Judge Thomas D. Long, Case 19STCV27683 2023-03-21 Tentative Ruling

On August 6, 2019, Plaintiff Financial Freedom, a Division of CIT Bank, N.A., filed this action against Defendant William Charles Reese and others, as well as all persons unknown claiming any legal or equitable right, title, estate, lien or interest in the real property commonly known as 11902 & 11904 Elva Avenue, Los Angeles, California 90059 with Assessor’s Parcel ID Number 6148-013-018 (“Property”).

Plaintiff later dismissed all defendants other than William Charles Reese. The Court entered default against William Charles Reese on November 12, 2021.

On November 16, 2021, the Court held a default prove-up hearing and entered an interlocutory judgment for partition by sale. Matthew L. Taylor was appointed as Partition Referee.

On January 12, 2023, the Partition Referee filed a Proof of Publication of the Notice of Sale of Real Property. The Notice complies with the requirements set forth in the interlocutory judgment.

On February 15, 2023, the Partition Referee filed a motion for confirmation of the sale of the Property. No oppositions were filed.

The Court shall order that property be sold and the proceeds be divided in accordance with the parties’ interests in the property as determined in the interlocutory judgment when sale and division of the proceeds would be more equitable than division of the property. (Code Civ. Proc., § 872.820, subd. (b).) In doing so, the Court may appoint a referee and take into account his report. (Ibid.) The referee must give notice of the sale of property according to the Court’s order, with a description of the property, the time and place of sale, and a statement of the principal terms of sale. (Code Civ. Proc., §§ 873.640, 873.650.)

After a sale of property, the referee shall provide a report to the Court that contains a description of the property sold to each purchaser; the name of the purchaser; the sale price; the terms and conditions of the sale and the security, if any, taken; any amounts payable to lienholders; a statement as to contractual or other arrangements or conditions as to agents’ commissions; any determination and recommendation as to opening and closing public and private ways, roads, streets, and easements; and other material facts relevant to the sale and the confirmation proceeding. (Code Civ. Proc., § 873.710.)

The referee, purchaser, or any party may move to confirm or set aside the sale. (Code Civ. Proc., § 873.720.) The Court shall examine the report and witnesses and may confirm the sale notwithstanding a variance from the prescribed terms of sale if to do so will be beneficial to the parties and will not result in substantial prejudice to persons interested in the sale. (Code Civ. Proc., § 873.730, subds. (a)-(b).) The Court may vacate the sale and direct that a new sale be made if it determines that (1) the proceedings were unfair or notice of sale was not properly given, or (2) the sale price is disproportionate to the value of the property. (Code Civ. Proc., § 873.730, subd. (c).)

Upon confirmation of a sale, the Court shall order the referee to execute a conveyance or other instrument of transfer, to collect the proceeds, take security, and perform other acts required to consummate the sale, and the Court may order may direct the referee concerning the distribution, deposit, or securing of sale deposits and sale proceeds. (Code Civ. Proc., § 873.750.)

The Partition Referee explains that he hired agent John D. Martindale, who has extensive experience selling properties through court sales, to market and sell the Property. (Taylor Decl. ¶ 3.) The Property was initially placed on the market in August 2022 and listed through industry-standard methods including in the multilisting service and on websites related to real estate property sales. (Taylor Decl. ¶ 3; Motion at p. 5.) Sales notices were run via publication six times, mailed to each owner or their counsel of record two times, and publicly posted at the property and adjacent public locations twice. (Taylor Decl. ¶¶ 3(a)-(c).)

Prior to listing the Property for sale, the tenants refused to cooperate with the Partition Referee, despite the Partition Referee’s attempts at contact through letters, posted notices, and knocking on the door of the units. (Motion at p. 4.) The Partition Referee has been unable to evict the tenants due to COVID restrictions, so Plaintiff agreed to list the Property for sale with no information available about the tenants or their tenancy. (Motion at pp. 4-5.) The Partition Referee also was not able to provide buyers with the opportunity for an interior inspection of the two units. (Motion at p. 6.)

The Partition Referee received offers from five potential buyers, and after a series of counteroffers, he entered into a sale contact with the highest bidder, American Pacific Investment Group LLC, for $520,000.00. (Taylor Decl. ¶ 6 & Ex. 1.) The buyers have removed all loan and appraisal contingencies, the property is being sold in “as is” condition, and the Partition Referee believes the offer is objectively reasonable in light of a lack of information about the tenants. (Taylor Decl. ¶ 7; Motion at p. 7.) The agent’s commission on the sale is $31,200.00. (Motion at p. 8.) At the time the motion was submitted, there are no overbids submitted to the Partition Referee. (Motion at p. 9.)

The sale involves the entirety of the Property. (Motion at p. 7.) It was a standard commercial sale on CAR form contract titled "CALIFORNIA RESIDENTIAL PROPERTY PURCHASE AGREEMENT AND JOINT ESCROW INSTRUCTIONS" with an addendum relating to sale by court-appointed Partition Referee. (Motion at p. 8 & Ex. 1.) The full amount of purchase price will be deposited into escrow on or before close of escrow. (Motion at p. 8.)

The Partition Referee obtained a preliminary title report for the Property, which discloses no lienholders who will need to be paid from the sale proceeds. (Motion at p. 8 & Ex. 2.) As part of the standard sale transaction, the title insurance company will request that a Statement of Information form be completed for or on behalf of each of the owners. (Motion at p. 8.) Therefore, the proposed order submitted requires the owners to complete such a form and authorizes the Partition Referee to complete it on behalf of the owners who do not complete the form. (Motion at p. 8.)

The Court finds that the Partition Referee has complied with the statutory requirements, and the sale price for the Property is fair and reasonable.

The Motion for Order for Confirmation of Sale of Real Property is GRANTED. The Court will sign the proposed order.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are encouraged to appear remotely and should be prepared to comply with Dept. 48’s new requirement that those attending court in person wear a surgical or N95 or KN95 mask.

Hon. Thomas D. Long

Judge of the Superior Court