Judge: Michael P. Linfield, Case: 22STCV31289, Date: 2023-05-05 Tentative Ruling

Case Number: 22STCV31289    Hearing Date: May 5, 2023    Dept: 34

SUBJECT:         Motion for Appointment of Receiver in Partition Action

Moving Party:  Plaintiff Angel Luis Barrueta

Resp. Party:    Defendant Alexis Barrueta

Plaintiff’s Motion for Appointment of Receiver in Partition Action is GRANTED.

        The undertaking for the receiver shall be $20,000.00. The funds for the undertaking shall come from the rent of the property and not solely from one party or the other.

PRELIMINARY COMMENTS:

1.     On pages 2-3, Defendant’s Opposition has the following quotation:

‘Evidentiary showing: Whether application is made ex parte, by OSC re appointment or on noticed motion, the moving party must present facts showing why a receiver should be appointed. The burden of proof is on the moving party.' ‘Competent evidence required: The supporting papers must contain competent and admissible evidence (i.e., not conclusions or hearsay) based upon the declarant's personal knowledge.' Hillsboro Brown Capital v. Taft (2021) 2021 Cal.Super. LEXIS 2 86170, *2-3, quoting, McCaslin v. Kenney (1950) 100 Cal.2d 87, 94, 223 P.2d 94 (emphasis added).

        Hillsboro Brown Capital – from which Defendant is quoting – is an unpublished and non-citable case.  This is improper.  “[A]n opinion of a California Court of Appeal . . .  that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action.”  (CRC Rule 8.1115.)  Further, Defense counsel has the wrong citation for the McCaslin case; it is an appellate case, not a California Supreme Court case.  The correct citation to McCaslin v. Kenney is 100 Cal.App.2d 87.  Lastly, this Court does not see any quotation on p. 94 in McCaslin v. Kenney that appears in the alleged quotation of Hillsboro Brown Capital. 

        The Court is setting an OSC re sanctions for Defense counsel’s failure to follow the California Rules of Court and misleading the Court in its opposition.

2.     While the Court is willing to grant the motion, hiring a receiver may well cost the parties $20,000.00.  The Court questions whether the two brothers who are parties to this case wish to spend the money on a receiver, or whether they can resolve this issue themselves.

BACKGROUND:

On September 22, 2022, Plaintiff Angel Luis Barrueta filed his Complaint for Partition of Real Property against Defendant Alexis Barrueta.

On January 23, 2023, Defendant filed his Answer to the Complaint.

On April 10, 2023, Plaintiff filed his Motion for Appointment of Receiver in Partition Action. In support of his Motion, Plaintiff concurrently filed: (1) Declaration of Kevin Singer; (2) Declaration of David A. Shapiro; (3) Proposed Order; and (4) Proof of Service.

On April 20, 2023, Defendant filed his Opposition. Defendant concurrently filed: (1) Declaration of Alexis Barrueta; (2) Declaration of Rosendo Gonzalez; and (3) Evidentiary Objections.

On April 28, 2023, Plaintiff filed his Reply. Plaintiff concurrently filed: (1) Declaration of Angel Barrueta; (2) Declaration of David A. Shapiro; (3) Response to Evidentiary Objections; and (4) Proof of Service.

ANALYSIS:

I.           Evidentiary Objections

        Defendant filed evidentiary objections to Plaintiff’s Motion; he did not file any objections to any evidence adduced by Plaintiff.  “[A]n assertion is not evidence.”  (Paleski v. State Dept. of Health Services (2006) 144 Cal.App.4th 713, 732.)

The Court OVERRULES all such evidentiary objections. Motions only contain argument, not evidence.

II.        Legal Standard

“A receiver may be appointed by the court in which an action or proceeding is pending, or by a judge of that court, in the following cases:

(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 of the property or fund, is probable, and where it is shown that the property or fund is in danger of being lost, removed, or materially injured.

. . .

(9)       “In all other cases where necessary to preserve the property or rights of any party.”

(Code Civ. Proc., § 564, subds. (b)(1), (b)(9).)

“The receiver has, under the control of the Court, power to bring and defend actions in his own name, as receiver; to take and keep possession of the property, to receive rents, collect debts, to compound for and compromise the same, to make transfers, and generally to do such acts respecting the property as the Court may authorize.” (Code Civ. Proc., § 568.)

“A receiver may, pursuant to an order of the court, sell real or personal property in the receiver’s possession upon the notice and in the manner prescribed by Article 6 (commencing with Section 701.510) of Chapter 3 of Division 2 of Title 9. The sale is not final until confirmed by the court.” (Code Civ. Proc., § 568.5.)

“Before entering upon the duties of a receiver:

(a)        “The receiver must be sworn to perform the duties faithfully.

(b)       “The receiver shall give an undertaking to the State of California, in such sum as the court or judge may direct, to the effect that the receiver will faithfully discharge the duties of receiver in the action and obey the orders of the court therein. The receiver shall be allowed the cost of the undertaking.”

(Code Civ. Proc., § 567, subds. (a)–(b).)

III.     Discussion

A.      The Parties’ Arguments

Plaintiff moves the Court for the appointment of a receiver regarding the real property located at 1027–1031 Coronado Terrace, Los Angeles CA 90026, which the Parties own as tenants in common. (Motion, pp. 3:3–6, 12:6–8.)

Plaintiff argues: (1) that a receiver is authorized in this action, where one tenant in common interferes with their co-owners’ rights to possession of and rents from the property; (2) that a receiver should be appointed to stop Defendant’s diversion of property rents and funds; (3) that appointing a receiver to manage the property pending trial is necessary since one co-owner is committing an ouster; (4) that if the property is to be sold, it is necessary to appoint a receiver or referee to sell the property; and (5) that an undertaking of the receiver should be $20,000.00 as the rental income of the property is $5,520.00 monthly and the reasonable rental value of the main house portion of the property is $4,500.00 monthly. (Motion, pp. 5:27–28, 7:19–21, 8:8–9, 9:5–6, 9:26–27, 11:24–27, 12:1–2.)

Defendant opposes the Motion, arguing: (1) there is insufficient evidence presented for the appointment of a receiver; (2) instead of a receiver, the Court should select a competent real estate broker to list, market, and sell the property; (3) there is no basis for the appointment of a receiver; and (4) in the alternative, if the Court is inclined to appoint a receiver, the Plaintiff should be solely responsible for all of the receiver’s fees and expenses. (Opposition, pp. 2:7–8, 3:9–11, 6:2–3, 7:18–21.)

In his Reply, Plaintiff argues: (1) there is sufficient evidence to support the appointment of a receiver; (2) appointment of a receiver is the most appropriate remedy in this case; (3) Defendant misrepresents the law; (4) Defendant’s assertions regarding diversion of property and denial of the ouster are unfounded and false; (5) Defendant’s request for a real estate broker as alternative relief should be denied; (6) the receiver’s fees and expenses should be paid from the property in the receivership or by Defendant; and (7) Defendant’s declarations provide inaccurate testimony. (Reply, pp. 2:4–5, 3:17–18, 5:27, 7:1–2, 7:12–13, 8:10–11, 8:25–26.)

B.      Discussion

While the Parties appear to vehemently disagree, they actually have several bases of agreement.

Defendant argues that the Court should select a real estate broker to list, market and sell the property, citing Gold v. Gold (2003) 114 Cal.App. 4th 791, 807 (“[T]he availability of other remedies does not, in and of itself, preclude the use of a receivership. Rather, a trial court must consider the availability and efficacy of other remedies in determining whether to employ the extraordinary remedy of a receivership.”) (Quotation and internal quotation marks omitted).)

Plaintiff declares that the Parties undertook an oral agreement to sell the property and split the proceeds evenly between the Parties. (Decl. Angel Barrueta, ¶ 4.) Plaintiff further declares that the Parties have agreed to sell the property, but the remaining issue involves selecting a broker and under which conditions the broker will be allowed to sell the property. (Id. at ¶ 9.)

Simply put, the evidence indicates that the Parties agree that the property should be sold, but they do not agree on how to sell it or how to address ongoing issues prior to the sale.

It appears that it would be most appropriate to appoint a receiver to preserve the rights of the Parties to the property. (Code Civ. Proc., § 564, subd. (b)(9).) The receiver will be able to handle issues with rent that arise during the pendency of this case. (Code Civ. Proc., § 568.) The receiver will also be able to sell the property upon order of the Court. (Code Civ. Proc., § 568.5.) Unlike a broker, the receiver will be neutral and under the control of the Court.

        The Court GRANTS the Motion.

        The undertaking for the receiver shall be $20,000.00. The funds for the undertaking shall come from the rent of the property and not solely from one party or the other.

IV.       Conclusion

Plaintiff’s Motion for Appointment of Receiver in Partition Action is GRANTED.

        The undertaking for the receiver shall be $20,000.00. The funds for the undertaking shall come from the rent of the property and not solely from one party or the other.