Case Number: ES017876    Hearing Date: July 18, 2014    Dept: A

City of South Pasadena v Ying

PETITION TO APPOINT RECEIVER

Calendar: 14
Case No: ES017876
Date: 7/18/14

MP: Petitioner, City of South Pasadena
RP: Respondent, Wang Ying

RELIEF REQUESTED:
1. Order appointing a receiver to correct the violations on the property and to report a plan for remediation of all code violations.
2. Order appointing Richardson Griswold as the receiver
3. Order enjoining property owners from interfering with the receiver
4. Order enjoining the Respondent from encumbering or transferring any interest in the property during the receivership.

DISCUSSION:
This case arises from the Petitioner’s claim that the Respondent’s property is dilapidated and dangerous. The Petitioner has filed this petition to seek orders to remediate the property.
This matter was originally set for July 3, 2014. It was then continued to July 18, 2014.

The Petitioner seeks an order appointing a receiver to manage the Respondent’s property at 619 Camino Verde, South Pasadena, so that it may be brought into compliance with applicable codes.

1. Statutory Scheme for Appointing a Receiver to Correct Code Violations
Under Health and Safety Code section 17980.6, if any building is maintained in a manner that violates any provisions of this part, the building standards published in the State Building Standards Code relating to the provisions of this part, any other rule or regulation adopted pursuant to the provisions of this part, or any provision in a local ordinance that is similar to a provision in this part, and the violations are so extensive and of such a nature that the health and safety of residents or the public is substantially endangered, the enforcement agency may issue an order or notice to repair or abate pursuant to this part. Section 17980.6 provides that any order or notice pursuant to this subdivision shall be provided either by both posting a copy of the order or notice in a conspicuous place on the property and by first-class mail to each affected residential unit, or by posting a copy of the order or notice in a conspicuous place on the property and in a prominent place on each affected residential unit. Section 17980.6 provides that the order or notice shall include, but is not limited to, all of the following:

a) The name, address, and telephone number of the agency that issued the notice or order.
b) The date, time, and location of any public hearing or proceeding concerning the order or notice.
c) Information that the lessor cannot retaliate against a lessee pursuant to Section 1942.5 of the Civil Code.

Health and Safety Code section 17980.7 provides that if the owner fails to comply within a reasonable time with the terms of the order or notice issued pursuant to Section 17980.6, the following provisions shall apply:

a) The enforcement agency may seek and the court may order imposition of the penalties provided for under Chapter 6 (commencing with Section 17995).
b) (1) The enforcement agency may seek and the court may order the owner to not claim any deduction with respect to state taxes for interest, taxes, expenses, depreciation, or amortization paid or incurred with respect to the cited structure, in the taxable year of the initial order or notice, in lieu of the enforcement agency processing a violation in accordance with Sections 17274 and 24436.5 of the Revenue and Taxation Code.
2) If the owner fails to comply with the terms of the order or notice to correct the condition that caused the violation pursuant to Section 17980.6, the court may order the owner to not claim these tax benefits for the following year.
c) The enforcement agency, tenant, or tenant association or organization may seek and the court may order, the appointment of a receiver for the substandard building pursuant to this subdivision. In its petition to the court, the enforcement agency, tenant, or tenant association or organization shall include proof that notice of the petition was served not less than three days prior to filing the petition, pursuant to Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure, to all persons with a recorded interest in the real property upon which the substandard building exists.
1) In appointing a receiver, the court shall consider whether the owner has been afforded a reasonable opportunity to correct the conditions cited in the notice of violation.
2) The court shall not appoint any person as a receiver unless the person has demonstrated to the court his or her capacity and expertise to develop and supervise a viable financial and construction plan for the satisfactory rehabilitation of the building. A court may appoint as a receiver a nonprofit organization or community development corporation. In addition to the duties and powers that may be granted pursuant to this section, the nonprofit organization or community development corporation may also apply for grants to assist in the rehabilitation of the building.
3) If a receiver is appointed, the owner and his or her agent of the substandard building shall be enjoined from collecting rents from the tenants, interfering with the receiver in the operation of the substandard building, and encumbering or transferring the substandard building or real property upon which the building is situated.
4) Any receiver appointed pursuant to this section shall have all of the following powers and duties in the order of priority listed in this paragraph, unless the court otherwise permits:
A) To take full and complete control of the substandard property.
B) To manage the substandard building and pay expenses of the operation
of the substandard building and real property upon which the building is
located, including taxes, insurance, utilities, general maintenance, and debt
secured by an interest in the real property.
C) To secure a cost estimate and construction plan from a licensed
contractor for the repairs necessary to correct the conditions cited in the
notice of violation.
D) To enter into contracts and employ a licensed contractor as necessary
to correct the conditions cited in the notice of violation.
E) To collect all rents and income from the substandard building.
F) To use all rents and income from the substandard building to pay for
the cost of rehabilitation and repairs determined by the court as necessary
to correct the conditions cited in the notice of violation.
G) To borrow funds to pay for repairs necessary to correct the conditions
cited in the notice of violation and to borrow funds to pay for any
relocation benefits authorized by paragraph (6) and, with court approval,
secure that debt and any moneys owed to the receiver for services
performed pursuant to this section with a lien on the real property upon
which the substandard building is located. The lien shall be recorded in the county recorder’s office in the county within which the building is located.
H) To exercise the powers granted to receivers under Section 568 of the
Code of Civil Procedure.
5) The receiver shall be entitled to the same fees, commissions, and necessary expenses as receivers in actions to foreclose mortgages.
6) If the conditions of the premises or the repair or rehabilitation thereof significantly affect the safe and sanitary use of the substandard building by any tenant, to the extent that the tenant cannot safely reside in his or her unit, then the receiver shall provide relocation benefits in accordance with subparagraph (A) of paragraph (3) of subdivision (d).
7) The relocation compensation provided for in this section shall not preempt any local ordinance that provides for greater relocation assistance.
8) In addition to any reporting required by the court, the receiver shall prepare monthly reports to the state or local enforcement agency which shall contain information on at least the following items:
A) The total amount of rent payments received.
B) Nature and amount of contracts negotiated relative to the operation or
repair of the property.
C) Payments made toward the repair of the premises.
D) Progress of necessary repairs.
E) Other payments made relative to the operation of the building.
F) Amount of tenant relocation benefits paid.
9) The receiver shall be discharged when the conditions cited in the notice of violation have been remedied in accordance with the court order or judgment and a complete accounting of all costs and repairs has been delivered to the court. Upon removal of the condition, the owner, the mortgagee, or any lienor of record may apply for the discharge of all moneys not used by the receiver for removal of the condition and all other costs authorized by this section.
10) After discharging the receiver, the court may retain jurisdiction for a time period not to exceed 18 consecutive months, and require the owner and the enforcement agency responsible for enforcing Section 17980 to report to the court in accordance with a schedule determined by the court.
11) The prevailing party in an action pursuant to this section shall be entitled to reasonable attorney’s fees and court costs as may be fixed by the court.
12) The county recorder may charge and collect fees for the recording of all notices and other documents required by this section pursuant to Article 5 (commencing with Section 27360) of Chapter 6 of Division 2 of Title 3 of the Government Code.
13) Nothing in this section shall be construed to limit those rights available to tenants and owners under any other provision of the law.
14) Nothing in this section shall be construed to deprive an owner of a substandard building of all procedural due process rights guaranteed by the California Constitution and the United States Constitution, including, but not limited to, receipt of notice of the violation claimed and an adequate and reasonable period of time to comply with any orders which are issued by the enforcement agency or the court.
d) If the court finds that a building is in a condition which substantially endangers the health and safety of residents pursuant to Section 17980.6, upon the entry of any order or judgment, the court shall do all of the following:
1) Order the owner to pay all reasonable and actual costs of the enforcement agency including, but not limited to, inspection costs, investigation costs, enforcement costs, attorney fees or costs, and all costs of prosecution.
2) Order that the local enforcement agency shall provide the tenant with notice of
the court order or judgment.
3) (A) Order that if the owner undertakes repairs or rehabilitation as a result of being cited for a notice under this chapter, and if the conditions of the premises or the repair or rehabilitation thereof significantly affect the safe and sanitary use of the premises by any lawful tenant, so that the tenant cannot safely reside in the premises, then the owner shall provide or pay relocation benefits to each lawful tenant. These benefits shall consist of actual reasonable moving and storage costs and relocation compensation. The actual moving and storage costs shall consist of all of the following:
i) Transportation of the tenant’s personal property to the new location. The new location shall be in close proximity to the substandard premises, except where relocation to a new location beyond a close proximity is determined by the court to be justified.
ii) Packing, crating, unpacking, and uncrating the tenant’s personal property.
iii) Insurance of the tenant’s property while in transit.
iv) The reasonable replacement value of property lost, stolen, or damaged (not through the fault or negligence of the displaced person, his or her agent or employee) in the process of moving, where insurance covering the loss, theft, or damage is not reasonably available.
v) The cost of disconnecting, dismantling, removing, reassembling, reconnecting, and reinstalling machinery, equipment, or other personal property of the tenant, including connection charges imposed by utility companies for starting utility service.
B)(i) The relocation compensation shall be an amount equal to the differential between the contract rent and the fair market rental value determined by the federal Department of Housing and Urban Development for a unit of comparable size within the area for the period that the unit is being repaired, not to exceed 120 days.
ii) If the court finds that a tenant has been substantially responsible for causing or substantially contributing to the substandard conditions, then the relocation benefits of this section shall not be paid to this tenant. Each other tenant on the premises who has been ordered to relocate due to the substandard conditions and who is not substantially responsible for causing or contributing to the conditions shall be paid these benefits and moving costs at the time that he or she actually relocates.
4) Determine the date when the tenant is to relocate, and order the tenant to notify the enforcement agency and the owner of the address of the premises to which he or she has relocated within five days after the relocation.
5) (A) Order that the owner shall offer the first right to occupancy of the premises to each tenant who received benefits pursuant to subparagraph (A) of paragraph (3), before letting the unit for rent to a third party. The owner’s offer on the first right to occupancy to the tenant shall be in writing, and sent by first-class certified mail to the address given by the tenant at the time of relocation. If the owner has not been provided the tenant’s address by the tenant as prescribed by this section, the owner shall not be required to provide notice under this section or offer the tenant the right to return to occupancy.
B) The tenant shall notify the owner in writing that he or she will occupy the unit. The notice shall be sent by first-class certified mail no later than 10 days after the notice has been mailed by the owner.
6) Order that failure to comply with any abatement order under this chapter shall be punishable by civil contempt, penalties under Chapter 6 (commencing with Section 17995), and any other penalties and fines as are available.
e) The initiation of a proceeding or entry of a judgment pursuant to this section or Section 17980.6 shall be deemed to be a “proceeding” or “judgment” as provided by paragraph (4) or (5) of subdivision (a) of Section 1942.5 of the Civil Code.
f) The term “owner,” for the purposes of this section, shall include the owner, including any public entity that owns residential real property, at the time of the initial notice or order and any successor in interest who had actual or constructive knowledge of the notice, order, or prosecution.
g) These remedies shall be in addition to those provided by any other law.
h) Nothing in this section or in Section 17980.6 shall impair the rights of an owner exercising his or her rights established pursuant to Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1 of the Government Code.

2. Application to the Pending Case
The Defendant provides facts in the declaration of Marlon Ramirez, who is a code enforcement officer. Mr. Ramirez states that after receiving complaints that unknown people were entering and exiting the property throughout the day, he learned that the property has been vacant for two or three years. Mr. Ramirez stats that the Respondent, Wang Ying, had been investigated by officials from the United States Treasury Department and that his passport had been invalidated.
Mr. Ramirez states that when he conducted an inspection of the property from a public right of way, he observed that no maintenance had been done to the property for a substantial period of time and that the property was in a state of disrepair. Mr. Ramirez states that he then obtained an inspection warrant and performed an onsite inspection of the property on January 14, 2014. Mr. Ramirez states that he the following during this inspection:

1) trash, debris, and containers littering the front yard;
2) extensive signs of dry rot, weathered and chipping walls, and overgrown and dry vegetation in the front and side of the residence.
3) the interior was littered with trash, shopping bags, newspapers, and boxes. Mr. Ramirez states that he found calendars from 2011.
4) parts of the bathroom window had been removed to create an opening large enough for a person.
5) an active beehive was inside the house and there large accumulations of rodent droppings that indicated a rodent infestation.
6) evidence of water intrusion, e.g., discolored portions of the ceiling, signs of mold, and peeling walls.
7) there is no electrical, gas, or water service at the property.
8) in the pool, there was an accumulation of leaves, branches, pine needles, and stagnant water.
9) the gate preventing access to the pool had been removed and that a wood fence along the south side of the property had collapsed.
Photographs of the property are contained in exhibit 4 to the Petition.

Mr. Ramirez states in paragraph 16 that in his opinion, the conditions of the property pose an immediate threat to life, health, and safety of the public.

Mr. Ramirez states that on March 24, 2014, pursuant to Health and Safety Code section 17980.6, he posted the required notice to abate and gave the Respondent until March 27, 2014 to fix the problems. A photograph of the notice to abate is in exhibit 2 to the Petition. The Petitioner filed the petition on May 27, 2014.

The Petitioner posted the notice to abate in a prominent place, as required by Health and Safety Code section 17980.6. Further, the Petitioner’s evidence shows that the notice was posted on March 24, 2014. The Respondent has had a reasonable time to comply with the notice to abate because the Respondent has had nearly four months to correct the code violations. Accordingly, under Health and Safety Code section 17980.7, the Court may appoint a receiver.

The Court file contains a proof of service filed on June 20, 2014 that indicates that the Respondent was served by personal service of the Petition on June 5, 2014. The Respondent has not filed any opposition papers. The Respondent has offered no evidence that the required repairs on the property will be performed. Since the Respondent has not offered any evidence that she is attempting to make repairs, it appears that a receiver is necessary to correct the violations on the property.

These facts demonstrate that there are grounds to appoint a receiver under Health and Safe Code section 17980.7(c)to correct the problems identified by the Petitioner.

3. Choice of Receiver
The Petitioner has nominated Richardson Griswold to be the receiver. A copy of his resume is attached as exhibit 8 to the Petition. His resume indicate that he has experience with being appointed as a receiver for distressed, abandoned, or dangerous properties pursuant to the procedures in health and Safety Code sections 17980 et seq. In addition, Mr. Griswold has attached a list of cases in which he was appointed as a receiver. Further, Mr. Griswold indicates that his billable rate is $275 per hour.

This indicates that Richardson Griswold has the experience needed to perform his duties as a receiver for the Court. Since there is no opposition from the Respondent, the Court will appoint Richardson Griswold to be the receiver in this case.

4. Brief Overview of Receiver Procedures
The receiver is an officer of the Court and is an agent of the Court, not the parties. Receiverships are governed by CCP sections 564 to 570 and CRC rules 3.1175 to 3.1184. Once the receiver has been selected, CCP section 567 requires the receiver to engage in the following two activities before entering upon the duties of a receiver:

1) the appointed receiver must be sworn to perform the duties faithfully.
2) the receiver must submit an undertaking to the State of California, in such sum as the Court directs, to the effect that the receiver will faithfully discharge the duties of receiver in the action and obey the orders of the Court.

After the receiver is appointed, the powers and duties of the receiver are those granted by the order appointing the receiver, by any subsequent Court orders, and by CCP sections 568, 568.5, and 569. Cal-American Income Property Fund VII v. Brown Development Corp. (1982) 138 Cal. App. 3d 268, 273. The Court has broad discretion in the directions and approvals it provides to a receiver in respect to management of the property. Hillman v. Stults (1968) 263 Cal. App. 2d 848, 876.
The property subject to the order is the receivership estate. The Court’s order appointing the receiver also specifies the receiver’s powers and duties. Interference with a receiver in carrying out the receiver’s duties is deemed contempt of the Court.
The receivership terminates upon completion of the receiver’s duties. On termination of the receivership, the receiver makes a final report in which he provides an accounting for the receiver’s costs and submits the report to the Court for approval. The receiver’s costs are then paid out of the receivership estate. When the final account is approved, the receiver is discharged and has no official duties.

A review of the papers reveals no evidence that the receiver has submitted an oath. Accordingly, at the hearing, the Court will ensure that the receiver is sworn to perform the duties of the receiver. Further, the Court will determine the amount of the undertaking that the receiver must file with the Court.

RULING:
1. Appoint Richardson Griswold to be the receiver under Health and Safety Code section 17980.7 to correct the problems on the Respondent’s property.
2. Set amount for receiver’s undertaking under CCP section 567.
3. Ensure receiver submits oath required by CCP section 567