Judge: Mary H. Strobel, Case: 22STCV34089, Date: 2022-12-08 Tentative Ruling

Case Number: 22STCV34089    Hearing Date: December 8, 2022    Dept: 82

             Plaintiffs Alkhemist LLC and Alkhemist DM LLC (“Plaintiffs”) move for a preliminary injunction ordering Defendants M&C Property Management, LLC, and Moo Han Bae (“Defendants”) to: (1) turn on and keep the electricity on for 1370 and 1400 Esperanza Street, Los Angeles, CA (“Premises”) or allow Plaintiffs’ electrician’s entry to the electric panel to turn the electricity back on or keep it on for said premises; and (2) turn on and keep the water on for Plaintiffs’ premises.  (Order to Show Cause (“OSC”) at 2.) 

Relevant Procedural History

            On October 21, 2022, Plaintiffs filed an unverified complaint for breach of contract, breach of implied covenant, and constructive eviction against Defendants.

            On November 18, 2022, the court granted Plaintiffs’ ex parte application for a TRO and OSC re: preliminary injunction.  The court set the OSC for hearing on December 8, 2022, and set a briefing schedule.  Plaintiffs did not file any additional moving papers.  On December 1, 2022, Defendants timely filed and served an opposition.  On December 6, 2022, at 3:55 pm, Plaintiffs untimely filed a reply.  The reply was due December 5, 2022, pursuant to the briefing schedule set by the court.  At the hearing, Plaintiffs’ counsel should explain why the reply was not timely filed pursuant to the briefing schedule ordered by the court.   

            On December 5, 2022, the Honorable Stephen Goorvitch issued his tentative statement of decision in an unlawful detainer action between the parties.  Judge Goorvitch found Alkhemist had breached its agreement with M&C (Defendants in this action) by failing to pay the rent due, long before M&C disconnected the electricity and allegedly water.  The tentative decision indicated the court would issue judgment and a writ of possession in favor of M&C.   

Legal Standard for Preliminary Injunction

The purpose of a preliminary injunction is to preserve the status quo pending a decision on the merits.  (Major v. Miraverde Homeowners Ass’n. (1992) 7 Cal. App. 4th 618, 623.)  In deciding whether or not to grant a preliminary injunction, the court looks to two factors, including “(1) the likelihood that the plaintiff will prevail on the merits, and (2) the relative balance of harms that is likely to result from the granting or denial of interim injunctive relief.”  (White v. Davis (2003) 30 Cal.4th 528, 553-54.) The factors are interrelated, with a greater showing on one permitting a lesser showing on the other.  (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.)  However, the party seeking an injunction must demonstrate at least a reasonable probability of success on the merits.  (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 73-74.)  The party seeking the injunction bears the burden of demonstrating both a likelihood of success on the merits and the occurrence of irreparable harm.  (Savage v. Trammell Crow Co. (1990) 223 Cal.App.3d 1562, 1571.) Irreparable harm may exist if the plaintiff can show an inadequate remedy at law.  (CCP § 526(a).)  “A preliminary injunction is not a determination on the merits.”  (Yee v. American National Ins. Co. (2015) 235 Cal.App.3d 363, 458.)

“The granting of a mandatory injunction pending trial is not permitted except in extreme cases where the right thereto is clearly established.”  (Teachers Ins. & Annuity Ass'n v. Furlotti (1999) 70 Cal.App.4th 1487, 1493.) 

Analysis

            Petitioner does not clearly specify upon which of its causes of action it bases its request for preliminary injunction.  Presumably it is based on its causes of action for breach of contract and breach of the implied covenant.  It cannot be based on its claim for constructive eviction, as Plaintiffs are still in the premises. 

“A constructive eviction occurs when the acts or omissions . . . of a landlord, or any disturbance or interference with the tenant's possession by the landlord, renders the premises, or a substantial portion thereof, unfit for the purposes for which they were leased, or which has the effect of depriving the tenant for a substantial period of time of the beneficial enjoyment or use of the premises.”  (Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 925-926.)  “Abandonment of premises by the tenant within a reasonable time after the wrongful act of the landlord is essential to enable the tenant to claim a constructive eviction.”  (Ibid.) 

The unverified complaint alleges that Plaintiffs and Defendant M&C entered into an agreement on June 9, 2021, to allow Plaintiffs to remain on the Premises until a new lease could be executed.  (Compl. ¶¶ 22-23.)  Plaintiffs allege that “[t]he June 9, 2021 agreement allowed plaintiffs to peacefully remain at the subject rental premises with full and complete use of the rental premises, which included but were not limited to, the use of electricity and water for the premises.  The use of electricity and water was vital to the plaintiffs' business operation as plaintiffs were cultivating and harvesting cannabis plants.”  (Id. ¶ 24.)  Plaintiffs allege that “Defendants, and each of them, however, breached the parties' agreement by intentionally cutting off the electricity and water to both of the rental premises commencing sometime on or about October 12, 2022 to the present.”  (Id. ¶ 26.)  Plaintiffs allege constructive eviction based on similar facts.  (Id. ¶¶ 35-38.) 

In opposition, Defendants deny they turned off the water to either 1370 or 1400 Esperanza.  There is a factual dispute as to this issue.  As to the electricity, Defendants do not deny they shut off the electricity, but present a separate “Agreement for Shared Electrical Services” (“Shared Meter Agreement”) signed by Plaintiffs, which allows the Landlord to disconnect power if the tenant fails to pay its part of the electrical bill to the landlord.  (Kye Decl. ¶4, Exh. A.)  Defendants submit evidence that “Plaintiffs have not paid the electricity bills since June 2022 to Defendants and to this day, Plaintiffs owe the past due amount of $63,466.94.”  (Id. ¶ 6.) 

Defendants “emailed Plaintiffs to notify and to request payments for past due electricity bills repeatedly from September 7, 2022 to November 29, 2022.”  (Id. ¶ 5.)  When Plaintiffs did not respond, Defendants elected to shut off the electricity provided to the Plaintiffs from the Shared Meter pursuant to the Agreement.  (Id. ¶ 7.) 

In the untimely reply, Plaintiffs do not materially dispute the evidence that they failed to pay their share of the electricity bill pursuant to the Agreement, and that Plaintiffs agreed that Defendants could shut off the electricity provided from the Shared Metter if they did not pay their bill.  In reply, Plaintiffs also state that water service has been restored for 1370 Esperanza Street after the court issued the TRO directing Defendants to restore such service.  (Reply Chung Decl. ¶ 4.)  Plaintiffs appear to acknowledge that LADWP provides the water for 1400 Esperanza Street.  (Ibid.) 

Plaintiffs argue that despite the Shared Meter Agreement and Plaintiffs’ failure to pay its share of the electrical bill, Defendants may not turn off the electricity.  Plaintiffs rely on Civil Code § 789.3.  Section 789.3(a) states: “A landlord shall not with intent to terminate the occupancy under any lease or other tenancy or estate at will, however created, of property used by a tenant as his residence willfully cause, directly or indirectly, the interruption or termination of any utility service furnished the tenant, including, but not limited to, water, heat, light, electricity, gas, telephone, elevator, or refrigeration, whether or not the utility service is under the control of the landlord.”  (bold italics added.) 

Plaintiffs present no evidence that the premises are used by tenant as his residence, or that section 789.3 applies to commercial tenancies.  Nor do Plaintiffs provide any authority that in a commercial tenancy agreement, the parties may not bargain for a provision that allows the landlord to disconnect electricity in the event a tenant does not pay the electrical bill pursuant to a shared meter agreement.

Given this lack of authority, and based on Judge Goorvitch’s tentative statement of decision, the court cannot conclude Plaintiffs are likely to succeed on the merits of their claims, at least as they relate to the disconnection of the electricity.  Nor can the court find Plaintiffs would suffer irreparable harm if a preliminary injunction were not granted.  Defendants present evidence they gave notice to Plaintiffs of the overdue bill and intent to disconnect.  Plaintiffs could have paid the bill and maintained its electrical service.  Any harm to Plaintiffs from disconnecting the electricity could have been avoided through payment of the bill.  Plaintiffs cannot rely on a hardship their own actions created.

As to the water service, the court finds Plaintiffs are likely to prevail on their claim  Defendants could not disconnect the service until completion of the unlawful detainer action.  It appears water, if it was disconnected, has been restored.  It also appears that Defendants control the water only as to 1370 Esperanza. 

Based on the above, the court will issue a limited preliminary injunction prohibiting Defendants from disconnecting the water service to 1370 Esperanza only until judgment is entered in the unlawful detainer action, 22STCV14610.  In all other respects, the TRO is dissolved.  Plaintiffs to prepare a proposed form of order, meet and confer with counsel for Defendants as to form, and lodge it with the court by 12/11/22.

Undertaking

A preliminary injunction ordinarily cannot take effect unless and until the plaintiff provides an undertaking for damages which the enjoined defendant may sustain by reason of the injunction if the court finally decides that the plaintiff was not entitled to the injunction.  (See Code Civ. Pro. § 529(a); City of South San Francisco v. Cypress Lawn Cemetery Ass’n. (1992) 11 Cal. App. 4th 916, 920; see Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 15-16 [“the prevailing defendant may recover that portion of his attorney's fees attributable to defending against those causes of action on which the issuance of the preliminary injunction had been based”].)  

Neither party addresses the undertaking requirement.  Pending argument, the court tentatively concludes that an undertaking of $5,000 is appropriate. 

Conclusion

            The court will issue a limited preliminary injunction prohibiting Defendants from disconnecting water service to 1370 Esperanza until entry of judgment in the unlawful detainer proceeding.  The preliminary injunction will expire upon entry of judgment against Alkhemist in 22STCV14610.  In all other respects, the TRO is dissolved.

Plaintiffs to post an undertaking of $5,000.