2012-00130439-CU-MC

The National Grange vs. The California State Grange

Nature of Proceeding: Motion for Appointment of a Receiver to Enforce Judgment

Filed By: Serlin, Mark A.

Plaintiff-in-intervention and Cross-plaintiff The California State Grange’s (“CSG”) Motion for an Order Appointing A Receiver to Enforce the Judgment is GRANTED. C.C.P., sec. 564(b)(3)

The appointment of a receiver after a judgment to carry the judgment into effect is authorized by Code Civ. Proc. § 564(b)(3). The court may appoint a receiver to enforce the judgment when the judgment creditor shows that considering the interests of both the judgment creditor and the judgment debtor, the appointment of a receiver is a reasonable method to obtain the fair and orderly satisfaction of the judgment [Code Civ. Proc. § 708.620].

Objections to the Proposed Order for the Appointment of the Receiver filed by the Redding Community Guild, the Freshwater Community Guild, the Fort Bragg Guild, the Cool Community Association, Inc., Nevada Star Guild, Redwood Valley Guild, Rubidoux Guild, Orchard City Guild, Paradise Guilds, Durham Guild, Chico Community Guilds are OVERRULED. The Court has also received the late-filed Objections of the Van Duzen RIver Guild, Redcrest Community Center and Bayside Community Hall, which are also OVERRULED for the reasons set forth below.

The motion is made on the grounds that on Nov. 15, 2015, this Court entered a declaratory judgment awarding all property owned by plaintiff The National Grange of the Order of Patrons of Husbandry as of April 5, 2013 and held by defendant California Guild (fka the unchartered California State Grange) be turned over to CSG. “[B]ased on the National Grange’s Digest of Laws, the [California Guild’s] Charter, Constitution,

Articles of Incorporation, Bylaws, and participation in the Order, the Court finds that the [California Guild] has the obligation to transfer to the [California State Grange] all Grange property in its possession or control as of the date its Charter was revoked,” i.e., April 5, 2013.

The Guild appealed this Court’s Judgment based on a summary judgment to the Third District Court of Appeal. On Nov. 30, 2017, in a now-final ruling, the Third District Court of Appeal affirmed the Judgment in all respects. Construing the provisions of the California State Grange’s articles of incorporation, constitution, and by-laws, and from the Order’s constitution and the National Grange’s by-laws, to determine whether they required the property of the old California State Grange to pass to the National Grange upon revocation of the old California State Grange’s charter all together, the court of appeal agreed with the trial court that they do require that transfer.

The Judgment has not been complied with by the Guild. As such, CSG seeks the appointment of a Receiver to carry out the Judgment. Attorney Serlin requests that Robert C. Greeley be appointed. Greeley charges $270/hr. for his services.

Despite repeated demands for turnover of the assets awarded by this Court to CSG, the Guild has failed and refused to turnover the assets. Moreover, no undertaking bond was ever filed and thus there is no stay pending any possible further appeal.

The Guild has willfully violated this Court’s injunction order, which specifically precluded the Guild from expending funds in an account at Morgan Stanley except in the ordinary course of business. Instead, the Guild has expended tens of thousands of dollars on attorneys’ fees in favor of a CSG affiliate in an unrelated case. (Bikoff Dec., ¶ ¶ 4-5, Exh. 3, 4.)

CCP § 564(b)(3) expressly provides that a receiver may be appointed to carry out a judgment entered by a court. Here, the Court’s declaratory Judgment provides that all property previously owned by CSG and/or its predecessor-in-interest in the possession of the Guild must be turned over to CSG. As the Guild has failed to abide by this Court’s Judgment, it is appropriate and necessary that the Court appoint a receiver to physically seize such property wrongfully withheld from CSG by the Guild and to thereby effectuate the Court Judgment.

In the absence of the appointment of a receiver, the Court’s Judgment will continue to be flouted by the Guild and CSG will be deprived of the remedy which this Court has already awarded to CSG. Therefore, appointment of a receiver to carry out judgment is particularly appropriate in this case. Gold v. Gold Realty (2006) 114 Cal.App.4th 791, 799-800; Sibert v. Shaver (1952) 113 Cal.App.2d 19, 22.

In Opposition, the Guild asserts that the opinion of the Court of Appeals is not yet final, as a review by the California Supreme Court has been requested. However, on Feb. 18, 2018 the Supreme Court issued its opinion: “Petition for review & application for stay denied.” National Grange of the Order of Patrons of Husbandry v. California Guild (Feb. 14, 2018, No. S246397) ___Cal.5th___ [2018 Cal. LEXIS 1396].)

In the alternative, the Guild asserts that the proposed Receivership order is overbroad and seeks possession and control of significantly more property and assets than are covered by this Court’s summary judgment. It asserts that CSG seeks property and assets owned by dozens of third parties who are not party/parties to this litigation and

would grant relief which would effectively shut down the Guild while the present trial and Supreme Court proceedings are pending.

First, the Receiver shall be tasked with determining and tracing what is and what is not encompassed by the court’s order. Moreover, the moving party’s Proposed Order identifies the following property to comprise the receivership estate as all real and personal property owned, controlled or possessed by the California Guild, including but not limited to: (a) property titled in the name of inactive or defunct subordinate granges held by the Guild, including but not limited to six specified locations; (b) all rights and interests of the Guild in and to monies owing from 85 specified subordinate granges,(c) all deposit accounts of or controlled by the Guild at Wells Fargo Bank, NA, Morgan Stanley/Smith Barney and First Bank, (d) all motor vehicles owned or possessed by the Guild, (e) the real property located at 3830 U Street, Sacramento, CA 95817, all tangible personal property of the Guild, including equipment, machinery, fixtures and money, wherever located, (g) all accounts receivable and general intangibles of the Guild, (h) all instruments, payment tangibles, and/or management rights as to the Heartland Foundation and all of its assets/properties, and (j) all funds held by First American Title in escrow no. 5175913.

Objections to the Proposed Order for the Appointment of the Receiver have been filed by the Redding Community Guild, the Freshwater Community Guild, the Fort Bragg Guild, the Cool Community Association, Inc., Nevada Star Guild, Redwood Valley Guild, Rubidoux Guild, Orchard City Guild, Paradise Guilds, Durham Guild, Chico Community Guilds, Van Duzen River Guild, Redcrest Community Center and Bayside Community Hall on the grounds that they are not owned, controlled, possessed by or participating with the California Guild nor any plaintiff or defendant in this action.

No evidence has been presented that any of the property identified in Exhibit A to the Proposed Order Granting Appointment of Receiver belongs to any of the Objectors as subordinate Granges/Guilds of the California Guild.

All property to be turned over to the Receiver are the rights and interest of the California Guild to monies owing from the designated subordinate granges. If none of these subordinate guilds is owned, controlled, possessed by or participating with the California Guild, as they represent to the Court, then none of their assets will be affected.

The Court finds no reason not to appoint Robert C. Greeley as Receiver to effectuate the Judgment.

Although not addressed directly by any of the parties, the Court recognizes that Exhibit A of the Proposed Order, item (h) “all instruments, payment tangibles, and/or management rights as to the Heartland Foundation and all of its assets/properties” is the subject of a pending related suit in case no. 2016-192665 pending in D. 54. The Court requires further briefing as to the appropriate scope of the property to be controlled by the Receiver when it is the subject of a related suit.

Additionally, no information is provided with this motion as to the nature of (j) all funds held by First American Title in escrow no. 5175913. The Court requires further briefing as to whether this is appropriately included within the scope of this property to be controlled by the Receiver.

Moving party shall file and serve its Supplemental briefing on subsections (h) and (j) of the proposed order not later than Monday, April 9, 2018, any opposition papers shall be filed not later than Monday, April 16, 2018. The court will entertain a request for a hearing, thereafter, by one or more of the affected parties.

The Receiver is appointed, subject to proof of the posting of an undertaking in the amount of $50,000. C.C.P., sec. 567.

The Court will sign the formal order provided, with the exception of property items (h) and (j) of Exhibit A, as set forth above.