Southern California Sunbelt Developers, Inc. v. Banyan Ltd. Partnership
8 Cal. App. 5th 910
| Cal. Ct. App. | 2017Background
- Long-running (since 1996) multi-phase business litigation between Baer (and his corporations IBT and SCSD) and Tedder plus various Grammer limited partnerships over loans, real property, and alleged fiduciary breaches; multiple prior appeals affirmed various phase outcomes and a final judgment awarding Grammer partnerships ≈ $1.1M against Baer’s corporations.
- During litigation (2005) a receiver was appointed over two properties (the Ranch owned by IBT and the Guild owned by SCSD) to preserve assets pending further proceedings; receiver incurred fees exceeding $323,000 and the appointment order authorized payment from the receivership estate.
- The receivership was later partially terminated and finally terminated (2007–2008); the trial court approved the receiver’s final accounting in February 2008, ordered payment from the estate, and retained jurisdiction over receivership matters.
- After final judgment and subsequent postjudgment cost proceedings, SCSD sought ≈ $281,265 in receivership fees as part of its costs against certain plaintiffs; the trial court granted plaintiffs’ motion to tax (strike) that portion of SCSD’s costs, reasoning the issue was decided at the receivership accounting and therefore the court lacked jurisdiction to reallocate the fees.
- On appeal, the Court of Appeal held collateral estoppel/res judicata did not bar reconsideration of who should ultimately bear receiver fees and that trial courts have discretion under Code of Civil Procedure §1033.5(c)(4) to award or reallocate receivership costs; the tax order was reversed and remanded for the trial court to exercise discretion on allocation of receivership fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether collateral estoppel/res judicata barred relitigation of who must pay receiver fees because the receiver’s final accounting (Feb 8, 2008) already approved payment from the estate | The final accounting and discharge were a final, appealable determination; SCSD should have appealed then, so the matter is precluded now | The accounting was collateral and did not decide which party should ultimately bear receiver costs; the allocation can be considered later | Court: collateral estoppel does not apply; the prior orders did not necessarily decide party liability for receiver fees and the court retained authority to revisit allocation |
| Whether receivership fees can be awarded as recoverable costs under CCP §1033.5 (i.e., §1032 prevailing-party costs and §1033.5(c)(4) discretion for items not listed) | Plaintiffs: receivership fees are not recoverable costs under §1032/§1033.5 | SCSD: receiver fees are analogous to fees for court-appointed assistants (special masters, referees) and thus fall within court’s discretionary authority under §1033.5(c)(4) if reasonably necessary | Court: receivership fees may be awarded under §1033.5(c)(4); trial court must exercise discretion considering equitable exceptions and factors; remanded for hearing on allocation |
Key Cases Cited
- City of Chula Vista v. Gutierrez, 207 Cal.App.4th 681 (explains receiver is officer of court and court has broad discretion over receivership costs)
- Lucido v. Superior Court, 51 Cal.3d 335 (lays out collateral estoppel/issue preclusion elements)
- Gibson v. Bobroff, 49 Cal.App.4th 1202 (court may award costs for court-appointed mediators/similar assistants under §1033.5(c)(4))
- Winston Square Homeowners Assn. v. Centex West, Inc., 213 Cal.App.3d 282 (special master fees can be apportioned and then awarded as costs under §1033.5(c)(4))
- Baker-Hoey v. Lockheed Martin Corp., 111 Cal.App.4th 592 (discretion to award fees for court-appointed referees if reasonable and necessary)
- Baldwin v. Baldwin, 82 Cal.App.2d 851 (equitable principle that party procuring unjustified receivership may be charged receiver fees)
- Aviation Brake Systems, Ltd. v. Voorhis, 133 Cal.App.3d 230 (final accounting discharges receiver and is res judicata for claims against receiver in official capacity)