Q: In the last issue of Receivership News, Ask
the Receiver discussed whether, in federal court, an order approving a
receiver's sale of assets is appealable. While the discussion was
interesting, it was not too helpful to me because I am a state court
receiver. What is the rule in California state court? Are orders approving
a receiver's sale appealable?
A: As the prior Ask the Receiver indicated, in federal court the
appealability of orders in a receivership are limited to three types of
orders: (1) orders appointing a receiver; (2) orders refusing to windup a
receivership; and (3) orders refusing to take steps to accomplish the
purposes for winding up a receivership. 28 U.S.C. § 1292 (a)(2). The rule
in state court is different.California Code
of Civil Procedure § 904.1 lists the type of orders and judgments that are
appealable. An order approving the sale of property is not listed. One
might assume, therefore, that a sale order is not appealable, but that is
incorrect. The case law holds that: “while not expressly appealable, an
interlocutory judgment is nevertheless appealable to the extent that it
requires as a collateral matter, the immediate payment of money or the
performance forthwith of an act. Thus, it has been held that an order
approving the sale of assets is final and appealable as a final
determination in a special proceeding. (citations omitted).” City of
Riverside v. Horspool, 223 Cal. App. 4th 670, 683 (2014); Fish v. Fish,
216 Cal. 14, 16 (1932) (finding that order approving sale of receivership
property, to pay the receiver's fees, was appealable); California etc.
Assn. v. Superior Court, 8 Cal. App. 711 (1908) (writ of prohibition to
restrain receiver from selling personal property denied because the order
approving the sale was appealable).
The City of Riverside case also points out that,
although the sale order is appealable, if the appellant does not obtain a
stay and post a bond as required by C.C.P. § 917.4, the sale can go
forward and, if the sale closes, the appeal is moot. 223 Cal. App. 4th at
685. In the case, the appellant also argued that the court lacked
authority to approve the sale free and clear of liens - an issue that has
been debated for some time by receivers in California. The court easily
dispensed of that argument stating: “A court of equity has the power to
order the sale of property free and clear of liens and encumbrances.” Id.
Therefore, in California, an order issued by the
Superior Court approving a receiver's sale is appealable, but if the
appellant does not obtain a stay of the order, the sale can go forward
and, if the sale closes, the appeal will be moot.
*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.
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