Dalessio Investments V Superior Court Ca43

Key Facts

Issues

• D'Alessio requested permission to submit alternative rehabilitation plans under SB 330 to the City for review and approval, arguing these plans would increase property value above $5.1 million. The respondent court denied this motion, finding D'Alessio had not identified any feasible option to remediate the property in compliance with current code and zoning requirements. The appellate court found no abuse of discretion, noting the court had already considered D'Alessio's evidence and arguments regarding further rehabilitation plans.
• D'Alessio sought permission to conduct discovery into the receiver, alleging the receiver failed to consistently issue monthly reports and may have misused funds. The respondent court denied the motion, noting the receiver is the agent of the court and D'Alessio had not shown good cause for discovery. The appellate court found no abuse of discretion, noting D'Alessio could request explanations on particular charges during the receiver's eventual discharge proceedings.
• D'Alessio Investments argues the respondent court abused its discretion by granting the receiver's motion to demolish the property, claiming insufficient evidence supported the finding that demolition was the only economically feasible option. The court addressed whether the evidence showed demolition was the only economically feasible course of rehabilitation, whether the court applied correct legal standards, and whether the issuance of a $540,000 second certificate of indebtedness was appropriate. The court found substantial evidence supported the receiver's demolition plan, including broker valuations showing demolition would preserve $1.5 million in property value compared to cost-prohibitive reconstruction costs.

Holdings

Remedies

Legal Principles

• In receivership matters involving demolition, courts may consider economic feasibility as a factor in their discretionary decision-making. The court must consider all material facts and evidence and apply legal principles essential to an informed, intelligent, and just decision. Economic information presented is relevant to the court's exercise of discretion in approving demolition plans.
• It is fundamental to appellate review that a judgment is presumed correct and all intendments and presumptions are indulged in favor of correctness. The one contesting the judgment bears the burden of showing legal error, which requires legal authority. The appellant must do more than assert error and leave it to the appellate court to search the record and the law books; they must present an adequate argument including citations to supporting authorities and to relevant portions of the record.
• Courts afford considerable deference to trial court decisions on receivership matters, especially when they involve demolition of substandard structures that pose substantial health and safety risks. The trial court has wide discretion in approving the receiver's proposed actions when there is no evidence of fraud, unfairness, or oppression. The appellate court must view the facts in the light most favorable to the order and refrain from exercising judgment retrospectively.
• The standard of review for discovery orders is abuse of discretion. A writ of mandate shall not issue simply to control the exercise of judicial discretion. The petitioner must demonstrate how their right to appeal the court's denial of discovery was inadequate by providing legal analysis and citations to relevant authority.
• Under Costa Mesa Municipal Code section 13-203, if a nonconforming development or portion of development containing a nonconforming use becomes physically unsafe or unlawful because of lack of repairs or maintenance and is declared unsafe or unlawful by any duly authorized official, it shall not thereafter be restored, repaired or rebuilt except in conformity with the regulations of the district in which it is located.

Precedent Name

• Singman v. IMDB.com, Inc.
• Avant! Corp. v. Superior Court
• City of Santa Monica v. Gonzalez
• Robbins v. Superior Court
• McClain v. Kissler
• Fladeboe v. American Isuzu Motors Inc.

Cited Statute

• Government Code
• Costa Mesa Municipal Code
• Health and Safety Code
• Civil Code

Judge Name

• Sanchez, J.
• Motoike, Acting P.J.
• Moore, J.

Passage Text

• "The property is . . . D'Alessio's property. But by virtue of the receivership, it's in the court's hands as to what to do at this stage. And as I said, I think to some extent we should all be on the same page. We want to maximize the value of this property. There's a lot of debt when it comes to this property. And it's been years now. And the court has understood that this day might come. Even at the time that I appointed the receiver, I knew this day might come, where the court might be asked to take a step like this. But I think if I were to do it, I would only be prolonging the inevitable. I really think that ultimately, ultimately it would cost too much to rehabilitate this property. Despite . . . D'Alessio's pleas, folks, I am going to adopt and confirm the tentative. It will be the ruling of the court. It does require an increased bond to protect the property owner. But it does permit the rehabilitation plan to go forward. And the court has—as I said, the court is well aware of this property. I've seen many, many reports on this property, from the time of the receivership. But I honestly think that, in all honesty, that it would take so much to try to bring this property back online. That it is better to start from scratch. And the only way to do that is to permit the demolition to go forward. As I said, it's—probably in the six years that I've been on the bench, this one is the one that I thought the most about. And yet we're strangely on the same page. It's just a disagreement about how to maximize the value of . . . D'Alessio's property."
• "The court can authorize demolition where the evidence shows that to be the only economically feasible option. The receiver here has shown that demolition is the only economically feasible course of rehabilitation for the property. [D'Alessio] has not identified any feasible option to remediate the property in a manner compliant with current code and zoning requirements. Moreover, given the unsafe condition of the property, any serious remediation plan would require a full reconstruction which, as the receiver points out, would be cost prohibitive. [D'Alessio] thus has not shown that there is in fact any economically feasible alternative to the receiver's proposal."
• "Not only has D'Alessio failed to show the respondent court was laboring under any misapprehension of the governing law, he failed to show the court in any way abused its discretion, particularly given the extensive amount of work that needed to be done to bring the property's conditions up to code, whether in the form of six dwelling units or 18. Although the receiver had produced estimates for market value, demolition costs, and reconstruction costs based on a six dwelling unit model, such evidence was sufficient for the court to infer the relative expense to value ratio for demolition versus reconstruction, regardless of the number of dwelling units at the property. D'Alessio does not argue otherwise. We find no error."