Judge: Thomas D. Long, Case: 22STCV03760, Date: 2023-08-22 Tentative Ruling

Case Number: 22STCV03760    Hearing Date: August 22, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On January 30, 2023, following a bench trial, the Court entered an interlocutory judgment for partition by sale of the property commonly known as 440 South Wilton Place, Los Angeles, CA 90020 (“Property”).  On February 16, 2023, the parties stipulated to the appointment of Kevin A. Singer as Partition Referee.

On July 24, 2023, the Partition Referee filed a motion for confirmation of the sale of the Property.  Defendant Old Republic National Title Insurance Company (“Old Republic”) filed an objection.

LEGAL STANDARD

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.)

DISCUSSION

The Partition Referee explains that he filed and served his Method of Sale Report on April 27, 2023, in which he recommended listing the Property at the initial listing price of $2,400,000, with a four-percent commission to Broker Nicole Apostolos of Equity Union Commercial.  (Singer Decl. ¶ 3.)  After receiving no objections, the Property was listed for sale on May 15, 2023.  (Singer Decl. ¶ 3.)  By May 31, 2023, the Partition Referee had received nine offers, and he directed all prospective purchasers to submit their best and highest offers.  (Singer Decl. ¶ 4.)  He received three non-contingent counteroffers, countered those offers at $2,250,000, and received one acceptance from 9055 Orion Partners LLC.  (Motion at p. 3; Singer Decl. ¶ 4.)  The sale is a standard commercial sale on California Association of Realtors form contract titled “RESIDENTIAL INCOME PURCHASE AGREEMENT AND JOINT ESCROW INSTRUCTIONS” with an addendum relating to sale by court-appointed Partition Referee.  (Singer Decl., Ex. 2.)

The Partition Referee will give notice of the sale and confirmation hearing according to statute, and he provides a copy of the notices.  (Singer Decl. ¶ 6 & Exs. 4-5.)

The Partition Referee obtained a preliminary title report for the Property, and he plans to pay all tax liens and a $400,000 recorded deed of trust through close of escrow.  (Singer Decl. ¶ 7 & Ex. 6.)  There are other lis pendens and others liens/encumbrances that he is requesting be stripped so the sale may close.  (Singer Decl. ¶ 7.) 

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

Old Republic objects to the extent that the motion seeks to strip its first priority lien against the Property.  An April 2, 2018 Order recorded in the Los Angeles County Recorder’s Office as Instrument No. 20180314880 provides that (1) Old Republic holds a first priority lien against the Wilton Place; (2) the lien is junior only to real property taxes but senior to and not subject to any costs of administration or fees, and exclusive of the customary and usual costs of sale; and (3) the lien must be paid from the proceeds of sale of the Property.  Old Republic and Defendant Brandon Min reached a settlement tin which Brandon Min confirmed the Old Republic’ lien encumbers 100% of the Property.  (Objection at p. 4.)  According to Old Republic, its lien must be paid from escrow after payment of tax liens but before payment of any other lien, including the $400,000 secured by a deed of trust recorded by Defendant Jeffrey Siegel.

In reply, the Partition Referee explains that Old Republic’s settlement agreement with Brandon Min is not referenced in the Property’s preliminary title report, and he became aware of the Settlement Agreement for the first time after receiving and reviewing Old Republic’s objections.  (Singer Reply Decl. ¶ 3.)  The Partition Referee admits that Old Republic’s lien “raises complicated issues of lien priority” due to how it is recorded.  (Singer Reply Decl. ¶ 4.)  He intends to work with the other parties to determine if the parties will stipulate to a manner of distribution.  (Singer Reply Decl. ¶ 5.)  The Court will continue the hearing to allow for such a stipulation or supplemental briefing.

Old Republic also objects to the extent that any party is seeking an order distributing any funds from the sale directly to non-party Chris Min.  In reply, the Partition Referee declares that he will not distribute the Property’s net sale proceeds absent further instructions from the Court, including making any distributions to non-party Chris Min.  (Singer Reply Decl. ¶ 2.)

CONCLUSION

The Motion to Confirm Sale of Real Property is CONTINUED to ___________.

The parties are ordered to meet and confer regarding the procedure for paying Old Republic’s lien.  If the parties agree, they should submit a stipulated proposed order no later than ________.  If the parties cannot agree, then the Partition Referee and Old Republic should file and serve supplemental briefs no later than ________.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit.  If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

         Dated this 22nd day of August 2023