|
|
|
I have concluded my work as receiver in a case & the parties have requested that I enter into a stipulation with them waiving my final account & report & discharging me as receiver, in order to avoid the cost of my preparing a final account & report & the hearing on same. Is this still good practice? By Davidson, Peter* Q: I have concluded my work as receiver in a case and the parties have requested that I enter into a stipulation with them waiving my final account and report and discharging me as receiver, in order to avoid the cost of my preparing a final account and report and the hearing on same. I have done this in the past. Is this still good practice? A: No. Although in the past parties would often enter into stipulations
with a receiver to waive his or her final account and report and stipulate
to the receiver’s discharge so as to avoid the costs involved, on January
2, 2002, Rule of Court 1908 was adopted, which changes the ability of
parties to waive the receiver’s final account and report or the hearing on
the final account and report. Rule of Court 1908 provides: “A receiver
must present a final account and report by noticed motion. If any
allowance of compensation for the receiver or for an attorney employed by
the receiver is claimed in the account, it must state in detail what
services have been performed by the receiver or the attorney, and whether
previous allowances have been to the receiver or the attorney and the
amounts” [emphasis added]. As the Rule is written, the receiver must
present his or her final account and report by noticed motion, it cannot
be waived by stipulation. Further, while wai-ving the receiver’s final
account and report and the hearing on the account and report saves money
it may not be in the receiver’s best interest. By preparing a final
account and report and detailing your activities as receiver, and your
receipts and disbursements, and serving notice of the hearing on the final
account and report and your request for discharge on all parties and all
possible claimants, once the court approves your final account and report,
that order insulates you from later liability based on your conduct as
receiver during the receivership. Aviation Brake Systems, Ltd. v. Voorhis,
133 Cal. App. 3d 230 (1982). Without preparing a final account and report
and setting it for hearing on notice to all parties that might have a
claim, the receiver may be deprived of this important protection.
Therefore, irrespective of the fact that the Rule 1908 requires the final
account and report to be heard on noticed motion, it is good practice for
a receiver to prepare and have heard, on noticed motion, his or her final
account and report and request for discharge. |