Judge Lynne M. Hobbs, Case Number: 23STCV07136, Date: 2025-03-27 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 23STCV07136, Date: 2025-03-27 Tentative Ruling

Case Number: 23STCV07136 Hearing Date: March 27, 2025 Dept: 61

TALUN HSU, et al. vs SCOTT EHRLICH, et al.

Tentative

Analysis:

I. MOTION TO DISSOLVE PRELIMININARY INJUNCTION

Defendant Scott Ehrlich (Defendant) seeks to dissolve the preliminary injunction preventing foreclosure on the property at issue in this case requested by Plaintiffs Talun Hsu and Fawnia Hsu (Plaintiffs), arguing that Plaintiffs have not posted the $100,000 undertaking ordered by the court. (Motion at pp. 4–7.) “A preliminary injunction ordinarily cannot take effect unless and until the party applying for it provides “an undertaking ... to the effect that the applicant will pay to the party enjoined such damages ... as the party may sustain by reason of the injunction, if the court finally decides that the applicant was not entitled to the injunction.” (City of South San Francisco v. Cypress Lawn Cemetery Assn. (1992) 11 Cal.App.4th 916, 920.) California Rules of Court (CRC) Rule 3.1150, subd. (f), provides that an undertaking must be presented to the court within one court day of the order granting the request for injunction, or else in the time provided by the court. (CRC Rule 3.1150, subd. (f).) This court granted Plaintiffs’ motion for an injunction on October 24, 2024.

Plaintiffs in opposition argue that they are financially unable to post the $100,000 undertaking required, because the bond companies they have spoken to have indicated that they will only provide a bond upon payment of 100% collateral or an irrevocable letter of credit from an approved bank. (Talun Hsu Decl. ¶¶ 4–32.) Talun Hsu states that he “does not have that kind of money in cash,” and cannot obtain a letter of credit because he does not “have that kind of money in my bank account.” (Hsu Decl. ¶¶ 28–29.) Plaintiffs offer to instead post an undertaking of $10,000, followed by monthly payments to Defendant in unspecified amounts. (Opposition at p. 6.)

Plaintiffs rely on the case Conover v. Hall (1974) 11 Cal.3d 842, 85, in which the court held, in a case involving welfare recipients’ challenge to a statewide rule that the trial court had enjoined upon their request, that the bond requirements for injunctions could be waived by the court upon a showing of inability to pay the bond. The court ruled as follows:

Although the superior court in the instant case apparently did not conduct any formal inquiry into the total assets of the plaintiffs, the court could reasonably conclude from the facts before it that plaintiffs were ‘poor’ and could not afford to post an injunction bond to cover the state's potential damages. The pleadings establish, of course, that all plaintiffs are currently welfare recipients; although all have some earned income, none has a gross monthly income of more than $540. In view of these meagre resources, plaintiffs obviously could not afford to post the significant undertaking that would be necessary to cover the substantial costs resulting from the application of the preliminary injunction over the entire statewide welfare program. On the facts of this case, we cannot say that the trial court abused its common law discretion in permitting a preliminary injunction to issue without an undertaking. (Conover v. Hall (1974) 11 Cal.3d 842, 852–853.)

Defendant here has demonstrated that no undertaking has been posted within the time provided by law. Plaintiffs, however, present evidence that they have sought by myriad channels to obtain a bond to support their injunction, but do not have the money to pay it, instead offering to post a $10,000 bond plus additional monthly payments. Defendant in reply contends that the declaration of Talun Hsu lacks detail concerning his indigence, and is limited to statements that he lacks sufficient cash on hand or money in his bank account to post the bond, which are mere indications that he lacks liquidity, not that Plaintiffs cannot obtain the bond. (Reply at p. 4.)

An order dissolving the injunction is appropriate. Whether to waive the requirement of an undertaking is a matter of trial court discretion. (See Venice Canals Resident Home Owners Assn. v. Superior Court (1977) 72 Cal.App.3d 675, 684 [“[T]he Supreme Court left the decision to waive a bond within the discretion of the trial court.”].) Plaintiffs here have provided a narrative of their attempts to secure a bond, but have provided little detail concerning their present ability to post an undertaking to mitigate the potential damages caused by their injunction. Said injunction was granted in a close case, in reliance upon Talun Hsu’s testimony that he and his family presently live in the property in question and thus face irreparable harm from foreclosure. This was despite prior representations in the loan application forms that the property was to be purchased as a rental property in which neither Hsu nor his relatives would live. Having thus obtained the injunction by a thin margin, Plaintiffs now seek an order absolving them of the requirement to post an undertaking upon a general attestation of their inability to pay. It would be inequitable to permit the waiver of the undertaking requirement in these circumstances.

Accordingly, the motion to dissolve the injunction is GRANTED.