Judge: Martha K. Gooding, Case: 23-01321037, Date: 2023-05-15 Tentative Ruling

Order to Show Cause re: Preliminary Injunction

The Application by Plaintiff Jason Reynolds (“Plaintiff”) for an injunction to prevent Defendants Kasie Hee Yoo, Ryan Kim, and American Default Management, LLC (collectively, “Defendants”) from conducting a Non-Judicial Foreclosure Sale with respect to Plaintiff’s home located at 121 Terrapin, Irvine, CA 92618 is DENIED.

Code of Civil Procedure (“CCP”) section 526(a)(3) provides that an injunction may be granted “[w]hen 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.”  The purpose of CCP § 526(a)(3) is to preserve the status quo pending litigation. See, Stockton v. Newman (1957) 148 Cal.App.2d 558, 563. 

First, for an injunction to issue, the moving party must establish a likelihood of prevailing on the merits.  (See San Francisco Newspaper Printing Co., Inc. v. Superior Court (1985) 170 Cal.App.3d 438, 442, and Rutter, Civil Procedure Before Trial, Section 9:528.)  Evidence must be submitted to establish a probability of prevailing on the merits, and this is customarily done by affidavits or declarations, although a verified complaint and other discovery can be considered.  (See Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 527, and Rutter, Civil Procedure Before Trial, Section 9:574 to 9:581.)

Second, before an injunction is issued, a party has the burden of showing that irreparable harm will be suffered if the injunction is not issued.  (See Tiburon v. Northwestern Pacific Railroad Co. (1970) 4 Cal.App.3d 160, 179.)  Under California law, if monetary damages provide an adequate remedy, then injunctive relief cannot be granted.  (See Thayer Plymouth Center Inc. v. Chrysler Motor Corp. (1967) 255 Cal.App.2d 300, 306.)  

Plaintiff has not established a likelihood of prevailing on the merits of his claims.

Plaintiff alleges in his Complaint that Defendants conspired to violate Business & Professional (“B&P”) Code section 17200 in violation of the Fair Debt Collection Practices Act, that they violated California usury laws, and they violated Civil Code section 2924.17.

Plaintiff argues that the “Collection Conspiracy, whereby Kim focuses on collecting money under the Stipulated Judgment and Yoo focuses on foreclosing against Reynolds’ home, are not separate actions by different creditors, but, as evidenced by them both being plaintiffs in the Yoo v. Reynolds case, were coordinated to avoid running afoul of the One-Action Rule.” (Application at pg. 8.)

The rule that plaintiff refers to, in relation to the first cause of action for conspiracy, is CCP section 726, which states in part that there “can be but one form of action for the recovery of any debt or the enforcement of any right secured by mortgage upon real property or an estate for years therein…”

Here, there are no allegations of a mortgage.  This statute and the one form of action rule does not apply.  Rather, the “loan” at issue was a form of a real estate investment whereby in 2017, Plaintiff obtained $250,000 from Yoo as an investment on the promise that he was going to use that money to loan to other people secured by deeds of trust.  When Yoo attempted to get her money back in 2020 and threatened to sue, Reynolds promised to pay back the money by selling his own house.  As security for this, he agreed to sign the promissory note and deed of trust. (Biggins Decl., ¶ 2, Yoo Decl., ¶  2.) 

Plaintiff also argues in his application the 18% default interest stated in the promissory note is usurious.  “‘Usury is the exacting, taking or receiving of a greater rate than is allowed by law, for the use or loan of money.’” (Korchemny v. Piterman (2021) 68 Cal.App.5th 1032, 1042.)  Here, the loan had a 10% interest rate.  The rate only went to 18% on default.  That is not subject to usury law. (See Southwest Concrete Products v. Gosh Construction Corp. (1990) 51 Cal.3d 701, 704 (“interest payments on overdue commercial accounts are not subject to the usury law”).) 

Plaintiff also contends that Defendant Yoo made false statements in her declaration attached to the Notice of Default, in violation of Civil Code section 2924.17.  Plaintiff provides no evidence of this, aside from his own declaration.  Even if the information were false, the statute only provides that the mortgage servicer is liable for a civil penalty as a result, (Civ. Code, § 2924.17(c).)  Plaintiff has not cited to any authority that this would suffice to support an injunction to prevent a foreclosure. 

Because Plaintiff fails to show he is likely to prevail on his claims, the request for an injunction is denied.

Defendants are ordered to give notice.