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A new court decision confirms that receivers cannot be sued for decisions made in the exercise of their judgment, even if those decisions later prove to be wrong. In Semaan v. Mosier, G064385, (Cal. Ct. App. Feb. 5, 2026), a California case of first impression, the Court of Appeal held that court-appointed receivers in California are entitled to quasi-judicial immunity for discretionary acts performed in their capacity as receivers.
Factual Background
The dispute arose from a criminal prosecution in which the criminal court froze certain assets and appointed a receiver to preserve them. On Dec. 7, 2021, the court ordered the receiver to “liquidate all stock holdings into cash as soon as practicable” and hold the cash pending further order.
The receiver did not immediately liquidate the holdings. He later explained that ongoing settlement negotiations could have mooted the need for liquidation, and that TDAmeritrade’s requirements for closing the accounts would require use of his personal and company tax identification numbers, creating potential tax consequences. By the time of his removal, the value of the investment accounts had declined by approximately $1.18 million. Plaintiffs subsequently filed a civil complaint for breach of fiduciary duty.
Quasi-Judicial Immunity for Receivers
The Court of Appeal reviewed foundational principles of quasi-judicial immunity. Judicial immunity bars civil suits against judges for acts performed in the exercise of judicial functions, and quasi-judicial immunity extends similar protections to non-judges who perform functions integral to the judicial process as “arms of the court.” While prior California appellate decisions had listed receivers among those potentially entitled to quasi-judicial immunity, no California state court had squarely decided the issue.
Drawing on federal authority uniformly affording immunity to state-court receivers, the Court of Appeal expressly held that court-appointed receivers in California are entitled to quasi-judicial immunity. Federal courts have recognized that receivers are officers of the court who “share the immunity awarded to judges,” and that exposing them to liability would make them “a lightning rod for harassing litigation aimed at judicial orders.”
Scope of Immunity: Discretionary vs. Ministerial Acts
Quasi-judicial immunity protects discretionary acts—i.e., where the officer uses judgment or discretion in performing assigned functions. The immunity does not extend to purely ministerial acts, nor to intentional misconduct such as self-dealing or actions taken wholly outside the officer’s role.
Plaintiffs argued that the receiver’s failure to liquidate the accounts violated a clear court order and therefore amounted to a ministerial failure disqualifying him from immunity. The Court of Appeal rejected this characterization, noting that the Dec. 7 order directed the receiver to liquidate the stock holdings “as soon as practicable.” Determining when liquidation was “practicable” required the receiver to exercise judgment and discretion—taking into account ongoing settlement negotiations, potential alternative sources of funds, and the broker’s requirements for closing the accounts. The court held that, whether or not those circumstances ultimately justified the delay or whether the decision was correct, the receiver was exercising discretionary judgment in carrying out the court’s directive. Quasi-judicial immunity therefore applied even to a potentially “wrong” decision.
Key Takeaways
- Court-appointed receivers in California are now expressly recognized as entitled to quasi-judicial immunity for discretionary acts undertaken in their capacity as receivers.
- Immunity applies even where the receiver’s decisions are later alleged to be erroneous or to constitute noncompliance with a court order, so long as the decisions involve the exercise of judgment within the scope of the appointment.
Jeffer Mangels & Mitchell LLP represents receivers, lenders, and special servicers in complex receivership matters, including asset preservation, liquidation, and defending against claims arising from receiver’s actions. For more information, contact Bennett G. Young (byoung@jmbm.com) or Christopher K. Whang (ckwhang@jmbm.com).
