Judge James C. Chalfant, Case Number: 25STCV12211, Date: 2025-05-20 Tentative Ruling

Plaintiff KB3 2275 Century LLC (“KB3”) applies for a preliminary injunction enjoining Defendants Jorge Tobias Leal (“Leal”) in his individual capacity and as Trustee for the Jorge Tobias Leal Family Trust DTD 12/14/2004, the Jorge Tobias Leal Family Trust DTD 12/14/2004 (“Leal Trust”), Cresencio Garcia (“Cresencio”), Maria D. Garcia (“Maria”), Daniel L. Barraza, (“Daniel”), Veronica R. Barraza (“Veronica”), Peter Mehrian (“Mehrian”), and Total Lender Solutions, Inc. (“Total Lender Solutions”) from foreclosing on the property located at 2275 Century Hill, Los Angeles, California 90067 (“Property”).

The court has read and considered the ex parte moving papers, opposition, and reply, and renders the following tentative decision.

On April 28, 2025, Plaintiff KB3 filed the Complaint alleging causes of action for (1) fraud/misrepresentation; (2) breach of contract; (3) breach of fiduciary duty; (4) unjust enrichment; (5) wrongful foreclosure; (6) unfair business practices; (7) breach of implied covenant of good faith and fair dealing; (8) quiet title; (9) cancellation of instruments; (10) accounting; and (11) declaratory relief. The Complaint alleges in pertinent part as follows.

KB3 is a debtor in bankruptcy case number 2:25-bk-10237-NB (“Bankruptcy Proceedings”), filed on January 13, 2025 in the United States Bankruptcy Court for the Central District of California. Compl., ¶2.

KB3 owns the Property. Compl., ¶15. K3B Enterprises, LLC (“K3B Enterprises”) is a related entity. Compl., ¶13. Behnam Ghasseminejad (“Ghasseminejad”) manages both KB3 and K3B Enterprises. Compl., ¶16. K3B Enterprises was the owner of 9996 Sunset Blvd, Beverly Hills, California 90210 (“Sunset Property”). Compl., ¶16

KB3 and K3B Enterprises were struggling financially in late 2023, including for a cross-collateralized note held by Sunwest Bank for approximately $5.5 million encumbering the Property and the Sunset Property (“Sunwest Bank Note”). Compl., ¶17.

On or about January 3, 2024, Leal introduced Ghasseminejad and Mehrian. Compl., ¶18. Leal and Mehrian represented that Mehrian could negotiate a settlement with Sunwest Bank for approximately $400,000, a matter that Mehrian had already discussed the matter with counsel for Sunwest Bank. Compl., ¶¶ 18-19. Relying on these representations, Ghasseminejad advanced Mehrian $50,000 to assist with negotiations. Compl., ¶20.

On February 7, 2024, Mehrian informed Leal and Ghasseminejad that he was waiting for “sign off” on the Sunwest Bank Note purchase but needed to ensure that “the funds were available.” Compl., ¶21. Leal offered to lend $400,000 to fund the purchase of the Sunwest Bank Note if KB3 and K3B Enterprises would enter a cross-collateralized loan agreement placing liens on the Property and the Sunset Property. Compl., ¶22.

On or about March 6, 2024, KB# and Leal, the Leal Trust, Cresencio, Maria, Daniel, and Veronica (collectively, “Lenders”) entered a Loan and Security Agreement (“Loan”). Compl., ¶23, Ex. A. The Loan was for $500,000 at 13% per annum with a default interest rate of 22% per annum, to mature on July 1, 2024. Compl., ¶23, Ex. A. The actual amount provided was $400,000, with the other $100,000 constituting fees, prepayment, and other charges. Compl., ¶24.

On March 8, 2024, a Deed of Trust, Assignment of Leases and Rents, Fixture Filing, and Security Agreement (“DOT”) was recorded for both properties. Compl., ¶25, Ex. B. By March 14, 2024, it became clear Mehrian could not complete the Sunwest Bank Note purchase, and Mehrian returned $300,000 to Leal by check. Compl., ¶¶ 26-27, Ex. C. Mehrian signed a note confirming the payment was made on behalf of Ghasseminejad. Compl., ¶25, Ex. C.

On March 19, 2024, Mehrian returned an additional $25,000 to Leal by check from Mehrian’s LLC payable to Leal, also including a signed note confirming the payment was made on behalf of Ghasseminejad. Compl., ¶28, Ex. D.

Finally, Ghasseminejad paid Leal $150,000 by cashier’s check drawn on Skylight Gardens Inc, another company belonging to Ghasseminejad, on March 15, 2024 payable to Leal. Compl., ¶29, Ex. E.

In total, Leal received $475,000 in payment on the Loan, which should have reduced the loan balance to $25,000. Compl., ¶30. Rather than applying the funds to the balance, Leal claimed to have invested the funds. Compl., ¶31. Ghasseminejad instructed Leal to apply the amount to the Loan balance or otherwise remove the lien on the collateral. Compl., ¶32. Leal said the funds were “on hold” because he had been “probably scammed” and so did not return the funds, nor remove the lien. Compl., ¶33. Leal promised to try to return the money but never succeeded. Compl., ¶33.

On or about May 10, 2024, Leal filed and recorded a Notice of Default and Election to Sell Under Deed of Trust against the Property (“NOD”). Compl., ¶34, Ex. F. On or about December 17, 2024, Leal filed a Notice of Trustee’s Sale (“NOS”), originally scheduling a foreclosure sale for January 14, 2025. Compl., ¶35, Ex. G.

Plaintiff filed a Chapter 11 bankruptcy petition on January 13, 2025. Compl., ¶36. On March 17, 2025, Lenders filed a Motion for Relief from the Automatic Stay in the Bankruptcy Proceedings, seeking to proceed with the foreclosure, claiming the full $500,000 due plus interest and fees. Compl., ¶37. On April 8, 2025, the Bankruptcy Court granted Lenders’ motion. Compl., ¶38, Ex. H.

On or about April 1, 2025, Lenders directed Total Lender Solutions to schedule a new foreclosure sale for the Property for April 29, 2025. Compl., ¶39, Ex. I.

KB3 is ready and willing to pay any actual remaining balance due, which is at most $25,000. Compl., ¶40.

KB3 prays for the following: (1) a temporary restraining order, preliminary injunction, and permanent injunction restraining Defendants from conducting a trustee’s sale or taking any other action to foreclose the Property. Prayer, ¶1; (2) damages to be determined at trial, but not less than $475,000. Prayer, ¶¶ 2-5, 8; (3) other damages to be determined at trial, plus punitive damages. Prayer, ¶¶ 6-7; (4) a judgment quieting title to the Property. Prayer, ¶9; (5) cancellation of the DOT, NOD, and NOS. Prayer, ¶10; (6) a full and complete accounting of all funds provided to or received by Defendants. Prayer, ¶11; (7) a declaration of the parties’ rights and duties with respect to the Property, the DOT, and the Loan. Prayer, ¶12; and (8) pre- and post-judgment interest according to law, costs, fees, and such other and further relief as the court deems just and proper. Prayer, ¶¶ 13-15.

On April 28, 2025, the court granted Plaintiff KB3’s ex parte application for a Temporary Restraining Order (“TRO”) and Order to Show Cause (“OSC”) re Preliminary Injunction solely on the issue of material variance in the NOD and NOS.

Proofs of service on file reflect: (a) Defendant Total Lender Solutions was served by substituted service on April 30, 2025, effective May 10, 2025; (b) Defendant Leal was served as individual and trustee each by substituted service on May 1, 2025, effective May 11, 2025; (c) Defendant Leal Trust was served by substituted service on May 1, 2025, effective May 11, 2025; (d) Defendant Daniel was served by substituted service on May 3, 2025, effective May 13, 2025; (e) Defendant Veronica was served by personal service on May 3, 2025; and (f) Defendant Mehrian was served by personal service on May 9, 2025. Each service included the Summons, Complaint, ex parte application, the minute order, and the TRO/OSC.

On May 13, 2025, Defendant Leal, individually and as trustee for the Leal Trust, filed an opposition to the 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.[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.

Sedoo A. Manu, Esq, is counsel for KB3. Manu Decl., ¶1. KB3 is in immediate danger of irreparable harm through the loss of the Property by a trustee’s foreclosure sale. Manu Decl., ¶¶ 3, 24.

On March 17, 2025, Lenders filed a motion for relief from the automatic stay seeking to proceed with foreclosure on the Property. Manu Decl., ¶5. On April 8, 2025, the Bankruptcy Court granted the motion. Manu Decl., ¶6, Ex. H.

On or about April 15, 2025, on the direction of Lenders, Total Lender Solutions scheduled a new foreclosure sale of the Property for April 29, 2025. Manu Decl., ¶7, Ex. I. Manu has reviewed the title record for the Property and identified four relevant documents: (a) the DOT (RJN 1); (b) the NOD (RJN Ex. 2); (c) the NOS (RJN Ex. 3); and (d) order granting relief from automatic stay entered on April 9, 2025 in the Bankruptcy Proceedings (RJN Ex.4). Manu Decl., ¶8, Exs. 1-4.

According to the DOT, Lenders’ address is Jorge Tobias Leal, 115 N. Lake Ave 8th Floor, Pasadena, CA 91101. Manu Decl., ¶13. Lenders are represented in the Bankruptcy Proceedings by Stella Havkin, Esq. (“Havkin”) of Havkin and Shrago.

Manu inquired of Havkin whether she was authorized to accept service for Lenders, but she informed him she was not and that her scope of representation was limited to the Bankruptcy Proceedings. Manu Decl., ¶14. Manu obtained her non-objection to directly contacting the Lenders for the purpose of notifying Lenders of the ex parte application. Manu Decl., ¶14.

Manu called Leal at the only number he had on April 24, 2025, but Leal did not answer. Manu Decl., ¶15. Manu left a voicemail informing Leal that on Monday, April 2, 2025 at 8:30 a.m., KB3 would apply ex parte to this court for a TRO and OSC. Manu Decl., ¶15. The voicemail further requested Leal to notify him whether Leal would appear or oppose. Manu Decl., ¶15.

The same day, Manu sent an email to Leal’s email address with notice of the proposed ex parte application. Manu Decl., ¶16, Ex. SM1. Again on the same day, Manu sent a fax message to Leal’s fax number which was successfully transmitted without error. Manu Decl., ¶17, Ex. SM2.

Manu does not have a phone number for Mehrian or knowledge of any attorney who may represent him. Manu Decl., ¶18. On April 24, 2025, Manu emailed notice of the ex parte application to Mehrian’s email address. Manu Decl., ¶18, Ex. SM3. Mehrian responded with a request to call his mobile phone number. Manu Decl., ¶18. On April 25, 2025, Manu called the number Mehrian provided but received no answer. Manu Decl., ¶18. Manu left a voicemail reiterating the notice of the ex parte application. Manu Decl., ¶18.

Total Lender Solutions is the foreclosing trustee. Manu Decl., ¶19. Manu is unaware of Total Lender Solutions’ counsel. Manu Decl., ¶19. On April 24, 2025, Manu called Total Lender Solutions, which provided an automated recorded message instructing all legal notices be sent by email or by fax, and provided an email address and fax number, but did not allow for a voicemail message. Manu Decl., ¶20. Manu emailed notice of the ex parte application to the address provided, as well as one he0 located on its website. Manu Decl., ¶21, SM4. On April 24, 2025, Manu faxed notice of the ex parte application to the number provided, which was successfully transmitted without error. Manu Decl., ¶22, Ex. SM5.

Ghasseminejad is the managing member of KB3. Ghasseminejad Decl., ¶1. KB3 owns the Property. Ghasseminejad Decl., ¶3. In late 2023, KB3 and affiliated K3B Enterprises faced financial difficulty, including with the Sunwest Bank Note for approximately $5.5 million encumbering the Property and the Sunset Property. Ghasseminejad Decl., ¶4.

On or about January 3, 2024, Leal introduced Ghasseminejad and Mehrian. Ghasseminejad Decl., ¶5. Leal and Mehrian represented that Mehrian could assist in negotiating a purchase of the Sunwest Bank Note for around $400,000, and that Mehrian has already discussed the matter with counsel for Sunwest Bank. Ghasseminejad Decl., ¶¶ 5-6. In reliance on these representations, Ghasseminejad advanced Mehrian $50,000 to assist with negotiations. Ghasseminejad Decl., ¶7.

On February 7, 2024, Mehrian told Leal and Ghasseminejad that he was waiting for “sign off” on the purchase and needed to ensure “the funds were available.” Ghasseminejad Decl., ¶8. Leal offered to loan $400,000 to fund the Note purchase, secured by the Property and the Sunset Property. Ghasseminejad Decl., ¶9.

On or about March 6, 2024, KB3 and K3B Enterprises entered the Loan with Lenders for $500,000 with a 13% interest rate, 22% default interest rate, and maturity date of July 1, 2024. Ghasseminejad Decl., ¶10, Ex. A. $100,000 of the $500,000 represented fees, prepayment, and other charges, so Lenders only disbursed $400,000. Ghasseminejad Decl., ¶11. On March 8, 2024, the DOT was recorded. Ghasseminejad Decl., ¶12, Ex. B.

By March 14, 2024, it became clear that Mehrian could not close the Sunwest Bank Note purchase, so Mehrian returned $300,000 to Leal by check. Ghasseminejad Decl., ¶¶ 13-14, Ex. C. Mehrian signed a note affirming the payment was made on Ghasseminejad’s behalf. Ghasseminejad Decl., ¶14, Ex. C.

On March 19, 2024, Mehrian returned an additional $25,000 to Leal by check, again with a signed note confirming the payment was made on behalf of Ghasseminejad. Ghasseminejad Decl., ¶15, Ex. D.

On March 15, 2024, Ghasseminejad paid Leal $150,000 by check from another Ghasseminejad company. Ghasseminejad Decl., ¶16, Ex. E.

In total, Leal received $475,000 in payments on the Loan. Ghasseminejad Decl., ¶17. Leal applied these payments to a “fantastic investment opportunity” rather than the Loan balance. Ghasseminejad Decl., ¶18. Ghasseminejad instructed Leal not to invest the money, but to return the money or remove the DOT lien. Ghasseminejad Decl., ¶19. Leal did not return the funds or remove the lien, claiming the funds were “on hold” and that Leal had been “probably” scammed. Ghasseminejad Decl., ¶20. Leal promised to try to return the money but never did. Ghasseminejad Decl., ¶20.

On or about May 10, 2024, Leal filed and recorded the NOD. Ghasseminejad Decl., ¶21, Ex. F. On or about December 17, 2024, Leal filed a NOS. Ghasseminejad Decl., ¶22, Ex. G.

On January 13, 2025, KB3 filed for Chapter 11 Bankruptcy. Ghasseminejad Decl., ¶23. On March 17, 2025, the Lenders moved for relief from the automatic stay in the Bankruptcy Proceedings, which the Bankruptcy Court granted on April 8, 2025. Ghasseminejad Decl., ¶¶ 24-25, Ex. H.

On or about April 15, 2025, Lenders directed Total Lender Solutions to schedule a new foreclosure sale for the Property for April 29, 2025. Ghasseminejad Decl., ¶26, Ex. I.

KB3 is willing and able to pay any actual remaining balance due, which should not be more than $25,000. Ghasseminejad Decl., ¶27. If the Property is sold, KB3 will lose any adequate legal remedy, as it will not be able to recover the Property. Ghasseminejad Decl., ¶¶ 28-29.

By time of filing, Mehrian and Total Lender Solutions both confirmed that they would not appear at the ex parte application. Supp. Manu Decl., ¶4. Total Lender Solutions also indicated it would not oppose. Supp. Manu Decl., ¶5.

On April 25, 2025, Manu emailed copies of the Complaint, Summons, ex parte application, and other documents to all opposing parties. Supp. Manu Decl., ¶6, Ex. B.

On April 28, immediately after the hearing on KB3’s ex parte application, Manu emailed Georgeann Nicol (“Nicol”), counsel for Leal, to provide a Notice of Ruling and copies of the court’s TRO, OSC, and minute order, to clarify which Defendants she represented and to ask whether she would accept service on behalf of those Defendants. Manu Service Decl., ¶8, Ex. A.

Also on April 28, 2025, Manu emailed a Notice of Ruling along with copies of the TRO, OSC, and minute order to Total Lender Solutions, which acknowledged receipt, confirmed it would forward the email to its client, and confirmed it would not proceed with the trustee’s sale. Manu Service Decl., ¶9, Ex. B.

On April 29, 2025, Nicol confirmed that she represented all Lenders (Leal as an individual and as trustee, the Leal Trust, Crecencio, Maria, Daniel, and Barraza). Manu Service Decl., ¶10, Ex. A. She indicated she was not authorized to accept personal service on their behalf. Manu Service Decl., ¶10, Ex. A.

Manu then dispatched a process server firm, Zachs Legal Services, on a “same-day service” basis to personally serve all named Defendants. Service Decl., ¶11. At that time, Manu had only three addresses for Defendants: (a) for all Lenders: 115 N. Lale Ave., Ste. 800, Pasadena CA 91101, as listed in the Loan and DOT; (b) for Mehrian: 3951 Valley Meadow Rd, Encino, CA 91436-3929; and (c) for Total Lender Solutions: c/o Agent for Service: Randy Newman, 10505 Sorrento Valley Rd, Ste. 125, San Diego, CA 92121. Manu Service Decl., ¶11.

Zacks Legal Service informed Manu the 155 N. Lake Ave. address is a Regus virtual office address and not a legitimate physical address. Service Decl., ¶12; see Declaration of Due Diligence attached to Proof of Service for Leal.

On April 29, 2025, Mau reached out to opposing counsel to request current residential or business addresses for Lenders. Manu Service Decl., ¶13, Ex. C. Defense counsel provided individual addresses, and Manu provided her with electronic courtesy copies of all documents on May 1, 2025. Manu Service Decl., ¶14, Ex. D.

(f) Total Lender Solutions, Inc., by personal service on Agent for Service on May 1, 2025.

Service has not yet been successfully completed on Cresencio or Maria. Manu Service Decl., ¶17. The process server has made multiple attempts at 604 N. Bushnell Ave., Alhambra, CA 9101 since receiving the address on April 30, 2025, including at various times of day, but has never received an answer. Manu Service Decl., ¶17. At the time of the Service Declaration, the process server was preparing its declaration documenting the attempts. Manu Service Decl., ¶17. The process server has scheduled additional service attempts at this address, including stakeouts. Service Decl., ¶19.

Service has not yet been successfully complete on Mehrian. Manu Service Decl., ¶17. The process server has made multiple attempts at 3951 Valley Meadow Rd., Encino, CA 91436-3929 since April 29, 2025. Service Decl., ¶17. This property is completely fenced off and gated, with no security personnel at the gate and no means of entry. Manu Service Decl., ¶17.[4]

In or about January of 2024, Ghasseminejad requested Leal to assist him with the Sunset Property. Leal Decl., ¶1. On or about March 6, 2024, Leal provided the $500,000 Loan Ghasseminejad requested and he signed the DOT for $500,000 cross-collateralized by the Property. Leal Decl., ¶2, Exs. A-B.

On or about February 28, 2024, Ghasseminejad learned about Leal’s successful crypto trading and asked if Leal would do the same for him, to which Leal agreed. Leal Decl., ¶3. Leal then received for the crypto purpose $475,000 in transfers on March 14, March 15, and March 19 of 2024. Leal Decl., ¶3, Ex. 1. Leal then transferred the funds on March 15 and March 20. Leal Decl., ¶3. Leal was waiting for a $150,000 cashier’s check to clear as advised by Ghasseminejad. Leal Decl., ¶3.

On March 28, 2024, Ghasseminejad sent Leal text instructions stating, “Please send/wire $50,000 of the $150,000 tomorrow morning and allocate the $100,000 to the $325,000 for a total of $425,000 for the trade this Saturday.” Leal Decl., ¶4, Ex. 2.

On March 29, 2024, before the crypto trade on May 30, 2024, Ghasseminejad asked Leal to send him $50,000 of the $475,000 for other business needs. Leal Decl., ¶5. On or about March 31, 2024, Ghasseminejad asked Leal to return an additional $70,000. Leal returned the requested funds. Leal Decl., ¶55, Ex. 3.

The Property was in default because KB3 had failed to pay taxes of approximately $10,000. Leal Decl., ¶6. Leal paid the delinquent taxes on May 7, 2024 and filed the NOD on May 10, 2024. Leal Decl., ¶6, Ex. 4.

Plaintiff KB3 seeks a preliminary injunction enjoining Defendants from a foreclosure sale of the Property.

In issuing the TRO/OSC, the court ordered Plaintiff to serve each Defendant personally. Proofs of service on file reflect: (a) Defendant Total Lender Solutions was served by substituted service on April 30, 2025, effective May 10, 2025; (b) Defendant Leal was served as individual and trustee each by substituted service on May 1, 2025, effective May 11, 2025; (c) Defendant Leal Trust was served by substituted service on May 1, 2025, effective May 11, 2025; (d) Defendant Daniel Barraza was served by substituted service on May 3, 2025, effective May 13, 2025; (e) Defendant Veronica Barraza was served by personal service on May 3, 2025; and (f) Defendant Peter Mehrian was served by personal service on May 9, 2025. Each service included the Summons, Complaint, ex parte application, the minute order, and the TRO/OSC.

Obviously, Plaintiff did not comply with the court’s order for personal service and instead often served through substituted service. Plaintiff also has not served two of the Lenders at all: Cresencio and Maria. Plaintiff contends that its efforts have been diligent and asks for reissuance of the TRO/OSC under CCP section 527(d)(5).

As two Defendants have not been served at all, and effective service of other Defendants is only recent, the court will reissue the TRO/OSC. KB3 is directed to personally serve Cresencio and Maria or apply ex parte for an alternative form of service. Those Defendants already served with process may be served with the TRO/OSC by electronic service or by U.S. mail.

In resetting the OSC, the court informs both KB3 and Defendant Leal that their evidence is both confusing and weak. The only issue is whether there is a material variance in the amount sought in the NOD and NOS. This issue turns on the amount loaned to KB3 and whether payments to Leal were intended for crypto investment or Loan repayment. The court expects to see clear evidence, argument and supporting documentation from both parties.

[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] In its ex parte application, KB3 requested judicial notice of (1) a DOT recorded on March 8, 2024 as Instrument No. 20240155864 (RJN Ex. 1); (2) a NOD recorded on May 10, 2024 as Instrument No. 20220144551 (RJN Ex. 2); (3) a NOS recorded on December 17, 2024 as Instrument No. 20240893639 (RJN Ex. 3); and (4) an order granting motion for relief from the automatic bankruptcy stay entered on April 9, 2025 in In re KB3 2275 Century LLC, Case No. 2:25-bk-10237-NB, United States Bankruptcy Court for the Central District of California (RJN Ex. 4). The court took judicial notice of these exhibits at the hearing for the ex parte application on April 28, 2025.

[4]A proof of service filed on May 15, 2025 reflects personal service of Mehrian was subsequently completed on May 9, 2025.