City of Riverside v. Horspool CA4/2
223 Cal. App. 4th 670
| Cal. Ct. App. | 2014Background
- The City of Riverside pursued nuisance abatement under Health & Safety Code §17980 et seq. against William and Kelly Horspool for a dilapidated, vacant house observed in late 2008; administrative penalties and a nuisance determination followed.
- Multiple bankruptcy filings by the Horspools triggered repeated motions for relief from the automatic stay; bankruptcy court ultimately exempted the City’s enforcement actions.
- The trial court appointed Kevin Randolph as receiver (Aug 2010) after finding the property unsafe; William appealed but did not post an appeal bond, and the receivership proceeded.
- The receiver could not obtain financing to rehabilitate due to defendants’ interference and delays; the receiver sought court approval to sell the property "as is" to a buyer who would fund repairs.
- The court approved a private sale for $75,000 free and clear of liens; defaults were entered against both Horspools (William’s default later set aside; Kelly’s remained), and the receiver was awarded about $114,000 in fees and costs.
- William appealed multiple rulings raising notice/service, appointment of receiver, propriety of sale (price and sale free of liens), default-setting, loan-stripping, and the fee award. The Court of Appeal affirmed in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of prelitigation notice and service/process | City: notices and service complied with statutory methods (posting, mail, personal service) and were proper | Horspool: defective service (unregistered server, substitute service on Kelly), due process violation | Forfeited by William: he made a general appearance, so service objections waived; service was adequate under statutes |
| Standing to raise certain claims (bank, trustee, Kelly) | City: William may only appeal as to errors affecting him | William: purports to appeal on behalf of bank, bankruptcy trustee, and wife | William has standing only for his own grievances; lacks standing to assert rights of bank, trustee, or Kelly (Kelly’s default left her nonappealing) |
| Appointment/continuation of receivership after appeal bond not posted | City: receivership could proceed because no stay without undertaking; receiver needed to rehabilitate or sell | William: appealed appointment and contends bond not required; challenges sale after appeal filed | Moot as to appellate relief: failure to post bond meant no stay; trial court retained authority; sale rendered appointment-related claims nonreviewable |
| Approval of private sale (price, sale free of liens, loan-stripping) | City/Receiver: sale "as is" to buyer who would fund rehab was reasonable given dilapidated condition; sale free of liens appropriate in equity | William: sale was for far less than fair market value, improper loan-stripping, private sale inappropriate | Court affirmed exercise of discretion: appraised "as is" value lower than rehab costs; sale approved and not an abuse of discretion; issues largely forfeited or moot |
| Entry and vacation of defaults (procedural posture) | City: defaults properly entered; William’s default later set aside; Kelly remained in default | William: default entry/denial to set aside was erroneous and void | William’s default set aside so not aggrieved; Kelly’s denial to set aside is nonappealable while default stands; issue not reviewable |
| Receiver’s fees and costs ($114,000) | City/Receiver: fees reasonable given extensive work and defendants’ obstructive conduct | William: fees excessive; receivers are expensive luxuries | Award affirmed: fee determinations are discretionary and supported by record; no abuse of discretion shown |
Key Cases Cited
- Pierotti v. Torian, 81 Cal.App.4th 17 (appellant must fairly summarize facts in opening brief)
- Ajaxo Inc. v. E*Trade Group Inc., 135 Cal.App.4th 21 (appellant duty to present material evidence, not only favorable facts)
- Foreman & Clark Corp. v. Fallon, 3 Cal.3d 875 (appellant must present material evidence bearing on issues)
- Weinstock v. Weinstock, 206 Cal.App.2d 683 (same principle regarding factual presentation)
- Estate of McDill, 14 Cal.3d 831 (when part of judgment is interwoven, reversal may affect whole)
- First Federal Bank of California v. Fegen, 131 Cal.App.4th 798 (failure to post appeal undertaking can render receivership-sale issues moot)
- City of Santa Monica v. Gonzalez, 43 Cal.4th 905 (court’s authority to approve receiver sales in public-safety receiverships; review for abuse of discretion)
- Melikian v. Aquila, 63 Cal.App.4th 1364 (receiver fee awards are reviewed for abuse of discretion)