Judge: James C. Chalfant, Case: 23STCV02134, Date: 2023-03-09 Tentative Ruling
Case Number: 23STCV02134 Hearing Date: March 9, 2023 Dept: 85
Charles Bernal and
Artist Worldwide Agency, LLC v. Christopher Maggiore, Artists Worldwide, et al,
23STCV02134
Tentative decision on application for preliminary injunction: granted
Plaintiffs
Charles Bernal (“Bernal”) and Artist Worldwide Agency, LLC (“Agency LLC”) apply
for a preliminary injunction enjoining Defendants Christopher Maggiore
(“Maggiore”) and Artists Worldwide (“Artists Worldwide”) from interfering with Agency
LLC’s promoter and client relationships by threatening them with lawsuits if
they continue to work with Agency LLC.
The
court has read and considered the moving papers and ex parte opposition
(no opposition was filed after a temporary restraining order (“TRO”) was
granted) and renders the following tentative decision.
A.
Statement of the Case
1.
Complaint
Plaintiffs
filed the Complaint on January 31, 2023, against Maggiore, Artists Worldwide,
Jamison Properties, Inc. (“Jamison”), and Force Protection Agency, Inc.
(“Force”). Plaintiffs allege (1)
conversion; (2) breach of contract; (3) fraud via concealment; (4) intentional
interference with prospective economic advantage; (5) negligent interference
with prospective economic advantage; (6) intentional interference with
contractual relations; (7) negligence; (8) assault; (9) battery; (10)
intentional infliction of emotional distress;(11) negligent hiring, retention,
and supervision; (12) premises liability; (13) interference with exercise of
civil rights; and (14) violation of Business and Professions Code section 17200. The Complaint alleges in pertinent part as
follows.
Bernal
and Maggiore had a partnership in 1999 and jointly operated Artists Worldwide via
oral agreement. Artists Worldwide
specializes in talent recruitment, and it connected clients with bands for
public or private events. In 1999,
Maggiore contributed approximately $3,000 to the business.
From
1999 to 2002, Maggiore contributed little work and took most of the profits
from Artists Worldwide. Maggiore also
assaulted multiple people. In 2003 or 2004,
Maggiore transferred Artists Worldwide’s bank accounts, emails, and office cell
phone accounts into his own name without permission or authorization. Between 2002 and 2021, Maggiore treated
Artists Worldwide’s money like it was his own and incurred significant debt on
its account. Bernal was required to run
the business himself even though Maggiore never shared its financials with
Bernal.
From
2005 to 2022, Maggiore abandoned the partnership but continued to appear at the
office a few times a year, usually disheveled and possibly intoxicated. Bernal and Artists Worldwide tolerated
Maggiore’s presence to avoid confrontation, but physical confrontations still
occurred. He vanished from the office
around March 2019 when the COVID-19 pandemic began.
In
February 2022, Bernal created Agency LLC, obtained his own talent recruitment
license, and ran the business on his own.
He renewed the office lease in Agency LLC’s name and operated it on his
own.
In
January 2023, Maggiore learned about Agency LLC. On January 17, 2023, Maggiore threatened that
Bernal would lose millions and be arrested for what Maggiore alleged was the
movement of his property. The next day, Maggiore
told landlord Jamison that Agency LLC was not the proper tenant of the offices
at 3660 Wilshire Blvd. Suite 924, Los Angeles, CA (“Premises”) and that Jamison
should throw Agency LLC out. Jamison
went to Bernal, who informed it that he had signed the lease. On January 19, either Magiorre or Jamison
changed the locks.
On
January 26, 2023, Maggiore tricked Jamison into letting him sign a lease for
the Premises that supplanted Agency LLC’s lease. On January 27, Bernal and another employee
went to the Premises and found that Magiorre hired an armed security guard and
stationed him at the Premises. The guard
informed Bernal that he is not allowed into the offices. Bernal went to Jamison, which told Bernal that
he was not allowed on the Premises that he was not on the lease. When Bernal informed Jamison about the guard,
Jamison replied that the guard should not be there.
The
Premises had important Agency LLC documents like checkbooks, client lists, band
lists, contact information for clients, trade secrets, awards, and employee
personal items. Later that day, Bernal
returned to the Premises to find that the guard was moving Agency LLC property
out. The guard gave Bernal the equipment
and called Maggiore, who told him to take the equipment away and stop Bernal
from entering. The guard assaulted and
threw Bernal, injuring his knee, back, and neck. Bernal fled, called the police, and visited
the hospital.
Maggiore
has disabled Bernal’s phone and locked all Agency LLC employees out of their
emails.
Bernal
and Agency LLC seek over $5,000,000 in compensatory damages, exemplary and
punitive damages, statutory penalties, injunctive relief, attorney’s fees and
costs, and pre-judgment interest at the maximum legal rate.
2.
Course of Proceedings
On
February 6, 2023, Bernal personally served Maggiore and Artists Worldwide with
the Complaint, summons, and an ex parte application for a TRO and order
to show cause for a preliminary injunction (“OSC”) compelling Defendants to
return passwords for Agency LLC email accounts.
On February 8, 2023, the court denied the ex parte application.
On
February 16, 2023, the court granted Bernal’s ex parte application for a
TRO/OSC enjoining Maggiore and Artists Worldwide from contacting Agency LLC
promoters and clients or threatening them with lawsuits if they continue to do
business with Agency LLC. The court ordered
Plaintiffs to submit a revised
TRO/OSC by February 17, 2023. No
revised proposed order has been filed. The
court also set the deadline for electronic service of any opposition as March
2, 2023.
On
March 3, 2023, Artists Worldwide and Maggiore filed and served an Answer dated
February 10, 2023.
B.
Applicable Law
1.
Preliminary Injunction
An
injunction is a writ or order requiring a person to refrain from a particular
act; it may be granted by the court in which the action is brought, or by a
judge thereof; and when granted by a judge, it may be enforced as an order of
the court. CCP §525. An injunction may be more completely defined
as a writ or order commanding a person either to perform or to refrain from
performing a particular act. See Comfort
v. Comfort, (1941) 17 Cal.2d 736, 741. McDowell v. Watson, (1997) 59
Cal.App.4th 1155, 1160.[1] It is an equitable remedy available generally
in the protection or to prevent the invasion of a legal right. Meridian, Ltd. v. City and County of San
Francisco, et al., (1939) 13 Cal.2d 424.
The
purpose of a preliminary injunction is to preserve the status quo
pending final resolution upon a trial. See
Scaringe v. J.C.C. Enterprises, Inc., (1988) 205 Cal.App.3d 1536. Grothe
v. Cortlandt Corp., (1992) 11 Cal.App.4th 1313, 1316; Major v. Miraverde
Homeowners Assn., (1992) 7 Cal.App.4th 618, 623. The status quo has been defined to
mean the last actual peaceable, uncontested status which preceded the pending
controversy. Voorhies v. Greene
(1983) 139 Cal.App.3d 989, 995, quoting United Railroads v. Superior Court,
(1916) 172 Cal. 80, 87. 14859 Moorpark Homeowner’s Assn. v. VRT Corp.,
(1998) 63 Cal.App.4th 1396. 1402.
A
preliminary injunction is issued after hearing on a noticed motion. The complaint normally must plead injunctive
relief. CCP §526(a)(1)-(2).[2] Preliminary injunctive relief requires the use
of competent evidence to create a sufficient factual showing on the grounds for
relief. See e.g. Ancora-Citronelle
Corp. v. Green, (1974) 41 Cal.App.3d 146, 150. Injunctive relief may be granted based on a
verified complaint only if it contains sufficient evidentiary, not ultimate,
facts. See CCP §527(a). For this reason, a pleading alone rarely
suffices. Weil & Brown, California
Procedure Before Trial, 9:579, 9(ll)-21 (The Rutter Group 2007). The burden of proof is on the plaintiff as
moving party. O’Connell v. Superior
Court, (2006) 141 Cal.App.4th 1452, 1481.
A
plaintiff seeking injunctive relief must show the absence of an adequate
damages remedy at law. CCP §526(4); Thayer
Plymouth Center, Inc. v. Chrysler Motors, (1967) 255 Cal.App.2d 300, 307; Department
of Fish & Game v. Anderson-Cottonwood Irrigation Dist., (1992) 8
Cal.App.4th 1554, 1565. The concept of
“inadequacy of the legal remedy” or “inadequacy of damages” dates from the time
of the early courts of chancery, the idea being that an 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. Department of Fish &
Game v. Anderson-Cottonwood Irrigation Dist., (1992) 8 Cal.App.4th 1554,
1565.
In
determining whether to issue a preliminary injunction, the trial court
considers two factors: (1) the reasonable probability that the plaintiff will
prevail on the merits at trial (CCP §526(a)(1)), and (2) a balancing of the
“irreparable harm” that the plaintiff is likely to sustain if the injunction is
denied as compared to the harm that the defendant is likely to suffer if the
court grants a preliminary injunction.
CCP §526(a)(2); 14859 Moorpark Homeowner’s Assn. v. VRT Corp.,
(1998) 63 Cal.App.4th 1396. 1402; Pillsbury, Madison & Sutro v.
Schectman, (1997) 55 Cal.App.4th 1279, 1283; Davenport v. Blue Cross of
California, (1997) 52 Cal.App.4th 435, 446; Abrams v. St. Johns Hospital,
(1994) 25 Cal.App.4th 628, 636. Thus, a
preliminary injunction may not issue without some showing of potential
entitlement to such relief. Doe v.
Wilson, (1997) 57 Cal.App.4th 296, 304.
The decision to grant a preliminary injunction generally lies within the
sound discretion of the trial court and will not be disturbed on appeal absent
an abuse of discretion. Thornton v.
Carlson, (1992) 4 Cal.App.4th 1249, 1255.
A
preliminary injunction ordinarily cannot take effect unless and until the
plaintiff provides an undertaking for damages which the enjoined defendant may
sustain by reason of the injunction if the court finally decides that the
plaintiff was not entitled to the injunction.
See CCP §529(a); City of South San Francisco v. Cypress Lawn
Cemetery Assn., (1992) 11 Cal.App.4th 916, 920.
2.
Renewed Motion
A party
who originally made an application for an order which was refused in whole or
part, or granted conditionally or on terms, may make a subsequent application
for the same order upon new or different facts, circumstances, or law, in which
case it shall be shown by affidavit what application was made before, when and
to what judge, what order or decisions were made, and what new or different
facts, circumstances, or law are claimed to be shown. CCP §1008(b). For
a failure to comply with this subdivision, any order made on a subsequent
application may be revoked or set aside on ex parte motion.
CCP §1008(b).
A motion for reconsideration
constitutes the exclusive means for a party seeking modification, amendment, or
revocation of an order.¿ Morite of Calif. v. Sup. Ct. (1993) 19
Cal.App.4th 485, 490.¿ To be entitled to reconsideration, a party must show (1)
new or different facts, and (2) a satisfactory explanation for failing to
produce such evidence earlier.¿ Kalivas v. Barry Controls Corp., (“Kalivas”)
(1996) 49 Cal.App.4th 1152, 1160-61. The requirement of satisfactory
explanation for failing to provide the evidence earlier can only be
described as a strict requirement of diligence.¿ Garcia v. Hejmadi, (“Garcia”)
(1997) 58 Cal.App.4th 674, 690.¿ A motion for reconsideration cannot be granted
on the ground that the court misapplied the law in its initial ruling.¿ Gilberd
v. AC Transit (1995) 32 Cal.App.4th 1494, 1500.¿
C.
Statement of Facts
1. Plaintiffs’ Evidence
a.
Merits
Bernal
and Maggiore had a partnership in 1999 and jointly operated Artists
Worldwide. Bernal Decl., ¶5. Artists Worldwide connected clients with
bands for public or private events.
Bernal Decl., ¶6.
From
1999 to 2019, Maggiore appeared at work about two to three times per year and
sometimes never during the year. Bernal
Decl., ¶7. When he did appear, he was
unkempt and dirty and may have been on drugs or alcohol. Bernal Decl., ¶7. He was also violent and threatened Bernal and
Artists Worldwide’s clients and employees.
Bernal Decl., ¶8. Maggiore took
the lion’s share of company profits and left Bernal with little for profit
splitting purposes. Bernal Decl., ¶9. Maggiore vanished from the office around
March 2020 when the COVID-19 pandemic began.
Bernal Decl., ¶11.
In
February 2022, Bernal created Agency LLC, obtained his own talent recruitment
license, and ran the business on his own.
Bernal Decl., ¶10. From late 2022
to January 2023, Agency LLC and Trapt Unplugged (“Trapt”) entered multiple
agreements whereby Agency LLC helped it secure bookings at specific
events. Bernal Decl., ¶25, Ex. 3. In January and February 2023, Agency LLC and
the Chris Duarte Group (“Duarte”) entered multiple agreements for bookings at
specific events. Bernal Decl., ¶25, Ex.
4. While the relationship with Trapt
started before Agency LLC was created, Duarte never had a relationship with
Artists Worldwide and its only relationship was with Agency LLC. Bernal Decl., ¶¶ 26, 29. Agency LLC’s relationships with both continue
to date. Bernal Decl., ¶26.
In
January 2023, Maggiore resurfaced and learned about Agency LLC. Bernal Decl., ¶11. On January 17 and 18, 2023, Maggiore sent
Bernal extortionate threats and make misrepresentations to Jamison, which is Artists
Worldwide’s former landlord and Agency LLC’s current landlord. Bernal Decl., ¶12.
On
January 26, 2023, Maggiore tricked Jamison into letting him sign a lease for
the Premises that supplanted Agency LLC’s lease. Bernal Decl., ¶13. On January 27, 2023, Bernal and another
employee went to the Premises. Bernal
Decl., ¶14. They found that Magiorre
hired a Force armed security guard and stationed him at the Premises. Bernal Decl., ¶14. The guard refused them access to the
Premises. Bernal Decl., ¶15.
After
several exchanges, Jamison informed Bernal that the guard should not be there. Bernal Decl., ¶16. During this conversation, the guard was
moving Agency LLC assets from the Premises into a vehicle. Bernal Decl., ¶17. The guard relinquished the property to Bernal
and called Maggiore, who told the guard to take it back by force. Bernal Decl., ¶18. The guard assaulted Bernal, injuring Bernal’s
knee, back, and neck. Bernal Decl.,
¶19.
Maggiore
has disabled Bernal’s phone and locked all Agency LLC employees out of their
emails. Bernal Decl., ¶20. This action shut Agency LLC out of its own
business. Bernal Decl., ¶20. Maggiore and Artists Worldwide has also converted
email addresses under the domain name “artist-worldwide.com,” which belonged to
Bernal and Agency LLC. Bernal Decl., ¶28. The access to these email accounts and the
Premises would put Maggiore and Artists Worldwide on notice of Agency LLC’s
contracts. Bernal Decl., ¶36.
On
February 10, 2023, Maggiore and AW sent emails to Agency LLC and Bernal’s clients
that threatened litigation if they continued to do business with Agency
LLC. Bernal Decl., ¶21, Exs. 5-6; Ching
Decl., ¶¶ 9-10. In these emails, Maggiore
called himself the “sole owner and CEO” of Artists Worldwide. Bernal Decl., ¶21, Exs. 5-6.
Bernal
learned about the emails because either Maggiore carbon-copied him on the
emails or Trapt forwarded them to him.
Bernal Decl., ¶21. Bernal told
Chris Taylor Brown (“Brown”) of Trapt not to email Maggiore again because he
was an ex-partner with no talent agency license. Bernal Decl., ¶21, Ex. 5. Brown replied that he never contacted
Maggiore and did not even know he existed until the email. Bernal Decl., ¶21, Ex. 5.
Because
Duarte has only worked with Agency LLC, the only way Maggiore could have known
about their relationship and sent the emails was by going through Agency LLC’s
email accounts or its files on the Premises.
Bernal Decl., ¶29.
After
the emails, Denise Gordon (“Gordon”), acting on Duarte’s behalf, left Bernal a
voicemail that asked what was going on and begged Bernal not to “f**k over
Chris Duarte.” Bernal Decl., ¶30.[3] Ron Bruman, apparently another Chris Duarte
representative, has asked about the impact those threats will have on Duarte’s
bookings. Bernal Decl., Ex. 7.
b.
Impact
Because
the relationship between Duarte and Agency LLC is new, Duarte will scrutinize
the agency’s services. Bernal Decl.,
¶32. Whether Duarte or Trapt will
continue to work with Agency LLC after Magiorre’s threats is unclear. Bernal Decl., ¶31. At minimum, these threats require Agency LLC
to spend extra time and labor costs to service both clients, communicate with
them to assuage concerns regarding litigation, provide them with semi-regular
updates, and make assurances that this will not affect scheduled performances
for either group. Bernal Decl., ¶¶ 33,
42. Since performance under contracts
for these clients is underway, Maggiore’s actions may have additional
unforeseen harm. Bernal Decl., ¶34.
Duarte
and Trapt are the only Agency LLC clients that Bernal knows Maggiore
contacted. Bernal Decl., ¶43. The loss of access to emails has left Agency
LLC with only a few clients it can contact.
Bernal Decl., ¶43. If Defendants’
actions cause Agency LLC to lose this business, Agency LLC will likely go
bankrupt and fire its three employees.
Bernal Decl., ¶43.
Maggiore
and Artists Worldwide are not doing any business. Bernal Decl., ¶45. Even if they wanted to do so, they cannot
because Maggiore does not have an active talent recruitment license. Bernal Decl., ¶45.
2. Defendants’ Ex Parte Evidence
Bernal was always an
independent contractor for Artists Worldwide with an “at will” association and never had an ownership interest. Maggiore Decl., ¶14. Maggiore has always been the sole corporate
officer, CEO, and shareholder of Artists Worldwide. Maggiore Decl., ¶14. Artists Worldwide has always owned the
artists-worldwide.com and all
email addresses thereunder. Maggiore Decl., ¶14.
Agency LLC’s February 1,
2022 registration on the California Secretary of State’s website uses the
Premises address, which is Artists Worldwide’s business address. Maggiore
Decl., ¶¶ 14, 16, Ex. 3.
During the COVID-19
downtown, Bernal tried to usurp authority over Artists Worldwide’s business finances and operations. Maggiore Decl., ¶17. He ran Agency
LLC with a similar name as Artists Worldwide from Artists Worldwide’s
offices without its consent. Maggiore Decl., ¶17. He signed contracts that belonged to Artists
Worldwide with instructions that diverted payment to Bernal’s personal
account. Maggiore Decl., ¶17. Bernal forged
checks from Artists Worldwide and diverted wire transfers from it to
Bernal and Agency LLC’s accounts. Maggiore Decl., ¶17. He falsely represented that he had exclusive
authority to act on Artists Worldwide’s behalf to Jamison, among other parties, and directed
Jamison to locked Maggiore out of the Premises.
Maggiore Decl., ¶17. Bernal also
stole Artists Worldwide’s computers, intellectual property, trade
secrets, and other professional and personal property in excess of
$500,000. Maggiore Decl., ¶17.
In August 2018, Gregg
St. Charles (“St. Charles”) was an independent contractor for Artists
Worldwide with the email address gregg@artists-worldwide.com.
Maggiore Decl., ¶¶ 6-7. On August
21, 2018, Chris Taylor Brown sent an email to St. Charles with details a Trapt
rider for contracting and booking shows.
Maggiore Decl., ¶9, Ex. 1.
In January 2023, Laurène
Vanlichtervelde (“Vanlichtervelde”) was an independent contractor for Artists
Worldwide with the email address
info@artists-worldwide.com. Maggiore
Decl., ¶¶ 10-11. On January 21, 2023,
Duarte exchanged emails with Vanlichtervelde about possible places to
perform. Maggiore Decl., ¶12, Ex. 2.
In contrast, Plaintiff shows that
Duarte’s representatives Gordon and Ron Bruman have expressed concern about Duarte’s
bookings through Ron Bruman, apparently
another Chris Duarte representative, has asked about the impact those threats
will have on Duarte’s bookings. Bernal
Decl., Ex. 7.
D.
Analysis
Plaintiffs
seek a preliminary injunction enjoining Defendants Maggiore and Artists
Worldwide from interfering with Agency LLC’s promoter and client relationships
by threatening them with lawsuits if they continue to work with Artists LLC.[4] Defendants opposed only the ex parte and
have not filed a more recent opposition.
1.
Probability of Success
The
elements which a plaintiff must plead to state the cause of action for
intentional interference with contractual relations are (1) a valid contract
between plaintiff and a third party; (2) defendant’s knowledge of this
contract; (3) defendant’s intentional acts designed to induce a breach or
disruption of the contractual relationship; (4) actual breach or disruption of
the contractual relationship; and (5) resulting damage. Pacific Gas & Electric Co. v. Bear
Stearns & Co. (1990) 50 Cal.3d 1118, 1126.
Intentional interference with prospective economic advantage
has five elements: (1) the existence between the plaintiff and some third party
of an economic relationship that contains the probability of future economic
benefit to the plaintiff; (2) the defendant’s knowledge of the relationship;
(3) intentionally wrongful acts designed to disrupt the relationship; (4)
actual disruption of the relationship; and (5) economic harm proximately caused
by the defendant’s action. Roy Allan
Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505,
512.
Plaintiffs
present similar facts to support both causes of action. From late 2022 to February 2023, Agency LLC
signed multiple agreements to secure specific bookings for Trapt and
Duarte. Bernal Decl., ¶25, Exs.
3-4. Between January 26 and February 10,
2023, Agents Worldwide and Maggiore locked all Agency LLC employees out of
their emails under the domain name “artist-worldwide.com.” Bernal Decl., ¶¶ 20, 28. Access to these email accounts gave Maggiore
and Artists Worldwide notice of Agency LLC’s contracts. Bernal Decl., ¶36. On February 10, 2023, Maggiore and AW sent
emails to Agency LLC’s clients threatening litigation if they continued to do
business with Agency LLC. Bernal Decl.,
¶21, Exs. 5-6.
Duarte
has twice expressed apprehension about how Defendants’ emails affect current
bookings. Bernal Decl., ¶30, Ex. 7. At minimum, these threats require Agency LLC
to spend extra time and labor costs to service both clients, communicate with
them to assuage concerns regarding litigation, provide them with semi-regular
updates, and make assurances that this will not affect scheduled performances
for either group. Bernal Decl., ¶¶ 33,
42. If Defendants’ actions cause Agency
LLC to lose this business, Agency LLC will likely go bankrupt. Bernal Decl., ¶43.
Defendants
assert that the business relationships they interfered with belong to them and
that Bernal created Agency LLC and began doing business through fraud. Opp. at 4-5.
As
to Trapt, Defendants present evidence that in 2018 Artists Worldwide provided Trapt
with booking services through an independent contractor. Opp.
At 3; Maggiore Decl., ¶¶ 6-7, 9, Ex. 1. This
business relationship predated the creation of Agency LLC and does not
show that Trapt has any present relationship with Artists Worldwide.
Defendants’ evidence for
Duarte is even weaker. The emails
from January 2023 are between
Duarte and info@artists-worldwide.com (Maggiore Decl., ¶12, Ex. 2), which Defendants
assert belongs to Vanlichtervelde, an independent contractor for Artists
Worldwide. Maggiore Decl., ¶¶ 10-11. On January 21, 2023, Duarte exchanged emails with Vanlichtervelde about
possible places to perform. Maggiore
Decl., ¶12, Ex. 2.
Vanlichtervelde may
be an independent contractor for Artists Worldwide, but Plaintiffs’ evidence
shows that Durate is their client and that they have actual, not potential, bookings
for him. Moreover, Vanlichtervelde’s
employment status is irrelevant; Maggiore and Artists Worldwide are out
of business and could not represent either Trapt or Duarte because Maggiore
does not have an active talent recruitment license. Bernal Decl., ¶45. Plaintiffs
have shown that the emails to Trapt and Duarte have interfered with their relationship
with those clients.
Privileged
publications include those in any judicial proceeding. Civil Code §47(b). this privilege extends to statements made as
part of steps taken prior to litigation.
Malin v. Singer (“Malin”) (2013) 217 Cal.App.4th 1283,
1300. The privilege only extends to
prelitigation communications when the litigation at issue is contemplated in
good faith and under serious consideration.
Id. at 1300. Whether a
prelitigation communication meets this standard is an issue of fact. Id. at 1301.
Based on the
litigation privilege, Defendants contend that their emails to Duarte and Trapt were
not extortion but a warning that Artists Worldwide would pursue litigation if
they did not sever ties with Agency LLC.
Opp. at 7-8. Defendants fail to
demonstrate that they made this threat of litigation in good faith. Given that they cannot represent either
client without a talent recruitment license, it appears they cannot do so. The litigation privilege does not apply.
Plaintiffs have demonstrated
a probability of success on the merits.
2.
Balance of Hardships
In
determining whether to issue a preliminary injunction, the second factor which
a trial court examines is the interim harm that plaintiff is likely to sustain
if the injunction is denied as compared to the harm that the defendant is
likely to suffer if the court grants a preliminary injunction. Donahue Schriber Realty Group, Inc. v. Nu
Creation Outreach, (2014) 232 Cal.App.4th 1171, 1177. This factor involves consideration of the
inadequacy of other remedies, the degree of irreparable harm, and the necessity
of preserving the status quo. Id.
Maggiore
and Artists Worldwide assert that the time and expense Plaintiffs claim they have
spent, or will spend, on reassuring Duarte and Trapt (Bernal Decl., ¶¶ 31-34) is
not irreparable harm. Opp. at 9.
Plaintiffs presented this evidence to show the economic harm
needed to demonstrate intentional interference with prospective economic
advantage and contractual relations. App. at 11, 14-15, 17. While this effort alone may not be sufficient,
if Plaintiffs lose Duarte, Trapt, or other clients to Defendants’ wrongful
interference, the damage will be hard to calculate and irreparable to the
business. Agency LLC then will likely go
bankrupt. Bernal Decl., ¶43.
The harm that Maggiore and Artists Worldwide will suffer
from a preliminary injunction is minimal because Defendants have no right to
interfere with Plaintiffs’ client relationships and Maggiore cannot compete for
the business of Plaintiffs’ clients without an active talent recruitment
license. Bernal Decl., ¶¶ 45-46.
The
balance of hardships favors a preliminary injunction.
3. The Undertaking
The court must require a bond
supporting the preliminary injunction.¿ The purpose of a bond is to cover the
defendant’s damages from an improvidently issued injunction.¿ CCP §529(a).¿ In
setting the bond, the court must assume that the preliminary injunction was
wrongly issued.¿ Abba Rubber Co. v. Seaquist, (“Abba”) (1991) 235
Cal.App.3d 1, 15.¿ The damages include any lost profits resulting
from the injunction. See Allen
v. Pitchess, (1973) 36 Cal.App.3d 321, 327-28. The attorney’s fees necessary to successfully
procure a final decision dissolving the injunction also are damages that should
be included in setting the bond. Abba,
supra, 235 Cal.App.3d at 15-16. While Abba reasoned that the
plaintiff’s likelihood of prevailing is irrelevant to setting the bond, a more
recent case disagreed, stating that the greater the likelihood of the plaintiff
prevailing, the less likely the preliminary injunction will have been wrongly
issued, and that is a relevant factor for setting the bond. Oiye v. Fox, (2012) 211 Cal.App.4th
1036, 1062. In lieu of a bond, the judge
may permit a deposit into court. CCP
§995.710. Defendants’ failure to submit
a substantive opposition means that the bond should be minimal. The court will set the bond at $100.
E.
Conclusion
The
application for a preliminary injunction is granted. Plaintiffs have not provided a proposed
preliminary injunction and must do so within two court days or it will be
waived.
[1] The
courts look to the substance of an injunction to determine whether it is
prohibitory or mandatory. Agricultural
Labor Relations Bd. v. Superior Court, (1983) 149 Cal.App.3d 709, 713. A mandatory injunction — one that mandates a
party to affirmatively act, carries a heavy burden: “[t]he granting of a
mandatory injunction pending trial is not permitted except in extreme cases
where the right thereto is clearly established.” Teachers Ins. & Annuity Assoc. v.
Furlotti, (1999) 70 Cal.App.4th 187, 1493.
[2]
However, a court may issue an injunction to maintain the status quo
without a cause of action in the complaint.
CCP §526(a)(3).
[3]
Exhibit 8 to Bernal’s declaration is a placeholder for the recording of this
message, which Bernal offered to play at the hearing. No copy is on file.
[4] The
court ruled at the ex parte hearing that this is not a renewed motion
for the same relief subject to CCP section 1008(b).