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A Better Partnership
May 31, 2016

COA holds that trial courts must adhere to court rules when deciding a plaintiff’s request for a receiver

Courts must adhere to Michigan court rules in accepting or rejecting a plaintiff’s requested receiver, held the Michigan Court of Appeals in Casa Bella Landscaping LLC v. Javier E. Lee, No. 326237.  Thus, the Court of Appeals held that the trial court violated court rules by simply stating it did not want to use the nominated receiver when it did not make any specific findings that a different receiver ought to be appointed. 
 
Plaintiff Casa Bella Landscaping, LLC nominated David Findling as its receiver, based on Findling’s “sufficient competence, qualifications, and experience to administer the receivership estate.”  Defendant failed to object to the nomination within the 14-day timeframe provided by MCR 2.622(B)(1).  The trial court allowed Plaintiff to appoint a receiver, but, instead of accepting Plaintiff’s nominee it appointed another party, Steven E. Smith.
 
The Court of Appeals held that the trial court failed to adhere to MCR 2.622(B)’s requirements in appointing the receiver.  The trial court rejected the Plaintiff’s nominee without any justification.  Instead, when questioned as to its rationale for not appointing Findling, the court merely stated that it “won’t use them.”  Accordingly, the Court of Appeals held that the trial court failed to satisfy the requirement that it must appoint the nominated receiver, unless it finds that a different receiver should be appointed.  Further, the trial court failed to explain its selection of Smith as receiver.
 
The Court of Appeals vacated the trial court’s appointment of Smith, and remanded the trial for further proceedings.  Consequently, the Court of Appeals held that the trial court must permit Plaintiff to nominate another receiver, and consider such nominee consistent with the requirements of MCR 2.622(B).

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