When a receiver is appointed over real property whether directly, or indirectly as receiver of a partnership or corporation that has real property, the order of appointment usually orders the receiver to take possession of the property involved and usually contains injunctive provisions which order the parties not only not to interfere or hinder the receiver in the performance of the receiver’s duties, but order the parties to “immediately turnover possession of the property …to the receiver.” See, Judicial Counsel Form RC- 310 ¶ 28a (Order Appointing Receiver After Hearing and Preliminary Injunction) as an example. Parties usually comply with such court orders. On occasion, however, a party, often without counsel, may refuse to comply. When that happens, the receiver must take steps to obtain possession of the property, as the court has ordered.
One option is to commence contempt proceedings. Interference with a receiver or refusal to comply with the terms of a court’s order can be contempt. Strain v. Superior Court, 168 Cal. 266 (1914). Contempt proceedings, however, are costly and time consuming because, among other things, they often require a mini-trial with live testimony, are quasi- criminal with the attendant safeguards (right to counsel, 5th Amendment, etc.) and the penalty may not be sufficient to coerce compliance. See, Cal. Civ. Proc. Code § 1218(a) limiting fines to $1,000 payable to the court (not the receiver) and not exceeding 5 days imprisonment. Although, each separate act of disobedience is a separate contempt and can be punished as such. In re Stafford, 160 Cal. App. 2d 110, 113- 114 (1958). Further, where a contemnor refuses to perform an act within his or her power, the court may jail them until performance is accomplished. Cal. Civ. Proc. Code § 1219.
Given these limitations, in the rare case when a party refuses to turn over possession of real property to a receiver, the receiver should consider obtaining a writ of possession, directing the Sheriff to seize the property and turn it over to the receiver.
A writ of possession is a written command by the court, to the Sheriff, to take property a party is wrongfully possessing and give it to the person entitled thereto. It is authorized by California law in various contexts. It is available, for example, in Claim and Delivery actions, C.C.P. § 510.010 et.al.; in forcible entry, forcible detainer and unlawful detainer actions, C.C.P. § 1166a; in eminent domain cases, Housing Authority of Los Angeles v. Lopez, 159 Cal App. 2d 661,662 (1958); and in the enforcement of a judgment for possession or sale of real property, C.C.P. §§ 712.010 and 715.010.
Courts of Equity have long used a writ of possession to aid their receivers obtaining possession of property. “Under the practice of the English Court of Chancery, when it was sought to compel a defendant to deliver up possession of lands to a receiver appointed in the cause, an order was first obtained to deliver possession and a writ of execution of such order was then served upon the defendant.” High, Treatise on the Law of Receivers, § 147 (1876). See also, § 144 (“The receiver…may have an order to procure possession of such property…”). These orders were often called writs of
assistance, which were simply the equitable equivalents of writs of possession issued at law. G.E. Capital Mort. Services, Inc. v. Edwards, 144 Md. App. 449, 458 (2002); Fuller v, Gibbs, 122 Mont. 177,182 (1948) (“The terms ‘writ of possession’ and ‘writ of assistance’ are sometimes used synonymously …[It] is the ordinary process used by a court of chancery to put a party, receiver, sequestrator, or other person into possession of property when he is entitled thereto…”). Clark agrees: “Some courts hold that a receiver may recover possession of property withheld by parties to the suit or by others claiming under such parties, in a summary way by a writ of possession.” 2, Clark on Receivers, § 634 (3d Ed.1959). Clark cites Thornton v. Washington Sav. Bank, 76 Va. 432 (1882). There the Virginia Supreme Court stated: “When, however, the possession is withheld by persons who are parties to the suit, or by others claiming under such parties, with notice of the appointment of the receiver, there can be no question as to the authority of the court to interfere in a summary way, and enforce its order for the surrender of the property, by attachment or by a writ of possession.” See also, In re Kennison Sales & Engineering Co., 363 Mich. 612, 618 (1961).
Because courts, and more importantly Sheriff’s offices who must enforce writs of possession, may be reluctant to rely, solely, on 19th century equity practice, receivers may want to use the Enforcement of Judgment Law provisions, cited above, which authorize writs of possession. C.C.P. § 715.010 states, in part: “A judgment for possession of real property may be enforced by a writ of possession of real property issued pursuant to Section 712.010. C.C.P. § 712.010 states, in part: “After entry of a judgment for possession or sale of property, a writ of possession or sale shall be issued by the clerk of the court upon application of the judgment creditor…”
The Enforcement of Judgment Law has its own definition of “Judgment.” It provides: “‘Judgment’ means a judgment, order, or decree entered in a court of this state.” Cal. Civ. Proc. Code § 680.230. As a result, the receiver’s order of appointment and accompanying injunction, which order one or more parties to deliver possession of designated property to the receiver is a “judgment for possession,” as required in C.C.P. §§ 715.010 and 712.010 and enables the receiver to obtain a writ of possession.
While the order of appointment and injunction constitute the predicate judgment needed to obtain a writ of possession, it is good practice to instead inform the court that the party is not complying with its orders and request a separate specific order, ordering the party and its agents to turnover the property to the receiver within “X” days. Such a motion and order of itself may result in compliance. The requested order should also direct the receiver, if the party fails to comply, to obtain a writ of possession under C.C.P. § 712.010, state the order is a judgment for possession and direct the clerk to issue the writ. It should also order the Sheriff to comply with and enforce the writ and remove the party in possession. In appropriate cases, the receiver may want to consider provisions indemnifying the Sheriff for the legal enforcement of the writ or that anyone interfering with the execution of the writ is subject to arrest.
C.C.P. §§ 712.020 and 715.010 state the information that is to be included in the writ. The Judicial Council has adopted Form EJ-130 for use in compliance with these sections. A copy of the court’s order (judgment) for possession should be attached to the form as “other” in paragraph 22(c) of the writ, because it will help explain to the Clerk and the Sheriff why the writ should issue and why the receiver is entitled to possession, instead of the occupant. Once the writ is issued it then needs to be forwarded to the Sheriff, with instructions. Each Sheriff’s office may have different instruction forms, which should be determined ahead of time, along with the fees the Sheriff will charge for executing the writ. Because writs of possession in favor of receivers are not something Sheriffs deal with day-to-day, calling the Sheriff’s office to clarify what is needed and follow-up calls will often make the process go smoother. Additionally, a detailed cover letter, sent with the writ and instructions, explaining the situation and the court’s orders may help.
*Peter A. Davidson is a Partner of Ervin Cohen & Jessup LLP a Beverly Hills Law Firm. His practice includes representing Receivers and acting as a Receiver in State and Federal Court.
*Chase Stone is an Associate in ECJ’s Bankruptcy, Receivership and Creditors’ Rights Department. Chase specializes in bankruptcy, receiverships, and creditors’ rights matters proceeding under California law and Chapter 7, 11 and Subchapter V of the Bankruptcy Code. He represents individual and corporate creditors, receivers, and parties in interest to help resolve complex insolvency issues.