Bedrosian v. Hadid CA2/5 ( 2021 )

Filed 3/4/21 Bedrosian v. Hadid CA2/5
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
JOHN C. BEDROSIAN et al., B303713
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. SC129388)
v.
MOHAMED HADID et al.,
Defendants and Appellants.
APPEAL from an order, of the Superior Court of Los
Angeles County, Craig D. Karlan, Judge. Affirmed.
Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg
& Rhow, Gary S. Licenberg, Ariel A. Neuman and Shoshana E.
Bannett for Plaintiffs and Respondents.
Lewis Brisbois Bisgaard & Smith, Roy G. Weatherup and
Caroline E. Chan; Law Offices of Abdulaziz, Grossbart &
Rudman, Bruce D. Rudman for Defendants and Appellants.
__________________________
Defendants Mohamed Hadid and Strada Vecchia, LLC
appeal the trial court’s order appointing a receiver to oversee the
demolition of defendants’ “megamansion.” Although defendants
agreed in the trial court that the unpermitted structure needed to
be demolished, they now argue there was no evidence the house
posed a danger to the plaintiffs or that it constituted a public
nuisance, as the trial court found. They also argue that the order
included an injunction for the demolition of their property which
was invalid because the trial court did not order plaintiffs to post
an injunction bond. We find no error and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs John Bedrosian et al. own homes in Bel Air at the
bottom of a hillside. Perched above their houses is defendants’
nearly-completed mansion (the Property). Plaintiffs sued
defendants in 2018 for fraud, nuisance and related claims arising
from defendants’ unpermitted construction. The City of Los
Angeles (City) was also named as a defendant with respect to
plaintiffs’ claim for a writ of mandate asking the City to remove
“all improvements” on the Property.
The complaint alleged that defendants began construction
on the megamansion in 2011, and over the next several years, the
Los Angeles Department of Building and Safety (LADBS) issued
11 citations for Building Code violations. Despite multiple orders
to stop the construction, defendants continued to build. In 2014,
the LADBS revoked defendants’ permits. Plaintiffs alleged the
Property’s construction created unsafe conditions on the slope
above their homes, increasing the risk of slope failures and
mudslides that could cause the Property to topple onto plaintiffs’
homes.
In March 2019, plaintiffs moved for a temporary
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restraining order requiring the City to enforce its regulations
regarding demolition of illegal construction. The trial court held
multiple evidentiary hearings, and ultimately found that
“safety—both at the jobsite and for adjoining neighbors—
necessitated” the demolition of certain portions of the structure.
The pool deck structure and most of the third floor were removed
pursuant to this order.1 The court ordered plaintiffs to post a
bond in the amount of $10,000.
In November 2019, plaintiffs filed an ex parte application
for appointment of a receiver to take possession of the Property to
demolish the structure down to the foundation. Plaintiffs moved
under Code of Civil Procedure section 564, subdivision (b)(9)
(Section 564(b)(9)) which provides for the appointment of a
receiver in a pending proceeding “ ‘where necessary to preserve
the property or rights of any party.’ ”2 The trial court conducted a
site visit, permitted supplemental briefing, and held two
hearings. At the November 13, 2019 hearing, defendants’ counsel
agreed with plaintiffs that the entire structure needed to be
1 This order is not the subject of the present appeal.
2 Section 564(b)(9) provides in full, “(b) A receiver may be
appointed by the court in which an action or proceeding is
pending, or by a judge of that court, in the following cases:
[¶] . . . [¶]
(9) In all other cases where necessary to preserve the
property or rights of any party.”
All further undesignated statutory references are to the
Code of Civil Procedure.
3
demolished down to the foundation slab.3 Defendants’ contractor
testified that the structure could be demolished safely.4
On December 2, 2019, the trial court granted the
application and appointed a receiver to oversee the demolition of
the Property. The court ordered that the house be demolished
down “to the foundation slab” because it was not compliant with
the Building Code and was a public nuisance. It was undisputed
that several “elements of the foundation were unapproved and
fail to comply with the Los Angeles Building Code,” and the
LADBS Chief of Structural Plan Check and Seismic Retrofit
Divisions had stated that “LADBS measures safety by code
compliance.” As a result of defendants’ failure “to address the
slope issues” created by their unpermitted removal of “thousands
of cubic yards of soil” from the property, the court observed that
“it is simply unclear whether the remaining soil and slope can be
relied upon to support the structure at issue, even if the
foundation had been built as per approved plans.”
The court concluded that the structure is a “public nuisance
and a danger to the public” and that “Plaintiffs and other
3 At the November 13, 2019 hearing, the court said, “It
sounds like even the defense is in agreement that this has to
come down. It sounds like what you’re saying is: we’re willing to
take it down, but we need to wait until we get approval of new
plans.” Defense counsel responded, “Yes and yes. We believe
that our retrofit program could work.”
4 The trial court asked defendants’ contractor, “Do you have
any question that you could do this safely?” The contractor
responded, “I would definitely consult a demolition engineer, for
sure, and we would phase it. . . . It can be done safely,
absolutely.”
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individuals are at a legitimate risk of suffering damage and harm
to their homes.” The trial court appointed a receiver “to take
possession, custody, and control” of the Property “for the sole
purpose of demolishing” the Property, and “to address and
remedy any and all soil[] and hillside stability issues.” The court
ordered the receiver to “work with necessary professionals to
propose a plan to safely complete demolition of the structure on
the Receivership Property (leaving the foundation slab and
below-grade piles in place).
The parties returned for a hearing on December 20, 2019,
to discuss payment of the receiver’s fees. On January 21, 2020,
the court entered an amended order adding language about
payment of the receiver. The parties appeared again on
January 31, 2020, on defendants’ motion to stay which the trial
court denied. In February 2020, defendants unsuccessfully
moved for reconsideration, and then appealed.
DISCUSSION
Defendants argue the trial court erred in authorizing the
receiver to oversee the demolition of the Property because there
was no evidence supporting the court’s finding that plaintiffs’
properties were in danger and the appointment order was not
authorized by statute. Defendants also argue the trial court had
no authority to appoint a receiver because “any right to abate the
alleged nuisance had not been established at trial.” Lastly,
defendants argue the trial court abused its discretion in not
requiring a bond under Code of Civil Procedure section 529,
subdivision (a) (Section 529(a)).
1. Substantial Evidence of Danger
Defendants first contend there was insufficient evidence
the Property posed a danger to plaintiffs necessary to support
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either the issuance of an injunction or the appointment of a
receiver. We observe pointedly that the opening brief recites only
the evidence in defendants’ favor and omits evidence supporting
the court’s order. “When a party challenges on appeal the
sufficiency of evidence, the party must discuss all the evidence
supporting the court’s ruling or the party waives the point.”
(Gombiner v. Swartz (2008) 167 Cal.App.4th 1365, 1374; see Cal.
Rules of Court, rule 8.204(a)(2)(c).) Here, defendants purport to
attack the sufficiency of the evidence in support of the trial
court’s finding of danger but do so without a fair recitation of all
the evidence, favorable and unfavorable to them. We deem the
contention waived.
Defendants’ argument also fails on the merits. It is
undisputed that the structure’s foundation was built according to
plans that were never submitted or approved by the City. It was
further undisputed that the foundation violated several Building
Code provisions. Foremost was that certain columns and beams
had insufficient rebar. The LADBS Chief of Structural Plan
Check and Seismic Retrofit Divisions, Shahen Akelyan, testified
that LADBS measures safety by compliance with the Building
Code.
Akelyan also testified that structure’s Building Code
violations compromised its ability to withstand an earthquake.
Based on information provided by the structural engineer
responsible for the project, LADBS concluded “the existing
piles/columns are not adequate and could not support the
structure.” As a result, and because any effort to bring the
structure into compliance would “severely compromise the
integrity and safety of the existing structure,” LADBS
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determined the structure needed to be demolished to the
foundation slab.
Finally, a geotechnical engineer expressed the opinion that
in case of “a severe storm and/or significant seismic event,
substantial amounts of earth material could fall rapidly onto the
properties below, resulting in property damage and/or the
potential for life-threatening injuries to those in its path,” and “if
the entire structure is demolished (with the exception of the
below-grade piles) it would significantly increase the feasibility of
stabilization of the currently unsafe hillside . . . .”
We conclude substantial evidence supported the court’s
express findings that the Property posed a danger to plaintiffs’
properties because the structure could fail in an earthquake or
storm and fall on the homes below.
2. The Trial Court Was Authorized to Appoint a
Receiver and Acted within its Discretion in Doing So
Under Section 564(b)(9), the trial court may appoint a
receiver “where necessary to preserve the property or rights of
any party.” A “receiver has, under the control of the court, power
to bring and defend actions in his own name, as receiver; to take
and keep possession of the property, to receive rents, collect
debts, to compound for and compromise the same, to make
transfers, and generally to do such acts respecting the property
as the court may authorize.” (§ 568.)
Defendants argue in their opening brief that the
appointment order was unauthorized because it was issued
before a final judgment. They cite as authority section 564(b)(3).5
5 Section 564(b)(3) provides:
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In their Respondents’ Brief, plaintiffs remind defendants that the
trial court appointed the receiver under a different section, one
that does not require a judgment. The trial court’s minute order
states, “Under Code of Civil Procedure section 564, subdivision
(b)(9), the Court is empowered to appoint a receiver ‘where
necessary to preserve the property or rights of any party.’ The
burden is on the moving party to establish the statutory grounds
for appointment of a receiver. The Court finds that Plaintiffs
have met their burden and have established a statutory basis for
the appointment of a receiver under Code of Civil Procedure
section 564, subdivision (b)(9).”
In their reply brief, defendants shift their argument to the
statute under which the trial court appointed the receiver,
Section 564(b)(9). Defendants contend the trial court acted
without authority because Section 564(b)(9) only authorizes the
appointment of a receiver where necessary to preserve “legally
established rights” or rights “established at trial.” Defendants
cite no authority for this proposition. More fundamentally,
defendants’ argument is contrary to the statute’s express
language which broadly authorizes the appointment of a receiver
when “an action or proceeding is pending.” (§ 564, subd. (b).)
Having concluded that the trial court had the authority to
appoint a receiver when it did, we review the court’s order under
the abuse of discretion standard of review. (City of Sierra Madre
“A receiver may be appointed by the court in which an
action or proceeding is pending, or by a judge of that court, in the
following cases:
[¶]
(3) After judgment, to carry the judgment into effect.”
8
v. SunTrust Mortgage, Inc. (2019) 32 Cal.App.5th 648, 657.)
Whether to appoint a receiver is “addressed to the sound
discretion of the court, exercised upon all the facts [citation], and
where a finding, based upon conflicting evidence, is to the effect
that danger is threatened to property or funds, and the
appointment of a receiver is made, it is seldom that the reviewing
court will hold that the lower tribunal has been guilty of an abuse
of the discretion confided to it. [Citation.]” (Breedlove v. J.W. &
E.M. Breedlove Excavating Co. (1942) 56 Cal.App.2d 141, 143.)
More expressively, “considerable deference” is afforded to
“court decisions that are drastic enough to extinguish an owner’s
interest in property” and to decisions regarding “the demolition of
substandard structures that pose a substantial health and safety
risk.” (City of Santa Monica v. Gonzalez (2008) 43 Cal.4th 905,
930.) We conclude the court did not abuse its discretion in
appointing a receiver. The facts that we have already described
— the real danger as found by the court — support the trial
court’s exercise of its discretion to appoint the receiver.
3. The Trial Court had the Authority to Order Nuisance
Abatement
Defendants argue the trial court had no authority to order
the receiver to abate the alleged nuisance because the existence
of a nuisance is a question of fact that “can only be determined by
a jury.” According to defendants, the “denial of a trial by jury to
which a litigant is entitled constitutes a miscarriage of justice
and requires reversal of the judgment.”
Defendants have not been denied a trial on the nuisance
claim. As defendants point out in their opening brief, a trial date
had, in fact, been scheduled in this action. The trial court’s
finding that the Property constitutes a public nuisance was a
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preliminary finding based on the evidence presented at this
interim stage of the proceedings. “The trial court’s order on a
request for a preliminary injunction ‘reflects nothing more than
the superior court’s evaluation of the controversy on the record
before it at the time of its ruling; it is not an adjudication of the
ultimate merits of the dispute.’ ” (See People v. Uber
Technologies, Inc. (2020) 56 Cal.App.5th 266, 303–304.) Even if
the trial court erred in finding the Property an actual nuisance —
although this is hard to imagine—we would find no reversible
error as the court’s order was also supported on the undisputed
fact that the Property was not code-compliant and created a
serious danger to persons and property.
4. Defendants Both Forfeited and Waived the Argument
that an Injunction Bond Was Required
Defendants argue the trial court abused its discretion in
failing to require a bond under Section 529, subdivision (a)
(Section 529(a)). That section broadly states that the trial court
must require an undertaking when granting an injunction.6
Defendants treat the injunctive portion of the receivership order
6 Section 529(a) provides: “On granting an injunction, the
court or judge must require an undertaking on the part of the
applicant to the effect that the applicant will pay to the party
enjoined any damages, not exceeding an amount to be specified,
the party may sustain by reason of the injunction, if the court
finally decides that the applicant was not entitled to the
injunction. Within five days after the service of the injunction,
the person enjoined may object to the undertaking. If the court
determines that the applicant's undertaking is insufficient and a
sufficient undertaking is not filed within the time required by
statute, the order granting the injunction must be dissolved.”
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as a separate order for demolition, and argue it was a mandatory
injunction. In defendants’ view, this injunction is “null and void”
because no bond was ordered.7 The demolition order, to be sure,
is part of the order appointing the receiver. We will assume but
not decide that Section 529(a) applies because the order
essentially grants a mandatory injunction. Nevertheless, we
agree with plaintiffs that defendants both forfeited and waived
their argument that a bond is required by failing to raise it in the
trial court, and conceding the Property had to be demolished,
leaving nothing to bond.
Upon granting a preliminary injunction, a court must
require the applicant to post an undertaking to protect the
enjoined party. (§ 529(a).) The undertaking must be in an
amount sufficient to pay the enjoined party “any damages . . . [it]
may sustain by reason of the injunction, if the court finally
decides that the applicant was not entitled to the injunction.”
(Ibid.) Ordinarily, a preliminary injunction cannot take effect
until the applicant provides such an undertaking. (See City of
South San Francisco v. Cypress Lawn Cemetery Assn. (1992)
11 Cal.App.4th 916, 920.) The Section 529(a) bond requirement
7 Defendants also argued that the order was automatically
stayed because it contained a mandatory injunction. (See 9
Witkin, Cal. Procedure (5th ed. 2020), Appeal § 270.) Defendants
filed a petition for writ of supersedeas in this court requesting a
stay. We denied the writ on March 20, 2020, and the Supreme
Court denied a petition for review on June 10, 2020. The focus of
the opening and reply briefs on appeal is on the trial court’s
failure to require a bond, not that the order is automatically
stayed. The parties do not tell us whether the property has been
demolished or if the trial in this case has been re-scheduled or
completed.
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may be waived or forfeited by the party to be enjoined. (See
Smith v. Adventist Health System/West (2010) 182 Cal.App.4th
729, 744 (Smith).) Waiver is the express relinquishment of a
known right, whereas forfeiture is the failure to object or invoke a
right. (See In re Sheena K. (2007) 40 Cal.4th 875, 880, fn. 1.)
Defendants do not dispute that they failed to address the
requirement of a bond with the trial court, either in the papers
they filed in opposition to the application or during oral argument
at the two hearings or in their motion for reconsideration. They
also acknowledge Smith’s holding that the bond requirement may
be forfeited, but urge us not to follow Smith. Defendants contend
Smith is “inconsistent” with three cases: Neumann v. Moretti
(1905) 146 Cal. 31 (Neumann), Griffin v. Lima (1954)
124 Cal.App.2d 697 (Griffin), and ABBA Rubber Co. v. Seaquist
(1991) 235 Cal.App.3d 1 (ABBA).
In Smith, the doctor-plaintiff sought a preliminary
injunction that his status at a hospital be restored until his
lawsuit was decided. (Smith, supra, 182 Cal.App.4th at p. 738.)
The plaintiff argued in his application that a bond was
“unnecessary.” (Ibid.) The defendant did not respond to this
argument or mention the bond requirement in its opposition
papers. (Ibid.) In the order granting the preliminary injunction,
the trial court stated only that no injunction bond was ordered to
be posted. (Ibid.) The Court of Appeal concluded that by waiting
to raise the issue until after the notice of appeal was filed, the
defendant forfeited the right to a bond. (Id. at pp. 748–749.)
Here, defendants had multiple opportunities to ask the
court to require an injunction bond including at two hearings post
the trial court’s order appointing the receiver: the December 20,
2019 hearing on payment of the receiver, and January 31, 2020
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hearing on defendants’ motion to stay. As in Smith, defendants
did not address the issue in the trial court, but waited until four
months after plaintiffs had applied for a receiver before raising
the issue in its writ petition filed with this court.8 By failing to
assert the lack of a bond in a timely fashion, defendants have
forfeited the issue. In words that could have been written with
the present case in mind, the Smith court held: “[W]e are
disinclined to allow parties to achieve a greater benefit by saving
the injunction bond issue for appeal when it could have been
dealt with more efficiently in the lower court with much less
detriment to the party who obtained the injunction. Addressing
the issue on appeal would encourage ‘sandbagging.’ ” (Smith,
supra, 182 Cal.App.4th at pp. 748–749.)
In addition to forfeiture, plaintiffs also argue the closely
related concept of waiver—defendants affirmatively agreed in the
trial court that demolition was necessary, and did not dispute the
evidence that the Property was more valuable with the structure
removed.9 In their reply, defendants do not respond to plaintiffs’
8 Defendants did, however, address other bonds, for example,
offering to post an undertaking under section 917.5 if the trial
court stayed the proceedings pending appeal.
9 At the November 20, 2019 hearing, counsel for the bank
that provided the construction loan asserted that “the value of
the property as is—because we have a non-conforming structure
on the property that we just cannot turn around and sell, for
obvious reasons—is the same $8,000,000 value of the land, less
the cost to completely demolish the structure, as well as pull the
piles out of the ground, the slab, as well, in order to create a
sellable piece of property.” Defense counsel did not dispute this.
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argument that this concession constituted a waiver and
essentially told the trial court there was nothing to bond.
Defendants’ acknowledgement that demolition was
necessary confirms that they failed to raise the issue of a bond for
tactical reasons. To the extent defendants might incur additional
costs in the demolition conducted under the receiver’s
supervision, they have not cited to anything in the record
showing that any amounts would be more than nominal. Under
these circumstances, we conclude defendants elected not to raise
the issue of a bond, thereby waiving the bond requirement. (See
City of Los Angeles v. Superior Court (1940) 15 Cal.2d 16, 23
[finding waiver where the parties both stipulated to entry of an
injunction and then one party waited a year before moving to
dissolve the injunction for lack of a bond].)
Nor are we persuaded by defendants’ broad argument that
Smith should not be followed “because its reasoning is
inconsistent with the mandatory language of [] section 529(a), as
well as being inconsistent with [] Neumann [], Griffin [], and []
ABBA.” Neither Neumann nor Griffin addresses forfeiture or
waiver. (Neumann, supra, 146 Cal. 31; Griffin, supra,
124 Cal.App.2d at pp. 698–700.) We agree with the Smith court
that ABBA, which also did not address forfeiture, stands only for
“the narrow proposition that an appellate court will not find as a
matter of law that a restrained party waives its statutory right to
a bond by failing to affirmatively request it when neither the
moving party nor the court has raised the topic prior to the trial
court’s ruling.” (Smith, supra, 183 Cal.App.4th at p. 744.) An
appellate court may not be required to find waiver in every case
where an “injunction bond” is not mentioned in the trial court,
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but here the record shows that defendants forfeited, and
affirmatively waived, a bond.
DISPOSITION
The order appointing a receiver to, among other things
oversee the demolition of appellants’ property is affirmed.
Respondents are awarded their costs on appeal.
RUBIN, P.J.
WE CONCUR:
MOOR, J.
KIM, J.
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