Judge: Bruce G. Iwasaki, Case: 22STCV35007, Date: 2023-04-24 Tentative Ruling
Case Number: 22STCV35007 Hearing Date: April 24, 2023 Dept: 58
Judge Bruce Iwasaki
Hearing Date: April 24, 2023
Case Name: Giuliana Romano v. Ruggero
Terzuolo, et al.
Case
No.: 22STCV35007
Motion: Preliminary
Injunction
Moving
Party: Plaintiffs Giuliana
Romano, Tullio Mamolo, and Alma Mamolo
Responding Party: Defendants Ruggero and Ida P. Terzuolo
Tentative
Ruling: Plaintiffs’ motion for
preliminary injunction is denied.
I.
Introduction
This is an action for partition of commercial
real property. Before the Court is a motion for preliminary injunction. Plaintiffs Giuliana Romano (Giuliana), Tullio
Mamolo (Tullio), and Alma Mamolo (Alma), as trustee of the First Restatement of
the Mamolo Living Trust dated March 11, 1992, (collectively Plaintiffs) move for
a preliminary injunction against Defendants Ruggero Terzuolo (Roger), and Ida
P. Terzuolo (Ida), both as trustees of the Ruggero Terzuolo and Ida P. Terzuolo
1980 Trusts dated January 24, 1980. Plaintiffs seek to enjoin Defendants from:
1)
Denying access to Plaintiffs or their representatives
and employees to their co-owned real property, located at 703-705 South Main
Street, Burbank, California (the “Burbank Property”)
2)
Changing locks or refusing to supply keys to the
co-owners;
3)
Changing or modifying any part of the building
structure;
4)
Removing any property, including equipment, furniture
and fixtures from the Burbank Property or failing to restore any such removed
property to Plaintiffs
5)
Conducting any business on the Burbank Property that
Plaintiffs do not authorize;
6)
Permitting any work of improvement on the Burbank
Property;
7)
Transferring, conveying or hypothecating any part of
the real property and improvements;
8)
Failing to allow any real estate salesperson from
inspecting the Burbank Property and posting marketing signs on it;
9)
Denying any persons authorized by the co-owners from
access to the Burbank Property.
Plaintiffs Giuliana, Tullio, and
Alma, and Defendant Roger, are alleged to be co-equal owners of a wholesale
bakery and storage facility located at the Burbank Property. Plaintiffs seek partition of the Burbank
Property. Defendants Roger and Ida oppose
imposition of a preliminary injunction.
Their opposition memorandum insists they “do not object to an order that
the Property be sold,” and “are not standing in the way.” But they contend the sale should comply with
the terms of an April 2017 Settlement Agreement in Los Angeles Superior Court
case no. BC567430. Roger states that Defendants
are “not willing to agree to a sale of the property without protections….” Plaintiffs contend that they have suffered
irreparable injury by the denial of access and use of the Burbank Property and
by Defendants’ conduct which Plaintiffs claim has caused injury to the parties’
co-owned business. The Court concludes
that Plaintiffs have not adequately demonstrated the likelihood of prevailing
on the merits and have not shown irreparable harm. The motion for preliminary injunction is
denied.
II.
Factual/Procedural Background
In 1973, Ugo Mamolo and Roger
Terzuolo purchased the Viktor Benes Co., which owned and operated a
bakery. In 1986, Ugo, Roger, Giuliana,
Tullio, and James Maher formed a partnership and purchased the Burbank Property
for the purpose of operating a bakery and distribution center. The partners initially took title to the Burbank
Property under “Viktor Benes, Inc.” and caused the Burbank Property to be
deeded to each of the individual partners.
In 2008, Maher was bought out of
the partnership and of the Property; and title to the Property was transferred
in 25% equal shares to the Mamolo Trust with Alma as trustee (25%), Roger and
Ritta as husband and wife (25%), Giuliana (25%), and Tullio (25%).
There are two other cases, BC567430
and BC577464, involving some of the parties.
On December 19, 2014, Giuliana and Tullio filed the first case
(BC567430) against Ugo Mamolo and Roger, alleging that the named defendants
misused and mismanaged partnership assets.
On April 2, 2015, the Viktor Benes Company filed the second case
(BC577464) against Giuliana, Mamolos Continental Baker, LLC, Frank Romano, and
Frank Romano Inc., alleging that Giuliana reportedly failed to pay the company
certain licensing fees. These two cases
were consolidated under BC567430.
On January 17, 2017, Plaintiffs
Giuliana and Tullio filed with the Court a Notice of Conditional Settlement of
the BC567430 case, which conditioned dismissal of the matter on the
satisfactory completion of specified terms.
On April 26, 2017, the parties in
the BC567430 case settled their disputes by entering into a written settlement
agreement (the “Settlement Agreement”).
On November 2, 2022, Giuliana, Tullio,
and Alma, as trustee of the First Restatement of the Mamolo Living Trust dated
March 11, 1992 filed this matter. They
sued Roger and Ida, both as trustees of the Ruggero Terzuolo and Ida P.
Terzuolo 1980 Trusts dated January 24, 1980, and City National Bank for
Partition of Real Property, ejectment, and accounting. Defendant City National Bank, the mortgagee,
consented to the requested relief.
On December 20, 2022, Defendants
Roger and Ida demurred to the Complaint, arguing that there were prior cases
filed in a different court and that this action should be abated because the
earlier court had exclusive concurrent jurisdiction. On January 26, 2023, the Court overruled the
demurrer on the grounds that the cases did not arise from the same transaction
or events.
On March 23, 2023, Plaintiffs filed
the instant motion for preliminary injunction.
On April 11, 2023, Defendants filed an opposition. On April 17, 2023, Plaintiffs filed a reply.
III.
Evidentiary
Objections
Defendants’ objections are overruled in full. These boilerplate objections fail to set
forth specific evidence deemed to be inadmissible.
Plaintiffs’ objections as to Declaration of Darin Margules,
Esq. are sustained as to no. 2, with respect to incorporation of the Code of
Civil Procedure section 998 offer, and overruled as to nos. 1, 3, and 4.
Plaintiffs’ objections as to Declaration of Ruggero
Terzuolo are overruled as to nos. 1 and 2.
Plaintiffs’ objections as to Declaration of Michael Eveloff
are overruled as to nos. 1, 2, 3, and 4.
IV.
Legal Authority
“In deciding whether to issue a preliminary injunction, a
court must weigh two ‘interrelated’ factors: (1) the likelihood that the moving
party will ultimately prevail on the merits and (2) the relative interim harm
to the parties from issuance or nonissuance of the injunction. . . . . The trial court’s
determination must be guided by a ‘mix’ of the potential-merit and interim-harm
factors; the greater the plaintiff’s showing on one, the less must be shown on
the other to support an injunction.” (Butt
v. State of California (1992) 4 Cal.4th 668, 677-78 (citations
omitted).)
“The general purpose of such an injunction is the preservation
of the status quo until a final determination of the merits of the
action.” (Continental Baking Co. v.
Katz (1968) 68 Cal.2d 512, 528.) The
status quo is the “last actual peaceable, uncontested status which preceding
the pending controversy.” (14859 Moorpark Homeowner’s Ass’n v. VRT
Corp. (1998) 63 Cal.App.4th 1396, 1408 (internal quotations and citations
omitted).) A preliminary mandatory
injunction “is not permitted except in extreme cases where the right thereto is
clearly established and it appears that irreparable injury will flow from its
refusal.” (Board of Supervisors v.
McMahon (1990) 219 Cal.App.3d 286, 295 (citations omitted).)
V.
Discussion
A.
Plaintiffs’ arguments
in support of preliminary injunction.
Plaintiffs argue partition by sale
is necessary because the co-owners and parties cannot agree on the use, sale,
maintenance, or payment of the Burbank Property’s expenses. The Burbank Property serves as a central
warehouse and baking facility providing baked goods and supplies to the 16
Viktor Benes bakeries which are a licensee within the Gelson’s Markets
throughout Southern California. The
Burbank Property — through the jointly-owned Mamolo’s Cont. & Bailey’s
Bakeries, Inc. (“Mamolo’s Bakeries”) — provide accounting, billing, and
invoicing services to the other bakery operators in the Viktor Benes system. (Romano Decl. ¶ 4.)
Plaintiffs argue they are likely to
succeed on the merits of their claims because the Burbank Property cannot be
divided in kind and partition of sale is the only feasible remedy. Plaintiffs contend that have the unfettered
right to use the property as co-owners and Defendants do not have any legal
standing to retain exclusive possession of the Burbank Property. However, Plaintiffs allege that Defendants
and other persons acting in concert have improperly denied or severely
restricted Plaintiffs’ access to the Burbank Property. Plaintiffs seek to recover the use and
possession of the Burbank Property.
Plaintiffs state that any delay in seeking injunctive relief was the
result of attempts to resolve the matter informally.
Plaintiffs also argue that the
balance of hardships weigh in favor of granting injunctive relief to preserve
the status quo and to halt the ongoing harm resulting from Defendants’
conduct. Plaintiffs contend that Defendants’
conduct prevents the marketing and sale of the Burbank Property and may result
in the co-owners receiving a lesser sale price if a sale is delayed. In Plaintiffs’ reply to Defendants’
opposition, Plaintiffs also state that the denial of their right to access the
Burbank Property is an ongoing harm that cannot be compensated by monetary
damages.
Finally, Plaintiffs submit that no
bond or undertaking is required because they are seeking to preserve their
fundamental rights, any damages asserted by Defendants are of their own making,
and Plaintiffs have been irreparably harmed by the denial of their property
rights.
B.
Defendants’ opposition
to preliminary injunction.
Defendants contend that Plaintiffs’
motion must be denied on the grounds that Plaintiffs fail to show they will
prevail on the merits due to their waiver of the partition right by virtue of
two written agreements which address how and when the Burbank Property can be
sold. Defendants argue that Plaintiffs
cannot demonstrate the inadequacy of other remedies, the degree of irreparable
harm, and the necessity of preserving the status quo necessary to support
injunctive relief. Finally, Defendants
contend that an undertaking of no less than two million dollars would be
necessary, as the requested relief would essentially put Viktor Benes
Continental Pastries, Inc. (“VBC,” an entity owned by Roger Terzuolo and his
partner who is not a party to this case) out of business and damage the
contractual relationships with the various operators of the Viktor Benes
bakeries and with Gelson’s Markets.
In response to Plaintiffs’
allegations of Defendants’ improper conduct, Defendants contend that they
assured Plaintiffs access to the Property with 24-hour advance notice. Additionally, Defendants state that
Plaintiffs could retrieve their personal property and corporate records could
be provided upon request. Defendants
claim they only made necessary repairs to maintain proper function of the
bakery and installed equipment (cameras, smoke detectors, emergency lighting)
to prevent harm and/or to comply with county health codes. They explain they changed locks for health
purposes and only allowed those with active roles at the bakery to use the
facility. Defendants argue that
Plaintiffs were welcome to contact Defendants’ counsel to make arrangements for
supervised access during normal business hours.
Finally, Defendants state that they moved corporate documents which were
deteriorating from dust, damp, and mold, creating a health and safety hazard,
but that Plaintiffs could retrieve and have access to them at any time.
As to the merits of Plaintiffs’
motion, Defendants argue that Plaintiffs will not prevail on the merits
because: (1) other parties who have interest in the property pursuant to the
Settlement Agreement have not been joined in the Partition Action pursuant to Code
of Civil Procedure section 872.510; (2) the Settlement Agreement acts as a
waiver by the owners of the Property to the right to partition; (3) VBC has
rights in the property as a tenant; (4) Plaintiffs’ action/partition is moot
based on Defendants’ section 998 offer to compromise the partition claim.
Defendants also argue that the
balance of harm does not tip in Plaintiffs’ favor because the relief requested
would not protect the status quo.
Defendants claim that Plaintiffs have not requested nor needed access to
the Property for years and have only recently requested such in service of
their alleged desire to sell the Property. Defendants argue that there is no demonstrable
reason why the trial of this matter cannot proceed without an injunction in
place especially given that Defendants have agreed to stipulate to the trial
being held on shortened time due to age and ill health of all the parties. Finally, to the extent that Plaintiffs are
harmed by the Defendants’ conduct, they can recover money damages.
C. Plaintiffs’ reply arguments
Plaintiffs argue that Defendants
fail to provide any legitimate justification for their conduct and contend that
Defendants’ focus on the merits of a pending sale offer is irrelevant. Plaintiffs point to Defendant Roger Terzuolo’s
deposition to show that Defendants are opposed to a sale and that they wish to
hold the Property for their own use, to the exclusion of other users. Plaintiffs state that Defendant Terzuolo
acknowledges that Plaintiffs have been denied access to their own
property.
Plaintiffs also contend that the
Settlement Agreement does not waive any of the co-owners’ right to seek
partition of the Property. Plaintiffs
state that Defendants’ attempts to enforce the Settlement Agreement were denied
because the Court found that Defendants themselves had not complied with the
terms.
Plaintiffs contend the Spousal
Agreement between Ruggero Terzuolo and Ugo Mamolo is inapplicable to this
instant action, and that it does not contain any language that waives the right
to seek partition.
Plaintiffs move to strike
Defendants’ exhibit containing a section 998 Settlement Offer as it has not yet
been accepted by Plaintiffs and it is an improper attempt to use as
evidence. As noted above the Court sustains
Plaintiffs’ objection to Defendants’ reference to the offer.
Finally, Plaintiffs argue that they
have sustained harm by Defendants’ conduct due to being denied access as
co-owners, and that the denial of their right to access the Property cannot be
compensated by monetary damages.
D.
Plaintiffs are not entitled to preliminary injunctive
relief
i. Plaintiffs do not establish a likelihood of prevailing on
the merits
An action of partition is an
equitable proceeding. (Elbert,
Limited v. Federated Income Properties¿(1953) 120 Cal.App.2d 194, 200.) Whenever a party affirmatively seeks relief
through the interposition of the remedy of partition, the courts have adhered,
in adjusting the rights of co-tenants and defining their interest in the common
property, to the classic formulas encapsuled in the maxims that equity is
equality and he who seeks equity must do equity, and have dispensed equitable
relief only upon condition that the equitable rights of a co-tenant are
respected and safeguarded.” (Ibid.)¿
The judgment of partition is left
to the discretion of the trial court and the determination requires a factual
inquiry by the court. When the evidence
permits the court to reasonably conclude partition by sale would be more
equitable to the owners, such decision should be upheld absent an abuse of
discretion. This is because “a partition
suit is in equity” and “a court of equity has broad powers and comparatively
unlimited discretion to apply.” (Richmond v. Dofflemyer (1980) 105
Cal.App.3d 745, 758-59, 765-66.)
The Court
finds that Plaintiffs fail to show a likelihood of prevailing on the
merits. First, they do not provide any
justification for the failure to join certain parties pursuant to the
Settlement Agreement. Defendants contend
that Frank Romano, Frank Romano, Inc., and Viktor Benes Continental Pastries,
Inc. have interests in the property pursuant to the Settlement Agreement or via
their possession and tenancy at the Burbank Property. Code of Civil Procedure section 872.510
requires the plaintiff to “join as defendants in the action all persons
having or claiming interests of record or actually known to the plaintiff or
reasonably apparent from an inspection of the property, in the estate as to
which partition is sought.” Here, Plaintiffs fail to show that they have met this
procedural requirement.
Second, the
issue is not whether the Burbank Property will be partitioned, but on what terms. A settlement will be better for the parties
than a court order. They should pursue mediation. But absent that, if the matter goes to trial,
a great deal of history, appraisal information, and likely conflicting
testimony on the relationship between this case and other litigation, will figure
in. This is a family dispute with understandable
emotional issues. Plaintiffs’ specific injunction requests do not preserve the
status quo and are likely to make resolution more difficult.
On the
topic of the merits, the Court is dubious of Defendants’ argument that the 2017
Settlement Agreement acts as a “waiver” of the right to seek partition. The Court does understand that enforcing the
parties’ reasonable expectations in light of that Agreement is an aspect of
fashioning an equitable remedy.
ii. The balance of harm does not weigh in Plaintiffs’ favor
Here, Plaintiffs
fail to show irreparable harm warranting an injunction. While Plaintiffs point to the potential loss
of an opportunity to obtain a higher sale price as a result of Defendants’
prevention of the marketing and sale of the Burbank Property, this demonstrates
that monetary damages are an adequate remedy and that Plaintiffs risk no
irreparable harm.
Plaintiffs’ declarations in support of this motion are remarkably
vague. The purported harm they allege is
lacking in any detail. Plaintiffs do not
contend they have been operating business at the Burbank Property and are now prevented
from doing so. Rather, they have an abstract concern of not having keys to the
facility. Their complaints about
unspecified construction changes – denied by Defendants – unspecified furniture
being moved, unspecified repairs performed, unidentified employees being
terminated, and unnamed files and business records made accessible to unidentified
persons, fail to meet a minimum standard for extraordinary relief.
Plaintiffs fail to show the irreparable injury needed for the
Court to issue injunctive relief.
VI.
Conclusion
Plaintiffs’ motion for preliminary
injunction is denied.
That said, as a matter of case
management, the Court will at the hearing discuss a prompt schedule for the
parties to permit one or more real estate brokers and property appraisers to
have access to the Burbank Property to facilitate settlement and trial
preparation. Similarly, if there is
personal property the Plaintiffs identify, the Court expects to fashion a
schedule and protocols in which the property can be returned, and to the extent
the material is shared business information, copied. The Court will also inquire of the parties
concerning trial preparation.