Q: I have concluded my work as a receiver in a
case, and the parties have requested that I enter into a stipulation with
them waiving my final account and report discharging me as a receiver so
they can avoid the cost and delay of my preparing a final account and
report and the hearing on same. Is this a good practice?
A: Although in the past parties would sometimes 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 cost
involved, in 2002, Rule of Court 1908 was adopted, which changed the
ability of the parties to waive the receiver’s final account and report or
the hearing on the final account and report. In 2004, the rule was changed
again and Rule of Court 3.1184 was adopted, again allowing stipulations,
but still requiring the preparation and filing of a final account and
report. Even if the parties are proceeding by stipulation rather than
motion, therefore, the receiver is still required to prepare: (1) a final
account and report; (2) a request for discharge; and (3) a request for
exoneration of the receiver’s surety. In addition, notice of the motion or
the stipulation must be given to every person or entity known to the
receiver to have a substantial, unsatisfied, claim that will be affected
by the motion or stipulation, whether or not the person or entity is a
party to the action. This is really for the receiver’s benefit since such
an order insulates the receiver from later liability based on the
receiver’s conduct during the receivership. Aviation Brake Systems, Ltd.
v. Voorhis, 133 Cal. App. 3d 230 (1982). When preparing a final account
and report, be sure to detail your activities as receiver, and your
receipts and disbursements, and serve notice of the hearing on the final
account and report and your request for discharge on all parties and all
possible claimants to get the maximum protection. While proceeding by
stipulation is now permitted, there may not be a big advantage because
notice of the stipulation or motion still has to be served on all possible
affected parties. An advantage of proceeding by stipulation, however, is
that the receiver knows in advance that the parties to the case have
stipulated that they have no objection to the final account and report and
what the receiver has been paid. Another possible benefit to a stipulation
is that the receiver can probably get discharged quicker than if he or she
had to proceed by motion, which in some courts now, because of budget cut
backs, can take five or more months.
*Peter A. Davidson is a Partner of Ervin
Cohen & Jessup LLP a Beverly Hills Law Firm. His practice includes
representing Receivers and acting as a Receiver in State and Federal
Court. |