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Who should I serve with my final account and report? Can I enter into a stipulation with the plaintiff approving my final account and report and discharging me? By Davidson, Peter* Q: I finally finished my activities as receiver and I am preparing my final account and report so I can get discharged. Who should I serve with my final account and report? Can I enter into a stipulation with the plaintiff approving my final account and report and discharging me? A: Very good question. The rules concerning the presentation of a receiver’s final account and report have changed a few times over the past three years. Effective January 1, 2002, California Rules of Court 1908 established rules relating to a receiver’s final account and report. As adopted, the rule provided that: “A receiver must present a final account and report by noticed motion.” The rule was silent as to who was to receive notice of the motion. By adopting the rule, the court by implication eliminated the ability of a receiver to enter into a stipulation with the parties approving his final account and report and/or discharging the receiver. Rule 1908 was amended again, however, effective the first of this year, to reintroduce stipulated approvals. It now provides that a receiver can present his final account and report, request for discharge, and/or a request for exoneration of the receiver’s bond either by noticed motion or “stipulation of all parties”. It also, for the first time, indicates who is to be served with notice of the motion or “of the stipulation”. Subsection (c) provides: “Notice of the motion or of 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 order or stipulation, whether or not the person or entity is a party to the action or has appeared in it.” Therefore, a receiver can enter into a stipulation approving his/her final account and report, discharging the receiver, and/or exonerating the receiver’s bond; however, the stipulation must be with “all parties”. You cannot simply stipulate with the plaintiff. This can be a problem where the defendant was involved only at the beginning of case, is without counsel or is no longer around. The alternative method of seeking approval of your final account and report, discharging you as receiver, and/or exonerating your bond, by a noticed motion, must be filed and served. Who must receive notice? The rule requires the receiver to give notice to “every person or entity known to the receiver to have a substantial, unsatisfied claim”. This should be known to the receiver in most cases. You should give notice to anyone you think might possibly have a claim against the receivership estate. Who that is will depend on the type of receivership case you are involved in. If you were the receiver for an apartment building or office building, you may want to give notice to all the tenants. You may also want to give notice to the taxing authorities and, of course, you should give notice to anyone who appeared in the case. The reason you want to give notice to anyone who might possibly have a claim is that if they do not object to your final account and report (after receiving proper notice), they cannot later pursue a claim against you as receiver or against the former receivership estate. See, Aviation Brake Systems, Ltd. v. Voorhis, 133 Cal. App.3d 230, 183 Cal Rptr. 766 (1982); Vitug v. Griffin, 214 Cal. App. 3d 488, 262 Cal. Rptr. 588 (1989). Another addition to Rule 1908, adopted this year, is subdivision (b), which provides: “No memorandum needs to be submitted in support of the motion or stipulation served and filed under (a) unless the court so orders”. *PETER A. DAVIDSON, an attorney with Rein Evans & Sestanovich LLP located in Los Angeles, is a receiver and an attorney who specializes in representing receivers in state and federal court. |