Judge James C. Chalfant, Case Number: 24STCV28821, Date: 2024-11-26 Tentative Ruling

Plaintiff Yellow Owl Properties Managements, Inc. (“Yellow Owl”) applies for a preliminary injunction to enjoin Defendant Christian Llamas (“Christian”) from entering or trespassing on Yellow Owl’s properties or purporting to take an action on behalf of Yellow Owl.

The court has read and considered the moving papers, opposition,[1] and reply), and renders the following tentative decision.

Plaintiff Yellow Owl filed the Complaint against Christian on November 4, 2024, for (1) trespass, (2) conversion, and (3) violation of Penal Code section 496. The Complaint alleges in pertinent part as follows.

On October 30, 2014, Arturo Llamas (“Arturo”) incorporated Yellow Owl and filed its Articles of Incorporation with the California Secretary of State. The Articles of Incorporation state that Arturo is Yellow Owl’s incorporator and bear Arturo’s signature. Yellow Owl’s corporate records reflect that Arturo was the company’s sole owner.

After creating Yellow Owl, Arturo began transferring properties that he owned, either individually or through his trust, to Yellow Owl. Those transfers were memorialized in signed, notarized deeds.

In or around 2018, Arturo appointed Jessica Llamas (“Jessica”) and Claudia Llamas (“Claudia”) as officers of Yellow Owl. Arturo also amended his Trust, making Jessica the Trustee and providing that ownership of Yellow Owl’s stock would transfer to Jessica and Claudia upon his death.

Earlier this year, Defendant Christian filed an action against Jessica and Claudia under Corporations Code section 709 seeking control of Yellow Owl.

Pursuant to a grant deed recorded on July 11, 2018, Yellow Owl is the owner of the property located at 3400 East 14^th Street, Los Angeles, CA (the “Property”). The other properties owned by Yellow Owl are located at the following addresses: (1) 3800 E. Olympic Blvd., Los Angeles, CA; (2) 13208 San Antonio Drive, Norwalk, CA 90650; (3) 1722 S. Gaffey St., San Pedro, CA; (4) 1141 S. Gaffey St., San Pedro, CA; (5) 3790 E. Olympic Blvd., Los Angeles, CA; (6) 3816 E. Olympic Blvd., Los Angeles, CA; (7) 3822 E. Olympic Blvd., Los Angeles, CA; and (8) 1108 E. Pacific Coast Highway, Wilmington, CA.

Christian has been instructing the Property’s tenant, Sergio Barraza, to pay rent to him instead of to Yellow Owl. Sergio Barraza, has been paying Christian $30,000 in rent per month since March of 2024. Christian has been depositing the funds, which are due and owing to Yellow Owl, in a bank account he opened.

On October 29, 2024, Christian’s agents forcibly entered the Property and forced open a secure automatic gate. His agents placed two food trucks, two food vans and five inoperable cars on the Property. Yellow Owl had to pay third parties to move these vehicles from the Property, but only after the police had to assist Yellow Owl in preventing Christian and his agents from interfering with the removal.

Proof of service on file show that Defendant Christian was served with Summons and Complaint on November 8, 2024.

On November 6, 2024, the court granted Plaintiffs’ ex parte application for a temporary restraining order (“TRO”) and order to show cause for a preliminary injunction (“OSC”).

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. Code of Civil Procedure (“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.[2] 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).[3] 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.

Jessica is one of the two owners of Yellow Owl. Jessica Decl. ¶2. The other owner is her sister Claudia Llamas (“Claudia”). Jessica Decl. ¶2. Their father, Arturo Llamas (“Arturo”), established Yellow Owl in November of 2014. Jessica Decl. ¶2. They have owned and operated Yellow Owl since their father’s death in December of 2021. Jessica Decl. ¶2. Since Arturo’s death, Claudia has been the President of Yellow Owl. Claudia Decl. ¶3. As the current President of Yellow Owl, Claudia is personally familiar with all of the properties owned and managed by Yellow Owl. Claudia Decl. ¶14, Ex. 4.

In July of 2018, Yellow Owl acquired the Property. Jessica Decl. ¶4, Ex. 1. The Property is adjacent to another parcel acquired by Yellow Owl located at 3400 East 14th St., Los Angeles, CA. Jessica Decl. ¶4, Ex. 1. After acquiring the Property, Yellow Owl made some changes to it in order to make it more useful for future tenants. Jessica Decl. ¶5. A new tenant was scheduled to move into the Property on November 1, 2024. Jessica Decl. ¶6, Ex. 2. The tenant signed a three-year lease and is named Cruz’s Produce. Jessica Decl. ¶6, Ex. 2.

On October 29, 2024, Jessica arrived at the Property between 1:30-2:00 p.m. for the purpose of meeting with a handyman, Alonzo Castro, who Yellow Owl had hired to paint the ceiling of the interior of the building before Cruz’s Produce moved in. Jessica Decl. ¶7. Jessica was there to pay the handyman on behalf of Yellow Owl and have him return the building’s key to her. Jessica Decl. ¶7.

Upon arriving at the Property, Jessica noticed that the automatic gate Yellow Owl had installed in 2021 had been damaged as the wires had been removed so the gate would no longer work with a remote. Jessica Decl. ¶8. A chain had been placed around the Property and the chain was secured by a new lock. Jessica Decl. ¶8. Jessica was able to get a grinder to remove the lock from the chain attached to the gate to gain access to the Property. Jessica Decl. ¶8.

The Property contains a 4,000 square foot interior warehouse with an additional 4,000 square foot parking lot. Jessica Decl. ¶9. Once she entered the building on the Property, she noticed two food trucks, two vans, and five damaged cars. Jessica Decl. ¶9. Jessica realized that the two food trucks and two vans belonged to her brother Christian, as they were all wrapped in his business logos. Jessica Decl. ¶10. The five cars inside the Subject Property were all unregistered. Jessica Decl. ¶11. None had license plates and they looked like cars that would be sold at an auction which is another business engaged in by Christian. Jessica Decl. ¶11. Jessica used her iPhone to take video of the Property and its contents. Jessica Decl. ¶12, Ex. 3.

Jessica called her sister, who called the Hollenbeck Police division about the break-in. Jessica Decl. ¶13. Jessica also called 911 at approximately 2:35 p.m. as well as one of her employees who knows how to operate a forklift to remove the five inoperable cars. Jessica Decl. ¶13. Jessica also called Tito’s Towing to remove the food trucks and food vans. Jessica Decl. ¶13.

The tow truck from Tito’s Towing arrived at approximately 3:30 p.m. Around the same time, Jessica was approached by a stranger asking to have access to the building. Jessica Decl. ¶14. The stranger claimed the Property, the cars, vans, and food trucks belonged to him. Jessica Decl. ¶14. Jessica told him he could not have access to the building or any of the property in it. When he would not leave, she called 911 again. Jessica Decl. ¶14. This stranger identified himself as Jose Manuel, whom Jessica later learned works for Christian. Jessica Decl. ¶14. To prevent Jose Manuel from gaining access, Jessica closed the gate and stood in front of the building’s door with her sister Claudia. Jessica Decl. ¶14. Jose Manuel tried to physically move them, but stopped when the police arrived at approximately 4:00 p.m. Jessica Decl. ¶14.

Jessica and Claudia provided the police officer, Officer Lorenzo, evidence that they own Yellow Owl by showing him grant deeds, property tax bills, and statements of information filed with the Secretary of State. Jessica Decl. ¶16. They told Officer Lorenzo that the issue of ownership and control of Yellow Owl is the subject of a lawsuit filed against them by their brother Christian. Jessica Decl. ¶16.

Someone called Christian, who was in Mexico at the time, so that he could speak with Officer Lorenzo. Jessica Decl. ¶17. During their conversation, which was on a speakerphone, Christian tried to convince Officer Lorenzo that he owned the Property and was entitled to place his trucks and vehicles there. Jessica Decl. ¶17. When he failed to convince Officer Lorenzo, he asked to speak with a sergeant. Jessica Decl. ¶17. Sergeant Peclazar arrived at the scene, and he told Christian, Claudia, and Jessica that this was a civil matter and the police were just there to keep the peace. Jessica Decl. ¶17. He stated that if Jessica and Claudia did not want the trucks and cars at the Property, they could have them removed. Jessica Decl. ¶17.

Between 4:30-5:00 p.m., Christian’s attorney, Chad Biggins, Esq. (“Biggins”), arrived at the scene. Despite the fact that he knew Jessica and Claudia are represented by counsel in the Corporations Code 709 case, he tried to talk with them. When they refused, he tried to intimate them by giving a hard time to the tow truck driver and Officer Lorenzo. At one point Biggins stood in front of the tow truck, not allowing it to move the food truck off the Property. Jessica Decl. ¶18, Ex. 4-6.

Later that afternoon, Jessica and Claudia had one of the food trucks, both vans, and four of the cars moved from the Property. Jessica Decl. ¶19. The other food truck and car were moved from the Property on October 31, 2024. Jessica Decl. ¶19.

Keith M. Gregory, Esq. (“Gregory”) is one of Yellow Owl’s attorneys. Gregory Decl. ¶1. On October 24, 2024, Gregory took the deposition of Christian. Gregory Decl. ¶2. During his deposition Christian admitted that he has been receiving rent payments in the amount of $30,000 per month from Sergio Barranza on behalf of Yellow Owl since March of 2024. Gregory Decl. ¶2, Ex. 1.

On October 31, 2024, Gregory sent an email to Biggins offering to enter into a stipulation in lieu of the ex parte application and verified Complaint if his client agreed that neither he nor any of his agents would take action to gain access to any of the properties owned by Yellow Owl until the court issues judgment in the Corporations Code section 709 matter. Gregory Decl. ¶3, Ex. 2- 3.

Christian’s mother and father were Claudia Corona Meija and Arturo Llamas Reyes and he has three younger sisters: Valeria (age 30), Claudia (age 27), and Jessica (age 24). Christian Decl., ¶2.

Christian grew up as a street vendor working with his parents from age 10 to age 18 and was generally not paid. Claudia and Jessica never had to sell food on the streets and did not work for the business at all until very recently. Christian Decl., ¶3.

Christian attended Le Cordon Bleu culinary school and graduated in 2008. His studies in culinary school enabled me to develop exceptional recipes relative to the competition in the taco truck industry, as well as learning superior restaurant management and marketing skills. Christian Decl., ¶5, Ex. 2.

In 2011, Christian bought his first home (a very modest home) in Montclair, CA. In July 2012, at age of 24, he used the equity and purchased my second home at 13216 Flallon Avenue, Norwalk, CA. Christian Decl., ¶6, Ex.3.

On March 1, 2013, Christian bought the assets of one of the family businesses, El Gallito Restaurant, Inc., from his parents for $11,000. Christian Decl., ¶7, Ex. 4.

In 2014, I bought another restaurant in Anaheim from a third party (i.e. not related to family) Jose Trejo. Christian Decl., ¶8,, Ex.5.

On October 30, 2014, Christian went to see the family’s accountant, Oliver Cisneros (“Cisneros”) to form a new company, Yellow Owl Properties Managements, Inc. He named it “Yellow Owl” because of a song he liked. Christian has always owned 100% of the shares of Yellow Owl and never transferred ownership of the company to anyone. He made his father a director and officer but his father was never an owner of Yellow Owl. Christian Decl., ¶9.

Since 2006, Cisneros has been in the business of providing accounting, tax preparation and general services. Cisneros Decl., ¶2. He prepare taxes for individuals and businesses, and also forms corporations and other business entities for clients. Cisneros Decl., ¶3.

In or about 2013, Cisneros was introduced to Christian through his mother, Claudia Corona Mejia. Cisneros Decl., ¶3. In October 2014, Christian hired Cisneros to form a business for him called Yellow Owl Properties Managements, Inc. Christian and Sergio Barraza (Christian’s manager at the time) went to Cisneros’ office and paid for his services. At the time, Cisneros had never met Arturo. Cisneros Decl., ¶5.

Cisneros prepared and filed the articles of incorporation, ordered the corporate book and prepared, inter alia, the bylaws, minutes of the board of directors’ organization meeting, stock ce1tificate, and a SS-4 form for a Yellow Owl Employer Identification Number (EIN). Cristian signed these documents in Cisneros’ presence (some in October 2014 and others in November 2014). Cisneros Decl., ¶6. Cisneros gave Christian the corporate book with all the original signed documents inside. At the time Cisneros prepared the book, Christian was identified as the owner of Yellow Owl. Cisneros Decl., ¶6. The sisters took over the corporate book at the time of their father’s death. Christian Decl., ¶19.

Yellow Owl’s first year’s tax return, signed by Christian as CEO on March 10, 2015, shows no assets and $1 of revenue. He began acquiring properties in 2015 for Yellow Owl. Some were internal transfers but, for the most part, Christian found distressed restaurants with seller-carry financing on Craigslist. He did not have to put down much of a deposit and would not have to get a conventional loan and was able to purchase real estate with a restaurant which he converted to the El Gallito chain which he and his parents operated. Christian Decl., ¶11, Ex. 7.

On October 30, 2015, Claudia Corona Meija, committed suicide and the family dynamics began to change. Christian Decl., ¶12. By about 2018, Christian left the day-to-day operations of Yellow Owl in his father’s hands. During the timeframe between 2018 and his father’s death on December 25, 2021, Christian’s father consulted with him on an ongoing basis. Christian’s sisters began working for Yellow Owl, but the business merely consisted of property management and collecting rent at that time. There were no new properties being purchased. Christian never gave up ownership rights in Yellow Owl to his father or to anyone else. Christian Decl., ¶13.

After the death of their father, Christian tried to resolve everything nicely with his sisters and did not immediately argue with them over management of Yellow Owl. His goal was always to share with my sisters and take care of them. However, his sisters became more and more deceitful and greedy, and Christian began searching for proof of ownership because the sisters had control of the corporate books and company operation. Christian Decl., ¶14.

In 2023, Cisneros confirmed that Christian was the true owner of Yellow Owl and advised me that the IRS would have the absolute proof. Christian contacted the IRS to ask for a copy of the SS-4 form requesting a tax ID number that was submitted at the time the company was opened. On December 4, 2023, the IRS sent the SS-4 form submitted on October 30, 2014. The form shows Christian as the responsible party and President of Yellow Owl. There is also a stock certificate issued in Christian’s name. Christian Decl., ¶15, Exs.8-9.

On January 26, 2024, Christian held a shareholder’s meeting where he terminated invalidly elected directors and officers Jessica and Claudia and nominated himself as the sole director of Yellow Owl. Christian Decl., ¶16, Ex.10. Since then, he has been attempting to regain control of operations of Yellow Owl, but his sisters have refused and have maintained control over most of the tenants. At least one tenant has taken Christian’s side. Christian Decl., ¶17.

Both sides are continuing to operate the part of Yellow Owl’s assets each side controls. Christian wants to cooperate with his sisters and have all monies deposited into trust by both sides. His sisters are the ones who first filed eviction proceedings against and harassed tenants paying Christian on behalf of Yellow Owl. Over the summer, they showed up at a property under Christian’s tenant’s control to harass the tenant, and the police were called and they left. Christian Decl., ¶29.

The status quo is that Christian is in control of some of Yellow Owl’s properties and managing the tenants and collecting the rent, while the sisters are in control of some others. Christian Decl., ¶30.

As the owner of Yellow Owl, Christian leased the Property to himself to store some vehicles. He did not break into the Property. It was open and he was let in by the handyman. There were no locks and the handyman gave Christian the controller for the gate. Then, on October 29, 2024, Christian’s sisters broke his locks and forcibly removed his property without permission. They damaged several vehicles in the process. The police were called but they refused to take either side because of the pending 709 Action. Christian Decl., ¶31, Ex. 15.

Christian has no interest nor intent to do anything unlawful to anyone, including tenants. Christian Decl., ¶32.

There are multiple unlawful detainer actions recently filed by Gregory purporting to represent Jessica and Claudia’s claim to ownership of Yellow Owl. Biggins Decl. ¶3.

On June 3, 2024, Christian’s attorney received 48 pages of documents, purportedly the contents of the corporate book for Yellow Owl via email. Biggins Decl. ¶4, Ex. A.

On June 6, 2024, Christian’s attorney took the deposition of Jessica and Claudia via Zoom. Biggins Decl. ¶5-6, Ex. B-C.

On July 16, 2024, Christian’s attorney went to Plaintiff’s counsel’s office to inspect the corporate book. Biggins Decl. ¶8. It was clear that the original documents had been removed and copies were inserted based on the way they were presented. Biggins Decl. ¶8, Ex. E. Biggins photographed every page, and Christian recorded the event. Biggins Decl. ¶8. Among others, Bates 134-38 were not in the corporate book. Biggins Decl. ¶9, Ex. D.

In 2019, Arturo named Claudia as Yellow Owl’s Chief Financial Officer and Jessica as the corporate secretary. Claudia Reply Decl., ¶2. Claudia and Jessica now serve as Yellow Owl’s sole directors on its board of directors. Jessica Reply Decl., ¶2.

Christian submitted a citation for Yellow Owl property located at 13208 San Antonio Drive, Norwalk, CA to the court. Claudia Reply Decl., ¶3. On April 25, 2023, Christian sent Jessica a text message with a photo of the citation and asked her to “Please take care of this.” Jessica Reply Decl., ¶3, Ex. 1.

Gregory has been in communication with Biggins, counsel for Christian, regarding the use of rent money placed in trust pursuant to the court’s Temporary Restraining Order. Gregory Reply Decl., ¶2. Yellow Owl needs to pay expenses such as loan obligations, property taxes, and maintenance obligations. Gregory Reply Decl., ¶2. The parties are working towards a stipulation that would allow rent money placed in trust to be used to pay such expenses. Gregory Reply Decl., ¶2, Ex. 1.

Plaintiffs seek a preliminary injunction to enjoin Defendant from entering into or trespassing upon Yellow Owl’s properties or purporting to take an action on behalf of Yellow Owl.

Plaintiffs present evidence that Christian worked for Yellow Owl in the company’s early days and was its original secretary, but he admits that he stopped working for Yellow Owl in 2018. Gregory Decl., ¶ 2, Ex. 1 (Christian Depo.), pp. 63-66. App. at 7.

In 2018, Claudia began working at Yellow Owl as a manager. Claudia Decl., ¶6. Arturo amended his Trust in March 2019, making Jessica the Trustee and providing that ownership of Yellow Owl’s stock would transfer to Jessica and Claudia upon his death. Claudia Decl., ¶ 4, Ex. 1. Arturo passed away in December 2021. Llamas Decl., ¶ 2. Pursuant to the terms of Arturo’s Trust, Jessica and Claudia have continued to operate Yellow Owl since Arturo’s death. Claudia Decl., ¶¶ 2-4; Jessica Decl., ¶2. App. at 7-8.

On August 8, 2022, Christian filed a probate action challenging Arturo’s will and trust. Claudia Decl. ¶ 5. Christian also sued Jessica and Claudia in the 709 Matter. Gregory Decl., ¶6, Ex. 6. The 709 Matter complaint asserts a single claim challenging the validity of any election or appointment of Yellow Owl’s directors based on the assertion that he is, and always has been, Yellow Owl’s sole shareholder. Gregory Decl., Ex. 6. C. App. at 8.

Christian admitted at his deposition that he has been collecting rent from at least one Yellow Owl tenant for several of Yellow Owl’s properties and depositing the rental income into a bank account that he opened. One particular Yellow Owl tenant, Sergio Barraza, has been paying Christian $30,000 in rent per month. Gregory Decl. Ex. 1 (Christian Depo.), pp. 79-80. Christian testified: “I’m depositing [that money] into my account.” Ex. 1, p. 82. He refused to answer what he has done with those funds after placing them into his bank account. Ex. 1, pp. 82-83. App. at 8.

Yellow Owl owns the Property. Christian, through his agents, entered the Property by breaking through a security gate and depositing at least nine vehicles on the Property. Christian and his attorney have never denied that Christian caused the trespass, instead arguing that he was entitled to enter the Property because he claims to own Yellow Owl. Christian does not have permission to enter Yellow Owl’s properties. Claudia Decl. ¶ 15. It did not authorize him to break its security gate, enter the Property, and deposit broken-down vehicles on the premises. App. at 12.

Christian claims, incorrectly, that he owns the corporate stock of Yellow Owl. But even if he were right, mere corporate ownership would not give Christian authority to enter Yellow Owl’s properties. Christian disputes Claudia and Jessica’s appointment as corporate officers and directors—the issue currently being decided in the 709 Matter—but he cannot dispute that Yellow Owl owns the properties. Indeed, by filing the 709 Matter, Christian admitted that Jessica and Claudia are the current directors and officers of Yellow Owl. Otherwise, the 709 Matter would be moot. See Gregory Decl. ¶ 6, Ex. 6. App. at 13.

Christian’s sole contention in the 709 Matter is that Jessica and Claudia were inappropriately appointed to their positions because he always has been Yellow Owl’s sole shareholder. The trial in the 709 Matter is set for December 19, 2024. Jessica Decl., ¶16. Unless and until Christian obtains a favorable decision in that proceeding and another corporate election is held granting management control of Yellow Owl to him, Christian does not have the right to act on Yellow Owl’s behalf. Christian cannot simply declare himself the victor of pending litigation in which he bears the burden of proof and treat Yellow Owl’s Properties as his own. App. at 13.

For his part, Christian argues that Jessica and Claudia do not show they will prevail because they have nothing supporting their claim to ownership other than self-serving statements that they own Yellow Owl. On the other hand, Cisneros, the accountant who prepared the corporate bylaws and minutes for Yellow Owl, agrees with Christian that he formed the company and is its true owner. Cisneros Decl., ¶¶2-8.

At the time Jessica and Claudia wrongfully evicted him, Christian was leasing the Property. At the end of October, the sisters came and broke his locks and forcibly removed his property without his knowledge or authority. They damaged several vehicles in the process. Both sides are collecting rents from tenants who are paying them and both sides have filed unlawful detainer cases against the tenants who are paying the wrong Yellow Owl. The UD courts cannot determine the ownership of Yellow Owl and none of the actions can proceed until the control issue is decided. Biggins Decl., ¶3.

The parties dispute who owns Yellow Owl. Jessica and Claudia rely principally on Arturo’s amended Trust making Jessica the Trustee and providing that ownership of Yellow Owl’s stock would transfer to Jessica and Claudia upon his death and their operation of Yellow Owl since their father’s death in December of 2021.

Christian relies on his formation of Yellow Owl in October 2014, the corporate documentation supporting his claim, his declaration that he began acquiring properties in 2015 for Yellow Owl by finding and buying distressed restaurants at low cost which he converted to the El Gallito chain, his operation of these restaurants with his parents, his withdrawal from operation of the business after his mother’s death but continued consultation with his father until the latter’s death on December 25, 2021.

The court cannot resolve the ownership issue for purposes of a preliminary injunction. All parties agree that issue will be resolved at the upcoming December 19 trial of the 709 Matter. Plaintiffs argue that it does not matter who owns Yellow Owl because they indisputably manage the company now. Not really. Christian purported to fire them as directors and officers in January 2024. If that is effective, Jessica and Claudia should not be managing the company.

Plaintiffs have shown some prospect of success, but the showing is not compelling.

Plaintiffs argue that Yellow Owl will suffer irreparable harm if Defendant is not enjoined from trespassing on its properties and siphoning rent while purporting to act on behalf of Yellow Owl. Christian’s trespass has caused irreparable harm not compensable fully by damages. His actions physically damaged not only the Property’s gate but also the interior of the premises. Yellow Owl had to hire a towing company to remove the vehicles and hire security to monitor the Property, again at significant expense. If his conduct continues, Christian will place at risk the entire lease agreement for the Property, potentially depriving Yellow Owl of a business relationship. If he continues his unlawful conduct with respect to other Yellow Owl properties, Christian will imperil those business relationships, as well. App. at 14.

Christian has no countervailing interest that weighs against Yellow Owl’s requested relief. He has no justification for forcibly invading Yellow Owl’s properties without authorization. Even if he owns shares in Yellow Owl, it is in his own interest to halt his conduct. Yellow Owl has a pecuniary interest in maintaining profitable lease agreements and complying with its obligations to lessees. Christian’s conduct severely the value of Yellow Owl’s properties as rental units. App. at 14-15.

Christian does not directly address the balance of harms. He argues that the status quo is that he controls some of Yellow Owl’s properties and is managing the tenants and collecting the rent, while his sisters are in control of others. He has repeatedly offered that all rents be put into a mutual account with operating expenses to be paid from it, but his sisters refused. In light of the recent events, Christian also offered to have a receiver manage Yellow Owl until their dispute is resolved, but again his sisters refused.

Damages would appear to be an adequate remedy for loss of rents. However, the issue surrounding the Property shows that a defined party must be in charge of each property to avoid confusion, loss of rent and leases, and damage to Yellow Owl’s business reputation.

The balance of harms does not favor either party, but does favor an injunction against trespass and purporting to take an action on behalf of Yellow Owl for properties not controlled by that party.

The application for a preliminary injunction is granted in part. The court remains of the view that the Yellow Owl properties should be maintained by the party currently controlling those properties until the 709 Matter is decided. An injunction shall issue to that effect and the parties must reach agreement on who controls what property. Of these Yellow Owl properties, the Property shall be controlled and maintained by Jessica and Claudia. Each side is ordered not to enter or trespass upon the properties controlled by the other side or purport to take action on behalf of Yellow Owl for those properties. Both sides are ordered to escrow all rent obtained from a Yellow Owl property, and their attorney’s client trust account will suffice for this purpose. Yellow Owl needs to pay expenses such as loan obligations, property taxes, and maintenance obligations (Gregory Reply Decl., ¶2) and these ordinary business expenses for the properties may be drawn from the rents. Should the 709 Matter not be decided on December 19, the parties are ordered to provide a monthly accounting to each other of the monies held in escrow.

A bond would normally be required for a preliminary injunction. As the preliminary injunction is reciprocal, the court will inquire of counsel whether the bond requirement can be waived.

[1] Christian filed a 128-page opposition without providing the court with a courtesy copy in violation of the Presiding Judge’s First Amended General Order re: Electronic Filing. The court has elected to read and consider the opposition and supporting declarations but not the exhibits.

[2] 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.

[3] However, a court may issue an injunction to maintain the status quo without a cause of action in the complaint. CCP §526(a)(3).

[4] Plaintiff requests the court to take judicial notice of Yellow Owl’s Articles of Incorporation, filed on October 30, 2014 with the California Secretary of State (RJN, Ex. 1). The request is granted. Evid. Code §452(c).

The court has rule on Defendant Christian’s written evidentiary objections, most of which were overruled. The clerk is directed to scan and electronically file the court’s rulings.