Motion for Leave to Sue Receiver
Moving Party: Specially Appearing Parties Anne Ford and William Perry Ford
Responding Party: Receiver Stephen Donell and Quality Healthcare Asset Management, LLC
The Motion of Specially Appearing Parties Anne Ford and William Perry Ford (“Movants”) for leave to sue the Receiver Stephen Donell and Quality Healthcare Asset Management, LLC is DENIED as MOOT.
People v. Stark, (2005) 131 Cal. App. 4th 184, 204 states: “In a civil action, a receiver is an agent and officer of the court, and property in the receiver’s hands is under the control and continuous supervision of the court … The receiver is but the hand of the court, to aid it in preserving and managing the property involved in the suit[.]”
Code Civ. Proc. § 568 states: “The receiver has, under the control of the Court, power to bring and defend actions in his own name, as receiver; to take and keep possession of the property, to receive rents, collect debts, to compound for and compromise the same, to make transfers, and generally to do such acts respecting the property as the Court may authorize.” Thus, essentially, the receiver is acting as the property or entity is has been appointed to possess.
Before the receiver’s discharge, the court has discretion to permit an independent action to be filed against the receiver or to require a claim against the receiver to be litigated in the receivership action. (Murray v. Etchepare, (1901) 132 Cal. 286, 64 P. 282; Jun v. Myers, (2001) 88 Cal.App.4th 117, 123–25.)
Jun v. Myers (2001) 88 Cal. App. 4th 117, 124 states: “After discharge the receiver is no longer a proper party to an action on his conduct in his official capacity. (Brockway etc. Co. v. County of Placer (1954) 124 Cal.App.2d 371, 375 [268 P.2d 524].) Because any recovery against the receiver is paid from the receivership estate and thus affects the final accounting, until discharge, actions challenging the receiver’s conduct during the receivership may still be pursued.”
Here, the Receiver, Stephen Donell, was discharged on 11-22-21. Thus, the Receiver has been relieved of his duties and is no longer a proper party to an action on his conduct in his official capacity.
Accordingly, the motion is denied as to Stephen Donell in his official capacity only.
Quality Healthcare Asset Management, LLC does not cite any law that requires leave to sue them as an entity the court allowed a court-appointment receiver to hire. By engaging Quality Healthcare Asset Management, LLC’s services, the receiver was just following the Court’s order.
Accordingly, the Court does not see the purpose of this motion and takes the request off-calendar as moot.
Lastly, the objections do not need to be ruled on because they do not affect the outcome of the motion.
Based on the foregoing, the Motion of Specially Appearing Parties Anne Ford and William Perry Ford for leave to sue the Receiver Stephen Donell and Quality Healthcare Asset Management, LLC is DENIED as MOOT.
Moving parties to give notice.