Judge: Nick A. Dourbetas, Case: 2019-01086840, Date: 2022-09-09 Tentative Ruling
Motion to Appoint Receiver
Plaintiffs Scott M. Rowe and Nicola J. Rowe’s motion to appoint receiver is DENIED.
Receivers are agents of the court and may be appointed only when authorized by statute. (Marsch v. Williams (1994) 23 Cal.App.4th 238, 246.)
Plaintiffs have brought this motion pursuant to California Rules of Court, rule 3.1177, Code of Civil Procedure section 564, subdivisions (a) and (b)(3), Code of Civil Procedure section 708.620, and Civil Code section 3439.07. (Notice of Motion & Motion, p. 2; Motion P&As at pp. 12-15.)
None of these authorities provide for a receiver in this case, at this time.
Rule 3.1177 of the California Rules of Court does not provide for the appointment of a receiver; it merely allows the parties to nominate persons for the appointment. (See Cal. Rules of Court, rule 3.1177.)
Plaintiffs also rely on Code of Civil Procedure section 564, subdivisions (a) and (b)(3), where it provides for the appointment of a receiver “[a]fter judgment, to carry the judgment into effect.” (Motion Memo. P&As at p. 13.) This section does not empower the court to appoint a receiver at this time, because a judgment has not yet been entered in this case.
The subject Riverside property is owned by Ibrahim Harb (Harb). (Hilton Decl. ¶¶ 3-4, Exs. B-C.) The subject Ladera Ranch property is owned by Samer Kurd-Misto (Samer). (Id. ¶ 2, Ex. A.) Nothing shows plaintiffs have a judgment against either of these record title holders.
Plaintiffs’ 1/31/20 judgment was obtained in a separate action and confirms an underlying arbitration award against only Bahjat Kurd-Misto (Bahjat), individually and as Trustee of the Kurd-Misto Family Trust (Trust). (Pltfs. Index of Exhibits (IOE) at Ex. 6.) Harb and Samer are third parties to the 1/31/20 judgment, and plaintiffs do not yet have a judgment against either of these record title holders.
Code of Civil Procedure section 708.620 also requires a judgment, which has not yet been entered in this case.
Civil Code section 3439.07 provides for a receiver subject to, inter alia, the limitations set forth in section 3439.08. (Civ. Code, § 3439.07, subd. (a)(3)(B).)
One of the limitations in section 3439.08 is that “[a] transfer ... is not voidable ... against a person that took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee....” (Civ. Code, § 3439.08, subd. (a).)
Whether the transferee defendants took the subject property in good faith and for a reasonably equivalent value is still at issue in this case. Until a final determination is made as to whether the transferees/record title holders took the properties in good faith and for a reasonably equivalent value, the court cannot appoint a receiver under section 3439.07 because its power to do so is subject to a finding that they did not. (See Civ. Code, §§ 3439.07, subd. (a), 3439.08, subd. (a).)
Finally, for the first time on reply, plaintiffs also argue that they are entitled to the appointment of a receiver pursuant to Code of Civil Procedure section 564, subdivision (b)(9). Plaintiffs did not raise this statutory ground for relief in its initial moving papers.
The court refuses to consider this new statutory ground for relief, raised for the first time on reply. “[P]oints raised in a reply brief for the first time will not be considered unless good cause is shown for the failure to present them before.” (Balboa Ins. Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010; accord, Browne v. County of Tehama (2013) 213 Cal.App.4th 704, 720, fn. 10.) Plaintiffs have failed to so much as mention, much less demonstrate, good cause for their failure to raise this ground for relief in their initial moving papers.
This is especially prejudicial here given the reach of this statutory catch-all ground for relief and the fact that the appointment of a receiver is at stake. (See Medipro Medical Staffing LLC v. Certified Nursing Registry, Inc. (2021) 60 Cal.App.5th 622, 628 [a receivership is a harsh, time-consuming, expensive and potentially unjust remedy].)
Moreover, even if plaintiffs had properly raised this ground for relief, which they have not, it would fail in any event. Plaintiffs argue a receiver is necessary to preserve the properties and “prevent further waste” (see Reply at pp. 6-7), but plaintiffs have provided no evidence of any need to preserve the Riverside property, and the only evidence of any potential “waste” with respect to the Ladera Ranch property consists of less than $30,000 in outstanding property taxes. Appointing a receiver would easily cost the parties more than twice that amount for rudimentary property management services and far outpace any penalties assessed by the OC Treasurer-Tax Collector. The only other “waste” that plaintiffs complain of is the fact that Samer is living “rent free” at the property, but there is no reason why a property owner should have to pay rent to himself to live at his own property. In sum, the only potential waste here consists of less than $30,000 in property taxes. This alone does not justify the appointment of a receiver.
The court declines to rule on the parties’ respective requests for judicial notice and objections, as they are not material to the disposition of this motion.
Plaintiffs shall give notice.