Judge: Carolyn M. Caietti, Case: 37-2023-00023459-CU-OR-CTL, Date: 2023-08-08 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - July 20, 2023

07/21/2023  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited  Other Real Property Motion Hearing (Civil) 37-2023-00023459-CU-OR-CTL WARD VS EXECUTIVE CAPITAL GROUP INC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Plaintiff Ronald Ward's Order to Show Cause re Preliminary Injunction is GRANTED.

Background Generally, in this case, Plaintiff, 72 years-old, alleges he attempted to refinance his real property home to pay consumer debts and expenses, but Defendants conspired to take excessive fees, interest and equity in Plaintiff's primary residence without following certain consumer protection laws and defrauding Plaintiff. In particular, Defendant Contreras misled Plaintiff into verifying his home was an investment property.

On June 13, 2023, the Court granted Plaintiff a Temporary Restraining Order, enjoining Defendants from proceeding with a foreclosure sale of the home. (ROA 32.) Plaintiff's ex parte application are the moving papers for this request for preliminary injunction. Only Defendant Executive Capital Group, Inc. opposed the Order to Show Cause.

Preliminary Matters Plaintiff's reply request for judicial notice is granted and notice will be taken to the extent allowed.

Plaintiff's reply objections are overruled.

Defendant's objections to Plaintiff's lodgment of out of state authorities are overruled.

Discussion The general purpose of a preliminary injunction is to preserve the status quo pending a determination on the merits of the action. (Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 528.) ' 'The granting or denial of a preliminary injunction does not amount to an adjudication of the ultimate rights in controversy.

It merely determines that the court, balancing the respective equities of the parties, concludes that, pending a trial on the merits, the defendant should or ... should not be restrained from exercising the right claimed by him.' ' (Ibid.) In determining whether to issue a preliminary injunction, courts must consider 'two interrelated factors': (1) the likelihood that plaintiff will prevail on the merits at trial, and (2) the comparative harm to be Calendar No.: Event ID:  TENTATIVE RULINGS

2985167  38 CASE NUMBER: CASE TITLE:  WARD VS EXECUTIVE CAPITAL GROUP INC [IMAGED]  37-2023-00023459-CU-OR-CTL suffered by plaintiff if the injunction does not issue against the harm to be suffered by defendant if it does. (King v. Meese (1987) 43 Cal.3d 1217, 1226 (affirming denial of motion for preliminary injunction).) '[T]he more likely it is that plaintiffs will ultimately prevail, the less severe must be the harm that they allege will occur if the injunction does not issue. This is especially true when the requested injunction maintains, rather than alters, the status quo.' (Id., at p. 1227.) A party seeking injunctive relief must also 'show the absence of an adequate remedy at law.' (Department of Fish & Game v. Anderson-Cottonwood Irrigation Dist. (1992) 8 Cal.App.4th 1554, 1564.) The plaintiff has the burden of proof on all of these issues. (Drakes Bay Oyster Co. v. California Coastal Com. (2016) 4 Cal.App.5th 1165, 1172 (affirming denial of injunction where moving party did not show a likelihood of prevailing on the merits of its claim).) Likelihood of Success on the Merits Plaintiff made an initial showing Defendants violated the Truth in Lending Act, the Home Ownership Equity Protection Act and the California Predatory Lending Act by failing to provide certain disclosures and notices to Plaintiff. The crux of Defendant's opposition does not concern the specific violations, but that these laws do not apply because Plaintiff verified the home was an investment property. However, the record shows Plaintiff did not sign the loan application stating the property is an investment or the alleged lease, lived at the home since 2008, it is his only home, does not know 'Mr. Banks' and did not receive rental income. (See, ROA 25 - Declaration of Ronald Ward; ROA 30 – Declaration of Ronald Ward.) Plaintiff will also likely succeed on his claim for rescission. In general, a party to a contract may rescind a contract on the ground that it was obtained through fraud. (Civ. Code, § 1689.) 'In the usual case of fraud, where the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable. In that case, the party seeking to void the contract must rescind under our statutory and common law rules.' (Orozco v. WPV San Jose, LLC (2019) 36 Cal.App.5th 375, 402–403.) Here, for purposes of this motion, the record shows Plaintiff was defrauded by Defendants into signing the loan application and mortgage documents.

Thus, Plaintiff established the merit required for purposes of this injunction.

Relative Interim Harm Here, Plaintiff is threatened with greater harm if the injunction is denied versus the harm Defendant would suffer if the injunction is granted. Defendant seeks to foreclose on Plaintiff's real property. Should Defendant prevail at trial, it will have suffered some delay in foreclosure. On the other hand, Plaintiff, 72 years-old, stands to lose any equity and the loss of this specific property, a residential home. 'Given the drastic implications of a foreclosure, it is not surprising to find courts quite frequently granting preliminary injunctions to forestall this remedy while the court considers a case testing whether it is justified under the facts and law.' (Baypoint Mortgage Corp. v. Crest Premium Real Estate etc. Trust (1985) 168 Cal.App.3d 818, 825.) On balance, Plaintiff demonstrated a likelihood of success on the merits and harm that weighs more in her favor. To keep the status quo, the Court will issue a preliminary injunction subject to certain conditions (infra).

Undertaking An undertaking is required. (C.C.P., § 529(a); CRC 3.1150(f).) Defendant requests a $1,000,000 bond based on the probable damage Defendant may sustain because of the injunction. In reply, Plaintiff contests the amount. An undertaking in the amount of $100,000 will be ordered.

In addition to the undertaking, the Court will also require Plaintiff to make payments in the amount of $2,020 (the amount of his mortgage before the alleged fraud) on the first of every month during this Calendar No.: Event ID:  TENTATIVE RULINGS

2985167  38 CASE NUMBER: CASE TITLE:  WARD VS EXECUTIVE CAPITAL GROUP INC [IMAGED]  37-2023-00023459-CU-OR-CTL litigation to Defendant, keep any other liens out of default, pay taxes and insurance on the property and waive any claim accepting payments pursuant to these conditions waives any default. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2022) ¶ 9:672–674.) Conclusion For these reasons, the preliminary injunction is GRANTED. The Trustee's sale of the property located at 241 S. 58th Street, San Diego, California 92114, is restrained until further order by this Court. An undertaking, monthly payments and other obligations as set forth above are also ordered.

Consistent with any applicable laws and rules of court, Plaintiff is ordered to prepare and submit a proposed order consistent with this ruling and any modifications made at the hearing. Plaintiff has five days to present the undertaking after service of the Court's final signed order.

Defendant is reminded to comply with Department 70's Polices and Procedures and to provide courtesy copies of all motion paperwork.

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