City of Norco v. Rodriguez CA4/2 (2020) · DecisionDepot
City of Norco v. Rodriguez CA4/2
California Court of Appeal Sep 14, 2020 No. E071911Unpublished
Filed 9/14/20 City of Norco v. Rodriguez CA4/2 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
CITY OF NORCO et al.,
Plaintiffs and Respondents, E071911
v. (Super.Ct.No. RIC1709081)
MARTIN RODRIGUEZ, OPINION
Defendant and Appellant;
CALIFORNIA RECEIVERSHIP GROUP, PBC, as Receiver, etc.,
Respondent.
APPEAL from the Superior Court of Riverside County. Sunshine S. Sykes, Judge.
Affirmed.
Baker Law Group and John H. Baker, for Defendant and Appellant Martin
Rodriguez.
Harper & Burns and John R Harper, for Plaintiffs and Respondents City of Norco
et al.
1
California Receivership Group, Thomas A. Yatteau, and Mark S. Adams, for
Respondent California Receivership Group, PBC.
Defendant and appellant Martin Rodriguez appeals from the trial court’s order
finding him personally liable for $48,000 in expenses stemming from a receivership.
In 2005, Rodriguez applied for a residential building permit from plaintiff and
respondent City of Norco (the City). He received the permit in 2008, and the permit
expired in 2014. In 2015 and May 2016, the City inspected a partially constructed
residence Rodriguez built on his property—the residence was never completed—and
issued citations for state and local building code violations.
In August 2016, the City issued Rodriguez—who is not a licensed contractor—
another residential building permit for the same property. When that permit expired in
February 2017, the City again inspected the property and, according to a later court filing
the City submitted, “red tagged the partially constructed residence . . . as unsafe and
dangerous because of numerous health and safety violations.” The City noted dozens of
violations of state and local laws and concluded that the property was “uninhabitable, 1 dangerous, and an immediate detriment to public safety.” The City issued a “Notice and
1 The violations included lack of heating and electrical lighting; infestation of insects, vermin, or rodents; lack of connection to a sewage system; insufficient vertical supports; unsafe and substandard wiring, plumbing, and vents; and faulty weather protection.
2
Order to Repair or Abate” and, after a month had passed with no remediations made,
initiated this action and sought the appointment of a receiver, which the trial court
granted.
The receiver, respondent California Receivership Group, PBC (Receiver),
removed Rodriguez and his family, who had been living in two recreational vehicles on
the property and using an unpermitted outhouse, from the property. The Receiver
recommended that the unfinished house be demolished. Although there were initial
concerns that an older, completed residential structure on the same property crossed over
onto an adjacent parcel—which would mean that both houses would need to be
demolished if the parcels ended up with different owners—a boundary survey later
revealed that the older house was located entirely on Rodriguez’s parcel. The Receiver
also recommended that the outhouse, along with some storage sheds, be demolished as
well. Although the family was allowed to remove its personal property in November
2017, by early 2018, items such as building materials, cabinets, furniture, and inoperable
vehicles still remained on the property. As the Receiver later informed the trial court,
“[t]his led to increased on-site security costs to ensure the valuables were not stolen,
increased [Receiver] time to have a low-level employee on-site, [and] increased
construction costs to ultimately remove these items.”
Most of the structures were demolished on February 28, 2018, and the property,
which still included the older, finished house, was ultimately sold for $275,000. The
Receiver then filed a motion for discharge; in it, the Receiver stated that sale proceeds
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were insufficient to cover remaining costs, estimated that there remained “approximately
$48,000 in unpaid City and receivership fees and costs,” and requested an order holding
Rodriguez personally liable for that amount. The trial court discharged the Receiver and
found Rodriguez personally liable for the $48,000.
II. ANALYSIS
“It has long been recognized that a receiver is an agent and officer of the
appointing court. [Citations.] As an officer of the court, a receiver is not an agent of any
particular party to the action, but represents all persons interested in the property.
[Citation.] Property in receivership remains under the court’s control and continuous
supervision, and the importance of such supervision cannot be overstated. [Citation.]”
(City of Santa Monica v. Gonzalez (2008) 43 Cal.4th 905, 930 (Santa Monica).)
“Receivers are entitled to compensation for their own services and the services
performed by their attorneys. [Citation.] Generally, the costs of a receivership are paid
from the property in the receivership estate. [Citations.] However, courts may also
impose the receiver costs on a party who sought the appointment of a receiver or
‘“apportion them among the parties, depending upon circumstances.”’ [Citation.] Courts
are vested with broad discretion in determining who is to pay the expenses of a
receivership, and the court’s determination must be upheld in the absence of a clear
showing of an abuse of discretion. [Citations.]” (City of Chula Vista v. Gutierrez (2012)
207 Cal.App.4th 681, 685-686 (Chula Vista).)
4
Rodriguez first contends that the appropriate standard of review is de novo
because, he asserts, the “operable facts of this case are not disputed” and because a
review of the bills “requires an interpretation of rules.” Not so. For one, the fact that
some interpretation of legal rules may be involved does not turn the standard of review
into a de novo one, as such a rule would make the standard of review in virtually every
case de novo. Moreover, Rodriguez disputes numerous operable facts here. He
contends, for example, that reversal is required because the Receiver “grossly
mismanaged its assets,” and he characterizes the Receiver’s fees as “excessive.” Even
unimportant details are contested, such as his characterization that the unfinished and
demolished house, shown in the footnote below, was a “two-story home with an attic” as 2 opposed to a three-story home exceeding the scope of his permits.
2
5
In any event, “[i]t is settled that fees awarded to receivers are in the sound
discretion of the trial court and in the absence of a clear showing of an abuse of
discretion, a reviewing court is not justified in setting aside an order fixing fees.”
(People v. Riverside University (1973) 35 Cal.App.3d 572, 587.) Accordingly, we review
for an abuse of discretion here.
On the merits, Rodriguez contends that the Receiver failed to act neutrally because 3 it never obtained an expert opinion on whether the house needed to be demolished. The
lack of an expert opinion here, however, does not mean the trial court abused its
discretion in approving the demolition, as the City itself “red tagged” the building as
“unsafe and dangerous” and characterized it as “an immediate detriment to public
safety.” This, coupled with the undisputed fact that the wooden frame of the house had
been exposed to the weather for eight years, is enough to support the trial court’s
discretion here, even though a contractor hired by Rodriguez opined that the building was
structurally sound. This is because “‘[w]hen two or more inferences can reasonably be
deduced from the facts, the reviewing court has no authority to substitute its decision for
that of the trial court.’” (Walker v. Superior Court (1991) 53 Cal.3d 257, 272.)
Rodriguez also asserts that the Receiver did not act neutrally because it “misled
the court by falsely saying that the foundation had never been inspected when in fact it
3 Although Rodriguez does not directly contend on appeal that the house should not have been demolished—a result we cannot undo—we consider the question as indirectly bearing on whether the Receiver’s expenses, such as demolition costs, were reasonable.
6
had been both inspected and approved.” This is an incomplete characterization of the
record. An earlier report from the Receiver stated that the house’s foundation had never
been inspected, but in a later report filed a month before demolition, the Receiver both
corrected the record and noted the parties’ agreement that the foundation would not be
demolished. Rodriguez fails to demonstrate either how the first statement was anything
more than an inadvertent oversight on the Receiver’s part or how this could have affected
the trial court’s decisions. As such, we have no basis to conclude that the Receiver was
improperly biased or that, even if it were, that the trial court’s decision to approve
demolition (which, by stipulation, did not include the foundation) was tainted as a result.
Rodriguez next contends that he should not have to pay for the Receivership’s fees
because he did not receive any benefit from it. To support this, Rodriguez cites Chula
Vista, where the Court of Appeal stated that “[i]n considering the appropriate source for
the compensation [of receivership fees], a relevant factor is whether the party to be
charged obtained a benefit from the receiver’s services.” (Chula Vista, supra, 207
Cal.App.4th at p. 686.) The receipt of a benefit is only one, nonexclusive factor to
consider, however, and nothing in Chula Vista stands for the proposition that the lack of a
direct benefit can preclude personal liability. To the contrary, the Health and Safety
Code provision addressing the appointment of a receiver in circumstances such as these
authorizes expense recovery from the property owner so long as the receiver makes a
request and the court grants it. (See Health & Saf. Code, § 17980.7, subd. (c)(15) [“Upon
the request of a receiver, a court may require the owner of the property to pay all
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unrecovered costs associated with the receivership in addition to any other remedy
authorized by law”].) This especially makes sense where, as here, Rodriguez’s delay in
removing his personal property caused the Receiver to incur additional expenses.
Rodriguez argues that reversal is required because the Receiver “grossly
mismanaged its assets.” In support, Rodriguez notes that a September 2017 report from
the Receiver stated that $136,100 was the “maximum amount[] anticipated” for the
demolition, even though the total expenses ultimately approximated $253,000. The fact
that actual costs ended up being significantly higher than estimated costs, though, is
hardly shocking for a project of this size, and it does not by itself show that the Receiver
mismanaged its assets. Moreover, the only specific example Rodriguez raises of a line
item disparity is for one we have already addressed. Rodriguez states that “there is no
explanation given for the security costs rising an exorbitant amount—from $700 per
week in September-November of 2017 to four times that—amounting to $2,800 per week
from mid-December to early March.” Far from there being no explanation, however, in
its motion for discharge, the Receiver specifically stated that Rodriguez’s failure to
remove his personal property in November 2017 “led to increased on-site security costs
to ensure the valuables were not stolen, increased [Receiver] time to have a low-level
employee on-site, [and] increased construction costs to ultimately remove these items.”
With Rodriguez raising no other concerns about the cost of any other specific items, we
find that the Receiver did not mismanage the estate’s assets.
8
Rodriguez’s final argument is that the Receiver should not be reimbursed for
secretarial, clerical, or administrative expenses. Variously relying on a Probate Code
section addressing what an executor’s attorney may bill for, federal guidelines on what
attorneys in large bankruptcy cases may bill for, United States Tax Court memorandum
opinions addressing attorneys’ fees, and cases from other states, Rodriguez urges this
court to disallow various line items of these expenses. We find these authorities
inapposite. For one, all of the authorities other than the out of state cases concern what
an attorney may charge for legal services, and so do not purport to apply to what
someone occupying another role (such as receiver) may bill for. As we have stated,
“[r]eceivers are entitled to compensation for their own services and the services
performed by their attorneys.” (Chula Vista, supra, 207 Cal.App.4th at p. 685, italics
added.) Moreover, the out of state cases stand only for the proposition that “payments
made by [a] trustee to bookkeepers, accountants or lawyers for [keeping his books]
cannot be allowed as items of discharge in his account.” (Hagedorn v. Arens (1930) 106
N.J. Eq. 377, 383.) Not only does Rodriguez fail to even attempt to show that this is (or
should be) currently the rule in California, such a rule also has no applicability where, as
here, Rodriguez does not demonstrate that the Receiver paid third parties to keep its
books. We therefore find no abuse of discretion in the trial court’s approval of the
Receiver’s expenses.
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In sum, Rodriguez has not demonstrated that the Receiver acted improperly or that
reimbursement of its expenses, including from Rodriguez personally, was an abuse of
discretion.
III. DISPOSITION
The order is affirmed. Respondents are awarded their costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RAPHAEL J.
We concur:
RAMIREZ P. J.
MCKINSTER J.
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AI Brief
AI-generated · verify before citing
Holding. The court affirmed the trial court's order holding the property owner personally liable for unpaid receivership expenses, finding no abuse of discretion in the trial court's approval of the receiver's fees and management of the property.
Issues
Whether the trial court abused its discretion in holding the property owner personally liable for $48,000 in receivership expenses.
Whether the receiver's management of the property and associated costs were reasonable and properly approved by the trial court.
Disposition. Affirmed.
Quotations verified verbatim against the opinion
“Courts are vested with broad discretion in determining who is to pay the expenses of a receivership, and the court’s determination must be upheld in the absence of a clear showing of an abuse of discretion.”
“Rodriguez has not demonstrated that the Receiver acted improperly or that reimbursement of its expenses, including from Rodriguez personally, was an abuse of discretion.”