approving the Final Report and Accounting. He seeks an order: (1) approving and settling the Final Report and Account; (2) approving and settling the Final Compensation and Reimbursement of Cost, approving the Partition Referee’s counsel’s fees and costs, and authorizing him to pay unpaid fees and costs from the Estate; (3) directing disbursement of remaining estate funds; (4) terminating appointment and discharging the Partition Referee from any further duties and responsibilities; (5) ordering Plaintiffs and Defendant jointly and severally to defend and indemnify the Partition Referee against any claims, demands, etc., which may arise from his service; (6) approving all of the Partition Referee’s contracts and actions as proper and in the best interest of the Estate; (7) retaining jurisdiction over any matters of claims which may arise concerning the Partition Referee; (8) authorizing the Partition Referee to defend any appeal of this Order and recover all fees and costs incurred in doing so; and (9) for such other orders as the Court deems proper.

Mr. Grobstein provides the background of his work and the sale of the Subject Property. He states that on January 6, 2023, the real property was conveyed to the buyers/Plaintiffs FB Ventura Blvd. LLC and 12251 Ventura Boulevard LLC (Francine Bernstein and Barry Gumbiner). A copy of the Closing Statement shows that $3,829,955.41 being due to the Seller (Investment Property Exchange Services, Inc.). (Grobstein Report/Decl., ¶25, Ex. 13.) Mr. Grobstein states that 150% of the estimated fees to Referee and counsel were paid to the Referee. (Id.) He states that he has now performed all the duties required of him and the remaining proceeds of the sale (consisting of estimated fees) are now ready to be distributed.

Mr. Grobstein provides the Court with a final reporting detailing the receipts of the Estate from October 19, 2021 to January 19, 2023. (Grobstein Report/Decl., ¶26, Ex. 14.) He states that he holds $170,000, representing 150% of the estimated fees. (Id.)

According to his billing statements regarding his services, fees, and costs, Mr. Grobstein states that from October 29, 2021 through the anticipated termination of his appointment, he has billed $24,275.00 (which includes a $7,500 flat fee for the competition, the Final Report and Account, attending the hearing on the motion, and preparing/serving the final disbursements. (Grobstein Report/Decl., ¶27, Ex. 15.)

Mr. Grobstein also provides the billing statements of his counsel, Marshack Hays LLP. (See David A. Wood Decl., Ex. 16.)[1] From October 19, 2021 to the anticipated termination of his appointment, counsel’s billing statement totals $131,778.55, which includes a $5,000 flat fee for the completion, the Final Report and Account, attending the hearing on the motion, and preparing/serving the final disbursements. (Wood Decl., ¶¶6-7.) None of these amounts has been paid.

The Court finds that Mr. Grobstein has performed the acts necessary to sell the Subject Property in accordance with the Interlocutory Judgment. This Court has already confirmed the sale of the property on October 7, 2022 and December 15, 2022. Finally, the fees and costs due to the Referee and Referee’s counsel appear to be reasonable and uncontested by the parties. Pursuant to the Interlocutory Judgment, proceeds of the sale of the subject property shall be made first to cover the direct expenses connected with the sale of the property, then to pay fees and disbursements to the Referee, and finally to be divided equally between Plaintiffs and Defendant.

Thus, the Court grants the motion and approves the Partition Referee’s Final Report and Account. The Court approves and settles the Final Report and Account and the Final Compensation and Reimbursement of Costs. The Court will direct the disbursement of the remaining estate funds. The appointment of Mr. Grobstein as the Partition Referee shall be terminated, such that his duties and responsibilities following this order are discharged.

The Petition Referee makes additional requests that: (1) Plaintiffs and Defendant, jointly and severally, be ordered to defend and indemnify the Partition Referee; (2) the Court approve of all the Partition Referee’s actions and contracts as proper and in the best interest of the Estate; (3) the Court retain jurisdiction over matters concerning the Partition Referee; and (4) the Court authorize the Partition Referee to defend any appeal of this Order and recover all fees and costs. These additional requests do not appear to be opposed by Plaintiffs and/or Defendant as no opposition papers were filed to the motion. As the parties to do not object, the Court grants the motion as to these additional requests.

Partition Referee Howard Grobstein’s motion to approve the Partition Referee’s Final Report and Accounting is granted. The Court approves and settle the Final Report and Accounting and the Final Compensation and Reimbursement of Costs. The Court will direct the disbursement of the remaining estate funds. The appointment of Mr. Grobstein as the Partition Referee shall be terminated, such that his duties and responsibilities following this order are discharged.

The Partition Referee also requests that Plaintiffs and Defendant, jointly and severally, be ordered to defend and indemnify Partition Referee, the Court approve of all his actions and contracts as proper and in the best interest of the Estate, the Court retain jurisdiction over matters concerning the Partition Referee, and the Court authorize Partition Referee to defend any appeal of this Order and recover all fees and costs, the Court declines to go this far to approve of matters that are not yet before the Court. The Court retains jurisdiction over this matter, and the Referee may apply to the Court for additional notice should any of these contingencies become realities.

[1] Mr. Wood’s declaration is filed separately on January 20, 2023 as the “Declaration of David A. Wood in Support of Attorneys’ Fees and Costs.” Exhibit 16 attached to his declaration includes his billing records.

	Plaintiffs (2/3)	Defendant (1/3)
Estimated Fees	$113,333.33	$56,666.67
Referee’s Fees and Costs of $24,275.00	($16,183.33)	($8,091.67)
Referee’s Counsel Fees and Costs of $131,778.55	($87,852.37)	($43,926.18)
Total Net to be Distributed	$9,297.63	$4,648.82

Superior Court of California

County of Los Angeles

Department B