2017-00206310-CU-FR

Mark D. Chisick vs. Stewart Title of Sacramento

Nature of Proceeding: Motion to Appoint Receiver and for Preliminary Injunction

Filed By: Danielson, Anthony I.

** If any party requests oral argument, then at the time the request is made, the requesting party shall inform the court and opposing counsel of the specific issue(s) on which oral argument is sought. **

The motion of Plaintiffs Mark D. Chisick (Chisick), as Manager of S360 Properties LLC (S360); Mark D. Chisick and Denise M. Chisick, as Co-Trustees of the Chisick Family Trust; and S360 (collectively “Plaintiffs) for appointment of a receiver and for a preliminary injunction is DENIED.

The court notes Plaintiffs’ objection to the Declaration of Dhanraj Sahadeo (Dhanraj) and other papers served with the opposition. It appears the opposition papers were served by electronic mail without the requisite agreement of counsel under the Code of Civil Procedure. It also appears that, when it was served by email, the Dhanraj Declaration was sent as an inconspicuous Google Drive link-attachment. Because Plaintiffs were able to submit a supplemental reply to address the Dhanraj Declaration, the court will not strike the Dhanraj Declaration or other, improperly served opposition papers. But defense counsel is advised in the future not to ignore applicable service requirements. Failures to comply with Rules of Court or procedural statutes could result in adverse rulings.

The defense request for a 60-day continuance to permit discovery is DENIED.

Plaintiffs’ request for judicial notice of court documents, Secretary of State filings and recorded land documents is GRANTED. Plaintiffs’ further request for judicial notice of property values (RJN Items 10 and 11) is DENIED as irrelevant.

This case presents a dispute between business partners who formed an entity to invest in real property. Chisick allegedly managed the entity, S360, with Defendant Raymond Sahadeo (Sahadeo). Sahadeo allegedly caused several of S360’s rental properties to be transferred to his father, Dhanraj. Dhanraj allegedly did not pay adequate consideration for the properties. In addition, Sahadeo allegedly failed to obtain Chisick’s approval as required under the operating agreement, and concealed the transfers from Plaintiffs. Defendants Chris Williams (Williams) and Guy Swanson (Swanson) allegedly facilitated escrow in some of the disputed transfers. With respect to seven of the rental properties, Plaintiffs have encumbered them by recording lis pendenses. The second amended complaint against Sahadeo, Dhanraj, Williams and Swanson contains causes of action for, among other things, fraudulent conveyance, fraud, conversion, breach of fiduciary duty, negligence, conspiracy and accounting.

With respect to the seven disputed properties under Dhanraj’s control, Plaintiffs move for the appointment of a receiver to manage, secure and maintain them. Plaintiffs assert that the portion of rents to which they are entitled is continually being converted to Sahadeo’s and Dhanraj’s use. In addition, Plaintiffs assert that Dhanraj is not paying the required taxes or utilities or otherwise maintaining the properties. Plaintiffs thus argue that, absent a receiver, the properties are likely to be wasted and the rents

diverted. (See CCP § 564(b)(1).) Further, Plaintiffs assert that Sahadeo and Dhanraj are probably insolvent. Hence, they argue damages after trial do not present a complete remedy. Much of the evidence Plaintiffs tender to support the motion is on information and belief.

A receivership is a drastic and costly remedy. At this point in the case, neither the fraudulence of the transfers nor the waste assertedly committed is sufficiently clear or pronounced to warrant the plenary receivership sought. (Compare Chisick Decl., ¶ 7 [asserting Chisick was unaware of the transfers to Dhanraj] with Dhanraj Decl., ¶¶ 2-3 [Chisick approved the transfers]; compare also Klassen Decl., Exh. A. [photos of properties overgrown with vines, with rubbish/personal property on the porch or with tire tracks in the yard] and Chisick Decl., ¶ 13 [given delinquency on property taxes, properties might be uninsured] with Dhanraj Decl., ¶¶ 3-5 [Dhanraj received the Section 8 properties in disrepair, he has undertaken some repairs, is current on mortgage payments, and properties are insured].) The court thus denies the motion.

In denying the motion, the court is mindful of the fact that Dhanraj is delinquent on property taxes as of late 2016. (See Obj. to Dhanraj Decl. at 4:5-7.) Despite the delinquency, Plaintiffs do not argue that a tax sale is likely to occur any time soon. Similarly , there is no evidence any municipality has cited the properties for code violations. Under these circumstances, appointment of a receiver to manage and repair the properties is unwarranted.