QUESTION: The last Ask the Receiver article discussed whether, in federal court, an order approving a receiver’s sale of assets is appealable. While the discussion was interesting, it was not too helpful to me because I am a state court receiver. What is the rule in California state court? Are orders approving a receiver’s sale appealable?
ANSWER: As the prior Ask the Receiver article indicated, in federal court the appealability of orders in a receivership are limited to three types of orders: (1) orders appointing a receiver; (2) orders refusing to windup a receivership; and (3) orders refusing to take steps to accomplish the purposes for winding up a receivership. 28 U.S.C. § 1292 (a)(2). The rule in state court is different.
California Code of Civil Procedure § 904.1 lists the type of orders and judgments that are appealable. An order approving the sale of property is not listed. One might assume, therefore, that a sale order is not appealable, but that is incorrect. The case law holds that: “while not expressly appealable, an interlocutory judgment is nevertheless appealable to the extent that it requires as a collateral matter, the immediate payment of money or the performance forthwith of an act. Thus, it has been held that an order approving the sale of assets is final and appealable as a final determination in a special proceeding. (citations omitted).” City of Riverside v. Horspool, 223 Cal. App. 4th 670, 683 (2014); Fish v. Fish, 216 Cal. 14, 16 (1932) (finding that order approving sale of receivership property, to pay the receiver’s fees, was appealable); California etc. Assn. v. Superior Court, 8 Cal. App. 711 (1908) (writ of prohibition to restrain receiver from selling personal property denied because the order approving the sale was appealable).
The City of Riverside case also points out that, although the sale order is appealable, if the appellant does not obtain a stay and post a bond as required by C.C.P. § 917.4, the sale can go forward and, if the sale closes, the appeal is moot. 223 Cal. App. 4th at 685. In the case, the appellant also argued that the court lacked authority to approve the sale free and clear of liens – an issue that has been debated for some time by receivers in California. The court easily dispensed of that argument stating: “A court of equity has the power to order the sale of property free and clear of liens and encumbrances.” Id.
Therefore, in California, an order issued by the Superior Court approving a receiver’s sale is appealable, but if the appellant does not obtain a stay of the order, the sale can go forward and, if the sale closes, the appeal will be moot.