Judge Kerry Bensinger, Case Number: 24STCV12117, Date: 2025-01-24 Tentative Ruling

CASE: Castillo I Partnership v. Valleyheart Condominium Homeowners’ Association

RESPONDING PARTY: Defendant Valleyheart Condominium Homeowners’ Association

This action concerns the failure to pay HOA fees for the real property located at 13236 Valleyheart Drive, Unit 101, Studio City, California, 91604 (the Property). In 2018, plaintiff Castillo I Partnership (Castillo or Plaintiff) acquired ownership of the Property. Ahron Zilberstein (Zilberstein) is the general partner of Castillo. Plaintiff alleges that Zilberstein had several conversations with defendant Valleyheart Condominium Homeowners’ Association’s (Valleyheart) President Swee Wee (Wee). According to the Complaint, Wee stated there were no monthly HOA fees or charges. Valleyheart consisted of only three residential units. Pursuant to that representation, Plaintiff did not pay any HOA fees or dues for the next six years.

In 2023, Wee died. Wee’s sister, Belinda Hwang (Hwang) moved into Wee’s unit and unilaterally assumed the role of President of Valleyheart. In September 2023, Rebecca Schneider (Schneider), the owner of Unit 103 at Valleyheart, claimed that each owner was responsible to pay the sum of $300 per month and that Plaintiff owned over $22,000 in past HOA dues. This action followed.

On May 15, 2024, Plaintiff commenced this action against Valleyheart for Declaratory Relief. Plaintiff seeks a declaration that Valleyheart is estopped from collecting fees or dues from Plaintiff at least before or about 2023 and has waived any right to do so.

On December 4, 2024, Plaintiff filed an ex parte application for a temporary restraining order against Valleyheart. Plaintiff sought an order preventing Valleyheart from proceeding with a December 12, 2024 Trustee’s Sale on Plaintiff’s Property. Plaintiff also sought an OSC why a preliminary injunction should not issue. On December 5, 2024, the court granted the ex parte application and issued a temporary restraining order (TRO) against Valleyheart. The court also set a briefing schedule for Plaintiff’s motion for preliminary injunction.

On December 11, 2024, Valleyheart filed its opposition to the motion for preliminary injunction.

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. (C.C.P. §526(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.)

The 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, 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, supra, 4 Cal.4th at pp. 677-78.)

The court’s ruling on a preliminary injunction is not an adjudication of the merits, is not a trial, and does not require a statement of decision. (Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, 286; People v. Landlords Professional Services, Inc. (1986) 178 Cal.App.3d 68, 70-71.) The court is not required to state its reasons for granting or denying a preliminary injunction; a cursory statement is sufficient. (City of Los Altos v. Barnes (1992) 3 Cal.App.4th 1193, 1198.)

Plaintiff is entitled to a preliminary injunction to enjoin Valleyheart from proceeding with the Trustee’s Sale of the Property. Plaintiff demonstrates a likelihood of prevailing on the merits of its claims. In addition, Plaintiff submitted evidence suggesting it is likely to sustain irreparable harm if the injunction is denied.

The sole cause of action sought by Plaintiff is declaratory relief. Plaintiff seeks a judicial determination as to whether Defendant is entitled to collect any amount of past or future HOA dues, fees, or assessments. (See Complaint, ¶ 22.) Accordingly, the injunction sought in the instant application is based on Plaintiff establishing a reasonable probability of prevailing on this cause of action.

Plaintiff establishes a probability of prevailing on this claim. In support, Plaintiff offers the declaration of its general partner, Zilberstein, who states the following:

Both before and after acquiring the Premises, I personally met and had several substantive conversations with Swee Wee (“Wee”), the owner of Unit 101 at 13236 Valleyheart Drive, Studio City, California. Wee identified himself as the President oft he HOA.

Wee explained that since the entirety of the Property consisted of only three residential units. there were no homeowner meetings and nothing that needed to be done. I personally and specifically asked Wee about HOA fees or assessments and Wee said that there were no monthly fees or charges and that if a problem or .issue arose in the future, the three unit owners would figure out what to do.

Defendant argues that Plaintiff cannot show irreparable harm because Zilberstein does not provide a credible basis for disregarding the written terms of Valleyheart’s governing documents. In support, Defendant cites Hewlett-Packard Co. v. Oracle Corp. (2021) 65 Cal.App.5th 506, 530, for the proposition that the clear and unambiguous terms of a written contract take precedence over self-serving verbal assurances. Defendant, however, does not sufficiently explain how that case is at all related to this action. Hewlett Packard had to do with actual breach and anticipatory breach of contract. On the contrary, Plaintiff brings a cause of action for declaratory relief based on representations purportedly made by Valleyheart’s then agent, Wee, excusing Plaintiff’s payment of HOA dues. Moreover, Defendant does not provide the documents stating Plaintiff’s obligation to pay HOA due. Defendant fails to counter Plaintiff’s showing of irreparable harm.

The court finds the balance of harms tips in Plaintiff’s favor. Plaintiff submitted evidence to show Valleyheart seeks a nonjudicial foreclosure of the Property for a purported $22,000 in unpaid HOA dues. (Goodfriend Decl., Ex. 1.) The estimated value of the Property is $600,000.

In opposition, Valleyheart argue the balance of harms weighs against issuing an injunction because the injunction would threaten Valleyheart’s financial stability. (Opposition, p. 5.) However, an injunction would preserve the status quo, especially considering Plaintiff established a likelihood of prevailing on the claim that Plaintiff was not required to pay HOA fees. Further, if Plaintiff has not paid HOA fees since 2018, Valleyheart fails to establish that Plaintiff’s nonpayment has indeed threatened Valleyheart’s financial stability. Indeed, Plaintiff represents that it has paid monthly dues during the last year and half. (Reply, p. 2.) Accordingly, the court finds the balance of harms weighs in Plaintiff’s favor.

In order to obtain the preliminary injunction, C.C.P. section 529 requires the Plaintiff to provide an undertaking. (See ABBA Rubber Co. v. Seaquist (1991) 2 Cal.App.3d 1, 10 (finding that bond is an “indispensable prerequisite to the issuance of a preliminary injunction” and the duty to order a bond is “mandatory, not discretionary.”).) In addition, an injunction is void without an undertaking. (See Federal Automotive Services v. Lane Buick Co. (1962) 204 Cal.App.2d 689, 695 (holding injunction inoperative and of no effect because the order did not require a bond).)

Section 529 identifies the amount of the undertaking to be any damages, not exceeding an amount to be specified, the defendant may sustain by reason of the injunction, if the court finally decides that the Plaintiff was not entitled to the injunction. Here, Valleyheart does not discuss its potential damages if the court were to decide Plaintiff was not ultimately entitled to the preliminary injunction. Valleyheart does not submit any evidence of damages resulting from the issuance of an injunction. Accordingly, court sets the undertaking at a standard amount of $10,000.

Based on the foregoing, Plaintiff’s application for a preliminary injunction is granted. A preliminary injunction consistent with the terms of the December 5, 2024 TRO shall issue. Plaintiff is ordered to post a bond in the amount of $10,000.

Kerry Bensinger

Judge of the Superior Court