City of Santa Clarita and the People of the State of California v. 25046 Atwood Boulevard

(Chatsworth Courthouse: Dept. F46) August 20, 2026 DEPARTMENT F46 LAW AND MOTION RULINGS Call the Courtroom Assistant at 818-576-8430 prior to 4:30 p.m. on the date prior to the hearing, or inform the Courtroom Assistant upon checking in.

Hearing Date: August 20, 2026 Case Number: 20CHCV00724 RECEIVER'S MOTION FOR PERSONAL ORDER AGAINST GUSTAVO CARDENAS FOR PAYMENT OF UNPAID RECEIVERSHIP FEES AND COSTS Motion filed on June 5, 2026. MOVING PARTY: Former Court-Appointed Receiver Mark S. Adams and California Receivership Group, Inc. (Receiver) RESPONDING PARTY: Party in Interest Gustavo Cardenas (Cardenas) NOTICE: OK. RELIEF REQUESTED: A personal monetary order requiring Cardenas to pay $231,834.50 in unrecovered receivership fees and costs, jointly and severally with Diabio LLC and Robert Rossil.

RULING: Granted. BACKGROUND Plaintiffs City of Santa Clarita and the People of the State of California filed the Complaint on November 17, 2020, to abate a public nuisance at 25046 Atwood Boulevard, Santa Clarita, California (Atwood property). The Court appointed Mark S. Adams of California Receivership Group, Inc. as receiver for the Property on July 23, 2021. On October 21, 2021, the Court confirmed the sale of the Property to Diabio LLC and Gustavo Cardenas. A grant deed recorded on January 19, 2022, conveyed an undivided 50 percent interest to Diabio LLC and an undivided 50 percent interest to Cardenas as tenants in common.

On August 2, 2024, the Receiver filed a Motion for Discharge, Final Report, and Final Accounting. On October 31, 2024, the Court entered an Order Discharging Receiver. The Court approved the Final Report and accounting. Paragraph 9 imposed joint and several personal liability on Diabio LLC, Robert Rossil, and Cardenas for $231,834.50 in unpaid receivership fees and costs. Paragraph 10 separately imposed $50,990.12 against Rossil on a promissory note. On April 29, 2026, the Court granted Cardenas's Motion to Set Aside or Vacate Judgment in part.

The Court vacated the October 31, 2024 Order as to Cardenas only, and only to the extent the Order imposed personal monetary liability on him or authorized enforcement against him. The Court left the Order otherwise unaffected. The ruling was without prejudice to a properly noticed motion seeking personal liability against Cardenas for receivership fees and costs. The Receiver filed the present Motion on June 5, 2026. Cardenas filed an Opposition, Request for Judicial Notice, and evidentiary objections on August 6, 2026.

The Receiver filed a Reply, reply declaration, and opposition to the evidentiary objections on August 13, 2026. Cardenas filed

an objection to new evidence and argument submitted with the Reply on August 17, 2026. REQUEST FOR JUDICIAL NOTICE The Request for Judicial Notice is granted. The Court takes judicial notice of Exhibits A, K, L, M, N, and O as official and recorded records, and of Exhibits B through J and P as records of this Court. (Evid. Code, Sec.Sec. 452, subds. (c), (d), (h), 453.) Judicial notice extends to the existence, filing or recordation, and legally operative content of those documents, but not to the truth of disputed factual assertions contained in them.

OBJECTION TO NEW MATTER SUBMITTED ON REPLY Cardenas's objection is sustained in part. The Court does not consider the imputed-notice theory first raised in the Reply, paragraph 4 of the Reply Declaration of Mark Adams, or Exhibit 2 to that declaration. (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764.) The objection to paragraph 3 and Exhibit 1 is overruled. Exhibit 1 includes the Sale Addendum already submitted with the moving papers, together with related addenda from the same purchase transaction.

Cardenas's alternative request for leave to file a sur-reply is denied as moot. CARDENAS'S EVIDENTIARY OBJECTIONS Objection Nos. 1, 2, 3, and 5 are sustained. Objection No. 4 is overruled. Objection No. 6 is sustained to the extent the challenged statement attributes all nonperformance and resulting costs personally to Cardenas, and is otherwise overruled. The Court does not rely on the assertions that Cardenas owned or controlled Diabio LLC, refused to subordinate his interest, opposed the later sale, or personally managed the remediation.

DISCUSSION Health and Safety Code section 17980.7, subdivision (c)(15), provides that, "[u]pon the request of a receiver, a court may require the owner of the property to pay all unrecovered costs associated with the receivership in addition to any other remedy authorized by law." For purposes of section 17980.7, "owner" includes "any successor in interest who had actual or constructive knowledge of the notice, order, or prosecution." (Sec. 17980.7, subd. (f).) A successor must have the required knowledge when the interest is acquired. (Kaura v.

Stabilis Fund II, LLC (2018) 24 Cal.App.5th 420, 431.) Section 17980.7 also preserves an owner's procedural due process rights, including notice of the claimed violation and an adequate and reasonable opportunity to comply with orders issued by the enforcement agency or court. (Sec. 17980.7, subd. (c)(14); City of Santa Monica v. Gonzalez (2008) 43 Cal.4th 905, 928.) Receivership expenses generally are paid from the receivership estate, but the Court has broad discretion to determine who should bear those expenses according to the circumstances. (City of Chula Vista v.

Gutierrez (2012) 207 Cal.App.4th 681, 685-686.) Subdivision (f)'s successor-in-interest definition applies here. Cardenas acquired an undivided 50 percent legal interest in the Atwood property as a tenant in common with Diabio LLC. (Cardenas Decl. P. 3; Cardenas RJN, Ex. A.) Cardenas does not dispute that he signed the Sale Addendum. (Opp. at 8.) The Addendum states that the Buyer had been provided the abatement

order, notice of violations, and July 23, 2021 Order Appointing Receiver, and that the Buyer agreed to complete the necessary repairs. (Adams Decl., Ex. 1, P.P. 4-6.) Cardenas therefore had the knowledge subdivision (f) requires when he acquired his interest. (Kaura, supra, 24 Cal.App.5th at p. 431.) The Addendum required the Buyer to take substantial steps toward remediation within 30 days after close of escrow and to complete the necessary repairs within 180 days after permits were pulled. It advised that failure to meet those deadlines could result in direct liability for further receivership fees and costs after review by the appointing Court. (Adams Decl., Ex. 1, P.P. 7, 9.)

The required remediation was not timely completed. The receivership thereafter resumed control, and the abatement and rehabilitation were completed in December 2023. (Cardenas RJN, Ex. I.) The Addendum establishes Cardenas's knowledge of the existing violations and receivership, the remediation obligations undertaken by the Buyer, and the express warning that nonperformance could result in further receivership fees and costs. (Adams Decl., Ex. 1, P.P. 4-9.) Section 17980.7, subdivision (c)(15), supplies the statutory authority to require payment of unrecovered receivership costs.

Cardenas's notice argument does not alter this conclusion. Before taking title, Cardenas acknowledged receipt of the abatement order and notice of violations and agreed to specified periods for undertaking and completing the remediation. (Adams Decl., Ex. 1, P.P. 4-9.) The April 29, 2026 Order addressed defective service of the prior personal-liability motion. (Cardenas RJN, Ex. H.) The present Motion is properly noticed. Cardenas contends that he was a passive financial investor and did not manage Diabio LLC, direct the remediation, or obstruct the Receiver. (Cardenas Decl.

P.P. 2-5, 11-16.) Those circumstances do not preclude relief. Cardenas voluntarily acquired title during the receivership with knowledge of the outstanding abatement obligations, signed the Addendum under which the Buyer undertook those obligations, and was warned that nonperformance could result in further receivership fees and costs. (Adams Decl., Ex. 1, P.P. 4-9.) The required remediation was not timely completed, and the Receiver thereafter completed the abatement. (Cardenas RJN, Ex. I.) City of Chula Vista v.

Gutierrez (2012) 207 Cal.App.4th 681 does not require a different result. The version of section 17980.7 considered there did not authorize direct recovery of receivership expenses from an owner. (Id. at pp. 688-689.) Current subdivision (c)(15) expressly authorizes the Court to require an owner to pay all unrecovered costs associated with the receivership. The equitable circumstances also differ because Cardenas purchased directly from the receivership with knowledge of the outstanding abatement obligations, and the Buyer thereafter failed to timely complete the required remediation.

The Court has independently reviewed the amount sought. The May 2024 Monthly Accounting reported $231,381.00 in unpaid receivership fees through that reporting period and stated that the supporting invoices were contained in that and prior monthly accountings. The Final Report subsequently identified $231,834.50 as the outstanding amount owed to the Receiver's office. The $100,000 deed of trust does not form part of the $231,834.50 sought from Cardenas. The Final Report separately identifies the

Rossil loan and accrued interest as $50,990.12. (Cardenas RJN, Ex. M; Ex. E, P.P. 55, 58.) The foreclosure evidence does not establish a basis to disallow the Receiver's documented fee balance. The Final Report, monthly accountings, and supporting invoices identify the services performed, time charged, and applicable rates. (Cardenas RJN, Exs. E, I.) The Buyer's failure to timely complete the required remediation necessitated the Receiver's continued involvement, including resuming control of the Atwood property, completing the abatement, maintaining the property, and carrying the receivership through the subsequent sale and discharge. (Adams Decl.

P.P. 9-10; Cardenas RJN, Ex. I.) The Court finds the $231,834.50 unrecovered balance adequately supported and reasonable. Considering the circumstances as a whole, the Court grants the Receiver's request to impose the $231,834.50 unrecovered receivership obligation on Cardenas. CONCLUSION The Motion is granted. Pursuant to Health and Safety Code section 17980.7, subdivision (c)(15), Gustavo Cardenas is ordered to pay $231,834.50 in unrecovered receivership fees and costs, jointly and severally with Diabio LLC and Robert Rossil.

Paragraph 9 of the October 31, 2024 Order remains in effect against Diabio LLC and Robert Rossil for the same obligation. Any amount paid or collected from Cardenas, Diabio LLC, or Rossil shall be credited against the same unpaid balance. The Receiver may obtain only one satisfaction of that obligation. Cardenas is not liable for the separate $50,990.12 promissory-note obligation imposed against Rossil. The Receiver is to give notice. | Home -->)" -->