Spring 2020 • Issue 68, page 1

Post-Judgement Receiverships: A Refreshing Discussion at the Loyola VIII Symposium with the Honorable Edward B. Moreton (LASC Dept. 44)

By Muse-Fisher, Michael*

A post-judgment receiver can be an extremely effective tool for a judgment creditor. Especially when the judgment debtor goes to great lengths to hide assets through schemes and artifices in the hopes of “wearing out” the judgment creditor, believing that at some point the creditor will simply give up. However, whether because practitioners are unfamiliar with post-judgment receiverships, or because creditors are fearful that post-judgment receivers will be too expensive, this potent tool is often underused or overlooked.

The right to a post-judgment receiver is authorized by statute [See e.g., Code of Civil Procedure § 708.620 and Code of Civil Procedure §§ 564(b)(3),(4)], and has been approved in numerous California cases. See e.g., Olsan v. Comora (1977) 73 Cal.App.3d 642; Crocker National Bank v. O’Donell (1981) 115 Cal.App.3d 264. The broad authority given to a post-judgment receiver has also been recognized by Courts throughout California. See e.g., Morand v. Sup. Ct (1974) 38 Cal.App.3d 347. These same cases concede that in some instances, a post-judgment receiver may be the only means of collecting on a judgment. Furthermore, in certain instances a post-judgment receiver may be the only method for levying on certain assets including liquor licenses [See Code of Civil Procedure § 708.630] and intellectual property, including patents. See e.g., Yufa v. TSI Inc., 2012 U.S.Dist. LEXIS 129403 (N.D. Cal. 2012). Yet, notwithstanding the broad authority for a post-judgment receiver and the fact that in some instances a post-judgment receiver may be required, practitioners rarely deploy this immensely effective tool.

This sentiment was echoed by the panelists at the California Receiver’s Forum Loyola VIII Symposium Post-Judgment Receivership Panel. On January 24, 2020, I had the great fortune of being able to moderate a lively discussion amongst experts in the industry, including Jake Diiorio [a Receiver from the Stapleton Group], Lei Lei Wang Ekvall [a Partner at Smiley Wang-Ekvall LLP], and the Honorable Edward B. Moreton, Judge Presiding in Department 44 of the Los Angeles Superior Court [the department responsible for all post-judgment matters at the Stanley Mosk Courthouse]. The panelists imparted their respective expertise from the vantage of the receiver, the creditor, and the Court on a wide range of issues affecting post-judgment receivers, and did not shy away from tough questions asked by the audience.

Those in attendance had the chance to ask questions directly of Judge Moreton, one of the leading judges overseeing post-judgment receivers in all of Los Angeles County. Judge Moreton explained that there is no hard or fast rule for when a post-judgment receiver is warranted in a particular case, but the remedy is not one that the Court will shy away from, especially if the facts warrant such relief. Judge Moreton also explained that he was very impressed with the effectiveness and skill employed by most post-judgment receivers appointed in cases he was overseeing.

Mr. Diiorio and Ms. Wang-Ekvall also imparted a wealth of wisdom for practitioners including this often-overlooked benefit –the mere threat of a post-judgment receiver can often get an elusive debtor to start talking settlement. I personally have successfully moved for the appointment of dozens of post-judgment receivers for creditor clients, and I echo the sentiment of Mr. Diiorio and Ms. Wang-Ekvall. In about half of the cases, after filing a motion for the appointment of a post-judgement receiver, the creditor magically finds resources to settle out the judgment. So while costs are always a concern for a post-judgment receiver, the value of such relief should not be overlooked by practitioners or creditors.

*Michael Muse-Fisher is Senior Counsel of Buchalter, APC. Mr. Muse-Fisher specializes in creditor’s rights, real estate disputes, corporate and partnership disputes, copyright and trademark disputes, cannabis law, and alternatives to bankruptcy.