Court Opinion

ID: 4371504
Source: CourtListenerOpinion
Date Created: 2019-02-26 22:02:43.506304+00
Date Added: 2024-06-11T14:49:35.029168
License: Public Domain

Filed 2/26/19

                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                       DIVISION THREE

CITY OF SIERRA MADRE,              B284550

     Plaintiff and Respondent,     Los Angeles County
                                   Super. Ct. No. GC046442
     v.

SUNTRUST MORTGAGE, INC.,

     Defendant and Appellant;

DAVID J. PASTERNAK,

    Real Party in Interest and
Respondent.

     APPEAL from an order of the Superior Court of Los
Angeles County, William D. Stewart, Judge. Affirmed.
     Wright, Finlay & Zak, Jonathan D. Fink and Ruby J.
Chavez for Defendant and Appellant.
     Dapeer, Rosenblit & Litvak and William Litvak for Plaintiff
and Respondent.
     Pasternak, Pasternak & Alsbrook, David J. Pasternak and
Blake C. Alsbrook for Real Party in Interest.
     Michael N. Feuer, City Attorney (Los Angeles), Wilfredo R.
Rivera, Assistant City Attorney, Christina V. Tusan, Jeremy
Berzon and Rebecca Morse, Deputy City Attorneys for The People
of the State of California as Amici Curiae on behalf of Plaintiff
and Respondent and Real Party in Interest.
            _______________________________________

                        INTRODUCTION

       This is the second appeal before us involving a public
nuisance created by Jeffrey M. and Taryn N. Hildreth (the
Hildreths) on their residential property in Sierra Madre. (See
City of Sierra Madre v. Hildreth (Dec. 26, 2018, B281729)
[nonpub. opn.].) Because the Hildreths refused to abate the
nuisance, the City of Sierra Madre (City) brought the present
action against them and their mortgage lender, appellant
SunTrust Mortgage, Inc. (SunTrust), and sought the appointment
of a receiver to undertake the remediation. SunTrust did not
object to the appointment of the receiver or the remediation plan,
but when the receiver borrowed $250,000 to fund the remediation
work, SunTrust objected to the issuance of the lien securing that
loan because it had priority over SunTrust’s preexisting lien. The
receiver and real party in interest in this appeal sought approval
for the super-priority lien because no lender would loan funds
without it. SunTrust appeals the court’s order authorizing the
super-priority lien.
       SunTrust’s primary argument is that Health and Safety
Code section 17980.7—a statute authorizing the appointment of a
receiver in cases involving remediation of substandard
buildings—does not explicitly provide that a court may issue a
super-priority lien which displaces previously existing liens. We
reject this argument because the use of super-priority liens has
been approved in California since at least 1915. SunTrust’s

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remaining arguments are without merit. We therefore affirm the
order.

       FACTS AND PROCEDURAL BACKGROUND

1.    Over the course of more than 10 years, the Hildreths
      undertake several unpermitted construction projects
      on their residential property.
      In July 1998, the Hildreths purchased a small home in
Sierra Madre. The home was in substantial disrepair and the
Hildreths began a complete remodel—without the benefit of any
permits from the City. In October 1998, after the City issued a
stop work order due to the absence of permits, the Hildreths
requested and obtained permits for plumbing, building, electrical,
and mechanical work relating to the renovation. Although the
Hildreths eventually completed the work contemplated by the
permits and moved into the home, they never notified the City
the work was completed or requested a final inspection.
      Around the time the Hildreths began the renovation, they
decided they wanted to develop the home and the property for
commercial use—specifically, a wine tasting and sales business.
In September 1999, the Hildreths applied for a conditional use
permit describing their proposed business operation, but the City
never issued the requested permit. The Hildreths, however,
proceeded to develop the property for their proposed wine
business. In 2005, the City discovered the Hildreths had
excavated a large pit on the eastern side of their property which
caused a portion of an adjacent alley to collapse. The City
immediately issued a stop work order and required the Hildreths
to work with a licensed engineer and a licensed shoring
contractor, together with the City Building Department, to install

                                3
temporary shoring. The Hildreths later constructed an
unpermitted cement structure in the pit.
       Then, in early 2009, the City discovered the Hildreths
had—again without permits—excavated the western portion of
their property to a depth of 12 feet below ground level, including
the area underneath the western side of the house. The excavated
area ran the entire length of the property and extended east to
the unpermitted subterranean cement structure. In June 2009,
the City issued another stop work order. It appears SunTrust
refinanced the Hildreths’ mortgage during this time, as a deed of
trust evidencing a mortgage loan of $276,000 was recorded in
March 2009.
       In 2010, apparently undeterred by the City’s prior
warnings, the Hildreths erected a large, unpermitted deck in
their front yard that extended over the public sidewalk adjacent
to their property. In late October 2010, after receiving complaints
from City residents, the City inspected the property and issued
another stop work order.
2.    The City files a nuisance action naming the Hildreths
      and SunTrust as defendants.
       On December 1, 2010, the City filed the present action
against the Hildreths and SunTrust seeking declaratory relief
and asserting claims for public nuisance, municipal code
violations, and state housing law violations. The following month,
in January 2011, the court issued a preliminary injunction
identifying a minimum of 30 violations of state and local building
codes and prohibiting the Hildreths from performing any
additional work or residing in the home without required
permits, inspections, and approvals by the City. The court also
ordered the Hildreths to submit the requisite applications, plans,

                                4
documents, and fees to the City regarding the outstanding
violations and, upon approval by the City, to remediate the home
and the property.
3.    After the Hildreths fail to remediate the property, the
      court appoints a receiver. SunTrust does not object to
      the appointment.
      The Hildreths refused to cooperate with the City or comply
with the preliminary injunction. In August 2012, more than a
year and a half after the court issued the preliminary injunction,
the City asked the court to appoint a receiver to take custody and
control of the Hildreths’ property. SunTrust did not object to the
appointment. Citing the Hildreths’ continuing obstruction, the
court granted the City’s request and appointed David J.
Pasternak to act as the receiver. Because the Hildreths
obstructed the receiver’s work, the City and the receiver agreed
to postpone the remediation until after the court entered
judgment in the nuisance action.
4.    Following a lengthy bench trial, the court finds in
      favor of the City on all claims and enters judgment
      accordingly. SunTrust does not participate in the trial.
       The court conducted a 27-day bench trial during the spring
of 2016. SunTrust did not participate in the trial but reserved the
right to challenge the issuance of any lien that would displace its
position as first lienholder.
       The court issued a lengthy and thorough statement of
decision in support of its judgment in favor of the City on all
claims. As pertinent here, the court found the unpermitted and
unapproved construction constituted a public nuisance under the
City’s municipal code as well as under state law, and injunctive

                                 5
relief to abate the nuisance was appropriate. The court entered
judgment in the City’s favor in January 2017.
       Also, and as part of the judgment, the court ordered the
previously-appointed receiver to oversee remediation of the
property. The court found the Hildreths would not be willing or
able to remediate the property if given the opportunity to do so.
The Hildreths were required to pay the receiver’s costs, however.
5.    The receiver presents a remediation plan, which the
      court adopts. SunTrust objects to the proposed
      super-priority lien for the lender funding the
      remediation but does not object to the plan.
       In early April 2017, the receiver provided his remediation
report to the court. The property needed extensive and costly
work performed. Specifically, a contractor would need to fill the
excavated portion of the lot with slurry, increase the home’s
structural support, and remove the large deck encroaching on the
public sidewalk. The lowest of the three contractor bids was
approximately $250,000 and the bulk of the expense related to
filling in the pit under the Hildreths’ home.
       The receiver also advised the court that the value of the
property after remediation would be $175,000 to $200,000 as a
vacant lot and $465,000 to $495,000 with the rehabilitated home.
Because the cost to remediate the home was relatively small and
the increase in value was substantial, the receiver recommended
rehabilitating, rather than demolishing, the home.
       To fund the remediation, the receiver proposed borrowing
funds from South County Bank (bank), one of very few
institutional lenders willing to provide such funding. The bank
would require, however, its loan to be secured by a receiver’s
certificate with first priority, i.e., a senior lien on the property

                                 6
ahead of all other recorded liens and encumbrances
(super-priority lien). The receiver indicated no lender would loan
money to the receiver unless it received a super-priority lien. The
property as it then existed had no equity in light of the SunTrust
lien. And even after remediation, the property value would be
insufficient to satisfy the SunTrust lien, the substantial
attorney’s fees and cost award to the City (approximately
$875,000), and the receiver’s costs of administration. In other
words, according to the receiver, a lender would not be repaid
unless it had a super-priority lien on the property.
       SunTrust objected to the receiver’s proposed remediation
plan but only to the extent it provided a super-priority lien for
the bank that would displace SunTrust as the senior lienholder.
SunTrust did not challenge the receiver’s approach or the cost of
the remediation.
6.    The court authorizes the receiver to borrow funds as
      proposed. SunTrust appeals.
       On July 5, 2017, the court granted the receiver’s request in
large part.1 Specifically, the court authorized the receiver to
borrow $250,000 from the bank in exchange for a receiver’s
certificate in the amount of the loan with first priority ahead of
all other encumbrances if SunTrust opted not to fund the
remediation. SunTrust opted not to do so and appealed from the
July 5, 2017 order.

1The July 5, 2017 order substantially modified a June 2, 2017 order
authorizing the receiver to proceed as he proposed. The court
reconsidered that order, however, and the July 5, 2017 order is the
court’s final ruling.

                                  7
                           DISCUSSION

      SunTrust contends the trial court erred in authorizing the
receiver to issue a receiver’s certificate with first priority over all
other liens and encumbrances.
1.    The appeal is not moot.
        We first address, and reject, the City’s contention that the
present appeal is moot.
        “ ‘ “[W]hen, pending an appeal from the judgment of a lower
court, and without any fault of the defendant, an event occurs
which renders it impossible for this court, if it should decide the
case in favor of plaintiff, to grant him any effectual relief
whatever, the court will not proceed to a formal judgment, but
will dismiss the appeal.” ’ [Citations.]” (Panoche Energy Center,
LLC v. Pacific Gas & Electric Co. (2016) 1 Cal.App.5th 68, 95–
96.) “ ‘The pivotal question in determining if a case is moot is ...
whether the court can grant the plaintiff any effectual relief.
[Citations.] If events have made such relief impracticable, the
controversy has become “overripe” and is therefore moot.’
[Citation.]” (Id. at p. 96.)
        The City contends SunTrust’s appeal is moot because the
receiver, in accordance with the order appealed by SunTrust,
obtained a loan from South Coast Bank to fund the remediation
of the Hildreths’ property and secured that loan with a
super-priority lien. Essentially, the City contends SunTrust
forfeited the right to challenge the court’s July 5, 2017 order
authorizing the receiver to provide a super-priority lien because
SunTrust did not obtain a stay of the order pending appeal. We
disagree. Although it appears the remediation is complete at this
point, that fact does not prevent us from resolving the issue

                                   8
presented here concerning the relative priority of liens on the
Hildreths’ property. And even if the property had been sold and
the funds improperly dispersed, SunTrust might still have a
remedy in equity against the recipient of those funds.
2.    The court did not abuse its discretion in authorizing a
      super-priority lien to secure the loan taken by the
      receiver to fund remediation of the Hildreths’
      property.
      2.1.   Legal Principles
       The function of the receiver is to aid the court in preserving
and managing the property involved in a particular lawsuit for
the benefit of those to whom it can ultimately be determined to
belong. (Free Gold Mining Co. v. Spiers (1901) 135 Cal. 130, 132;
City of Santa Monica v. Gonzalez (2008) 43 Cal.4th 905, 930
(Gonzalez); City of Chula Vista v. Gutierrez (2012) 207
Cal.App.4th 681, 685 (Chula Vista).) A receiver is an officer of the
court and is subject to the court’s continuing control; a receiver
only has those powers granted to it by statute or an order of the
court. (Gonzalez, p. 930; Code Civ. Proc., § 568.) The receiver,
acting for the court, is not the agent of any party but acts for the
benefit of all holding an interest in the receivership property.
(Gonzalez, p. 930; Cal. Rules of Court, rule 3.1179(a).)
       A receiver has the power, with court authorization, to take
possession of property, receive rents, collect debts, borrow money,
and sell real or personal property in receivership pursuant to
court order. (Code Civ. Proc., §§ 568, 568.5.) The receiver acquires
no title in the property but instead acts as an officer of the court,
and title remains vested in those persons or entities in whom it
was vested when the receiver was appointed. (North v. Cecil B.

                                 9
DeMille Productions, Inc. (1934) 2 Cal.2d 55, 58; Kaura v.
Stabilis Fund II, LLC (2018) 24 Cal.App.5th 420, 433.)
       Most matters related to receiverships rest in the sound
discretion of the trial court. As our Supreme Court noted in
Gonzalez, for example, 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 or
rehabilitation of substandard structures. (Gonzalez, supra, 43
Cal.4th at p. 931.) Similarly, the amount of compensation paid to
a receiver is within the court’s discretion. (People v. Riverside
University (1973) 35 Cal.App.3d 572, 587 [“It is settled that fees
awarded to receivers are in the sound discretion of the trial court
and in the absence of a clear showing of an abuse of discretion, a
reviewing court is not justified in setting aside an order fixing
fees.”].) And although the receiver’s compensation is typically
paid from the receivership estate, the court has considerable
discretion to determine who must ultimately bear the cost of the
receivership. (See, e.g., Ephraim v. Pacific Bank (1900) 129 Cal.
589, 592 [noting “the general rule that the costs of a receivership
are primarily a charge upon the fund in his possession” but that
“ ‘it may sometimes happen that a direct liability is imposed upon
the parties to the action, or upon some of them, for the
remuneration of the receiver’ ” due to “ ‘irregularity of the
appointment, or from the insufficiency of the fund, or out of the
agreement between the parties’ ”]; Baldwin v. Baldwin (1947) 82
Cal.App.2d 851, 855 [“ ‘As a general proposition the costs of a
receivership are primarily a charge upon the property in the
receiver’s possession and are to be paid out of said property.
However, this is not an invariable rule. In many cases a direct
liability is imposed upon the parties to the action, or upon some

                                10
of them, for the remuneration of the receiver.’ ”].) Here, as noted,
the court imposed the cost of the receivership on the Hildreths.
SunTrust has not challenged that determination.
       Courts also have substantial discretion to authorize a
receiver to borrow money to fund the preservation and
management of property in the receivership estate, particularly
where, as here, the estate does not produce income. In that
circumstance, the receiver may ask the court to authorize the
issuance of a receiver’s certificate to the lender as security for
money loaned to the estate. Typically, such a receivership
certificate will have priority over all other liens—even preexisting
liens. (See, e.g., 12 Miller & Starr, Cal. Real Estate (4th ed. 2018)
§41.12, p. 41-33 [“Receivership certificates are then issued as
evidence of the indebtedness and become liens on the subject
property when issued under the direction and control of the court,
usually with priority over all other liens, including preexisting
liens.”].) This too is a matter committed to the sound discretion of
the court. (Title Ins. & Trust Co. v. California Development Co.
(1915) 171 Cal. 227, 233 [“The questions here involved, i.e.,
whether receiver’s certificates should be issued and whether
those certificates when issued should be given priority over the
other indebtedness of the defendant, rested largely in the
discretion of the court below. That court, upon a consideration of
all the facts, determined that the certificates should equitably be
given priority over the bonds, and we think its conclusion should
not be interfered with.”]; 12 Miller & Starr, supra, pp. 41-33 to
41-34 [“Whether receiver’s certificates should be issued, and
whether those certificates when issued should be given priority
over the other indebtedness already of record against the
property, are decisions that rest largely in the discretion of the

                                 11
court.”].) But as the receiver points out, use of super-priority liens
should be infrequent because the disturbance of preexisting liens
may bring harsh consequences. (See 2 Clark on Receivers (3d ed.
1959) § 463, pp. 760–761 [“The authority to disturb existing liens
should be exercised with great caution, and should be carried no
further than actually necessary to attain the desired protection to
the res.”].)
      2.2.   SunTrust’s arguments are without merit.
       Notwithstanding the well-settled authority just discussed,
SunTrust claims the court had no authority to give the bank a
super-priority lien, thereby displacing SunTrust as the senior
lienholder. SunTrust’s arguments are not persuasive.
       SunTrust first argues no statute authorizes the issuance of
a super-priority lien. Here, the receiver was appointed under
Code of Civil Procedure section 564 (a generally applicable
receivership statute) and Health and Safety Code section 17980.7
(authorizing appointment of receivers to remedy building code
violations). SunTrust’s primary argument is that Health and
Safety Code section 17980.7 does not explicitly authorize the
issuance of a super-priority lien. That section specifically
identifies the powers of a receiver appointed under the Health
and Safety Code and provides, in pertinent part, that a receiver
appointed to take control of a substandard building2 has the
power “[t]o borrow funds to pay for repairs necessary to correct
the conditions cited in the notice of violation and to borrow funds
to pay for any relocation benefits authorized by paragraph (6)

2A substandard building is defined in Health and Safety Code section
17920.3.

                                 12
and, with court approval, secure that debt and any moneys owed
to the receiver for services performed pursuant to this section
with a lien on the real property upon which the substandard
building is located. The lien shall be recorded in the county
recorder’s office in the county within which the building is
located.” (Health & Saf. Code, § 17980.7, subd. (c)(4)(G).) As
SunTrust notes, that section makes no mention of a
super-priority lien. And SunTrust urges us to infer from the plain
language of the statute (i.e., the absence of language authorizing
a super-priority lien) and the legislative history of section
17980.7 that the Legislature intended to prohibit super-priority
liens when it adopted this statute in 1990 and amended it in
2001.
      We conclude it is unnecessary to engage in a lengthy
statutory analysis of Health and Safety Code section 17980.7
because, as noted, the receiver was also appointed under Code of
Civil Procedure section 564. Section 568 of the Code of Civil
Procedure—first enacted in 1872—gives a receiver appointed
under section 564 very broad powers: “The 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.”
(Code Civ. Proc., § 568.) As already noted, the California
Supreme Court long ago concluded a court may authorize a
receiver to issue a super-priority lien in appropriate
circumstances. (Title Ins. & Trust Co. v. California Development
Co., supra, 171 Cal. at p. 233.) And Health and Safety Code

                               13
section 17980.7, subdivision (c)(4)(H),3 specifically gives a
receiver appointed under that section the powers of a receiver
appointed under Code of Civil Procedure section 564.
       SunTrust also contends Chula Vista, supra, does not
support the issuance of a super-priority lien. (207 Cal.App.4th at
p. 681.) Specifically, SunTrust argues “courts may impose the
costs [of the receiver] on the party who sought the appointment of
the receiver or apportion them among the parties.” That is true,
as noted ante. And here the court has assigned the costs of the
receivership to the Hildreths. That issue is distinct, however,
from SunTrust’s apparent concern that it might be unable to
collect the debt owed by the Hildreths if it is not paid from the
proceeds of sale of the property due to the new super-priority lien
created by the receiver.
       In any event, Chula Vista is of no assistance to SunTrust.
There, a receiver was appointed under Health and Safety Code
section 17980.7 to cure code violations in a residential building.
(Chula Vista, supra, 207 Cal.App.4th at p. 684.) The court
approved the receiver’s request for a lien to secure his fees, but
the receiver never recorded the lien. (Id. at p. 685.) Eventually,
the lender (and senior lienholder) foreclosed and conveyed the
property to a bona fide purchaser. (Ibid.) Several years later, the
receiver filed an action against the lender seeking payment of his
fees under a theory of unjust enrichment. (Ibid.) The issue on
appeal was whether the lender “benefited” from the receiver’s

3That portion of the statute states a receiver appointed under Health
and Safety Code section 17980.7 has the power “[t]o exercise the
powers granted to receivers under Section 568 of the Code of Civil
Procedure.”

                                  14
services. (Id. at pp. 685–687.) As that issue is not remotely
relevant to the present proceeding, we address it no further.
       Finally, SunTrust points out that under the Health and
Safety Code, the receiver may look to numerous sources for
payment of receivership costs. For example, SunTrust notes the
receiver could create a junior lien to secure a loan under Health
and Safety Code section 17980.7, subdivision (c)(4)(G). Further, a
receiver may look to the rents and profits produced by a property
to pay for the cost of the receivership. (Health & Saf. Code,
§ 17980.7, subd. (c)(4)(E), (F).) Alternatively, the court could have
appointed as receiver a nonprofit organization or community
development corporation which would have been eligible to apply
for grants to assist in the rehabilitation of the property. (Health
& Saf. Code, § 17980.7, subd. (c)(2).) SunTrust also suggests the
Hildreths, as owners, or the City, as the party that requested the
receiver, should pay the costs of the receivership.
       SunTrust correctly states the provisions of the statute at
issue. But the fact that the court had a variety of options to
choose from when it authorized the receiver to obtain funding for
the needed remediation is beside the point. SunTrust cites no
authority suggesting—and doesn’t even argue—the court abused
its discretion by authorizing a super-priority lien after
considering all the facts and balancing the equities.
       In any event, we would find no abuse of discretion on this
record. The Hildreths refused to abate the nuisance they created
on their property. SunTrust chose to take no action against the
Hildreths, despite the fact the Hildreths were plainly in breach of

                                 15
the deed of trust.4 Accordingly, the court properly appointed a
receiver to abate the nuisance and, notably, SunTrust did not
object. Because neither the Hildreths nor SunTrust was willing to
fund the costly remediation and the property did not produce any
income, the receiver had to borrow money in order to proceed
with the remediation. And as no lender would loan money to the
receiver unless the loan was secured with a super-priority lien on
the property, the only way to effect the remediation was to
authorize the receiver’s request to issue such a receiver’s
certificate. In short, the court did not abuse its discretion.
       In closing, we note SunTrust repeatedly argues its interest
in the Hildreths’ property was inequitably displaced by the
lender’s super-priority lien. For example, SunTrust urges “[i]t is
inequitable to allow [its] lien to be essentially stripped to nothing
for a receivership that it did not request and which, as it will eat
up most if not all the equity in the property, offers little to no
benefit to [SunTrust]. It was not [SunTrust]’s duty to protect
against and monitor the Hildreths’ use of the property that they
owned subject to a loan [t]hat was current or the City’s related
neglect. Therefore, [SunTrust]’s priority lien should not be
sacrificed to pay for the remediation.”
       The critical point, unmentioned by SunTrust, is that its
lien on the Hildreths’ property was worthless (or nearly so) well
before the court authorized the receiver to issue a super-priority
lien.5 The Hildreths persisted with unpermitted excavation and

4 We note, for example, that under the deed of trust, the Hildreths
agreed to preserve, maintain, and protect the property, not to allow it
to deteriorate, and not to commit waste on it.
5As noted, the receiver concluded the property remediation would cost
at least $250,000 and the value of the property after remediation

                                   16
construction on the property and created the public nuisance
which required remediation so costly it exceeded the value of the
unimproved land. As a result, SunTrust had an inadequately
secured loan and, due to California’s anti-deficiency statutes, also
had an extremely limited ability to obtain payment from the
Hildreths directly.6 Stated differently, the imposition of a
super-priority lien by the receiver did not substantially prejudice
SunTrust because prior to the remediation, SunTrust was the
senior lienholder on a property with minimal (or perhaps
negative) value and was unlikely to be repaid in any event.
SunTrust’s contention that it should remain the senior
lienholder—and benefit from the increased property value
provided by the remediation while bearing none of the cost—is
simply untenable.

would likely be $175,000 to $200,000 as a vacant lot and $465,000 to
$495,000 with the rehabilitated home.
6 Although a mortgage lender is generally barred from suing its
borrower to recover the balance of a mortgage loan when the value of
the property is inadequate to satisfy the loan (see Code Civ. Proc.,
§ 580b), a lender may bring an action against a borrower for “ ‘bad
faith’ ” waste in appropriate circumstances. (Cornelison v. Kornbluth
(1975) 15 Cal.3d 590, 604.) As Miller & Starr explains: “To the extent
that there has been a reduction in the value of the property by
depressed market conditions, the trustor or other person liable on the
debt cannot be held personally liable. However, when the reduction in
value resulting from bad-faith waste is the result of intentional or
malicious action by the owner or person in possession, they can be held
personally liable despite the limitations against personal liability on a
purchase-money obligation.” (5 Miller & Starr, Cal. Real Estate, supra,
§ 13:313, p. 13-1322.)

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                          DISPOSITION

      The July 5, 2017 order authorizing the receiver to issue a
receiver’s certificate with first lien priority is affirmed. The City
of Sierra Madre shall recover its costs on appeal.

               CERTIFIED FOR PUBLICATION

                                                        LAVIN, J.
WE CONCUR:

      EDMON, P. J.

      EGERTON, J.

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