Judge: Michael D. Washington, Case: 37-2023-00051559-CU-FR-NC, Date: 2024-05-17 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - May 16, 2024

05/17/2024  01:30:00 PM  N-31 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Michael D Washington

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Civil - Unlimited  Fraud Motion Hearing (Civil) 37-2023-00051559-CU-FR-NC DUDENHOEFFER VS LASKEY [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Preliminary Injunction, 01/17/2024

The Motion for Preliminary Injunction brought by plaintiff John Dudenhoeffer (Plaintiff) is disposed as follows: As to the Plants --as to the plants identified in the briefing, the request for a prohibitive injunction is DENIED --as to the plants identified in the briefing, the request for a mandatory injunction is also DENIED As to the Personal Property (i.e. the cargo containers and their contents) --as to the three large cargo containers (measuring 40 feet, 40 feet, and 20 feet, respectively) and the personal property contained therein (including, but not limited to family heirlooms, files for clients of Plaintiff's mortgage brokerage business, and a safe) (collectively, all three cargo containers and there contents are referenced herein as the Personal Property), the request for a prohibitive injunction that defendants William Laskey and Erika Strecker-Laskey (collectively, Defendants) not dispose or destroy said Personal Property is GRANTED --as to the Personal Property, the hearing on the request for a mandatory injunction is continued to Friday, July 12, 2024 at 1:30 p.m. in Department N-31 and the parties are ORDERED to meet and confer about the best, least disruptive, and most efficient way to have the Personal Property transferred of the premises of 4420 Sleeping Indian Road, Fallbrook, California, 92028 (the Subject Property) and to the location where Plaintiff intends to store it, and, if the parties are unable to resolve the issue via stipulation, both parties are ORDERED to file Status Reports, limited to 5 pages, 5 court days prior the continued hearing date apprising the Court of the status of the meet and confer efforts and proposing various logistical and practical terms for the transfer of the Personal Property in light of any issues that arise during the meet and confer process. The Court intends to grant the request for mandatory injunctive relief as to the personal property, but is inclined to issue such order in whatever manner is least disruptive to both parties – i.e. if use of movers or agents would be better than having Plaintiff do the moving himself, if a particular date and time would be best for Defendants, etc.

An appearance is necessary to discuss whether a bond is required in this circumstance, and, if so, the appropriate amount of said bond.

Factual Background This case concerns personal property that was left on the premises of a parcel of real property by a former owner. That former owner, Plaintiff, sold the Subject Property to a third party who, it appears, agreed to allow the personal property to remain on the premises. However, the third-party buyer later Calendar No.: Event ID:  TENTATIVE RULINGS

3091213 CASE NUMBER: CASE TITLE:  DUDENHOEFFER VS LASKEY [IMAGED]  37-2023-00051559-CU-FR-NC sold the Subject Property to yet another buyer – the Defendants. The contract between the middle-buyer and the Defendants contains clauses indicating that Plaintiffs' personal property (including the plants, which appear to be actually planted in the ground) could remain – for a time. However, it also contains a clause indicating that if the personal property and plants could not be removed by that time (June 28, 2021) the parties would negotiate an agreement regarding the remaining plants. Several things are argued regarding the contract between the middle-buyer and the Defendants, including: --that Plaintiff is a third-party beneficiary under that agreement --that the agreement contains an arbitration clause that Plaintiff is subjected to --that the arbitration clause specifically exempts claims for injunctive relief from its ambit --that Plaintiff acted as the broker for the transaction that gave rise to the agreement, which mean two things: (1) a clause exempting any broker from the arbitration requirements covers Plaintiff, and (2) Plaintiff may have violated ethical rules by including terms that were in his interest (i.e. terms regarding the storage of his personal property) in a contract where he was acting as a broker According to the evidence provided, Plaintiff had planned to move his Personal Property to another location. However, that other location allegedly became embroiled in litigation itself to the point that, allegedly, Plaintiff did not have sufficient access to it to use it as an alternative storage location for his Personal Property. That case, Dudenhoeffer v. Provost (S.D. Superior Court No. 21-23994), allegedly settled somewhat recently. As a result, the Personal Property remained on the premises and Defendants began taking more and more hostile steps toward Plaintiff regarding the Personal Property that remained on their land – first locking Plaintiff out of his access, but eventually spreading 120 yards of mulch to, in Plaintiff's words, 'seal off any access' to his Personal Property.

Procedural History Plaintiff filed this action on November 28, 2023. It alleges the following causes of action against Defendants: (1) breach of contract (2) fraud (3) conversion (4) receipt of stolen property (Penal Code § 496) (5) negligence (property damage) (6) promissory estoppel The Complaint seeks both money damages and injunctive relief. Plaintiff filed the instant Motion for Preliminary Injunction on January 17, 2024. (ROA 9.) Defendants filed a Motion to Compel Arbitration on March 21, 2024. (ROA 21.) It is set for hearing on July 12, 2024.

Via the instant motion, Plaintiff seeks an order prohibiting Defendants from disposing of either his Personal Property or the plants. Plaintiff also seeks a mandatory injunction to require Defendants to grant Plaintiff access to the land so that he can retrieve his personal property and the plants. What makes the case somewhat interesting is the fact that the plants at issue appear to be rare and valuable.

Plaintiff makes a rough estimation that the plants had a valuation between $300,000.00 and $500,000.00. Because of this rarity and the fact that the plants are embedded into the land, Plaintiff posits that a mandatory injunction for removal of the plants requires him to have access to the Subject Property over the course of about one month, preferably during the late Spring or Summer months when conditions would be best for moving the plants.

Defendants oppose the request for a preliminary injunction on grounds that Plaintiff is, in the first instance, required to arbitrate his claims against them. Second, they argue that Plaintiff is not likely to prevail on the merits of his claims and that there is no 'irreparable injury' that will result if the Personal Property and plants are not returned to him while the lawsuit proceeds on its merits.

Procedural Issue – Arbitration Requirement Calendar No.: Event ID:  TENTATIVE RULINGS

3091213 CASE NUMBER: CASE TITLE:  DUDENHOEFFER VS LASKEY [IMAGED]  37-2023-00051559-CU-FR-NC Defendants argue that Plaintiff is required to arbitrate his claims because they are subject to the sale contract which, in turn, has an arbitration clause. Plaintiff makes two arguments in response: first, that he was the broker for the transaction and brokers are specifically excluded from the arbitration clause, and second, that he is seeking injunctive relief and claims for injunctive relief are expressly not subject to the arbitration clause. Both arguments are colorable, but neither is particularly clear.

With regard to being a broker, it appears to be undisputed from the face of the documents that Plaintiff did, indeed, serve as the broker for both parties on the transaction. Defendants argue that this violates ethical rules that bind brokers, but they do not cite clear authority for the proposition that such involvement necessarily invalidates the agreement or its provisions. The clause that Plaintiff is invoking reads as follows: (3) BROKERS: Brokers shall not be obligated nor compelled to mediate or arbitrate unless they agree to do so in writing. Any Broker(s) participating in mediation or arbitration shall not be deemed a party to the Agreement. (ROA 11, Ex. A, ¶ 28C(3).) The problem here is that Plaintiff appears to have dual roles with regard to the contract at issue. He was the broker for the real estate action, but he was also an interested party who, as a former owner, was continuing to use the premises for storage of his own belongings. Plaintiff's own pleadings make clear that he is not suing in his role as broker, he is suing because he: was an is an intended third-party beneficiary to the Agreement within the meaning of California law because he was likely to benefit from the contract, a motivating purpose of Defendants' and their counterparty's purpose was to provide Plaintiff that benefit, and permitting Plaintiff to bring his own breach of contract action against Defendants is consistent with the contract's objectives and the contracting parties' reasonable expectations. (ROA 1, ¶ 24 (bold added).) Thus, Plaintiff is suing as a third-party beneficiary, not as a 'broker' per se. On the other hand, the language of the contract does not necessarily make a distinction about the roles in which a broker acts.

Ultimately, a formal decision on this issue is unnecessary at this juncture because of Plaintiff's second argument about injunctive relief being exempt from the arbitration clause. As such, given that there is presently a Motion to Compel Arbitration set for hearing in this matter in July 2024, this Court refrains from making a final decision as to whether or not Plaintiff's status as a 'broker' exempts him entirely from the arbitration clause.

Plaintiff's second argument is that claims for injunctive relief are exempt from the arbitration clause because of the following language in the contract: (2) PRESERVATION OF ACTIONS: The following shall not constitute a waiver nor violation of the mediation and arbitration provisions: (i) the filing of a court action to preserve a statute of limitations; (ii) the filing of a court action to enable the recording of a notice of pending action, for order of attachment, receivership, injunction, or other provisional remedies; or (iii) the filing of a mechanic's lien. (ROA 11, Ex. A, ¶ 28C(2) (bold added).

Similar to how Plaintiff was acting in a dual-role as both a broker and a beneficiary (which leads to some muddling of the legal rights of each), Plaintiff's claims in the instant lawsuit seek injunctive and non-injunctive relief. While the injunctive relief aspects of the claims do 'not constitute a waiver [or] violation of the ... arbitration provision[],' the filing of the claims for money damages would appear to, if, indeed, Plaintiff is not entirely exempt as a broker (as discussed above).

The motion the is before the Court presently seeks a preliminary injunction and thus rests entirely on the injunctive aspects of the claims made in the Complaint. As such, the Court concludes that the instant motion falls outside the ambit of the arbitration clause – even if the claims for money damages may be subject to the arbitration clause (which will be addressed when the formal Motion to Compel Arbitration comes on for hearing). All that need be determined at this juncture is that the terms of the arbitration Calendar No.: Event ID:  TENTATIVE RULINGS

3091213 CASE NUMBER: CASE TITLE:  DUDENHOEFFER VS LASKEY [IMAGED]  37-2023-00051559-CU-FR-NC clause do not prevent Plaintiff from bringing the instant motion or seeking the instant relief or a preliminary injunction.

Legal Standard 'The purpose of a preliminary injunction is to preserve the status quo pending a trial on the merits.' (Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group, 2022) ¶ 9:523, citing Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 528, also citing SB Liberty, LLC v. Isla Verde Ass'n, Inc. (2013) 217 Cal.App.4th 272, 280.) The legal test for a preliminary injunction is: (1) the likelihood that the plaintiff will prevail on the merits at trial and (2) the interim harm that the plaintiff would be likely to sustain if the injunction were denied as compared to the harm the defendant would be likely to suffer if the preliminary injunction were issued. Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 749.

The Court views the Personal Property (i.e. the three containers with heirlooms, client documents, and a safe) as quite different-in-kind from the plants. As such, the Court will address and analyze each category separately under the preliminary injunction standard.

Merits of Motion – Personal Property The terms of the contract provide the following: Buyers are aware that some plants do not convey. All encephalartos, Cycas (except 50% of Sagos), jubae, and royal palms, potted plants, containers and all remaining personal property will be removed by Jack Dudenhoeffer prior to June 28th, 2021. If said plants are not removed, Buyers and Jack Dudenhoeffer shall negotiate an agreement regarding remaining plants. (ROA 11, Ex. A, Text Overflow Addendum No. 1 (bold added)).

It thus appears that there was agreement that the containers are not the property of Defendants. It further appears that, while perhaps somewhat of an illusory 'agreement to agree,' the parties were aware that there might be some delays that would require 'negotiating an agreement regarding [the] remaining plants.' As such, it appears to the Court that Plaintiff is generally likely to prevail on the merits of having his Personal Property (some of which is unique property like family heirlooms and client files) returned to him. While it is a more difficult question whether that obligation may be offset by some form of money damages for the storage cost of leaving the property on the premises past the due date, for purposes of the instant motion and in light of some of the arbitration arguments made above and the exemption applicable to injunctive relief, the Court confines its analysis of the issue of this question to whether Plaintiff is likely to prevail on the injunctive claim to have his Personal Property returned to him.

Moreover, even if the Court were to view the monetary aspects, it appears that the interim harm to Plaintiff is greater if a preliminary injunction is not granted than the interim harm to Defendants will be if a preliminary injunction is granted. The Personal Property at issue is unique. While there is a potential argument that family heirlooms do not necessarily serve a purpose, such that the harm of any delay in having them returned might be minimal, the Personal Property at issue also contains client files, which may have more immediate repercussions. Beyond that, to the extent that the preliminary injunction procedure is designed to preserve the status quo, the Court views the status quo as the time prior to June 28, 2021 when the Personal Property remained on the premises and Plaintiff continued to have ready access to it. What appears to have changed is that Defendants have since cut-off access. Given the animosity that seems to have arisen between the parties, the Court does not view an order forcing Defendants to continue to provide Plaintiff with access as particularly workable or wise. As such, the best way to preserve the status quo of Plaintiff's access to the documents is for Plaintiff to retrieve them and get them off of the Subject Property as soon as possible.

Indeed, in terms of balancing the harms, there is some evidence that Defendants have since begun taking steps that further block access to the Personal Property, such as covering the surroundings with mulch. To the extent that Defendants' actions demonstrate a desire to modify their property in ways that may further curtail Plaintiff's access in the event he prevails in this lawsuit, getting the Personal Property Calendar No.: Event ID:  TENTATIVE RULINGS

3091213 CASE NUMBER: CASE TITLE:  DUDENHOEFFER VS LASKEY [IMAGED]  37-2023-00051559-CU-FR-NC off the premises sooner rather than later is the better balance of harms.

The Court notes that Plaintiff's request seeks one month worth of access to remove his property from the premises, but that lengthy time appears to be primarily due to the care that needs to be taken with regard to moving the plants. The Court will address the plants below. To the extent that the preliminary injunction can be granted with regard to getting the containers off of the premises, it appears to the Court that that can be done much more quickly. On the other hand, to the extent that there may be acrimony between the parties, having Plaintiff personally visit the premises – particularly if he cannot access the plants when he visits – appears as it if may present some challenges. Therefore, rather than issue an open-ended order at this juncture, the Court ORDERS the parties to meet and confer on this issue of how, logistically, to best setup a time, date, and procedure (which may include movers, agents, or lawyers) to best have the Personal Property removed from the premises.

Merits of Motion – Plants The plants are different from the containers in three different ways: (1) the containers contain items like heirlooms and client files which seem to be unique and have more specific value to Plaintiff than they would on the open market, (2) the plants are embedded into the land and require much greater care and skill to extricate safely, (3) the plants require maintenance and care that the containers do not.

Plaintiff's request indicates that the plants will likely require one month to properly and safely remove from the premises. As to the first prong of a preliminary injunction, it appears to the Court that Plaintiff is likely to prevail on the claim that the plants belong to him. Though, again, prevailing on that issue may still be subject to some sort of offset for rental/storage cost of the space that was used to store them.

However, even with a setoff, without knowing the market for rental of fertile land for growing plants of this nature, it appears to the Court that the cost of storage would not overtake the estimated $300,000.00 to $500,000.00 value of the plants. Then again, it seems unlikely that Defendants will be able to obtain much of a rental or storage offset for keeping the plants after Plaintiff was ready to have them moved. In other words, the Court does not view it as likely that damages in the form of storage rents would continue to accrue while the lawsuit proceeds given that Defendants appear to be the ones barring Plaintiff from removing the plants from the Property. All-in-all, however, while it appears more likely that Plaintiff has the stronger claim to the plants, it also does not appear that there is an 'inadequate' remedy at law. If Defendants have taken the plants and converted them, a valuation can be placed on those plants. Indeed, Plaintiff himself placed a valuation on them in the range of $300,000.00 to $500,000.00.

Thus, while Plaintiff appears likely to prevail, it appears that he can prevail monetarily in a way that will be less imposing on Defendants.

The trickier prong of the preliminary injunction test here is considering the relative harms to the parties.

For Defendants, the harm involves allowing Plaintiff to access their property for a month – a process which seems rather laborious, tedious, and likely to tender significant acrimony between the parties. For Plaintiff, the harm involves the loss of the plants and the acceptance of having to be compensated for the somewhat unique and rare plants monetarily rather than by saving the plants themselves. Uniquely, it appears that the plants themselves will require maintenance or they may die, and it does not appear to the Court that Defendants necessarily have any interest in maintaining the plants pending the outcome of the lawsuit. Were it possible to remove the plants in a day, or perhaps even over a weekend, the Court might be inclined to grant the mandatory injunction given that the plants may be somewhat unique and require maintenance and that having them preserved by the person who owns them would, on balance, preserve the status quo while the parties litigate their money damages. However, injecting Plaintiff onto the Subject Property for the protracted period of one month is too onerous when weighing the equities.

While the Court denies the motion with regard to the mandatory injunction for turning over the plants, the Court nonetheless encourages the parties to discuss solutions that may be available to them. As it stands, the result available seems to be in neither party's best interests, as Plaintiff will lose access to his plants (which he uniquely values), and as Defendants may be stuck with paying for if they do not find a way to maintain the plants if Plaintiff prevails in his claim that the plants belong to Plaintiff (which the Calendar No.: Event ID:  TENTATIVE RULINGS

3091213 CASE NUMBER: CASE TITLE:  DUDENHOEFFER VS LASKEY [IMAGED]  37-2023-00051559-CU-FR-NC Court thinks he is likely to do). The law is not providing the best of remedies here, but the parties themselves might be able to – and it appears to the Court that there is incentive on both sides for doing so.

Bond Requirement When a preliminary injunction is granted, it is mandatory that the requesting party post a bond unless the opposing party expressly waives or forfeits such right. (Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group, 2022) ¶¶ 9:640-9:641.) The briefing does not discuss a bond.

As such, an appearance is necessary to discuss whether a bond is required in this circumstance, and, if so, the appropriate amount of said bond.

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