The California Code of Civil Procedure Section 564 lists many of the traditional types of cases in which receivers may be appointed. They include, but are not limited to, the following: Preservation of a common fund or property in dispute and in danger of injury or dissipation;Rents, Issues and Profits (Real Estate);Substandard Housing – The…
What is the legal standard to have a California court receiver appointed in a probate matter?
California Probate Code § 16420 provides that (a) If a trustee commits a breach of trust, or threatens to commit a breach of trust, a beneficiary may commence a proceeding for any of the following purposes that is appropriate:
(1) To compel the trustee to perform the trustee’s duties.
(2) To enjoin the trustee from committing a breach of trust.
(3) To compel the trustee to redress a breach of trust by payment of money or otherwise.
(4) To appoint a receiver or temporary trustee to take possession of the trust property and administer the trust.
California Probate Code section 1000 states the California Code of Civil Procedure applies to cases filed in Probate Court. Code of Civil Procedure Section 564, subd. (b)(1), provides that a receiver may be appointed by the court in an action “between partners or others jointly owning or interested in any property or fund, on the application of the plaintiff, or of any party whose right to or interest in the property or fund, or the proceeds thereof, is probable, and where it is shown that the property or fund is in danger of being lost, removed, or materially injured.” (Cal. Civ. Proc. § 564(b)(1).)
Code of Civil Procedure Section 564, subd. (b)(9), provides that a receiver may be appointed by the court in all cases where necessary to preserve the property or rights of any party. (Cal. Civ. Proc. § 564(b)(9).) A receiver may also be appointed to complete an accounting when assets are disputed among copartners. (See, e.g., Moore v. Oberg (1943) 61 Cal.App.2d 216, 219 (The court may appoint a receiver where the defendant makes improper entries in the books of account, commingles the funds of the venture, and excludes the plaintiff from a knowledge of the accounts.)4
PETITIONERS’ NOTICE OF MOTION AND MOTION FOR APPOINTMENT OF A RECEIVER 10
This Court has broad discretion to appoint a receiver. California Code of Civil Procedure, Section 564(a) provides: “A receiver may be appointed, in the manner provided in this chapter, by the court in which an action or proceeding is pending in any case in which the court is empowered by law to appoint a receiver”. (Cal. Civ. Proc. § 564(a).) Generally, the appointment of a receiver rests in the sound discretion of the court, in the exercise of which it must be governed necessarily by the situation as it is presented and appears to the court at the time of making the order. (Misita v. Distillers Corp. (1942) 54 Cal.App.2d 244; Armbrust v. Armbrust (1946) 75 Cal.App.2d 272 (The court did not abuse its discretion in appointing a receiver where the pleadings showed a danger of misappropriation of the property involved in the controversy).) Appointment of a receiver before judgment is ancillary to and in aid of the action, purpose of appointment being to preserve the property pending litigation so that any relief awarded by judgment may be effective. (Steinberg v. Goldstein (1954) 129 Cal.App.2d 682.)
“Evidence to justify the appointment of a receiver may be presented ‘in the form of allegations in a complaint or other pleading, by affidavit or by testimony’”. (Id. citing Baldwin v. Baldwin (1944) 67 Cal.App.2d 175, 177.) When it appears “that assets are being wasted or misappropriated, these are matters entirely in the hands of the trial court”. (Baldwin, 67 Cal.App. at 177.) Such evidence, even if contradicted, is sufficient to support the appointment of a receiver. (Id.)
4 See also Sibert v. Shaver (1952) 113 Cal.App.2d 19 (order appointing receiver to effectuate an accounting of partnership affairs to administratrix of deceased partner warranted by plaintiff’s affidavit that surviving partner made statements that he would not account to the plaintiffs and by false statements kept them from knowledge
A receivership can be structured in a variety of ways based on the nature of the dispute, the goals and objectives of the parties, the type of asset(s) that will be placed under the control of a receiver as well as the ruling of the court. There are two core types of receiverships – a…