Judge: Robert B. Broadbelt, Case: 21STCV06598, Date: 2023-04-05 Tentative Ruling

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Case Number: 21STCV06598    Hearing Date: April 5, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Plaintiff and cross-defendant Jesika Yeroomian, individually as Trustee of the Yeroomian Living Trust dated December 18, 2018, and as Trustee derivatively on behalf of Ocean Front Urgent Care, P.C.

RESPONDING PARTY:        Defendant and cross-complainant Dr. Mostafa Rahimi

Motion for Order Appointing Receiver and For a Preliminary Injunction

The court considered the moving, opposition, and reply papers filed in connection with this motion.

EVIDENTIARY OBJECTIONS

The court rules on defendant and cross-complainant Dr. Mostafa Rahimi’s evidentiary objections and requests to strike directed to the declaration of Jesika Yeroomian as follows:

Objections Nos. 1-2, 4, and 8-11 are sustained.

Objections Nos. 3 and 5-7 are overruled.

DISCUSSION

Plaintiff and cross-defendant Jesika Yeroomian, individually as trustee of the Yeroomian Living Trust dated December 18, 2018, and as trustee derivatively on behalf of Ocean Front Urgent Care, P.C. (“Yeroomian”) moves the court for an order (1) appointing a receiver to take possession and control of all assets, together with all income, revenues, profits, proceeds, and payments therefrom (the “Receivership Property”) and to operate the business of Ocean Front Urgent Care, P.C. (“Ocean Front”), and (2) issuing a preliminary injunction preventing any parties to this action, including defendant and cross-complainant Dr. Mostafa Rahimi (“Dr. Rahimi”) and their officers, agents, representatives, employees, and any other person or entity acting on their behalf, from doing any of the following: (i) committing or permitting any waste of the Receivership Property, or any part thereof, or removing, transferring, encumbering, or otherwise disposing of the Receivership Property; (ii) directly or indirectly interfering with the discharge of the receiver’s duties or the possession and operation or management of the Receivership Property; (iii) expending, disbursing, transferring, assigning, selling, conveying, devising, pledging, mortgaging, creating a security interest in, encumbering, concealing, or in any manner whatsoever, dealing in or disposing of the whole, or any part of the Receivership Property; (iv) withholding any Receivership Property, including any assets, books, records, or funds from the receiver; and (v) doing any act which will, or which will intend to, impair, defeat, divert, prevent, or prejudice the preservation of the Receivership Property.  Yeroomian moves for this relief pursuant to Code of Civil Procedure section 564, subdivisions (b)(1) and (b)(9).

“‘A receiver is an agent and officer of the court, and is under the control and supervision of the court.  [Citations.]’”  (Southern California Sunbelt Developers, Inc. v. Banyan Limited Partnership (2017) 8 Cal.App.5th 910, 922.)  “‘The receiver is an agent of the court and not of any party, and as such:  (1) Is neutral; [¶] (2) Acts for the benefit of all who may have an interest in the receivership property; and [¶] (3) Holds assets for the court and not for [any party].’  [Citations.]  The receiver is obligated to preserve and manage the property during the course of the receivership.  [Citation.]”  (Ibid.) 

Code of Civil Procedure section 564, subdivisions (b)(1) and (9) provide that the court may appoint a receiver in a pending action in the following cases:   

(1)  In an action . . . between partners or others jointly owning or interested in any property or fund, on the application of the plaintiff, . . . 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. 

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.  (Barclays Bank of California v. Superior Court (1977) 69 Cal.App.3d 593, 597; City & County of S.F. v. Daley (1993) 16 Cal.App.4th 734, 744.)  “The remedy is an extraordinary and harsh one, to be allowed cautiously and only where less onerous remedies would be inadequate or unavailable.  [Citation.]”  (Cohen v. Herbert (1960) 186 Cal.App.2d 488, 495.)  Further, a party to an action should not be “subjected to the onerous expense of a receiver, unless . . . his appointment is obviously necessary to the protection of the opposite party . . . .”  (De Leonis v. Walsh (1905) 148 Cal. 254, 255.)   

“The power of a court of equity to appoint a receiver of a corporation . . . appears to be settled; but it is equally well settled that this power is subject to certain limitations, namely, it must always be exercised with great caution, and only for such time and to such extent as may be necessary to preserve the property of the corporation and protect the rights and interests of its stockholders [or creditors] . . . [.]”  (In re Jamison Steel Corp. (1958) 158 Cal.App.2d 27, 36 [quotations omitted].)  “[A]ppointment of a receiver may well result in serious injury to the name and good will of a solvent, going concern, and . . . if there is any other adequate remedy, which is less severe and which will protect the rights of the parties, a court should not take the drastic step of appointing a receiver.”  (Ibid.) 

Yeroomian contends that appointment of a receiver is warranted because (1) although she has an interest in the profits of Ocean Front as owner of decedent Dr. Valod Yeroomian Massihi’s 50 percent interest in Ocean Front, Dr. Rahimi has refused to share in the corporate profits, to permit full access to corporate records, and to repurchase Dr. Massihi’s interest at fair value; (2) she alleges that Dr. Rahimi is diverting the profits from Ocean Front to fund another business that he owns; and (3) much of Ocean Front’s income consists of cash, which is easy to divert.

The court finds that Yeroomian has not met her burden to show (1) that her interest in the property or fund of Ocean Front is in danger of being lost, removed, or materially injured (Code Civ. Proc., § 564, subd. (b)(1)); (2) that a receivership is necessary to preserve her property or rights (Code Civ. Proc., § 564, subd. (b)(9)); and (3) that other, less severe remedies are inadequate so as to justify the appointment of a receiver.  The court therefore exercises its discretion to deny Yeroomian’s request for appointment of a receiver.

First, Yeroomian has not submitted any admissible evidence showing that Dr. Rahimi is diverting funds from Ocean Front to himself or to fund any other business.  The court notes that, even if it had not sustained Dr. Rahimi’s objection to that allegation in Yeroomian’s declaration, her statement that “Dr. Rahimi could have been charging [Ocean Front] for medical supplies which are actually used at his San Pedro practice” is insufficient to show that Dr. Rahimi has engaged, or will engage, in such conduct.  (Yeroomian Decl., ¶ 15 [emphasis added].)  Moreover, Dr. Rahimi has submitted evidence showing that he does not “have another medical practice nor office in San Pedro.”  (Dr. Rahimi Decl., ¶ 52.)  

Second, even if the court had not sustained Dr. Rahimi’s objection to Yeroomian’s statement that Ocean Front received much of its income in cash, such an allegation is similarly insufficient to show that Dr. Rahimi has, or will, diverted funds from Ocean Front.  The court therefore finds that Yeroomian has not met her burden to show “that the property or fund is in danger of being lost, removed, or materially injured.”  (Code Civ. Proc., § 564, subd. (b)(1).)

Third, although Yeroomian states, in conclusory fashion, that Dr. Rahimi has denied her full access to Ocean Front’s corporate records, she does not provide any evidence (1) that she has made a request for those records, (2) if so, when, and (3) how Dr. Rahimi responded.  (Yeroomian Decl., ¶ 13.)  Finally, the court finds that Yeroomian has not met her burden of showing that other, less severe remedies would be inadequate or unavailable, and that only the “extraordinary” remedy of a receivership is necessary.  (Cohen, supra, 186 Cal.App.2d at p. 495 [“The remedy is an extraordinary and harsh one, to be allowed cautiously and only where less onerous remedies would be inadequate or unavailable”].)  For example, Yeroomian has not shown that she is unable to obtain the corporate records of Ocean Front by (1) serving on Dr. Rahimi an inspection demand pursuant to Code of Civil Procedure section 2031.010 et seq., and then conducting an accounting, or (2) serving a written demand upon Ocean Front for the accounting books and records pursuant to Corporations Code section 1601. 

The court therefore finds that Yeroomian has not shown that a receivership is “necessary to preserve the property or rights of any party.”  (Code Civ. Proc., § 564, subd. (b)(9).)

Yeroomian’s request for a preliminary injunction assumes the appointment of a receiver.  (Mot., p. 12:8-10 [“Plaintiff requests preliminary injunctive relief as to all parties who assist the receiver in carrying out the responsibilities of the receivership”].)  In light of the court’s order denying Yeroomian’s request for a receivership, the court denies Yeroomian’s request for a preliminary injunction.

ORDER

The court denies Plaintiff and cross-defendant Jesika Yeroomian, individually as trustee of the Yeroomian Living Trust Dated December 18, 2018, and as trustee derivatively on behalf of Ocean Front Urgent Care, P.C.’s motion for an order appointing receiver and for a preliminary injunction.

The court orders defendant and cross-complainant Dr. Mostafa Rahimi to give notice of this ruling.

IT IS SO ORDERED.

DATED:  April 5, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court