2014-00171252-CU-FR

AG-Seeds Unlimited vs. Paul Samra

Nature of Proceeding: Motion to Vacate Order Appointing Receiver

Filed By: Knight, Noel

Defendants/judgment debtors’ motion to vacate the court’s order appointing receiver and to set a new briefing schedule on the issue of whether the sale of defendants’ Nicolaus Farm would satisfy its outstanding judgment is DENIED, as follows.

The notice of motion does not comply with Code of Civil Procedure §1010 or CRC Rule 3.1110(a).

Moving counsel failed to comply with CRC Rule 2.111(3) and Rule 3.1110(b)(3)-(4).

Factual Background

This action was commenced in 2014 and alleges that the named defendants conspired with Steve Samra dba Steve Samra Farms (against whom plaintiff had previously obtained a judgment in 2010) to defraud plaintiff and hinder its collection of the 2010 judgment against Steve Samra.

In November 2016 the parties to the present action entered into a stipulation whereby defendants agreed to pay plaintiff a total of $231,025.85 plus interest at 10% per annum and in the event of default, plaintiff “may obtain a judgment…upon ex parte application.” The parties also expressly agreed that plaintiff “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.” (Underline added for emphasis.)

Defendants made the initial payment due under the parties’ stipulation, but then defaulted. Plaintiff then applied for and obtained judgment pursuant to the stipulation on 1/10/2018 in the amount of just over $235,000. After several unsuccessful attempts to collect on the judgment, plaintiff filed in September 2018 a motion for appointment of receiver but it was denied without prejudice with the court noting that one of the defendants/judgment debtors, P&M Samra Land Investments, LLC (“P&M”), had filed for bankruptcy.

In November 2018 plaintiff renewed its motion for appointment of receiver and on 12/3/2018, the court issued a tentative ruling which continued the motion to 1/10/2019 so the parties could submit additional briefing relating to defendants’ “evidence that on November 1, 2018, the bankruptcy judge granted the [P&M’s] application to authorize employment of a real estate broker” and P&M now has a listing agreement to sell 166.50 +/- acres of land in the City of Nicolaus,…the proceeds from [which] will far exceed…the judgment [and obviate the] need for the appointment of a receiver.”

Having received no request for oral argument, this court on 1/10/2019 affirmed its tentative ruling granting plaintiff’s motion for appointment of receiver pursuant to the parties. Although it did note defendants’ failure to file a supplemental brief, the court found that plaintiff had nevertheless demonstrated “good cause” for the appointment of receiver inasmuch as (1) judgment debtors had not moved to vacate the judgment entered in early 2018, (2) plaintiff was entitled to enforce the otherwise valid judgment,

(3) the bankruptcy court rejected P&M’s proposal to modify its Chapter 12 plan and to sell the Nicolaus property since the sale would not generate proceeds necessary to pay all creditors, and
(4) the use of a receiver would be “a reasonable method to obtain the fair and orderly satisfaction of the judgment,” as required by Code of Civil Procedure §708.620.

Moving Papers. Defendants now move to vacate the 1/10/2019 order appointing receiver on the ground that due to attorney error, no supplemental brief was filed in advance of the 1/10/2019 hearing. The court notes that defendants filed on 1/22/2019 the supplemental brief which they wish the court would have considered prior to the 1/10/2019 hearing. According to this 1/22/2019 brief, there is no need for a receiver because (1) defendants have a motion pending with the bankruptcy court to permit the sale of the Nicolaus property, (2) defendants have already received “several offers” on the property, (3) defendants have not “defaulted” on the stipulation to pay their second installment but merely “delayed” payment and (4) plaintiff failed to comply with Code of Civil Procedure §1008 in bringing its “renewed” motion to appoint receiver.

Analysis

The court will deny the present motion to vacate the court’s order appointing receiver since nothing in defendants’ belated 1/22/2019 supplemental brief alters the conclusion that there is “good cause” for the receiver’s appointment.

First, defendants’ suggestion that plaintiff failed to comply with Code of Civil Procedure §1008 was not within the narrow scope of the supplemental briefing requested by the court on 12/3/2018 but regardless, defendants’ argument is without merit.

Second, defendants’ claim they are not in “default” under the stipulation is equally specious because their failure to make a timely installment payment constitutes a default, particularly when the parties’ stipulation states in Paragraph 3 that the “payment dates described herein shall mean the date by which the payment is to be received” and in Paragraph 4 that “In the event that any payment required…hereunder is not fully and timely made,…Creditor may obtain a judgment…” (Underline added for emphasis.) Moreover, as previously noted, defendants have not to date sought to vacate the judgment, thereby entitling plaintiff to proceed with its enforcement pursuant to California law.

Third, according to the attachments to the Serlin Declaration in Opposition, the bankruptcy court on 1/30/2019 not only denied outright P&M’s motion to authorize the sale of the Nicolaus property due to the findings that there were no offers to purchase the property and the proceeds would in any event be insufficient to satisfy the creditors’ claims but also dismissed the entirety of P&M’s Chapter 12 case on account of various incidents of misconduct and misrepresentations.

Conclusion

Because (1) defendants’ 1/22/2019 supplemental brief has now been considered by the court, (2) the contentions offered therein are insufficient to alter the court’s previous determination of “good cause” to justify for the appointment of a receiver and

(3) the stipulation of the parties expressly permits the appointment of a receiver, the present motion to vacate the court’s prior order appointing receiver must be and hereby is denied in its entirety.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. §1019.5; CRC Rule 3.1312.)