Judge: Joseph Lipner, Case: 23STCV10720, Date: 2023-12-26 Tentative Ruling

Case Number: 23STCV10720    Hearing Date: February 8, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendant and Cross-Complainant Antelope Valley Country Club Improvement Company (“Antelope”) seeks a preliminary injunction against Plaintiffs and Cross-Defendants Maria Grado and Bob and Me Productions, Inc. DBA The Lemon Leaf (collectively, “Plaintiffs”) enjoining their continued presence at Antelope. 

The Court DENIES Antelope’s motion for a preliminary injunction.

Background

This case concerns Plaintiffs’ work as food service contractors for Antelope, a country club. On July 23, 2020, the parties entered a contract (the “Agreement”) whereby Plaintiffs provided food services for Antelope. Plaintiffs occupied and operated a kitchen on Antelope’s premises as part of the Agreement. The agreement ran for a three-year term, with automatic three-year extensions up to three times unless either party delivered a notice of cancelation four months in advance of the end of the term.

On February 13, 2023, Antelope served a “Notice of Non-Renewal of Agreement” on Plaintiff. The parties dispute whether this notice validly ended the agreement.

As of the filing of this motion, Plaintiffs retained possession and use of the kitchen.

Plaintiffs filed this action against Antelope and other defendants on May 12, 2023, alleging (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) declaratory relief; (4) injunctive relief; (5) negligence; (6) fraudulent promises without intent to perform; (7) negligent promises without intent to inform; and (8) intentional infliction of emotional distress (“IIED”). Plaintiffs subsequently dismissed their third claim for declaratory relief.

Antelope filed a Cross-Complaint against Plaintiffs on June 22, 2023. The operative cross-complaint is the Second Amended Cross-Complaint (“SACC”), which raises claims for (1) breach of contract; (2) wrongful interference; and (3) declaratory relief.

On September 13, 2023, Antelope filed an ex parte application for a preliminary injunction and temporary restraining order (the “Ex Parte”). Judge Kin denied Antelope’s application on September 15, 2023. Antelope contends that the primary basis for the denial was that a noticed motion was the proper vehicle to obtain a preliminary injunction. Antelope also contends that the denial was based, at least in part, on Antelope’s insufficient allegations of ongoing damages. Plaintiffs claim it was a decision on the merits based on the same evidence currently before the Court.

At the CMC held on October 4, 2023, Antelope informed the Court that it would seek a preferential setting of Plaintiff’s Declaratory Relief cause of action. The Court set a briefing schedule on the issue of preferential setting. On the day Antelope’s brief was due, Plaintiff dismissed its Declaratory Relief cause of action.

On November 17, Antelope filed a “NOTICE OF MOTION AND MOTION BY CROSS-COMPLAINANT FOR A PRELIMINARY INJUNCTION AND RESTRAINING ORDER AGAINST THE CROSS-DEFENDANTS MARIA ELENA GRADO, AN INDIVIDUAL AND BOB AND ME PRODUCTIONS, INC. DBA THE LEMON LEAF AND MOTION TO AMEND THE FIRST AMENDED CROSSCOMPLAINT” (the “First Motion”). Antelope subsequently amended its notice of motion to replace the request for a preliminary injunction and replace it with a request for leave to amend the cross-complaint. The Court therefore denied the First Motion for a preliminary injunction for improper notice. The Court granted Antelope leave to amend the cross-complaint so that it could allege ongoing damages and add a claim for declaratory relief after Plaintiffs had dismissed their own declaratory relief claim.

On January 3, 2024, Antelope filed the SACC.

On January 16, 2024, Antelope filed the current motion for a preliminary injunction requiring Plaintiffs to vacate the kitchen and Antelope’s premises. Plaintiffs filed an opposition and Antelope filed a reply.

Request for Judicial Notice

The Court grants Plaintiffs’ request for judicial notice.

Legal Standard

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; and (2) a balancing of the “irreparable harm” that the plaintiff is likely to sustain if the injunction is denied compared to the harm that the defendant is likely to suffer if the court grants a preliminary injunction. (Code Civ. Proc., § 526, subd. (a); 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.) “Substantively, before a court may issue a nonstatutory injunction as a provisional remedy for breach of contract, it must appear that monetary relief would not afford adequate relief or that it would be extremely difficult to ascertain the amount of damages.” (Pacific Decision Sciences Corp. v. Superior Court (2004) 121 Cal.App.4th 1100, 1110.)

A court’s determination is guided by a “mix” of the potential-merit and interim-harm factors; the greater the plaintiff’s showing on one, the less must be shown on the other to support an injunction. (Butt v. State of California (1992) 4 Cal.4th 668, 678.) However, a trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim. (Ibid.)

The court must consider both factors. The two factors are a sliding scale – the stronger the showing of probability of prevailing, the lesser showing is required for irreparable harm. (Butt v. California, supra, 4 Cal.4th at p. 678; The Right Side Coalition v. Los Angeles Unified School District (2008) 160 Cal.App.4th 336 (reversing denial of preliminary injunction based solely on balancing of hardships without considering probability of prevailing). The plaintiff must make some showing of each factor. (Jessen v. Keystone Savings & Loan Assn. (1983) 142 Cal.App.3d 454, 459.) A court may not issue a preliminary injunction if the plaintiff cannot possibly prevail on the merits even if a strong showing of irreparable harm has been made. (Butt v. California, supra, 4 Cal.4th at p. 677-78.)

Discussion

Propriety of the Motion

Plaintiffs argue that this motion is a motion for reconsideration of either the Court’s denial the Ex Parte or the Court’s denial of the First Motion for a preliminary injunction.

As discussed above, the Court did not consider the First Motion on its merits because it was not properly noticed.

Judge Kin similarly appears not to have reached the merits of the preliminary injunction on the Ex Parte. “A preliminary injunction … is issued after hearing on either (1) noticed motion or (2) an order to show cause[,]” as compared with a temporary restraining order, which is issued ex parte. (Rutter, Civ. Proc. Before Trial (2023), Ch. 9(II)-A(4).) Although Antelope sought an order to show cause why a preliminary injunction should not be granted, an OSC was not issued. Thus, it appears that Judge Kin did not consider the request for an injunction on the merits.

Preliminary Injunction

“[A]n injunction is prohibitory if it requires a person to refrain from a particular act and mandatory if it compels performance of an affirmative act that changes the position of the parties.” (Davenport v. Blue Cross of California (1997) 52 Cal.App.4th 435, 446.) “The granting of a mandatory injunction pending trial is not permitted except in extreme cases where the right thereto is clearly established.” (Slatkin v. White (2002) 102 Cal.App.4th 963, 972, citing Shoemaker v. County of Los Angeles (1995) 37 Cal.App.4th 618, 625; Brown v. Pacifica Foundation, Inc. (2019) 34 Cal.App.5th 915, 925.) Appellate courts “will more closely scrutinize an injunction that changes the status quo.” (Brown v. Pacifica Foundation, Inc., supra, 34 Cal.App.5th at p. 925.)

Antelope seeks an injunction requiring Plaintiffs to leave Antelope’s premises and cease any operation of the kitchen. Although the requested order requiring Plaintiffs to cease operation of the kitchen is prohibitive, the requested order requiring Plaintiffs to leave the kitchen entirely is mandatory – and furthermore, it is this mandatory injunction which is argued to be necessary to protect Antelope’s interest of operating the kitchen itself. Thus, the Court will apply the standard for mandatory injunctions, granting the injunction only “in extreme cases where the right thereto is clearly established.” (Slatkin, supra, 102 Cal.App.4th at p. 972.)

This does not appear to be an extreme case. Both Antelope and Plaintiffs contend that the inability to operate the kitchen will be seriously damaging to their businesses. Antelope argues that it may have to reduce or end usage of the clubhouse, which contains the kitchen, in order to cut costs if it does not have revenue from the kitchen. Antelope additionally would lose the atmosphere provided by the kitchen, which may affect its appeal to customers. Antelope argues that an award of damages months or years from now will not replace the loss of members. Conversely, Plaintiffs would have to incur costs of at least $575,000.00 bring another kitchen in Antelope Valley into code-compliance for their use, a process which would likely take at least nine months. Further, without the use of the kitchen, Plaintiffs would lose their food service contract with Compass Group North America Palmdale campus, which has been the main source of income keeping their company alive. Thus, it appears that the potential harm to Plaintiffs from an injunction is far greater, and less likely to be repairable, than the potential harm to Antelope from its denial.

Antelope argues that it will clearly succeed on the merits because the Agreement reached the end of its first term in July 2023 and Antelope served a notice of nonrenewal in February 2023, well more than four months before the end of the term. Plaintiffs argue that the notice violated the Agreement because Antelope was required to negotiate in good faith to determine whether an extension would be mutually agreeable. (Grado Decl. ¶¶ 5-7.) Moreover, Plaintiffs argue that Antelope is estopped from terminating the license.  (Plaintiff’s Opp. at § XIII.)  Although these contentions appear to be fundamental disputes between the parties as to whether the Agreement was validly terminated, the parties do not brief the issue in any orderly manner. Without clearer argumentation on the issue, the Court is not prepared to issue a mandatory injunction, particularly when the balance of the harms at risk here appears to weigh against the injunction. The Court therefore denies Antelope’s motion.