Bedrosian v. Hadid CA2/5 ( 2021 )


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  • Filed 3/4/21 Bedrosian v. Hadid CA2/5
    NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
    California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
    not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
    has not been certified for publication or ordered published for purposes of rule 8.1115.
    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
    2
    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.”
    4
    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
    5
    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
    6
    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:
    7
    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
    9
    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.”
    10
    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.
    11
    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
    12
    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.
    13
    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,
    14
    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.
    15
    

Document Info

Docket Number: B303713

Filed Date: 3/4/2021

Precedential Status: Non-Precedential

Modified Date: 3/4/2021