Judge: Curtis A. Kin, Case: 24STCP02381, Date: 2024-10-03 Tentative Ruling

Case Number: 24STCP02381    Hearing Date: October 3, 2024    Dept: 86

MOTION FOR PRELIMINARY INJUNCTION

Date:               10/3/24 (1:30 PM) 

Case:               1138 Princeton, LLC v. Santa Monica Rent Control Board (24STCP02381) 

TENTATIVE RULING:

Petitioner 1138 Princeton, LLC’s Motion for a Preliminary Injunction is DENIED.

Respondent Santa Monica Rent Control Board’s evidentiary objections to the declarations of Jorge Velasquez and Ada R. Cordero-Sacks are OVERRULED. Respondent and petitioner’s respective requests for judicial notice is DENIED in their entirety as “unnecessary to the resolution” of the issues before the Court. (Martinez v. San Diego County Credit Union (2020) 50 Cal.App.5th 1048, 1075.)

Petitioner moves for a preliminary injunction to enjoin respondent Santa Monica Rent Control Board (“Board”) and real party tenants from implementing the four rent reductions in favor of real party tenants, which were ordered in respondent’s July 5, 2024 decision.  

“[T]he question whether a preliminary injunction should be granted involves two interrelated factors: (1) the likelihood that the plaintiff will prevail on the merits, and (2) the relative balance of harms that is likely to result from the granting or denial of interim injunctive relief.”  (White v. Davis (2003) 30 Cal.4th 528, 554.) Before the Court can exercise its discretion and consider the two interrelated factors, however, “the applicant must make a prima facie showing of entitlement to injunctive relief. The applicant must demonstrate a real threat of immediate and irreparable injury due to the inadequacy of legal remedies.” (Triple A Machine Shop, Inc. v. State of California (1989) 213 Cal.App.3d 131, 138, citation omitted.)

“[A]n injunction is an unusual or extraordinary equitable remedy which will not be granted if the remedy at law (usually damages) will adequately compensate the injured plaintiff,” and the party seeking injunctive relief bears the burden to prove its absence. (Department of Fish & Game v. Anderson-Cottonwood Irrigation Dist. (1992) 8 Cal.App.4th 1554, 1564-65.) “Mere monetary loss is not ordinarily irreparable in the contemplation of the remedy by injunction. At least, it should not be considered so in the absence of any averment or showing that the parties causing the loss are insolvent or in any manner unable to respond in damages.” (Duvall v. White (1920) 46 Cal.App. 305, 308.)

The foregoing principles concerning injunctive relief remain applicable notwithstanding petitioner’s attempts to distinguish the facts of the cases. (See also CCP § 526(a)(4) [injunction may be granted “[w]hen pecuniary compensation would not afford adequate relief” and “[w]here it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief”].)

Here, petitioner maintains that the rent reductions ordered by the Board will create a negative cash flow of -$9,154 per month from at least August 2024 until December 2024. (Velasquez Decl. ¶¶ 12-20.) Petitioner also maintains that the tenant in one of the units at issue was contemplating moving, which means that the likelihood of recouping its loss should petitioner ultimately prevail on its petition for writ of mandate is unlikely. (Velasquez Decl. ¶¶ 26, 30(c).)

Plaintiff’s assertion of harm is solely financial hardship, which is not irreparable. If plaintiff prevails on the instant petition and the tenants fail were to fail to pay back rent owed, plaintiff would have recourse to bring a civil action for damages against any such tenant. This is true even if certain tenants were to relocate in response to an order from this Court reversing the Board’s decision, as such tenants could still be served with a summons and complaint. Further, plaintiff’s assertion of harm is based on the loss of rental revenue for four units. (Velasquez Decl. ¶¶ 12, 19.) It is unclear whether plaintiff’s assertion of total monthly revenue, from which the purportedly negative cash flow was calculated, is based on all 24 units at the property or only 8 units, as petitioner references two structures with four units each. (Velasquez Decl. ¶¶ 8 [24 households], 14 [monthly revenue for “1132-1136 Princeton, Units A through D” and “1138-1142 Princeton, Units A through D].) Consequently, plaintiff’s assertion of irreparable harm lacks foundation and is ambiguous at best.

Because plaintiff fails to show irreparable harm due to the inadequacy of legal remedies, the Court declines to consider the likelihood that plaintiff will prevail on the merits or the balance of harms that would result from the proposed preliminary injunction.

To the extent that petitioner relies on CCP § 1094.5(g) for a stay of the Board’s decision (Mtn. at 6:6-12), the Court declines to stay the decision as against the public interest.  The Rent Control Law and implementing regulations at issue provide for rent reductions due to unreasonable construction impacts, which is a benefit to renting members of the public.  Thus, notwithstanding plaintiff’s assertion that construction ultimately increases housing stock (Cordero-Sacks Decl. Ex. 4 at 5, Ex. 5 at 43-49), the Court finds that any stay of respondent’s decision would be against the public interest here.