Can a Receiver’s Appointment Be Declared Void by Another Court?

QUESTION: I am a receiver appointed pursuant to stipulation in an action pending in superior court between a husband and a wife over the operation of a business they own. After operating the business for many months, I agreed to a settlement with the husband resolving many of the disputed issues. The wife disagreed with the proposed settlement and moved to transfer the litigation to the family law court. After the action was transferred, the judge in the family court ruled that the original judge who appointed me had no jurisdiction to do so and that the appointment was “void.” The judge did indicate that I could seek payment for my services. The wife’s attorneys have objected to all my fees, contending that the reasonable value of my services was zero. Big surprise, but that’s another story. Was the court correct in its ruling that the order of the first superior court judge appointing me receiver was void?

ANSWER: It is unclear from your question whether the family law case was pending prior to the action in which you were appointed receiver. That could affect the jurisdiction of the court. If the family law case was already pending, disputes between the husband and the wife should have proceeded before it. If the family law case was not pending, because a family law judge does not sit on the court of appeal, it was inappropriate for the family law judge to declare an order issued but another superior court judge “void.” Because the action was transferred from a civil department to the family law department, the family law judge took control of the case and had the right to terminate the receivership and your services at any time.

Declaring your order of appointment “void,” however, can have negative unintended consequences. It could raise issues of liability for you, as receiver, for having taken actions pursuant to a “void” order. But see Binney v. San Dimas Lemon Ass’n, 81Cal.App. 213, 220 (1927) (holding that a receiver is not responsible for the court exceeding its authority). It could also affect who is responsible to pay your fees, because there is case law holding that if an appointing order is void or improper, the party who sought the receiver’s appointment may be responsible for the fees, rather than the receivership estate. See Louis v. Hill, 38Cal.App. 329, 336 (1918). Here because you were appointed pursuant to a stipulation of the parties, your fees should probably be paid either out of the assets of the estate or by both parties, although that is a decision ultimately for the new judge. This situation is similar to a case decided long ago by the California Supreme Court in Williams v. Superior Court, 14 Cal.2d 656, 662(1939). There, one superior court judge issued an order to show cause why a court reporter should not be held in contempt for violating a prior court order directing the reporter to prepare a trial record needed for an appeal by a certain date. A different judge, on motion of the reporter, issued an order that the first judge’s order was void for want of jurisdiction. The Supreme Court held:

The state Constitution (Art. VI, Sec 6) provides for but one superior court in each county…and that the judgments, orders and proceedings of any one session of the superior court held by any one or more of the judges thereof shall be equally effectual as though all the judges of said court presided at such session. Accordingly, it has been held that jurisdiction is vested by the Constitution in the court and not in any particular judge or department thereof;…therefore, that where a proceeding has been duly assigned for hearing and determination to one department of the superior court by the presiding judge of said court in conformity with the rules thereof, and the proceeding so assigned has not been finally disposed of therein or legally removed there from, it is beyond the jurisdictional authority of another department of the same court to interfere with the exercise of the power of the department to which the proceeding has been so assigned.

The Court also went on to note: “[I]t is well settled that if one department of a court exercises authority in a matter which might properly be heard in another, the action constitutes at most an irregularity and doesn’t affect the jurisdiction” Id. at 663.