Judge Mitchell L. Beckloff, Case Number: 21STCV30656, Date: 2023-10-06 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 21STCV30656, Date: 2023-10-06 Tentative Ruling

[Tentative] ORDER DENYING MOTION TO APPOINT RECEIVER AND RELATED PRELIMINARY INJUNCTION

Plaintiff, Cally Williams Caiozzo,[1] again moves for appointment of a receiver over mixed-used real property (the Property) located in the Beachwood Canyon area of the City of Los Angeles. Plaintiff also requests a preliminary injunction in aid of the receivership. Defendants, Beachwood Master Commercial, LLC (LLC), Gregory Paul Williams, and James Linardos, jointly oppose the motion.

Plaintiff’s request for judicial notice (RJN) (filed August 28, 2023) of certain documents (Exhibit C) is granted. (Evid. Code, § 452, subd. (d).) While the court may judicially notice the documents, it may not take judicial notice of any hearsay statements within the documents. Defendants’ objection to Plaintiffs’ RJN is overruled.

The court judicially notices the existence of Exhibit C, not the truth of any hearsay statements therein. Defendants’ objection is overruled.

Defendants’ RJN (filed October 2, 2023) of allegations made in Plaintiff’s complaint (Exhibit A) is granted. (Evid. Code, § 452, subd. (d).)

The court reminds counsel witness declarations should consist of facts, not argument. Including argument in declarations not only circumvents the page limits set forth in California Rules of Court [CRC], Rule 3.1113, subd. (d), but it “forces the trial and appellate courts, and opposing counsel, to sort out the facts that are actually supported by oath from material that is nothing more the statement of an opinion ostensibly under oath. . . . The proper place for argument is in points and authorities, not declarations.” (In re Marriage of Heggie (2002) 99 Cal.App.4th 28, 30 n. 3.) The parties’ witness declarations are replete with inappropriate argument unnecessarily resulting in hundreds of well taken evidentiary objections.

Objections 3, 6, 9, 11, 15, 16, 17, 18, 20, 23, 25, 26, 34, 37, 39, 42, 43, 45 (a)-(f), 47, 49, 50, 51, 51 (b) a., 51 (b) b., 51 (j), 52, 54, 55, 63, 74, 79, 102 and 104. The remaining objections are sustained except the following objections which are sustained in part: 22 (as to “due to . . . occurred”),[3] 30 (c) ( as to all except “I made a complaint . . . Wade’s” and “work”), 44 (as to Exhibit BB) and 45 (as the third and fourth sentence).

Objections 40, 41, 47, 49, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 65, 66, 68, 69, 70, 71, 72, 73, 74, 75, 78, 84 and 86 are sustained. The remaining objections are overruled except the following objections which are sustained in part: 5 (as to the last sentence) and 6 (as to “and communicated . . . applicants”).

All of the evidentiary objections to the Declaration of Jason Rubin are overruled.

Defendants’ objection to the entirety of Plaintiff’s response to Defendants’ evidentiary objections is overruled.[4]

Objections 35, 36, 44, 56, 57 and 59 are overruled. The remaining objections are sustained (See footnote 4 supra) except the following objections which are sustained in part: 10 (as to “improperly”) and 50 (as to “He gave . . . phone number”).

Objections 1, 2, 3, 4, 8, 16, 17, 22, 39, 43, 47 and 51 are sustained. The remaining objections are overruled.

Objections 3, 4, 5, 9, 10, 13, 14, 15, 16, 19, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 36 and 37 are sustained. The remaining objections are overruled.

The objections to the Declaration of Stephen Lockard are sustained in their entirety.

The objections to the Declaration of Gregroy Williams are all sustained except objection 7. Objection 2 is sustained in part (as to “The best . . . to date,”).

All objections to the Declaration of Llandys Williams are sustained except objection 5 which is overruled.

All objections to the Declaration of Alexa Williams are sustained except objection 4 which is overruled.

All objections to the Declaration of John Gebhardt except objection 1 which is sustained.

All objections to the Declaration of John Merrill are overruled except objections 9 and 11 which are sustained. The court notes it overruled the hearsay objection to City employee statements as the statements are not received for the truth of the matter asserted but instead to explain any delay with the permitting process.

All objections to the Declaration of Al Wade are sustained except objection 5 which is overruled as there are no grounds stated for the objection.

The objections to the Declaration of Med Gorgy are all sustained except objection 4 which is overruled.

The objections to the Declaration of Mike Fahim are all sustained except objection 10 which is overruled.

The objections to the Declaration of Vance Lorenzini are all sustained except objection 2 which is overruled.

Plaintiff is a minority member of the LLC. Defendants Williams and Linardos are Plaintiff’s cousins, members of the LLC, and co-managers of the LLC. (Caiozzo Decl. ¶¶ 2-11.) The LLC manages the Property.

On August 18, 2021, Plaintiff filed a complaint against Defendants for: (1) breach of fiduciary duty; (2) conversion; (3) failure to provide LLC’s books and records (Corporatons Code section 17704.10); (4) financial elder abuse; (5) involuntary dissolution of LLC; (6) accounting; and

On November 9, 2021, Plaintiff filed her first motion for appointment of a receiver over the Property. Defendants opposed the motion.

On December 17, 2021, after a hearing, this court denied Plaintiff’s the motion. The court issued a written order explaining its decision; the decision is incorporated herein by reference. At the hearing on the motion, the court indicated Plaintiff could seek additional and/or different relief based on new or different facts.

On June 1, 2022, the court (Judge Maureen Duffy-Lewis) granted Defendants’ motion to compel arbitration as to all causes of action. Plaintiff had opposed the motion. On November 28, 2022, after a hearing regarding compliance with an alternative writ of mandate issued by the Court of Appeal, the court vacated its June 1, 2022 order compelling arbitration as to the fifth cause of action seeking involuntary dissolution pursuant to Corporations Code section 17707.03.

On February 23, 2023, Defendants filed a motion to stay the civil action pending arbitration. Plaintiff opposed the motion. The court (Judge Duffy-Lewis) denied the motion. On June 27, 2023, after a hearing regarding compliance with an alternative writ of mandate issued by the Court of Appeal, the court vacated its order and granted Defendants’ motion to stay the proceedings.

“In this state a receiver may be appointed only as permitted by Code of Civil Procedure section 564.” (Barclays Bank of California v. Superior Court (1977) 69 Cal.App.3d 593, 597.)

Appointment of a receiver is a drastic provisional remedy that the court should only grant when facts are presented by admissible evidence that clearly establish a receiver is necessary to protect the property and maintain the status quo. (Id. at 597; City and County of San Francisco v. Daley (1993) 16 Cal.App.4th 734, 744). The appointment of a receiver is an equitable remedy and should be used only when necessary and where other legal remedies are unavailable. (Rogers v. Smith (1946) 76 Cal.App.2d 16, 21.)

Plaintiff does not address the court’s authority to grant a provisional remedy of a receivership while all but one of her claims are being arbitrated and while this litigation is stayed.

The LLC’s operating agreement includes an arbitration provision and six of Plaintiff’s seven causes of action have been referred to arbitration. (See Memo 16:14-20; Caiozzo Decl. Exh. D.) Given the pending arbitration, Plaintiff is required to comply with Code of Civil Procedure section 1281.8, subdivision (b), which provides in relevant part:

A party to an arbitration agreement may file in the court in the county in which an arbitration proceeding is pending, or if an arbitration proceeding has not commenced, in any proper court, an application for a provisional remedy in connection with an arbitrable controversy, but only upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without provisional relief. (Emphasis added.)[5]

The court cannot grant a request for a provisional remedy if the moving party has not made the required showing. (See California Retail Portfolio Fund GMBH & Co. KG v. Hopkins Real Estate Group (2011) 193 Cal.App.4th 849, 856-857.) “ ‘The logical reason for the requirement that an applicant be required to show that an arbitration award may be rendered ineffectual is to ensure that the court does not invade the province of the arbitrator—i.e., the court should be empowered to grant provisional relief in an arbitrable controversy only where the arbitrator’s award may not be adequate to make the aggrieved party whole.’ ” (Id. at 856 [citation omitted].)

In this action, all of Plaintiff’s causes of action, except for the fifth cause of action for involuntary dissolution of the LLC, have been compelled to arbitration.[6] In her motion and reply papers, Plaintiff does not address Code of Civil Procedure section 1281.8 or explain how any arbitration award related to her arbitrable causes of action, specifically breach of fiduciary duty, conversion, failure to provide LLC records, elder abuse, accounting, and involuntary dissociation of members, would be rendered ineffectual without the requested provisional relief.

Accordingly, on this briefing, Plaintiff does not meet her initial burden of proof to establish a provisional remedy may issue pending arbitration of her first, second, third, fourth, sixth, and seventh causes of action. (See CRC, Rule 3.1113, subd. (a). [“The court may construe the absence of a memorandum as an admission that the motion . . . is not meritorious”]; Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197 Cal.App.4th 927, 934 [same]; Nelson v. Avondale Homeowners Assn. (2009) 172 Cal.App.4th 857, 862-863 [argument waived if not raised or adequately briefed].)

As noted, the court did not compel the fifth cause of action for involuntary dissolution to arbitration; Code of Civil Procedure section 1281.8 is therefore not relevant to that cause of action. Accordingly, the court considers Plaintiff’s request to appoint a receiver under Code of Civil Procedure section 564 in the context of Plaintiff’s fifth cause of action.[7]

Plaintiff moves for appointment of a receiver pursuant to Code of Civil Procedure section 564, subdivisions (b)(1) and (9). Code of Civil Procedure section 564, subdivisions (b)(1) and (9) authorize the appointment of a receiver in a pending action, as follows:

(1) In an action . . . 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.

Plaintiff submits evidence she is a member of the LLC and the sole asset of the LLC is the Property. (Caiozzo Decl. ¶¶ 2-10 and Exh. D, F.) For purposes of this motion, Plaintiff has shown a “probable” interest in the Property by virtue of her membership interest in the LLC. Defendants develop no argument to the contrary. Accordingly, the issue is whether Plaintiff has shown the Property is “in danger of being lost, removed, or materially injured” or that a receivership is necessary to preserve Plaintiff’s rights in the Property.

In summary, Plaintiff contends Defendants Williams and Linardos (collectively, Managers) “have mismanaged, performed unpermitted construction work at, and failed to properly and competently maintain the Property, as a result of which several of the Property addresses have been cited by the City of Los Angeles for hazardous, substandard conditions in violation of applicable building codes and local laws, and portions of the Property have fallen into a visible state of disrepair, leading to the filing of a criminal complaint against the Commercial LLC and its Managers.” (Memo 8:10-15.) Plaintiff contends “the Managers are manifestly unqualified and incapable of competently and responsibly managing the Property . . . .” (Memo 9:7-8.) As support, Plaintiff summarizes two misdemeanor criminal complaints and seven administrative proceedings related to the Property. (Memo at Attach. 1.)[8]

Plaintiff alleges Case No. 1 concerns unpermitted plumbing, mechanical, electrical, and HVAC issues at 2699 ½ N. Belden Drive, a unit occupied by a commercial tenant, United Mailbox. (Attach. 1 at A-1.) Plaintiff acknowledges the underlying Notice of Code Violation for Case No. 1 and Order to Comply were served by the City’s Department of Building and Safety (LADBS) on May 5 and November 12, 2021, respectively, before the court ruled on Plaintiff’s first receiver motion on December 17, 2021. (Caiozzo Decl. ¶¶ 19, 22.) Plaintiff addressed this LADBS case in her first receivership motion. Accordingly, consistent with the court’s December 17 order and Code of Civil Procedure section 1008, Plaintiff must show new or different facts related to Case No. 1 to justify an order granting a receivership. (See Code Civ. Proc., § 1008, subds. (b), (e).)

Plaintiff reports a misdemeanor criminal case has been filed against the LLC and Managers related to unpermitted work at 2699 ½ N. Belden Drive. (Attach. 1 at A-1.)[9] Plaintiff declares the court arraigned the LLC and Managers on June 21, 2023 with a “follow up hearing date” set for December 11, 2023. (Caiozzo Decl. ¶ 45.) Plaintiff does not demonstrate the LLC and/or Managers entered a plea at the arraignment.

Evidence of the misdemeanor criminal complaint standing alone merely demonstrates a deputy city attorney elected to file a criminal case. The filing evidences a deputy city attorney’s belief there is probable cause to believe a crime has been committed, and the deputy city attorney can prove the allegations beyond a reasonable doubt. There is no foundation for Plaintiff’s assertion of LADBS’s rationale for referring the matter to the City Attorney’s office. (Caiozzo Decl. ¶ 20 (g); Taylor Decl. ¶ 20 (g).) Should the LLC or Managers later be convicted after a trial or plea, the conviction would likely be relevant to the court’s assessment of the need for a receiver.

Given the presumption of innocence and the due process to which the LLC and Managers are entitled, the criminal misdemeanor complaint does not establish criminal behavior by the LLC and/or Managers. Accordingly, the established facts today about Complaint No. 1—other than a claim of delay—are consistent with those that existed on December 17, 2021.[10]

Further, the court notes the City agreed to continue the criminal arraignment “so long as Defendants were taking affirmative steps to remediate the Property.” (Lockard Decl. ¶ 13.) The City’s willingness to continue the criminal proceedings bolsters Managers’ claim they are working with the City to resolve and close the outstanding issues. (Williams Decl. ¶ 10.)

Plaintiff concedes Managers have obtained an HVAC permit and filed applications for building and non-building repair; Managers submitted plans to the City after the December 17, 2021 hearing on the first receiver motion; and these acts by the Managers relate to the municipal code violations alleged in Case No. 1. (Caiozzo Decl. ¶ 22; Taylor Decl. ¶¶ 17-21.) Plaintiff’s expert concerning city planning, Gregory C. Taylor, attests “[t]here is nothing in the records available for public review that indicates a reason or justification for failure to complete the permit” process for Case No. 1. (Taylor Decl. ¶ 20 (e).) Taylor admits, however, he lacks percipient knowledge and is “in the dark” as to the Americans with Disabilities Act (ADA) requirements at issue for Case No. 1. (Reply Taylor Decl. ¶ 8.)

Planning expert Taylor suggests Defendants are at fault for the delays in obtaining required permits related to Case No. 1. As noted, he lacks foundation for his assertion. Plaintiff does not submit competent evidence establishing Defendants are necessarily at fault for delays in the permitting process related to Case No. 1. In fact, Managers’ expert attests the City “has been extremely slow to process property improvement and permit applications.” (Gebhardt Decl.

¶ 15.) Managers’ general contractor substantiates the general delays with the City. (Merrill Decl. ¶ 10. [“Getting progress has taken a very long time because inquiries were relegated to email and sometimes I would not hear back for 3-7 days at a time.”]) Finally, the court finds credible the evidence indicating delays have occurred based on ADA compliance and potential changes in the law. (Merrill Decl. ¶¶ 14, 16.)

More importantly, a substantial amount of Plaintiff’s evidence related to Case No. 1 is inadmissible, as reflected in the court’s rulings on evidentiary objections. As an example, Plaintiff’s declarants do not provide sufficient foundation or demonstrate percipient knowledge to explain the photographs. That is, how the photographs depict violations in Case No. 1. (See Taylor Decl. ¶ 27, Exh. R and Reply Taylor Decl. ¶ 18.) While the court has reviewed the photographs, there is no expert declaration or other evidence explaining the evidence—how the photographs demonstrate a violation of the City’s municipal code or other law. Significantly, Plaintiff has not submitted expert testimony from Taylor or any other expert establishing the magnitude of potential harm to a tenant or the Property based on the alleged building code violations for Case No. 1. Absent such corroborating and explanatory evidence, as discussed in December 2021, the notices of violation themselves do not establish a need for court to step in with the drastic remedy of a receivership. Moreover, nothing precludes the City (and its LADBS) from pursuing appropriate relief based on the magnitude of the risk of harm to tenants and the Property. In fact, based on the evidence, it appears the City is satisfied with Managers’ efforts to remediate the violations.

Plaintiff alleges Managers “have used certain vendors to perform repairs, construction, upgrades, restoration, and work on the Commercial Properties, who have performed work outside of their licenses, and performed work without inspections prior, during and after completion.” (Caiozzo Decl. ¶ 30.) Much of Plaintiff’s testimony and other evidence in support of the allegation is inadmissible. While Plaintiff made a complaint to the Contractor’s State License Board (CSLB) about plumber Al Wade’s work, Plaintiff does not show the CSLB made any finding Wade performed work beyond that permitted by his plumbing license. (Caiozzo Decl. ¶¶ 30 (c)-(d) and 33, Exh. Y.) Managers provide evidence disputing Plaintiff’s assertion. (Merrill Decl. ¶ 8. [“In all of my engagements with Al, the work he performed at the Property was either (a) permitted work under his license, or (b) Al assisted me under my direct guidance, for example helping me rearrange materials and do loading.”]) Therefore, the court finds insufficient evidence to conclude Defendants’ contractors have performed work at the Property outside of that permitted by their licenses. (See also Wade Decl. ¶¶ 3-6; Merrill Decl. ¶¶ 3-8.)

Managers submit evidence they “applied for a finalized permit but have the temporary permit of # 21042-30000-09539, which was issued on June 29, 2021 for 2699 ½ Belden [Drive] (also known as Beachwood Drive). This permit is to install a water heater, toilet and sink. In addition, [Managers] are currently in plan check for 2699 1/2 Beachwood Drive.” (Merrill Decl. ¶ 12.) Managers’ contractor also submitted remodel plans to the City to reach ADA compliance for the unit’s bathroom. (Merrill Decl. ¶ 13.) Managers’ plumber attests Managers are still waiting for the City for plan approval to complete certain plumbing work. (Wade Decl. ¶ 20 [“cannot proceed unit the City issues a decision on such parking lot plans”].) Although not all of Managers’ evidence is admissible, there is sufficient competent evidence Managers have taken actions to address building permit issues related to Case No. 1. The court also finds credible the evidence supporting Managers’ position they are unable to move forward based on the City’s delays of approval of plans and permits.

Significantly, Managers’ general contractor, John Merrill, attests: “In my experience, none of the pending alleged violations for Case Number 908586 reflect any dangerous conditions. I have not observed any aspect of United Mailbox to be unsafe, whether that be for its owners or their customers.” (Merrill Decl. ¶ 17.) Managers have also submitted declarations from several tenants expressing support for Managers and disputing Plaintiff’s assertion of potential harm to tenants from the allegations in Case No. 1. (See generally Gorgy, Fahim, Milford, and Lorenzini Decls.) Plaintiff has not submitted evidence to rebut the testimony of Managers’ contracts or the LLC’s tenants.

Based on the admissible evidence before the court, the court finds Plaintiff has failed to demonstrate Defendants or their attorneys made intentionally false statements at the hearing before this court on December 17, 2021. (See e.g. Caiozzo Decl. ¶ 22 (b)-(c).)[11] Further, to the extent certain statements may have been exaggerated and/or inaccurate, such inaccuracies and exaggerations are insufficient to establish grounds for the appointment of a receiver. The court also believes Managers’ evidence resolution of Case No. 1 has been delayed by the City, and Managers’ position they are actively working with the City to resolve Case No. 1.

Plaintiff alleges Case No. 2 concerns an unpermitted electrical panel, kitchen exhaust venting into an upstairs apartment, and a water heater issue. (Attach. 1 at A-1.) The court’s analysis here is similar to that stated above for Case No. 1. The court does not repeat the analysis but merely highlights the main points. To be clear, the court’s reasoning with Case No. 1 is equally applicable here.

That a criminal misdemeanor complaint has been filed does not alone establish grounds to appoint a receiver. Moreover, the evidence supports Managers’ position the criminal proceedings have been delayed and continued because they are working with the City to remedy the violations. The evidence supports a reasonable inference that if the City were dissatisfied with Mangers’ performance and response to the violations, the City would be pressing to move forward with the misdemeanor prosecutions for the protection of the public.

Again, much of Plaintiff’s testimony and other evidence concerning Case No. 2 is inadmissible, as reflected in the court’s rulings on evidentiary objections. For example, Plaintiff fails to show percipient knowledge or expert qualification to provide her opinion that “[w]hen the above apartment windows are open, the kitchen exhaust vents noxious/toxic fumes and smoke into apartment units, endangering the lives of tenants.” (Caiozzo Decl. ¶ 38.) Again, Plaintiff’s declarants do not provide sufficient foundation or percipient knowledge to explain the meaning of the photographs of the alleged violations in Case No. 2. (See Taylor Decl. ¶ 39, Exh. BB; Reply Taylor Decl. ¶ 18.) While the court has reviewed the photographs, there is no expert declaration or other evidence explaining the evidence—that is, how the photographs demonstrate a violation of the City’s municipal code or other law. Significantly, Plaintiff has not submitted expert testimony from Taylor or any other expert establishing the magnitude of potential harm to a tenant or the Property based on the alleged building code violations for Case No. 2. Absent such corroborating and explanatory evidence, the notices of violation themselves do not establish a need for court to step in with the drastic remedy of a receivership. Again, nothing precludes the City (and its LADBS) from pursuing appropriate relief based on the magnitude of the risk of harm to tenants and the Property. Certainly, the misdemeanor criminal complaints demonstrate the Property, issues with it, and the potential for harm is actively before the City.

Again, planning expert Taylor suggests Defendants are at fault for the delays in obtaining required permits related to Case No. 2. As noted, he lacks foundation for his assertion. Plaintiff does not submit competent evidence establishing Defendants are necessarily at fault for delays in the permitting process related to Case No. 2. The evidence of the City’s delays discussed earlier is equally applicable here.

Further, Managers submit evidence the water heater issues related to Case No. 2 have been resolved. (Fahim Decl. ¶ 8; Williams Decl. ¶ 11.) Plaintiff has not rebutted that evidence. (See Reply Caiozzo Decl. generally and Reply Taylor Decl. ¶¶ 11-12 [discussing only unapproved vent issues].)[12]

Defendants also submit evidence the “electrical subpanel has remained unchanged for years” and “[t]he vents have been positioned there for decades.” (Williams Decl. ¶¶ 11-12.) The Department of Public Health Inspection Report dated May 18, 2022, submitted by Plaintiff, states “the exhaust fan from kitchen venting to apartments above” is “not enforceable.” (Memo Exh. PP.)[13] Defendants submit a declaration from Gerry Milford, a residential tenant who has resided in Apartment 2 on the second floor for eight or nine years. Milford attests he does not have any issue with the exhaust vent from the Beachwood Café. (Milford Decl. ¶¶ 2-4.) Plaintiff does not rebut the evidence from Milford. (Reply 11:10-12:1.) Since it appears the alleged conditions have existed for many years at the Property, and since Plaintiff lacks relevant expert testimony regarding such conditions, the evidence does not support a conclusion that they establish a material risk of harm to the Property.

To be sure, the court agrees with Plaintiff—the allegations in the Order to Comply and criminal misdemeanor complaint are “serious.” (Reply 11:23.) Nonetheless, under the circumstances here, ongoing administrative and criminal proceedings do not alone establish grounds for a receivership. Plaintiff fails to demonstrate a receivership is necessary to protect the Property during the pendency of the administrative, criminal and civil proceedings. Moreover, the evidence supports a finding Managers are actively working with the City to remedy the violations.

Plaintiff alleges Case No. 3 concerns an Order to Comply issued by the City’s Housing and Community Investment Department (HCIDLA) for an unpermitted awning[14] for Apartment Unit 5. (Attach. 1 at A-1.) While Plaintiff also alleges Case No. 3 concerns “rooftop patio structures,” it appears the Order to Comply is based primarily on the unpermitted awning and members apparently supporting it. The undisputed evidence shows the tenant, not the Managers, constructed the awning at issue. (See Williams Decl. ¶¶ 14-15 and Lorenzini Decl. ¶ 3.) The tenant also installed the awning without Managers’ permission. (Williams Decl. ¶ 14.)

Plaintiff does not submit expert testimony establishing a magnitude of harm to the Property, the tenant or the public from the awning and its support. (See Taylor Decl. ¶¶ 42-54.) Absent expert testimony, the photographs submitted by Plaintiff do not establish the magnitude of the risk of harm to the Property or others. (Memo Exh. DD.)

Additionally, Managers provide evidence they are actively working with the City to remedy the issue. (Williams Decl. ¶ 15.) Managers have requested from the City clarity on the need for a permit and a physical inspection of the awning. (Lockard Decl. ¶ 18, Exh. 11.) The City’s inspector assigned to the case made contact with Managers’ counsel. (Lockard Decl. ¶ 18, Exh. 11.)

The allegations raised in the Order to Comply are serious and must be addressed by Defendants.

The court requests Defendants address their delay in addressing the issue. HCIDLA issued the Order to Comply on September 6, 2022. The court has been unable to locate in any of the evidence before it any facts to support a nearly one-year delay in addressing the problem. It does not appear Defendants took any action until their counsel contacted the City in August 2023.

Case Nos. 4 through 9 are administrative orders issued by HCIDLA or the Los Angeles County Department of Health related to an unpermitted awning, a tripping hazard at a fire exit door, unpermitted electrical and plumbing work, and hallway lights not working, among other matters. (See Attach. 1 at A-2-A-3; Caiozzo Decl. ¶¶ 57-100.)

Significantly to the court, Plaintiff concedes all of these administrative cases have been closed and the alleged violations have been addressed to the satisfaction of local authorities. (Ibid.) Plaintiff suggests that Defendants inexcusably delayed in addressing the alleged violations. (Ibid.) Defendants dispute Plaintiff’s assertion. The court finds it unnecessary to resolve the dispute given their closed status in the context of this motion. Having considered all of Plaintiff’s and Defendants’ evidence, the court finds any alleged past delays in addressing the notices of violations in Case Nos. 4 through 9, in themselves or cumulatively with Case Nos. 1 through 3, are not a sufficient basis to appoint a receiver over the Property.

Plaintiff submits a declaration of Certified Public Accountant Jason Rubin regarding Defendants’ alleged failure to produce LLC records on a timely basis. (See Rubin Decl. generally; see also Caiozzo Decl. ¶ 101.) As noted above, Plaintiff’s third cause of action for failure to provide LLC records pursuant to Corporations Code section 17704.10 has been referred to arbitration. Plaintiff has not complied with Code of Civil Procedure section 1281.8 to obtain a provisional remedy of receivership related to such cause of action. Furthermore, Plaintiff has an adequate remedy in the third cause of action to obtain LLC records. A receivership is an excessive and inappropriate remedy for Plaintiff to obtain LLC records.

Based on the foregoing, Plaintiff has not met her burden of proof under Code of Civil Procedure section 564, subdivisions (b)(1) and (9) and has not established that a receivership is necessary to protect the Property. The court acknowledges the administrative and criminal allegations in Case Nos. 1 through 3 are serious and will be addressed by Defendants in the ongoing administrative and criminal proceedings.

Nonetheless, on this evidentiary record, Plaintiff does not demonstrate the underlying violations establish a material and significant risk of harm to the Property, the LLC’s tenants or the public generally. The City is actively involved and monitoring the Property and Managers’ efforts at resolving the violations.

To that end, Defendants have submitted credible evidence they are actively addressing the violations (or alleged violations) in Case Nos. 1 through 3. Plaintiff has not demonstrated Defendants lack the ability and qualifications to respond to and correct any permitting or related issues for Case Nos. 1 through 3 in the administrative process. Moreover, it is not clear from the evidence—including the credible evidence of delays by the City—a receiver would result in a more speedy resolution of the violations. In fact, it is unclear to the court what benefit the Property would obtain from a receiver under the circumstances.

Plaintiff lacks evidence the delays in the permitting process are necessarily, or completely, attributable to Defendants—in fact, the court finds otherwise. Absent additional evidence of potential harm to the Property, the filing of two misdemeanor criminal complaints (where the City has intentionally and knowingly delayed prosecution) alone does not justify a receivership. Given Managers’ active efforts to resolve Case Nos. 1 through 3, the drastic remedy of a receiver is unwarranted here.

Based on the foregoing, the motion to appoint a receivership as well as a preliminary injunction to aid the receiver is DENIED.[15]

[1] Plaintiff’s last name is sometimes spelled “Caoizzo” in her papers. The court uses “Caiozzo,” the spelling used in the petition and her declaration.

[2] Unfortunately, Defendants’ objections are not consecutively numbered. For example, Defendants’ objections for some reason start with objection 2. There are also multiple subparts to objection 22 based on paragraph 22 of Plaintiff’s declaration. While Defendants lodged two objections to the Declaration of Stephen Donell, Defendants labeled them objection 1 and objection 6. For clarity, the court uses the numbering system adopted by Defendants in the objections. To simplify the process, the court requests counsel use sequential numbering with evidentiary objections in the future. (See, e.g., CRC, Rule 3.1354, subd. (b).)

[3] To be clear, objection 22 (a) is sustained.

[4] All evidence and arguments (including foundation and/or authentication for admission of documentary evidence) necessary for Plaintiff to meet her burden of proof should have been developed and included in her moving papers. New evidence is not permitted on reply and for that reason has been excluded. (See Defendants’ objection [actual page 5 at lines 8-17].) Submitting evidence in reply to demonstrate foundation or authenticity for exhibits to which Defendants lodged an objection at the time they filed their opposition papers unfairly deprives Defendants of a right to be heard on that new evidence and deprives them of their right to fully appreciate the extent of Plaintiff’s showing. While the court found Plaintiff’s initial declaration failed to provide foundation or authenticate certain exhibits, the general facts—not opinions—related to this motion are largely undisputed. That is, there is no dispute concerning the City’s involvement with the Property based on building code violations. There is also no dispute about the issues with the Property that require resolution. In the court’s view, much of the “evidence” the parties elected to present to the court merely demonstrates their long-standing feud, is unhelpful to resolution of the dispute and detracts from the issues relevant to the motion.

[5] A provisional remedy is defined to include “Receivers appointed pursuant to Section 564.” (Code Civ. Proc., § 1281.8, subd. (a)(4).)

[6] In her motion, Plaintiff vaguely asserts Defendants have caused the arbitration to be delayed and that she “may” file a motion “that arbitration is waived by delay in commencing it.” (Memo 16:14-20.) Plaintiff has not, however, filed such a motion. Therefore, the court proceeds with this matter in its current procedural posture.

[7] Even assuming Code of Civil Procedure section 1281.8 was completely inapplicable here, the court would reach the same result herein.

[8] While Plaintiff sets forth nine proceedings, it is undisputed only three remain unresolved.

[9] The criminal complaint does not specifically refer to 2699 ½ N. Belden Drive. (Caiozzo Decl. Exh. C.) Nonetheless, the LLC and Managers have not disputed the criminal complaint applies to work performed at this location. (See Opposition 5-7.)

[10] The court sustained evidentiary objections to Defendants’ evidence purporting to reveal representations made by Deputy City Attorney Dennis Kong and the pending criminal case. (Lockard Decl. ¶¶ 4-15.) Plaintiff did not objection to email communications to Defendants’ counsel from the deputy city attorney reflecting the City’s willingness to continue the arraignment “[s]o long as we are updated on progress . . . .” (Lockard Decl. Exh. 9.) The deputy city attorney indicated the City wished to see “affirmative steps to remediate the property.” (Lockard Decl. Exh. 9.) Finally, the deputy city attorney reported: “We understand fully that sometimes the permitting process can be lengthy and delayed in most instances as well as scheduling work.” (Lockard Decl. Exh. 9.)

[11] While the court sustained Defendants’ evidentiary objections to these statements, the court nonetheless considers the claim Defendants’ counsel lied to the court on December 17, 2021.

[12] It is troubling to the court that both Plaintiff’s expert, Taylor, and Plaintiff’s son each attest they took the photographs that comprise Exhibit BB. (Compare Taylor Decl. ¶ 39 with A. Caoizzo Decl. 25:11-14.) Based on the evidence, the court finds the evidence untrustworthy.

[13] Again, even though the court sustained Defendants’ evidentiary objection to Exhibit PP, the court nonetheless considers Plaintiff’s claim based on it.

[14] The awning does not appear to be fabric; it is constructed of stiff, solid material.

[15] In light of this conclusion, the court need not analyze the remaining arguments raised by Defendants against appointment of a receiver.