Judge Lynne M. Hobbs, Case Number: 24STCV23096, Date: 2024-10-02 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 24STCV23096, Date: 2024-10-02 Tentative Ruling

Case Number: 24STCV23096 Hearing Date: October 2, 2024 Dept: 61

CHUNHUA QI vs FENPING WANG, et al.

TENTATIVE

Plaintiff Chunhua Qi’s Application for Preliminary Injunction is GRANTED.

Plaintiff to give notice.

DISCUSSION

Code of Civil Procedure, section 526, subdivision (a) provides that the court “may” grant an injunction in the following cases:

(1) When it appears by the complaint that the plaintiff is entitled to the relief demanded, and the relief, or any part thereof, consists in restraining the commission or continuance of the act complained of, either for a limited period or perpetually.

(2) When it appears by the complaint or affidavits that the commission or continuance of some act during the litigation would produce waste, or great or irreparable injury, to a party to the action.

(3) When it appears, during the litigation, that a party to the action is doing, or threatens, or is about to do, or is procuring or suffering to be done, some act in violation of the rights of another party to the action respecting the subject of the action, and tending to render the judgment ineffectual.

(4) When pecuniary compensation would not afford adequate relief.

(5) Where it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief.

(6) Where the restraint is necessary to prevent a multiplicity of judicial proceedings.

(7) Where the obligation arises from a trust.

(Code Civ. Proc., § 526, subd. (a).)

In determining whether to issue a preliminary injunction, a trial court considers: (1) the likelihood that the plaintiff will prevail on the merits of its case at trial, and (2) the interim 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. (Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach (2014) 232 Cal.App.4th 1171, 1177.) “‘The latter factor involves consideration of such things as the inadequacy of other remedies, the degree of irreparable harm, and the necessity of preserving the status quo.’ [Citation.]” (Ibid.)

“The trial court's determination must be 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.)

Plaintiff Chunhua Qi (Plaintiff) seeks a preliminary injunction preventing Defendants Fenping Wang (Wang) and Integrated Lender Services, Inc. (ILS) from proceeding with any foreclosure upon the real property on Sierra Madre boulevard in Arcadia that is the subject of this action. Plaintiff notes that any foreclosure by these Defendants upon the property would be pursuant to a deed of trust executed on July 8, 2022, by his wife Yan Zhong (Zhong) on her own behalf and purportedly as his attorney in fact. (Complaint Exh. B.) Said execution was based on a notarized power of attorney purportedly executed by Plaintiff mere days earlier in Los Angeles County on July 5, 2022. (Complaint Exh. C.) But Plaintiff denies signing the power of attorney or authorizing the deed of trust, and claims that he was in China during the relevant period. (Qi Decl. ¶¶ 4–8, 11, 13–14.) Plaintiff claims to have initiated divorce proceedings against Zhong in

China as of August 8, 2024. (Qi Decl. ¶ 24.)

Plaintiff argues that the power of attorney, being forged, is void, and as such so is the deed of trust pursuant to which Defendants seek to foreclose upon the property. “It has been uniformly established that a forged document is void ab initio and constitutes a nullity; as such it cannot provide the basis for a superior title as against the original grantor.”. (Wutzke v. Bill Reid Painting Service, Inc. (1984) 151 Cal.App.3d 36, 43.) Plaintiff thus argues that he has a likelihood of prevailing on the merits in this case. And faces a risk of irreparable injury in the loss of his home to foreclosure. (Reply at p. 2.)

Defendant Wang in opposition argues that Plaintiff cannot establish irreparable harm, since he can seek compensation for the loss of his property from Zhong in the pending divorce proceedings. (Opposition Brief at pp. 3–4.) This argument is unpersuasive, however, because land is “unique,” and loss thereof is not necessarily susceptible to adequate compensation by monetary damages. (See Real Estate Analytics, LLC v. Vallas (2008) 160 Cal.App.4th 463, 473.) Plaintiff here specifically seeks to bar the foreclosure against his property, i.e. to prevent the loss of the land. Plaintiff has therefore shown the potential for irreparable harm if the relief sought is not granted.

Defendant Wang also argues that Plaintiff will not prevail on his claims, because the money loaned to Zhong was for the benefit of Zhong and Plaintiff’s jointly owned family business. (Opposition at pp. 4–5.) Defendant argues that Plaintiff cannot establish that he did not authorize Zhong to sign the deed of trust, or that the forgery thereof was made with fraudulent intent. (Opposition at p. 5.) Wang argues that their reliance upon the power of attorney in good faith renders the transaction only voidable, not void, under the case Schiavon v. Arnaudo Brothers (2000) 84 Cal.app.4th 377. (Opposition at pp. 5–6.) Wang argues that they are entitled to immunity under Probate Code § 4303, which insulates them from liability for relying in good faith on facially valid powers of attorney. (Opposition at pp. 6–8.)

Plaintiff has presented direct testimony concerning the lack of authorization for the power of attorney and the deed of trust. Although Defendant draws attention to the absence of documentary corroboration for his claims, they present little in the way of contrary evidence. In light of Plaintiff’s straightforward showing of likely irreparable harm in the form of the loss of his property, and Wang’s contrary showing of only pecuniary loss (Ex Parte Opposition at p. 5), the issuance of the injunction sought is proper here.

Defendant’s reliance on Schiavon is unavailing. In that case, the court held that an authentic reconveyance of a deed of trust was only voidable, and not void, against a subsequent purchaser of real property, because the reconveyance was authentic and made by one with “full awareness of the effect of the act,” but merely based on a misrepresentation contained in a forged request for reconveyance. (Schiavon, supra, 84 Cal.App.4th at p. 379.) This authority has little application here, where Plaintiff contends that his assent to the power of attorney and the derivative deed of trust was inauthentic, and offered by someone with no authority to offer it.

It is unclear what Wang hopes to gain by arguing for the voidability, rather than voidness, of the deed of trust, since a voidable deed of trust is subject to cancellation in any event. (See Civ. Code § 3412 [allowing cancellation of an instrument by “a person against whom it is void or voidable”].) While a good faith purchaser may obtain valid title from a seller whose title is voidable by a third party (See Strutt v. Ontario Sav. & Loan Assn. (1970) 11 Cal.App.3d 547,

554), this principle weighs in favor of Plaintiff’s request for relief, since permitting a sale of the property while a claim for cancellation is pending could permanently deprive Plaintiff of relief against the purchaser.

Wang’s reliance on Probate Code § 4303 is misplaced, as that section has no application here. That section states, “[a] third person who acts in good faith reliance on a power of attorney is not liable to the principal or to any other person for so acting,” provided the power of attorney meets certain requirements. (Prob. Code § 4303, subd. (a).) Plaintiff does not here attempt to impose liability or damages upon Wang, but rather seeks to cancel certain instruments he contends were fraudulently executed. Section 4303 may insulate Wang from liability; it does not insulate the instruments from cancellation.

Because Plaintiff has shown a likelihood of prevailing upon his claims, and of irreparable harm if the request for relief is not granted, his application for a preliminary injunction is therefore GRANTED.