2014-00171252-CU-FR

AG-Seeds Unlimited vs. Paul Samra

Nature of Proceeding: Motion to Appoint Receiver

Filed By: Serlin, Mark A.

This matter was continued from 12/3/2018 to today’s date for additional briefing regarding whether the sale of the Nicolaus Farm would satisfy the judgment. In response, Plaintiff/Judgment Creditor AG-Seed Unlimited (“AG”) filed a supplemental declaration. Defendants/Judgment Debtors did not file a responsive brief as directed.

AG’s motion for the appointment of a receiver pursuant to a stipulation for entry of judgment (“Stipulation”) is GRANTED.

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.)

In November 2016, the parties entered into the Stipulation. Defendants/Judgment Debtors agreed to pay $213,170.60 plus attorneys’ fees and costs of $17,855.25 for a total of $231,025.85 plus interest at 10% per annum. In the event of default Defendants/Judgment Debtors agreed that “Creditor may obtain a judgment . . .upon ex parte application on five (5) business days’ notice via fax/email to Debtors’ counsel of record.” (Declaration of Mark Serlin, Ex. A, para. 4.) Additionally, the parties agreed that “Creditor may employ any and all means of enforcing such judgment, including but not limited to appointment of a receiver, which may be done on an ex parte basis, without bond.” (Id.)

Defendants/Judgment Debtors made the initial payment due under the Stipulation, but then defaulted. (Declaration of Mark Serlin, para. 2.) AG, therefore, applied ex parte for entry of judgment pursuant to the Stipulation. On January 10, 2018, the Court entered judgment in AG’s favor in the amount of $235,280.18 which amount included attorneys’ fees of $17,855.25 and interest of $24,254.33.

Co-Defendant Judgment Debtor P&M Samra Land Investments, LLC (“P&M Samra”) has filed for bankruptcy. Thus, this motion is only against the non-bankrupt Judgment Debtors.

AG requests appointment of Greg K. Webster as the Receiver to enforce the judgment. According to AG, Judgment Debtors have farming operations which involve multiple companies under common ownership and control. The Judgment Debtors received substantial payments in the form of crop insurance, fallow payments, and other agricultural subsidies from one or more governmental and/or quasi-governmental entities. Because such payments are not subject to levy of execution and cannot be determined by way of subpoena, a receiver is the only practical means of reaching those payments. Moreover, the Judgment Debtors’ farming operations are going concerns and levying execution on plant and equipment is not the best way to maximize returns on assets. A receiver will be able to continue farming operations and complete harvests and the like in ways which would not be possible by any other enforcement measure.

In opposition to the motion, Judgment Debtors proffer evidence that on November 1,

2018, the bankruptcy judge granted the P&M Samra’s application to authorize

employment of a real estate broker. P&M Samra had a listing agreement to sell 166.50

+/- acres of land in the City of Nicolaus, County of Sutter (“Nicolaus Farm”) for

$2,747,250. According to Judgment Debtors, the proceeds from the sale would far

exceed the amount needed to satisfy the judgment, thus, there is no need for the

appointment of a receiver.

As noted above, the Court requested additional briefing on whether the sale of the Nicolaus Farm provides an adequate alternative to the appointment of a receiver. AG submitted a supplemental declaration from Mark Serlin. Serlin indicates that at the time of the original hearing date, two hearings were pending before the U.S. Bankruptcy Court for the Eastern District of California in the P&M Samra bankruptcy case scheduled for December 10, 2018. Relevant here is P&M Samra’s motion to modify its Chapter 12 plan. P&M Samra sought to delay plan dividends to creditors but not change the amounts of those dividends. The change was necessitated by the P&M Samra’s desire to sell its real property in Nicolaus, California, rather than continue business operations on it. Similar to Judgment Debtors’ opposition to the motion, P&M Samra claimed that that a sale would pay all claims secured by the property in full.

The Bankruptcy Court denied P&M Samra’s motion to modify its Chapter 12 plan because P&M Samra had not established feasibility of the proposed plan since there would be insufficient funds to pay all creditors in full from the sale.

Judgment Debtors failed to file a supplemental brief as directed by the Court. Therefore, Judgment Debtors have not shown that the sale of the Nicolaus Farm will satisfy the judgment.

The Court also notes that Judgment Debtors claim that they did not default on their payments due under the Stipulation, but were only late on one of the payments.

Judgment Debtors, however, have not moved to vacate the judgment which was entered nearly one year ago, and the judgment remains in effect.

Given the above, AG has demonstrated good cause for the appointment of a receiver.

Judgment Debtors have not shown otherwise. Accordingly, the motion is GRANTED.

The Court appoints Greg K. Webster as the receiver. Mr. Webster shall file the oath required by CCP § 567(a). In addition, the receiver shall post a $20,000 undertaking pursuant to CCP § 567(b).

Having received no objection to the proposed order, The Court will sign the propped order once the undertaking is posted.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.