Judge: Mary H. Strobel, Case: 22STCV17409, Date: 2023-04-04 Tentative Ruling

Case Number: 22STCV17409    Hearing Date: April 4, 2023    Dept: 82

            Receiver Kevin Singer (“Receiver”) moves for an order (1) approving and settling the Receiver’s final report and accounting, (2) approving final compensation and reimbursement of expenses, (3) exonerating all bonds, (4) terminating the Receivership appointment and discharging the Receiver, and (5) retaining jurisdiction regarding this Receivership appointment.  No opposition has been received from Plaintiff Museum Building Holdings, LLC (“Plaintiff”) or Defendant Broadbridge LA, LLC (“Defendant” or “Borrower”). 

Background and Procedural History

            On May 26, 2022, Plaintiff filed a verified complaint against Defendant for judicial foreclosure and specific performance for appointment of receiver and injunctive relief.

            On June 8, 2022, the court granted Plaintiff’s ex parte application for appointment of a receiver, temporary restraining order, and order to show cause (“OSC”) re: confirmation of receiver.  The court set the OSC for hearing on June 30, 2022, and set a briefing schedule.  The court’s order for the appointment of Receiver was filed June 8, 2022 (“Appointment Order”). 

On June 9, 2022, Receiver filed an undertaking of $25,000.  Plaintiff filed an undertaking for the TRO in the sum of $10,000. 

            On June 30, 2022, the court granted Plaintiff’s application for confirmation of appointment of the receiver and issuance of a preliminary injunction.

            On July 5, 2022, Plaintiff filed an undertaking for the preliminary injunction in the amount of $10,000.

            Defendant’s primary asset was the real property located at 826 and 832 South Hill Street and 801 South Broadway, Los Angeles, California, better known as the Museum Building (the “Property”).  (Receiver Decl. ¶ 2.)  The Appointment Order directed Receiver to operate, manage, protect, preserve, and control the Property.  (Id. Exh. 1.)

            On July 8, 2022, Receiver filed an inventory of the Property. 

            On October 4, 2022, and January 5, 2023, the court held status conferences re: receivership.  In a report for the January 5 conference, Receiver advised the court that Plaintiff completed a non-judicial foreclosure of the Property on December 6, 2022, and was the successful bidder. 

            On March 3, 2023, Receiver filed and served the instant motion.  No opposition has been received.  On March 21, 2023, Plaintiff filed and served a Notice of Non-Opposition to the Receiver’s Motion.

Summary of Applicable Law

In order to terminate and discharge the receivership, Receiver 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).)  Notice must be provided to every person or entity known to the receiver to have a substantial, unsatisfied claim that will be affected by the order, “whether or not the person or entity is a party to the action or has appeared in it.”  (Cal. Rules of Court, Rule 3.1184(c).)  “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.”  (Rule 3.1184(d).) 

In addition, “[i]nterim fees are subject to final review and approval by the court.  The court retains jurisdiction to award a greater or lesser amount as the full, fair, and final value of the services rendered.”  (Id., Rule 3.1183(a).  “Unless good cause is shown, objections to a receiver's interim report and accounting must be made within 10 days of notice of the report and accounting, must be specific, and must be delivered to the receiver and all parties entitled to service of the interim report and accounting.”  (Id., Rule 3.1183(b).) 

Analysis   

Notice

            Notice on Plaintiff and Defendant is proper, as stated above.  It appears there are not any other persons or entities known to the Receiver to have a substantial, unsatisfied claim that will be affected by the order.  Receiver should confirm this at the hearing. 

Approval of Final Report and Accounting; and of Receiver’s Fees and Expenses

            In a declaration, Receiver summarizes the work he has performed pursuant to the Appointment Order.  (Receiver Decl. ¶¶ 4-6.)  Among other duties, Receiver installed security at the Property; facilitated an appraisal of the Property; arranged to have the Property’s electrical panels repaired; paid property taxes; and transitioned control of the Property to Plaintiff following the foreclosure sale.  (Ibid.)  Receiver declares that his total fees and expenses in this matter from June 30, 2022, through the hearing on this motion are $116,088.80, comprised of $113,951.50 in fees and $2,137.30 in expenses.  Receiver has been paid $79,129.73 toward the total fees and expenses of $116,088.80, leaving a balance of $36,959.07.  Receiver’s trust account holds $36,959.07, which can be used to fully satisfy the Receiver’s outstanding balance.   Receiver also advanced $64,854.84 in case funding, which amount has been reimbursed. Receiver submits invoices and a final accounting in support of these statements.  (Id. ¶¶ 7-13, Exh. 2-7.)  No objection has been received. 

The court approves Receiver’s final accounting and Receiver’s request for reimbursement of Receiver’s fees and expenses. 

Order Discharging Receiver; Terminating Receivership Appointment; and Retaining Jurisdiction Over Receivership Matters  

“A receivership terminates upon completion of the duties for which the receiver was appointed; or at any time, upon court order.”  (Rutter, Civ. Pro. Before Trial ¶ 9:774; see generally CCP § 568 [receiver is “under the control of the Court”] and O’Flaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1053, 1062.) “As a general proposition a receiver has no official duties and is not a proper party to any action after being discharged by the court…. The discharge order operates as res judicata as to any claims of liability against the receiver in her official capacity.”  (Vitug v. Griffin (1989) 214 Cal.App.3d 488, 494.) 

Receiver is entitled to discharge and termination of the Appointment Order.  The court retains jurisdiction over matters or claims which may later arise in connection with the Receiver and/or the Receivership Estate.  No objection has been received.

Order Exonerating the Receiver’s Bond

The court will exonerate Receiver’s bond.  No objection has been received.

Plaintiff’s Undertakings

            Receiver also requests an order exonerating “all bonds posted herein.” Receiver should clarify to which undertakings he is referring.  The court does not exonerate any undertakings filed by Plaintiff related to the TRO or preliminary injunction. 

Conclusion

The court approves the final report and accounting, approves final compensation and reimbursement of expenses, exonerates the Receiver’s bond, terminates the receivership, and discharges the receiver.  The Receiver may address at the hearing whether any additional undertakings should be exonerated.    

The motion is granted in all other respects.