HomeMy WebLinkAbout20260311_Opposition Filed- Laurel Creek_City v Smith
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Opposition to Ex Parte Application
25CV-0667
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Robert A. Curtis, SBN 203870
Kevin D. Gamarnik, SBN 273445
Jordan A. Liebman, SBN 317930
FOLEY BEZEK BEHLE & CURTIS, LLP
15 W. Carrillo Street
Santa Barbara, CA 93101
Telephone: (805) 962-9495
Facsimile: (805) 962-0722
Email: rcurtis@foleybezek.com
kgamarnik@foleybezek.com
jliebman@foleybezek.com
Attorneys for Laurel Creek, LP, Laurel Creek II, LP
1160 Laurel Lane, LLC, Patrick N. Smith, and
Patrick N. Smith, as trustee of the Patrick N. Smith
2004 Living Trust
SUPERIOR COURT FOR THE STATE OF CALIFORNIA
COUNTY OF SAN LUIS OBISPO
THE PEOPLE OF THE STATE OF
CALIFORNIA, EX REL, J. CHRISTINE
DIETRICK, CITY ATTORNEY OF THE
CITY OF SAN LUIS OBISPO; and,
THE CITY OF SAN LUIS OBISPO, a
California municipal corporation,
Plaintiffs,
vs.
LAUREL CREEK, LP, a California Limited
Partnership; LAUREL CREEK, II, L.P., a
Delaware limited partnership; 1160 LAUREL
LANE, LLC, a California limited liability
company; PATRICK N. SMITH a/k/a
PATRICK SMITH, an individual; SMITH
AND COMPANY, A REAL ESTATE
INVESTMENT DEVELOPMENT
CORPORATION, a California corporation;
PATRICK N. SMITH a/k/a PATRICK
SMITH, AS TRUSTEE OF THE PATRICK N
SMITH 2004 LIVING TRUST; CPIF
CALIFORNIA LLC, a California limited
Case No. 25CV-0667
Assigned to the Honorable Tana Coates
OPPOSITION TO PLAINTIFF CITY OF
SAN LUIS OBISPO’S EX PARTE
APPLICATION FOR APPOINTMENT
OF RECEIVER, OR ALTERNATIVELY,
FOR AN ORDER SHORTENING TIME
Hearing:
Date: March 12, 2026
Time: 8:30 a.m.
Dept: 4
Complaint filed on October 16, 2025
ELECTRONICALLY FILED
3/11/2026 4:26 PM
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Opposition to Ex Parte Application
25CV-0667
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liability company; CPIF LAUREL CREEK,
LLC, a Washington limited liability company;
ALL WALL SYSTEMS, INC., a Delaware
corporation; AMERICAN RIVIERA BANK, a
California corporation; ARNOLD BUILDERS,
INC., a California corporation; B & B
CONSTRUCTION CLEANUP INC., a
California corporation BLUE STEEL
CONCRETE, LLC, a California limited liability
company; COAST ENGINEERING &
DESIGN INC., a California corporation;
CONSOLIDATED ELECTRICAL
DISTRIBUTORS, INC., d/b/a CALIFORNIA
ELECTRICAL SUPPLY, a Delaware
corporation; CULBERT PLUMBING INC.,
F/K/A CULBERT CONSTRUCTION AND
PLUMBING, INC., a California stock
corporation; EMPIRE ELECTRICAL
SOLUTIONS, INC., a California corporation;
FAMCON PIPE & SUPPLY, INC., a California
corporation; G W SURFACES, a California
corporation; HOMER T. HAYWARD
LUMBER CO., a California corporation; KIRK
CONSTRUCTION, a California corporation;
LC LENDERS, LLC, a Delaware limited
liability company; LW CONSTRUCTION,
INC., a California corporation; MAHOGANY
CONSTRUCTION, INC., a California
corporation; NOLAN CHURCH DOING
BUSINESS AS COLORTRENDS PAINTING
& DECORATING, a California sole ownership
or proprietor business; THE SHERWIN-
WILLIAMS COMPANY, an Ohio corporation;
UNITED RENTALS (NORTH AMERICA)
INC., a Delaware corporation; US AIR
CONDITIONING DISTRIBUTORS, LLC, a
Delaware limited liability company; and,
DOES 1-50, inclusive
Defendants.
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Opposition to Ex Parte Application
25CV-0667
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Defendants Laurel Creek, L.P. and Laurel Creek II, L.P. (together, the “Partnerships”), 1160
Laurel Lane, LLC, Patrick N. Smith, as trustee of the Patrick N. Smith 2004 Living Trust (collectively,
“LC Defendants”) hereby oppose the ex parte application filed by plaintiff City of San Luis Obispo (the
“City”) seeking the appointment of a receiver to take possession and control the Partnerships’ real
property located at 1150 Laurel Lane, San Luis Obispo, CA 95205 (the “Property”).
1. Receivership is a drastic remedy, especially on an ex parte basis
“The power of a court to appoint a receiver is a delicate one, and is to be exercised with caution
lest injury be done to the parties and their properties.” (Cohen v. Herbert (1960) 186 Cal.App.2d 488, 495;
Morand v. Superior Court (1974) 38 Cal.App.3d 347, 350 [explaining that the power to appoint a receiver
should be exercised sparingly and with caution, and “‘only in an extreme case under such circumstances
as demand or require summary relief, and never in a doubtful case or where there is no necessity or
occasion for the appointment.’”].)
It is a remedy that should be exercised “only where less onerous remedies would be inadequate or
unavailable.” (Morand, 38 Cal.App.3d at p. 351, internal quotation marks omitted; Medipro Med. Staffing
LLC v. Certified Nursing Registry, Inc. (2021) 60 Cal.App.5th 622, 628.)
Whether a receiver should be appointed is one that should not be made lightly. (Elson v. Nyhan
(1941) 45 Cal.App.2d 1, 5 [noting that “[r]eceivers are often legal luxuries, frequently representing an
extravagant cost to a losing litigant. When it appears that no reasonably certain benefit will result to one
litigant, and a distinct disadvantage will result to another, courts should weigh carefully the propriety of
appointing a receiver.”].)
The bar is even higher when a party requests appointment of a receiver ex parte. “Although
frequently requested, ex parte appointments are rarely granted.” (Weil, et al., Cal. Practice Guide: Civil
Procedure Before Trial (The Rutter Group 2026) ¶ 9:751, citing Cal. Rules of Court, rule 3.1175 and Turner
v. Superior Court (1977) 72 Cal.App.3d 804, 809, fn. 2.)
For appoint of a receiver on an ex parte basis, the applicant must show, by declarations or verified
pleading: (1) The nature of the emergency, and the reasons why “irreparable injury” would be suffered if
no ex parte receiver was appointed; (2) a description of the property and the names, addresses, and
telephone numbers of the persons in possession of it; (3) if the property in question is used by a business,
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facts sufficient to show the nature and size of the business and the impact that appointment of a receiver
might have on the business (affecting the amount of bond); and (4) reasonable diligence to ascertain any
of these matters if such matters have not been fully ascertained. (Cal. Rules of Court, rule 3.1175.)
Beyond meeting the standard for appointment of a receiver, the City also must meet the high bar
for relief on an ex parte basis. “A court will not grant ex parte relief in any but the plainest and most certain
of cases. Substantively, [a]n applicant must make an affirmative factual showing in a declaration containing
competent testimony based on personal knowledge of irreparable harm, immediate danger, or any other
statutory basis for granting relief ex parte.” (Newsom v. Superior Court of Sutter Cty. (2020) 51 Cal.App.5th
1093, 1097, cleaned up.)
The controlling authorities state that ex parte relief on an expedited basis is only appropriate when
the applicant can make an affirmative evidentiary showing of “irreparable harm, immediate danger, or any
other statutory basis for granting relief ex parte.” (Ibid.; Cal. Rules of Court, rule 3.1202(c) [“An applicant
must make an affirmative factual showing in a declaration containing competent testimony based on
personal knowledge of irreparable harm, immediate danger, or any other statutory basis for granting relief
ex parte.”].)
2. The bankruptcy stay precludes the City’s relief
The filing of a bankruptcy petition creates an automatic stay on all actions against the debtor, the
debtor’s property, and the property of the bankruptcy estate—except for limited exceptions. (11 U.S.C. §
362.) “Actions taken in violation of the automatic stay are void and without effect.” (Raczynski v. Judge
(1986) 186 Cal.App.3d 504, 510.) Here, as the Court is well aware, the Partnerships filed Chapter 11
bankruptcy petitions in the U.S. District Bankruptcy Court for the Central District of California on July
24, 2025, Case Nos. 9:25-bk-10985-RC, 9:25-bk-10986-RC. The City has not obtained relief from the
automatic stay to prosecute its claims against the Partnerships in this action and to dispossess the
Partnerships of their real property.
To the extent the City contends that the automatic stay does not apply to it under 11 U.S.C. §
362(b)(4), that is a determination for the bankruptcy court to make. “[T]he applicability of the automatic
stay is within the exclusive jurisdiction of the bankruptcy court.” (Dingley v. Yellow Express, LLC (In re
Dingley) (B.A.P. 9th Cir. 2014) 514 B.R. 591, 597 [“[B]y virtue of the power vested in them by Congress,
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Opposition to Ex Parte Application
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the federal courts have the final authority to determine the scope and applicability of the automatic
stay.”].) Presently, there has been no adjudication as to whether the exception under 11 U.S.C. § 362(b)(4)
applies to the City’s action overall or its requested appointment of a receiver. Thus, the automatic stay
bars the relief sought here.
3. The City’s own delay establishes that there is no emergency supporting ex parte relief
Ex parte relief is generally appropriate only in emergency situations where a noticed motion would
not timely afford the relief necessary to avoid irreparable harm or immediate danger. (See Cal. Rules of
Court, rule 3.1202(c).) Further, a party “cannot create a justification for emergency relief by sitting on his
rights until he creates an emergency situation.” (Davenport v. Blue Cross of California (1997) 52
Cal.App.4th 435, 455.)
Here, the City claims that ex parte relief is necessary to address “dangerous and hazardous
violations” at the Property that were identified in September 2025. (Application, pp. 1, 4, 8–9.) The City
then filed its Complaint in this action on October 16, 2025. However, rather than apply for the
appointment of a receiver to address these asserted violations shortly after this, the City sat on its hands
and delayed for months. Specifically, the City waited approximately six months from the date it says it
identified the asserted violations in September 2025 (or approximately five months from the filing of its
Complaint) to then seek appointment of a receiver. If there truly was an emergency necessitating drastic
ex parte relief on an expedited basis, then the City would have sought it much earlier. The City’s substantial
delay undercuts any argument that ex parte relief is appropriate here.
4. If anything, the Court should continue the hearing to allow the LC Defendants full
opportunity to oppose the City’s requested relief
The City has filed an ex parte application supported by a voluminous appendix of exhibits totaling
271 pages, five declarations containing dozens and dozens of allegations, and a request for judicial notice
asking the Court to take judicial notice of numerous documents and factual contentions. These documents
were served on March 10, 2026, giving the LC Defendants a mere two days to prepare an opposition prior
to the hearing on the morning of March 12, 2026. Such a shortened briefing schedule does not afford the
LC Defendants sufficient time to review, analyze, and oppose the numerous allegations and asserted
evidence set forth by the City as part of its ex parte application. Given the substantial number of documents
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the City submits in connection to its application, the LC Defendants request that, if the Court is not
inclined to deny the application outright, that the hearing be continued at least sixty days. Such a
continuance is reasonable and affords the parties and the Court time to adequately address the application
and supporting documents.
Additional time to prepare an opposition is especially warranted because the City’s sought-after
relief would violate the Partnerships’ constitutional property rights. (See U.S. Const., 5th & 14th Amend.;
Cal. Const. art I, § 1; People v. Freitas (2009) 179 Cal.App.4th 747, 751 [“There is a constitutional right to
possess property.”], disapproved on other grounds in People v. Hall (2017) 2 Cal.5th 494, 503, fn. 2.)
Because the appointment of a receiver transfers property . . . ‘out of the hands of its owners’ and into the
hands of a receiver [citation], the appointment of a receiver is a very ‘drastic,’ ‘harsh,’ and costly remedy
that is to be ‘exercised sparingly and with caution.’” (Medipro Med. Staffing, 60 Cal.App.5th at p. 628.) It
would not be fair to the Partnerships, nor prudent for the Court, to dispossess them of their real property
based on an ex parte application served and filed only two days before the hearing. Therefore, if anything,
a continuance of the hearing by at least sixty days is sensible and avoids the extreme prejudice to the
Partnerships from the shortened notice the ex parte procedure provides.
Dated: March 11, 2026 FOLEY BEZEK BEHLE & CURTIS, LLP
By ___________________________
Jordan A. Liebman
Attorneys for the LC Defendants
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PROOF OF SERVICE
25CV-0667
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PROOF OF SERVICE
STATE OF CALIFORNIA COUNTY OF SANTA BARBARA
I am employed in the County of Santa Barbara, in the State of California. I am over the age of 18
and am not a party to the within action. My business address is 15 West Carrillo Street in Santa Barbara,
California 93101.
On March 11, 2026, I served a copy of: OPPOSITION TO PLAINTIFF CITY OF SAN LUIS
OBISPO’S EX PARTE APPLICATION FOR APPOINTMENT OF RECEIVER, OR
ALTERNATIVELY, FOR AN ORDER SHORTENING TIME on the interested parties in this
action addressed as follows:
SEE ATTACHED SERVICE LIST
BY HAND DELIVERY: I caused a true copy of the above-referenced document(s) to be personally
delivered the person(s) listed above.
BY OVERNIGHT DELIVERY: I am familiar with the practice at my place of business for collection
and processing of documents for overnight delivery with an overnight courier service. The above-
referenced document(s) will be placed in an envelope, addressed to the person(s) listed above, sealed,
and placed for collection and delivery the next business day with fees fully prepaid in accordance with
ordinary business practices.
BY E-MAIL: I submitted an electronic version of the above-referenced document(s) to the person(s)
whose e-mail address(es) is/are known to me as listed above.
BY MAIL: I am familiar with the practice at my place of business for collection and processing of
correspondence for mailing with the United States Postal Service. The above-referenced
document(s) will be placed in an envelope, addressed to the person(s) listed above, sealed, and
deposited with the United States Postal Service with postage fully prepaid in accordance with the
ordinary course of business.
Executed on March 11, 2026, I declare under penalty of perjury under the laws of the State of California
that the foregoing is true and correct.
Vianey Hernandez
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PROOF OF SERVICE
25CV-0667
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SERVICE LIST
J. CHRISTINE DIETRICK, SBN 206539
City Attorney, City of San Luis Obispo
MATTHEW R. SILVER, SBN 245528
MSilver@CivicaLaw.com
SEAN E. MORRISSEY, SBN 297371
SMorrissey@CivicaLaw.com
CIVICA LAW GROUP APC
4000 Barranca Parkway, Suite 250, PMB #782
Irvine, California 92604
Phone: 949-592-0165
Fax: 949-335-1701
Attorneys for Plaintiffs
City of San Luis Obispo, and
People of the State of California