Court Opinion

ID: 2659341
Source: CourtListenerOpinion
Date Created: 2014-04-02 20:06:31.043216+00
Date Added: 2024-06-11T11:10:07.378216
License: Public Domain

Filed 4/2/14 P. v. Aguayo CA2/2
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or
ordered published for purposes of rule 977.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                     SECOND APPELLATE DISTRICT
                                                  DIVISION TWO

THE PEOPLE,                                                          No. B246406

               Plaintiff,                                            (Los Angeles County
                                                                      Super. Ct. VC048452)
         v.

JESUS AGUAYO et al.,

               Defendants and Appellants;

DAVID J. PASTERNAK,

         Real Party in Interest and
Respondent.

         APPEAL from an order of the Superior Court of Los Angeles County. John
Shepard Wiley, Jr., Judge. Affirmed.

         No appearance for Plaintiff.

         Ronald E. Wiksell for Defendants and Appellants.

         Pasternak & Pasternak and David J. Pasternak for Real Party in Interest and
Respondent.
       Jesus Aguayo and Sofia Aguayo (appellants) appeal from an order of the trial
court approving the first report for interim compensation of respondent, court-appointed
receiver David J. Pasternak (receiver). Appellants contend that the trial court abused its
discretion in approving hourly compensation to the receiver in an amount greater than
that previously approved by the court, and in permitting payments for the receiver’s
employee of hourly rates that appellants argued were unreasonable. We find no abuse of
discretion and affirm.
                                     BACKGROUND
       Appellants have been convicted of 31 felonies in furtherance of a plan to steal title
to real property belonging to others. At the same time the People of the State of
California (People) initiated criminal proceedings against appellants, the People filed this
civil case to enjoin appellants’ conduct, obtain restitution for victims, and impose civil
penalties. On October 19, 2006, the court in the criminal action appointed a receiver over
the real property at issue and over some of appellants’ other assets. On April 2, 2007, the
court in this matter entered a receivership on the same terms as the order in the criminal
action. On July 19, 2007, an order was entered confirming the receiver’s appointment.
       Although the receiver originally took possession and control of 122 real
properties, together with over $1 million on deposit at bank accounts, the number of
receivership properties was eventually reduced to approximately 82. On April 10, 2012,
the receiver filed his first report and account and notice of motion for issuance of an order
approving his first report and approving interim compensation from the commencement
of the case through February 29, 2012.
       On April 27, 2012, appellants filed an opposition to the receiver’s motion.
Appellants argued that the receiver overcharged for the services he rendered; was
negligent in paying property taxes; was negligent in renting the properties and
maintaining the properties at reasonable cost; and overpaid for insurance.1

1     The negligence claims raised in appellants’ opposition to the receiver’s motion
have not been addressed in this appeal, therefore we consider these claims to be forfeited.
(Benach v. County of Los Angeles (2007) 149 Cal. App. 4th 836, 852 [“‘Issues do not have

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       In the opposition, appellants argued that the receiver charged more per hour than
permitted by the applicable orders. Appellants pointed to language in the October 19,
2006 order which provided that “‘The Receiver may charge as interim fees his standard
hourly billing rate, which is currently $440 per hour, plus reimbursements of costs for the
Receiver’s services.’” Three subsequent orders, including an order appointing receiver
dated April 2, 2007, an order confirming receiver’s appointment dated July 19, 2007, and
an amended order confirming receiver’s appointment dated August 9, 2007, all contained
identical language. However, without court approval, on April 1, 2007, the receiver
began billing $475 per hour, which is $35 more per hour than the court ordered.
Beginning in January 2009, the receiver began billing at a rate of $495 per hour, and
since January 1, 2011, the receiver had been charging $550 per hour, which is $110 per
hour more than the amount stated in the court orders. Appellants also complained that
the receiver billed his employee Ellen Phillips (Phillips), who is not a lawyer, at $225 per
hour. Appellants argued:
              “Certainly the Receiver is entitled to reimbursement of his costs but
       if Ms. Phillips costs [the receiver] $225 per hour, on a 40 hour week, 52
       weeks a year, [the receiver] would be paying Ms. Phillips $472,500 per
       year. If he is paying her that amount, Ms. Phillips is overpaid for the job
       she performs. If he is not paying her that amount, [the receiver] is making
       an excessive profit for Ms. Phillips’ services which is not permitted by the
       Court orders which are limited to ‘reimbursement of costs for Receiver’s
       services.’”

       The trial court issued its order granting the receiver’s motion on November 13,
2012. The court rejected appellants’ argument that the orders entered in the related
criminal and civil cases prevented the receiver from charging more than $440 per hour.
Instead, the court found that the order “permits [the receiver] to change his standard
hourly rate, which was $440 at the time of the order.”

a life of their own: If they are not raised or supported by argument or citation to
authority, [they are] . . . waived’”].)

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         The court also rejected appellants’ argument that the charges for Phillips’s
services violated the orders. The court held:
                “[Appellants] argue[] [the receiver] overbilled for Ellen Phillips, a
         member of [the receiver’s] office staff. The trial court has discretion in
         determining the appropriate compensation for a receiver. (Melikian v.
         Aquila, Ltd. (1998) 63 Cal. App. 4th 1364, 1368.) [The receiver] bills
         Phillips at $225 per hour. This is reasonable.

                “[Appellants] argue[] [the receiver] can charge this amount only if
         [the receiver] actually pays Phillips this hourly sum. The apparent but
         incorrect premise is that [the receiver] may bill only for his own fees, and
         may charge [appellants] only for actual costs of his support staff.
         [Appellants] cite[] no authority for this premise, which would be contrary
         to [appellants’] interests: [the receiver] could have elected to perform all
         the work Phillips did, at his higher rate.”

         The trial court also addressed appellants’ complaint that the receiver utilized
Phillips’s services to deposit rent checks and update rent rolls. Appellants asserted that
the bank where the checks were deposited was in the same building as the receiver’s
offices. The court first noted that appellants did not cite a basis for their claim that the
bank was in the lobby of the receiver’s building. The court further noted that the task
was perfectly appropriate given the receiver’s duties:
                “[Appellants have] not explained why [the receiver] should not be
         permitted to charge for fees and costs related to depositing rent checks for
         the receivership. This task is related to the receivership. [Appellants have]
         not suggested a more cost-effective procedure, except to say that [the
         receiver] should employ a person with a lower billing rate to deposit the
         checks. As [the receiver] explains in his response . . . Phillips has worked
         on this receivership since its inception. She is familiar with the properties
         and parties involved. . . . [The receiver’s] use of Phillips to deposit the rent
         checks is reasonable.”

         On January 3, 2013, appellants filed their notice of appeal from the trial court’s
order.

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                                       DISCUSSION
I. Standard of review
       The parties agree that the appropriate standard of review for an order concerning
the amount of fees awarded to a receiver is abuse of discretion. (Melikian v. Aquila, Ltd.
(1998) 63 Cal. App. 4th 1364, 1368; see also City of Santa Monica v. Gonzalez (2008) 43
Cal. 4th 905, 931 [“court rulings on receivership matters are afforded considerable
deference on review”].)
       Under this standard, “‘a trial court’s ruling will not be disturbed, and reversal of
the judgment is not required, unless the trial court exercised its discretion in an arbitrary,
capricious, or patently absurd manner that resulted in a manifest miscarriage of justice.’
[Citation.]” (People v. Hovarter (2008) 44 Cal. 4th 983, 1004.)
II. No abuse of discretion occurred
       As set forth below, we find no abuse of discretion in the trial court’s order.
       We first address appellants’ contention that the trial court abused its discretion in
allowing the receiver to adjust his billing rate from $440 per hour to $550 per hour during
the six-year period covered by the report. The trial court reviewed the relevant orders
and concluded that the language of those orders permitted the receiver to change his
standard hourly billing rate. This decision was reasonable, given the specific language of
the orders, which reads, in part: “The Receiver may charge as interim fees his standard
hourly billing rate . . . .” The inclusion of the receiver’s current billing rate does not
require the trial court to deny any charges above that billing rate. Any decision as to the
reasonableness of the receiver’s hourly billing rate is well within the discretion of the trial
court. (Melikian v. Aquila, Ltd., supra, 63 Cal.App.4th at p. 1368.)
       Next, we address appellants’ contention that Phillips’s billing rate of $225 per
hour was excessive. Appellants offered no comparative rates for employees performing
similar job functions. Instead, they claimed that the receiver offered no evidence for the
trial court to conclude that Phillips’s services, such as depositing checks in a bank, were
worth $225 per hour. However, “‘[t]he burden is on the party complaining to establish an
abuse of discretion, and unless a clear case of abuse is shown and unless there has been a

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miscarriage of justice a reviewing court will not substitute its opinion and thereby divest
the trial court of its discretionary power.’ [Citations.]” (Denham v. Superior Court of
Los Angeles County (1970) 2 Cal. 3d 557, 566.) Appellants have failed to show that the
rates charged for Phillips’s services were unreasonable, especially given her apparent
familiarity with the receivership and the numerous properties involved.2
       Finally, appellants argue that the receiver could not bill $225 per hour for
Phillips’s services unless the receiver was actually paying Phillips this fee. The trial
court rejected this argument, pointing out that appellants’ position actually harmed them.
If the receiver were not allowed to use employees to perform work associated with the
receivership, appellants would be paying the receiver’s higher rate for all such work.
Thus, the trial court implicitly found that the receiver’s actions in delegating work to
Phillips was beneficial to appellants. Appellants cite no factual or legal authority for
their argument that the receiver may not bill Phillips at an hourly rate which is higher
than the hourly rate that he pays her.3 We find no abuse of discretion.

2      Appellants briefly mention two other employees, Zachary N. Lake and Carolyn
German, whom they claim were billed at hourly rates which exceeded their hourly pay.
Appellants make no further argument concerning these two employees. There is no
explanation of what their duties were, and no explanation of the basis for appellants’
allegation that these two employees were being billed at excessive rates. We therefore
decline to address appellants’ claims concerning the hourly rates paid to these employees.

3      Appellants make much of what they describe as the receiver’s “admission” that his
employees were a profit center. We disagree with appellants’ characterization of the
receiver’s words. To be more precise, he admitted that he was “not saying [his] firm
never profits off employees billing.” However, the court confirmed its understanding of
the standard practice in the business: “There’s no claim by you that by billing some
employee at $225 an hour, that that money is simply handed directly to the employee at
$225 an hour. That’s never the claim . . . .” Appellants’ attorney agreed, stating “It’s no
different than a lawyer billing their paralegal who are full-time employees.” Thus, the
court’s acceptance of the receiver’s billing practices for his employees seemed to be
based on the court’s understanding of how such billing is normally carried out in the
industry.

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                                   DISPOSITION
      The order is affirmed. Respondent is awarded costs on appeal.
      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

                                               ____________________________, J.
                                               CHAVEZ

We concur:

__________________________, P. J.
BOREN

__________________________, J.*
FERNS

_____________________________________________________________________
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

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