TENTATIVE RULING

Plaintiff Linda Reinbold’s Motion for Preliminary Injunction is DENIED.

Plaintiff Linda Reinbold to give notice.

REASONING

Plaintiff Linda Reinbold (“Plaintiff”) moves the Court to issue a preliminary injunction enjoining Defendant Philippe B. Craig, Trustee of the Philippe B. Craig, Attorney at Law, 401k Profit Sharing Trust, FBO Philippe B. Craig, and his agents, officers, employees, representative, assigns, and all persons acting in concert or participating with him, including their principal, Phillip B. Craig (“Craig”), from engaging in, committing, or performing, directly or indirectly, by any means whatsoever, foreclosing and/or proceeding with any and all efforts to engaged in a forced non-judicial sale of Plaintiff’s home located at 1333 Ashland Avenue, Santa Monica, California 90405.

Legal Standard

The function of a preliminary injunction is the preservation of the status quo until a final determination of the merits.” (Beehan v. Lido Isle Cmty. Ass’n (1977) 70 Cal.App.3d 858, 866.) “Trial courts traditionally consider and weigh two factors in determining whether to issue a preliminary injunction. They are (1) how likely it is that the moving party will prevail on the merits, and (2) the relative harm the parties will suffer in the interim due to the issuance or nonissuance of the injunction.” (Dodge, Warren & Peters Ins. Servs., Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.) “The greater the showing on one, the less must be shown on the other to support an injunction.” (Ibid., quoting Butt v. State of California (1992) 4 Cal.4th 668, 678, brackets and ellipses omitted.) The burden of proof is on the plaintiff as the moving party “to show all elements necessary to support issuance of a preliminary injunction.” (O’Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.)

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 [injunction erroneously granted without verified complaint, affidavits, or declarations to support injunctive relief].) Injunctive relief may be granted based upon a verified complaint only if it contains sufficient evidentiary, as opposed to ultimate, facts. (Code Civ. Proc., § 527, subd. (a).) A plaintiff seeking injunctive relief must also show the absence of an adequate damages remedy at law. (Code Civ. Proc., § 526, subd. (a)(4).)

A preliminary injunction may be classified as either a prohibitory injunction, which requires parties “to refrain from a particular act,” or a mandatory injunction, which requires parties to perform “an affirmative act that changes the position of the parties.” (Davenport v. Blue Cross of California (1997) 52 Cal.App.4th 435, 446.) Mandatory preliminary injunctions are rarely granted. (Teachers Insurance & Annuity Association v. Furlotti (1999) 70 Cal.App.4th 1487, 1493.) More specifically, “[t]he granting of a mandatory injunction pending trial is not permitted except in extreme cases where the right thereto is clearly established.” (Ibid.)

Background

Plaintiff alleges that in 2008, she met Defendant Laura L. Lazar aka Laura Gottlieb (“Lazar”) and developed a relationship with her, and in May 2013, Lazar approached Plaintiff with a request to borrow money against Plaintiff’s property to complete renovations of Lazar’s residence with the intention of repurposing it as a wedding and event venue. (First Am. Compl. ¶¶ 10-16.) Lazar assured Plaintiff that she would be in a position to settle the loan within a year, and she reiterated her commitment to prioritizing the loan repayments, which would be serviced from Lazar’s monthly trust disbursements. (First Am. Compl. ¶ 17.) Plaintiff agreed to the loan agreement, and Lazar arranged a loan with Craig, with Defendant Michael J. Christl (“Christl”) to act as a mortgage broker in the transaction. (First Am. Compl. ¶¶ 18-19.) The loan, which amounted to $550,000, was secured by placing a lien against Plaintiff’s property located at 1333 Ashland Avenue in Santa Monica. (First Am. Compl. ¶ 19.) The loan application was prepared by Christl and his business Defendant CNC Investments, Incorporated dba California Private Lenders (“CNC”) and listed Plaintiff and Lazar as co-borrowers with the same address of 3537 Bayberry Lane, Malibu, California 90265, with differing incomes, and Plaintiff alleges that Craig, CNC, and Lazar engaged in subsequent discussions to remove Lazar as the co-borrower to the loan. (First Am. Compl. ¶ 20.) The funds were wired to Lazar, CNC, and Golden Rule Management FBO Martin Grant, and Plaintiff alleges that the funds were not used for Lazar’s wedding venue business but instead given directly to Grant. (First Am. Compl. ¶ 21.) Plaintiff alleges that neither CNC nor Christl met with or spoke to Plaintiff directly before the loan documents were signed or before Lazar was removed as a co-borrower obligated to the loan. (First Am. Compl. ¶ 22.) The loan was subsequently modified four different times, which increased the loan amount to $1,000,000 and extended the maturity date to December 1, 2023. (First Am. Compl. ¶¶ 24-27.) In July 2023, Lazar promised Plaintiff she would pay off the loan, as she had promised in the past, and Lazar told Plaintiff she needed to execute a Real Estate Power of Attorney so Lazar could extend the loan because Craig wanted to see a connection between Lazar and Plaintiff’s property. (First Am. Compl. ¶ 30.) Plaintiff signed the document, and soon thereafter, Lazar told Plaintiff they needed to sell Plaintiff’s home. (First Am. Compl. ¶ 31.) Plaintiff alleges that Lazar gained access to Plaintiff’s residence to photograph the home and list it for sale, and Lazar claimed she needed to secure an additional loan, which could only be done if a legitimate offer was made. (First Am. Compl. ¶ 33.) Plaintiff learned that Lazar had only been paying off interest on the loan and not paying down the principal, and Plaintiff informed the realtor selling her house that she had not consented to the sale, so the house was taken off market, and Plaintiff executed a Revocation of Power of Attorney, revoking all authority previously granted to Lazar. (First Am. Compl. ¶¶ 33-35.) Plaintiff alleges that she consented to the initial loan of $550,000, but she did not consent to a $1,000,000 loan, and she signed the fourth modification only to extend the loan period because she believed she would lose her home if she did not do so. (First Am. Compl. ¶ 36.) The loan remains outstanding and unpaid, with the liability standing at approximately $1,000,000 in principal, with interest exceeding $52,709.74, and on November 14, 2023, Craig issued a Notice of Default and Election to Sell Under Deed of Trust, thereby initiating foreclosure proceedings. (First Am. Compl. ¶ 37.) Plaintiff alleges claims for fraud, breach of fiduciary duty, financial elder abuse, negligence, unfair business practices, breach of contract, intentional infliction of emotional distress, and quiet title, among others.

Analysis

The Court first considers the likelihood that Plaintiff will prevail on the merits. In short, Plaintiff contends that a preliminary injunction is warranted because there were indicia of fraud throughout the entire transaction based on Defendants’ conduct. Plaintiff contends that Lazar’s fraud, coupled with Christl, CNC, and Craig’s actions of engaging in a pattern of unfair predatory real estate practices caused Plaintiff to become a victim of such behavior and to be in jeopardy of losing her home through foreclosure should the injunction not be granted. The Court focuses its analysis on the claims against Craig here, as Plaintiff seeks to enjoin Craig’s ability to conduct foreclosure proceedings. While Defendants Christl and CNC have filed an opposition to the motion, the Court need not determine whether Plaintiff has demonstrated a likelihood of success on her claims against them because Plaintiff does not seek to enjoin any conduct by these defendants.

As to Plaintiff’s negligence claim, she must show that Craig owed her a duty of care. (See McIntyre v. Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671 [to state a claim for negligence, Plaintiff must allege the elements of (1) “the existence of a legal duty of care,” (2) “breach of that duty,” and (3) “proximate cause resulting in an injury”].) Plaintiff alleges that Craig had a duty to investigate and inquire about the suspicious loan given the indicia of third-party fraud arising out of payments being made from him to Lazar directly while Lazar was not on the property deeds, and Craig allowed Plaintiff to be the single borrower on the loan despite Plaintiff’s income. (First Am. Compl. ¶ 90.) Plaintiff’s other claims all require an element of showing a duty owed to Plaintiff by the named Defendants. The Court finds that Plaintiff cannot demonstrate a likelihood of succeeding on her claims.

As to Craig, who is alleged to be Plaintiff’s commercial lender on the subject loan, Plaintiff has failed to provide any evidence that Craig acted as a broker, attorney, fiduciary, or trustee as to this loan. “[A]s a general rule, a [lender] owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.” (Nymark v. Heart Federal Savings & Loan Association (1991) 231 Cal.App.3d 1089, 1096.) If the Court were to hold Craig liable as a fiduciary simply based on his conduct as a lender, it would be conceivable that few lenders would provide loans, fearing liability simply for lending an individual money. While Craig could be liable if he had done more than provide funds to Plaintiff, Plaintiff has failed to show any such conduct. Further, there is no indication that Craig had any notice of issues with the loan or with Lazar when Craig acquired an interest in the property. Rather, Plaintiff signed documents affirming the validity of the loan, and Craig had no duty to explain the loan to Plaintiff or determine her ability to repay it. It follows that Plaintiff cannot show that Craig engaged in unfair business practices because Plaintiff must establish Craig was engaged in an “unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising” and certain specific acts (Bus. & Prof. Code, § 17200), and all that has been shown is that Craig was a lender on the loan. Further, Plaintiff’s claims for declaratory relief, injunctive relief, and quiet title rely on the same allegations, and there is the requirement that Plaintiff has tendered the amount of the secured indebtedness on the property, which extends to all causes of action which are “implicitly integrated” with the allegedly wrongful sale. (Arnolds Management Co. v. Eischen (1984) 158 Cal.App.3d 575, 579.) “A full tender must be made to set aside a foreclosure sale,” and a plaintiff attacking a foreclosure sale is required to allege tender of the full amount owed. (See Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 526.) This requirement exists so plaintiffs may not recoup the property while evading their lawful debt on the property. (Ibid.) Plaintiff has provided no evidence that she has tendered the amount due to Craig or any other defendant. Further, Plaintiff has alleged she was involved in the loan process and subsequent modifications, even if certain documents were executed as a result of Lazar’s fraud, such that the trier of fact could hold Plaintiff liable for the representations she made in those documents.

Finally, it is clear that Craig will suffer with the issuance of a preliminary injunction, as Plaintiff remains in the property despite her default on the loan, and Craig will continue to lose the value of his investment in providing a loan to Plaintiff if he is unable to foreclose on the property while also being unable to collect on the loan. Accordingly, Plaintiff Linda Reinbold’s Motion for Preliminary Injunction is DENIED.

Evidentiary Objections

Defendants Christl and CNC object to certain statements within the declarations of Jake Babcock, Linda Reinbold, and Beth Chrisman, and the entire declaration of Caroline Knab. Objection Nos. 1, 2, 4, 5, and 7 to 10 are SUSTAINED. Objection Nos. 3, 6, and 11 to 24 are OVERRULED.

Plaintiff objects to certain statements within the declaration of Defendant Michael Christl, Andrew S. Louis, Gabrielle Gonzalez, Clay Wilkinson, and Defendant Phillippe B. Craig. Objection Nos. 1 to 20, 22, 31, 33, 34, 37 to 39, 42, 44, 46, and 58 are OVERRULED. Objection Nos. 21, 23 to 30, 32, 35, 36, 40, 41, 43, 45, and 47 are SUSTAINED as to the declarant’s legal conclusions but otherwise OVERRULED.