Marriage of Deloje and Dumitrescu
Filed 5/21/13 Marriage of
Deloje and Dumitrescu CA2/7
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
SEVEN
In re the Marriage of ANDRE
DELOJE and ANDREEA DUMITRESCU.
B241245
(Los Angeles
County
Super. Ct.
No. BD494069)
ANDRE DELOJE,
Respondent,
v.
DAVID J. PASTERNAK, as
Receiver, etc.,
Appellant.
APPEAL from
an order of the Superior Court
of
County, Christine Byrd, Judge. Affirmed in part, reversed
in part and remanded with directions.
Pasternak, Pasternak
& Patton, John W. Patton, Jr. for Appellant.
Allione
& Associates, Paul R. Allione for Respondent.
_______________
David J. Pasternak, a court-appointed receiver in this
the court’s order denying him the full amount of receivership fees he
requested. We reverse the order to the
extent it denies Pasternak any fees for successfully defending a prior appeal
in this action and for finalizing a court-ordered sale of property. In all other respects, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The
Marital Dissolution Action
Andre Deloje and Andreea
Dumitrescu were married on September
16, 2004. On October 10, 2008 Deloje petitioned
for dissolution of the marriage.
Dumitrescu requested temporary spousal support, attorney fees and
additional funds to conduct a forensic accounting of the community’s interest
in several real properties held in Deloje’s name. In response Deloje maintained he made his
living buying and selling real property through his company, ADAD, LLC, which
he had acquired before the marriage. He
also asserted ADAD lost money during the four years he and Dumitrescu were
married and his personal assets and bank accounts had been depleted. He claimed the only significant asset he
owned was a Roth individual retirement account (Roth IRA)
estate valued at $1,258,895.36. Deloje
insisted he had made no contributions to his Roth IRA during the marriage.
After a
full hearing, on December 2, 2008
the court found Deloje’s description of his financial condition not credible
and ordered him to pay Dumitrescu $2,428 per month in temporary spousal
support, $10,000 in attorney fees incurred by Dumitrescu and an additional
$5,000 for a forensic accountant.
2. The
Appointment of a Receiver
On March
25, 2009, after Deloje failed to pay anything in connection with the court’s
December 2, 2008 order, the court appointed Pasternak as a receiver and
directed him to review Deloje’s real estate portfolio and provide the court
with a proposal as to whether any of Deloje’s real properties should be
“refinanced, sold or otherwise liquidated†to satisfy the
December 2, 2008 order.
3. The
Court’s Order Placing Seven of 99 Real Properties in Receivership
On May 18, 2009 Pasternak reported his
findings and recommendations to the court.
The court ordered Deloje’s outstanding obligations, including spousal
support and attorney and forensic accounting fees, as well as Pasternak’s
receivership fees, to be paid from the sale of Deloje’s real property. On June 23, 2009 the court clarified that
seven of the 99 real properties held in Deloje’s Roth IRA were to be placed in
receivership and listed for sale “as is,†“subject to this [c]ourt’s
confirmation with possible overbidding.â€
4. Pasternak’s
Request To Confirm the Sale of Two Real Properties
On November 16, 2009 Pasternak
filed and served an ex parte application seeking, among other things, orders
confirming the sale of two undeveloped properties, 8571 and 8573 Crescent
Drive, for the sum of $60,000. Deloje
urged the application be denied, asserting the properties were part of his Roth
IRA and thus exempt from execution under Code of Civil Procedure section
704.115. The court denied the ex parte
request but continued the matter for a full hearing.
On December
1, 2009 the trial court granted Pasternak’s request and confirmed the sale of
the Crescent Drive properties. The court
directed that the “[f]irst $20,000 of sale proceeds shall pay Receiver’s bond
premium, [the] next $30,000 [to go] to [Dumitrescu] for [spousal] support and
[the] balance†to go toward the payment of Pasternak’s administrative
fees.
5. Deloje’s
Appeal from the Order Confirming the Sale and His and Dumitrescu’s Settlement
of Their Marital Dissolution Action
On December 11, 2009 Deloje
filed a notice of appeal challenging
the court’s order confirming Pasternak’s proposed sale of the properties. On March 10, 2010 the trial court granted
Pasternak’s request to place 24 real properties in the receivership and
authorized him to list the additional properties for sale. Soon thereafter, Deloje and Dumitrescu resolved
their family law dispute; and Deloje dismissed his appeal as to Dumitrescu
only. Judgment in the dissolution action
was entered on September 23, 2010.
Deloje, however, continued to prosecute the appeal against Pasternak
challenging the sale of the Crescent Drive properties, and Pasternak defended
it to preserve his right to use the proceeds of the sale to satisfy his
outstanding receivership fees.
On November
10, 2010 Deloje moved in the trial court to stay all proceedings relating to
the liquidation of his real properties pending resolution of the appeal, to
reduce the amount of the receiver’s bond retroactively and to terminate the
receivership and determine the amount of receiver’s fees and costs. After several continuances, on April 19,
2011 the court denied Deloje’s request to terminate the receivership. As for the stay request, the court ruled all
proceedings to liquidate the property would be stayed only if Deloje posted a
bond in the amount of $125,000 pursuant to Code of Civil Procedure section
917.4. Although Deloje did not post a
bond, Pasternak could not complete the sale while the property’s status
remained uncertain.
title="">[2] Pasternak continued to provide monthly
receivership reports to Deloje throughout this period. (See Cal. Rules of Court, rule 3.1182.)
On
September 19, 2011 we affirmed the trial court’s December 1, 2009 order,
holding the Crescent Drive properties were not exempt from execution and could
be sold to satisfy Pasternak’s fees and expenses. (See In
re Marriage of Deloje and Dumitrescu (Sept. 19, 2011, B220897) [nonpub.
opn.].)
6. Deloje’s
Motion To Terminate The Receivership and Pasternak’s Final Accounting
Following
our decision, Deloje moved to terminate the receivership and set a hearing as
to a final accounting of Pasternak’s fees and costs. Deloje withdrew the motion at the October 19,
2011 hearing, acknowledging the sale of the Crescent Drive properties was still
in progress and it would be improper to terminate the receivership while the
sale was pending. The court (a different
judge from the one who had appointed Pasternak) continued the matter at
Deloje’s request, but conveyed its displeasure with continuing the
receivership. The court observed that
Pasternak’s fees and expenses as of March 2010, at the time Deloje and his wife
settled their marital dispute, were approximately $50,000; and by October 2011
had nearly doubled with no further benefit to the estate: “I find this whole situation just absolutely
horrendous. What has gone on here, the
fees incurred[,] in other words, the selling property to cover fees, that it’s
all negative. It’s all just going
further into the hole. I don’t see the
benefit to the estate anywhere here, but nevertheless the orders are what they
are. . . . We need to
have an end game here. Otherwise
. . . [i]t will be a never ending cycle.â€
In response
to the court’s concerns about an unnecessarily prolonged receivership,
Pasternak explained he could have completed his work as receiver by selling the
Crescent Drive properties in the Spring of 2010 had Deloje agreed to abandon
his appeal challenging that sale. At
that time, Pasternak asserted, the sale would have likely covered the full
amount of receivership fees and expenses and the receivership could have been
terminated. Because Deloje had continued
to prosecute the appeal even after he settled his marital dispute, however, the
Crescent Drive properties could not be sold; the receivership remained active
pursuant to court order; and Pasternak was forced to defend the appeal as well
as spend additional time satisfying the receiver’s mandatory reporting
requirements.
The court
advised the parties it intended to terminate the receivership at the earliest
opportunity and ordered Pasternak to provide a final accounting. In the meantime, Pasternak was ordered to complete
the sale of the Crescent Drive properties.
On November
28, 2011 Pasternak moved ex parte for an order confirming the sale of other
real property in the receivership for the purpose of satisfying Pasternak’s
fees. Deloje objected. Deloje ultimately agreed to place $50,000 in
an escrow account until the amount of Pasternak’s fees was resolved by the
court. Based on that agreement,
Pasternak withdrew his request to sell additional property.
Deloje’s
motion to terminate the receivership and Pasternak’s final accounting of
receivership fees and expenses were finally heard together on February 22,
2012. Pasternak sought $117,587.48 in
fees and expenses related to the receivership: $88,335.83 for the period March
25, 2009 (the inception of the
receivership) through August 21, 2011, and $29,251.65 for the period
September 1, 2011 through “the anticipated termination of the receivership,â€
including $7,500 for “estimated future fees and costs†in connection with
attending the hearing and closing out the estate. Pasternak attached to his final accounting
his line-item billing reports, which included a description of the work
provided and the hours and costs incurred, and his declaration attesting to his
hourly rate. (See Cal. Rules of Court,
rule 3.1184.)
Deloje
contended Pasternak had committed various acts of negligence during the
receivership. Deloje also argued each
mandated receivership report following the September 2010 judgment in the
marital dissolution action was essentially the same but for an additional
sentence or paragraph and claimed Pasternak had vastly overbilled for his time
in preparing them. As for the fees
incurred in defending the appeal, Deloje did not challenge the reasonableness
of the fees, but argued that no fees should have been incurred at all. Rather, Pasternak should have “abandoned†the
appeal and sold the Crescent Drive properties following the March 2010
settlement between Deloje and Dumitrescu.
Deloje maintained that, contrary to Pasternak’s contention, Pasternak
could have completed the sale since no stay order was in effect. Overall, Deloje argued, Pasternak had spent
at most 118 hours in connection with the receivership. At Pasternak’s “average†billing rate of $500
per hour, Pasternak was entitled to no more than $59,000.
After
permitting additional briefing, on March 14, 2012 the trial court issued its
order awarding Pasternak a total of $64,287.60 in receivership fees: The award included the $55,862.60 Pasternak
had requested for fees and expenses incurred prior to the judgment in the
marital dissolution action (an amount the court implicitly found was reasonable
and in good faith) and $8,425 in additional postjudgment fees.
costs and fees relating to his defense of the prior appeal in this action,
agreeing with Deloje that Pasternak could have sold the Crescent Drive
properties and abandoned the appeal once the parties had settled their marital
dissolution dispute, thereby substantially reducing the costs of the receivership
and limiting further harm to the estate.
DISCUSSION
1. Standard
of Review
A trial court has broad
discretion in fixing the amount of fees awarded to a receiver. (Melikian
v. Aquila (1998) 63 Cal.App.4th 1364, 1368; People v. Riverside University (1973) 35 Cal.App.3d 572, 587.) Such an order will not be disturbed on appeal
unless a manifest abuse of discretion is shown.
(PLMC Group, Inc. v. Drexler (2000)
22 Cal.4th 1084, 1095.) The question
whether a party is legally entitled to fees at all is subject to de novo
review. (See generally
195 Cal.App.4th 373, 378 [order granting or denying attorney fees is
generally reviewed for an abuse of discretion; however, the determination
whether such fees are legally authorized is a question of law subject to de
novo review].)
2. Governing
Law
A receiver
is an agent of the court, appointed to aid it in preserving and managing the
property involved in the suit for the benefit of those to whom it may
ultimately be determined to belong. (
Cal.2d 494, 499; Gold v. Gold (2003)
114 Cal.App.4th 791, 806; see Cal. Rules of Court, rule 3.1179.) The receiver is entitled to reasonable
compensation for the services it performs.
(See Stanton v. Pratt (1941)
18 Cal.2d 599, 603 [receiver entitled to reasonable fees and expenses incurred
as compensation for fulfilling receivership duties]; Cal. Rules of Court,
rule 3.1184(d) [authorizing compensation for duties performed by
receiver].)
3. The
Trial Court Erred in Denying Pasternak His Fees Incurred in Defending the Prior
Appeal
In his
final accounting Pasternak reported he had incurred $18,000 in costs and fees
in defending the prior appeal in this matter.
The trial court denied Pasternak any fees in connection with the prior
appeal, agreeing with Deloje that Pasternak should have “abandoned†the appeal
following the entry of judgment in the marital dissolution action. The court’s reasoning is flawed. Deloje was the appellant in this collateral
receivership action, not Pasternak. To
the extent the appeal could have been abandoned, it was Deloje who was in the
position to do so and thereby permit the sale of the Crescent Drive properties
to pay Pasternak’s receivership fee in accordance with the trial court’s
order. He did not. By continuing to prosecute the appeal, Deloje
prolonged the receivership, forcing Pasternak to incur costs to defend the
appeal and complete the sale in accordance with the court’s order.
Deloje asserts Pasternak acted in
bad faith throughout the receivership, particularly in relation to expenses
incurred in listing other property for sale in Palm Springs, but does not
suggest the court applied any offsets in denying Pasternak fees for defending
the appeal; and no such finding can be inferred from this record. On remand, the trial court will have the
opportunity to consider in the first instance the reasonableness of the $18,000
Pasternak requested for defending the appeal along with any offsets, to the
extent any are applicable.
4. The
Trial Court Erred in Failing To Compensate Pasternak for His Efforts in
Finalizing the Sale of the Crescent Drive Properties
Pasternak
also contends the court erred by failing to compensate him for the time spent
effecting the sale of the Crescent Drive properties after September 25,
2010. It is not clear whether the trial
court refused to compensate Pasternak for those efforts based on its conclusion
that such efforts were primarily expended (and compensated) prior to
September 25, 2010 when Pasternak found the buyer and arranged the sale (a
matter fairly within the court’s discretion and for which it had already
compensated Pasternak), or on its erroneous finding Pasternak was at fault for
defending the appeal and delaying the sale.
Pasternak sought additional funds for his efforts in October 2011 to
finalize the sale once his authority to do so was resolved by this court. The trial court may find the total fees
requested in that regard are unreasonable or offset by other items; but on this
record the court’s decision to deny Pasternak any fees for his actions in
finalizing a court-ordered sale of property is unjustified.
5. The
Trial Court Did Not Err in Denying Pasternak’s Request for Additional Fees
Associated with the Preparation of Several Interim Reports
Pasternak also contends the court abused its discretion
in denying his request for $3,375 for the preparation of nine interim
receivership reports, which he was required to prepare. (See Cal. Rules of Court, rule 3.1182.) The trial court carefully considered
Pasternak’s request for fees in connection with reports generated after
September 25, 2010, aware those reports were legally required. Ultimately, the court found his request
unreasonable because the post-September 25, 2010 interim reports were
effectively identical to one another and to prior reports for which he had been
compensated (with some minor modifications to reflect the different time period). The court found any costs relating to these
additional reports were negligible.
Pasternak does not directly dispute that assessment, and our review of
the reports in the record supports the trial court’s characterization. The court’s refusal to award additional fees
for those reports was not an abuse of its broad discretion.
DISPOSITION
The March 14, 2012 order is
reversed to the extent it denies Pasternak any fees in connection with
defending the prior appeal in this action and finalizing the sale of the
Crescent Drive properties. On remand the
trial court is directed to determine the reasonable fees and costs incurred in
connection with those activities and whether any offsets should be applied. In all other respects the order is affirmed. Each party is to bear his own
PERLUSS,
P. J.
We
concur:
WOODS,
J.
ZELON,
J.
Roth IRA is a particular individual retirement plan defined in title 26 of the
United States Code sections 7701(a)(37) and 408a.
explained the buyer had refused to close the sale until Pasternak’s authority
to sell the property was resolved on appeal.
