Judge: Monica Bachner, Case: 21STCV45687, Date: 2023-01-05 Tentative Ruling
Case Number: 21STCV45687 Hearing Date: January 5, 2023 Dept: 71
Superior Court of California
County of
DEPARTMENT
71
TENTATIVE RULING
|
GEORGE
TASH and DEBRA B. TASH, trustees of GEORGE & DEBRA B. TASH INTERVIVOS
TRUST AGREEMENT DATED NOVEMBER 25, 1985, AMENDED AND REINSTATED MAY 19, 1999, vs. HARON
HELMANDI, et al. |
Case No.: 21STCV45687 Hearing Date:
January 5, 2022 |
Plaintiffs George Tash and Debra B. Tash, Trustees
of the George and Debra B. Tash Intervivos Trust Agreement Dated November 25,
1985, Amended and Reinstated May 19, 1999’s motion for a preliminary
injunction is granted. Defendants Haron Helmandi, Roshawn Helmandi ,
Shubyre Mohammed Humkar, and Roohina
Humkar, as well as Defendants’ agents, representatives, and employees, enjoining
them from conveying, selling, encumbering, hypothecating, or otherwise
attempting to transfer 19438-19444 Business Center Drive, Los Angeles,
California, APN 2783-025-068 (“Parcel B”).
Plaintiffs George
Tash (“George”) and Debra B. Tash (“Debra”), Trustees of the George and Debra
B. Tash Intervivos Trust Agreement Dated November 25, 1985, Amended and
Reinstated May 19, 1999 (collectively, “Tash Trustees”) (collectively,
“Plaintiffs”) move for a preliminary injunction against Defendants Haron
Helmandi (“Haron”), Roshawn Helmandi (“Roshawn”), Shubyre Mohammed Humkar
(“Shubyre”), and Roohina Humkar (“Roohina”) (collectively, “Defendants”), as
well as Defendants’ agents, representatives, and employees, enjoining them from
conveying, selling, encumbering, hypothecating, or otherwise attempting to
transfer 19438-19444 Business Center Drive, Los Angeles, California, APN
2783-025-068 (“Parcel B”). (Notice Ex
Parte Application, pg. 2.)
Background
Plaintiffs,
husband and wife, as joint tenants, acquired title to two adjacent parcels,
Parcels A and B, of commercial real property by way of a grant deed on or about
October 25, 1976. (Decl. of George
¶4(a), RJN Exh. A.) Parcel A is located
at 19450 Business Center Drive, Los Angeles, California, APN 2783-025-069
(“Parcel A”). (Decl. of George ¶¶2,
4(a), RJN Exh. A.) Parcel B is located
at 19438-19444 Business Center Drive, Los Angeles, California, APN 2783-025-068. (Decl. of George ¶¶2, 4(a), RJN Exh. A.) On or about May 1, 1986, George Tash and
Debra B. Tash, as joint tenants, transferred Parcel A and Parcel B to George
Tash and Debra Tash, Trustees of the George & Debra Tash Intervivos Trust
Agreement Dated November 25, 1985, by way of a quitclaim deed recorded with the
Los Angeles County Recorder’s Office as document number 86-542529. (Decl. of George ¶4(b), RJN Exh. B.)
On or about June
17, 2009, Plaintiffs transferred their interest in Parcel A to related entity
Julia Christian Properties – Business Center 1 LLC by way of a quitclaim deed
recorded with the Los Angeles County Recorder’s Office as document number
20090913229. (Decl. of George ¶4(c), RJN
Exh. C.) On the same day, Plaintiffs
transferred their interest in Parcel B to Julia Christian Properties – Business
Center 2 LLC by way of a quitclaim deed recorded with the Los Angeles County Recorder’s
Office as document number 20090913228. (Decl. of George ¶4(c), RJN Exh.
D.) On or about December 30, 2009, Julia
Christian Properties – Business Center 1 LLC transferred Parcel A back to
Plaintiffs by way of a quitclaim deed recorded with the Los Angeles County
Recorder’s Office as document number 20091982992. (Decl. of George ¶4(d), RJN Exh. E.) On the same day, Julia Christian Properties –
Business Center 2 LLC transferred Parcel B back to Plaintiffs by way of a quitclaim
deed recorded with the Los Angeles County Recorder’s Office as document number
20091982993. (Decl. of George ¶4(d), RJN
Exh. F.)
Parcel A is
currently occupied by Edwin Dolgopat (“Dolgopat”) and Jon-Paul Fortunati (“Fortunati”)
(collectively, “Tenants”). (Decl. of
George ¶3.) The Tenants have been renting
the building on Parcel A for more than twenty years, and have asked Plaintiffs
to buy their building from Plaintiffs for at least five years, saying that
“when you’re ready,” the Tenants would be happy to purchase their building. (Decl. of George ¶3; Decl. of Debra ¶3.) Parcel B was occupied by multiple tenants
until about June or July of 2021, when Plaintiffs asked those tenants to leave,
because Plaintiffs were in an escrow to sell Parcel B to the Defendants. (Decl. of George ¶3.)
In April 2021,
Plaintiffs allege Haron entered into a Commercial Property Purchase Agreement
(“Purchase Agreement”) with Plaintiffs to purchase Parcel B for a purchase
price of $2.6 million, and Roshawn was subsequently added as a buyer through
amended escrow instructions. (Decl. of
George ¶¶6, 9, RJN Exh. H.) On October
18, 2021, Plaintiffs transferred Parcel B to the Helmandis by grant deed
recorded with the Los Angeles County Recorder’s Office as document number
2021156274 (“Parcel B Grant Deed”).
(Decl. of George ¶11, RJN Exh. G.)
The Parcel B Grant Deed identifies the property being transferred as
“Property commonly known as 19438 and 19444 West Business Center Drive,
Northridge, CA 91324.” (Decl. of George
¶11.) However, the Parcel B Grant Deed
erroneously includes a reference to the APN of Parcel A and the legal
description of Parcel A, rather than just Parcel B. (Decl. of George ¶11; Decl. of Lovelace
¶¶2-6; Decl. of Nelson ¶¶3-6.)
In November 2021,
after the close of escrow, Plaintiffs discovered that the Parcel B Grant Deed
contains the erroneous legal description that references the APN of Parcel A
and the legal description of Parcel A, rather than just Parcel B. (Decl. of George ¶¶8, 11; Decl. of Lovelace,
¶ 9; Decl. of Nelson, ¶ ¶4-5.) Plaintiffs
allege they contacted the escrow and title companies after they learned of the
error in the legal description. (Decl.
of George ¶12.) Prior to being informed
of the error, the Helmandis did not make any attempt to take possession of, or
collect rent generated from, Parcel A.
(Decl. of George ¶12.) In August
2021, Plaintiffs met with Defendants and Defendants mentioned they would also like
to purchase Parcel A; Plaintiffs informed Defendants that would not be possible
because Plaintiffs had already agreed to sell Parcel A to Tenants. (Decl. of George ¶9; Decl. of Debra ¶5.) In October 2021, Plaintiffs entered into an
escrow to sell Parcel A to Tenants.
(Decl. of George ¶10; Decl. of Debra ¶6.) Plaintiffs argue they are now unable to close
escrow with Tenants because Plaintiffs cannot transfer clear title. (Decl. of Debra ¶9.)
The instant
preliminary injunction relates to Plaintiff’s request that this court enjoin Defendants
from conveying, selling, encumbering, hypothecating, or otherwise attempting to
transfer Parcel B. (Decl. of George ¶13;
Decl. of Debra ¶10.)
On October 31,
2022, this Court denied Plaintiffs’ original application for a temporary
restraining order to prevent the Helmandi Defendants from interfering with
Plaintiffs’ ownership and rents derived from Parcel A, and to enjoin the
Helmandi Defendants from attempting to encumber, transfer, or alienate Parcel A
in any manner. This Court found
Plaintiffs established a likelihood of success, but failed to show sufficient
irreparable harm. (10/31/22 Ruling.)
On December 12,
2022, Plaintiffs filed the instant ex parte application for a temporary
restraining order and order to show cause regarding a preliminary
injunction. One December 14, 2022, this
Court granted Plaintiffs’ ex parte application and entered a temporary
restraining order enjoining Defendants from selling or encumbering Parcel B to
expire on January 5, 2023. (12/14/22
Order.) On December 21, 2022, Defendants
timely filed their opposition according to this Court’s briefing schedule. On December 28, 2022, Plaintiffs timely filed
their reply.
Preliminary Injunction
The purpose of a preliminary injunction is to preserve the status quo pending final judgment in the
case. (See Scaringe v. J.C.C. Enterprises, Inc. (1988) 205 Cal.App.3d
1536.) The status quo has been
defined to mean the last actual peaceable, uncontested status which preceded
the pending controversy. (Voorhies v. Greene (1983) 139 Cal.App.3d
989, 995 (quoting United Railroads v.
Superior Court (1916) 172 Cal. 80, 87).)
In determining whether to
issue a preliminary injunction, the trial court considers two factors: (1) the
reasonable probability that the plaintiff will prevail on the merits at trial;
and (2) a balancing of the “irreparable harm” that the plaintiff is likely to
sustain if the injunction is denied compared to the harm that the defendant is
likely to suffer if the court grants a preliminary injunction. (C.C.P. §526(a); 14859 Moorpark Homeowner’s Association v. VRT Corp. (1998) 63
Cal.App.4th 1396, 1402; Pillsbury,
Madison & Sutro v. Schectman (1997) 55 Cal.App.4th 1279, 1283.)
The Court’s determination is
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.) However, a trial court may not grant a
preliminary injunction, regardless of the balance of interim harm, unless there
is some possibility that the plaintiff would ultimately prevail on the merits
of the claim. (Id.)
The court must consider both
factors. The two factors are a sliding
scale— the stronger the showing of probability of prevailing, the lesser
showing is required for irreparable harm.
(Butt v. State (1992) 4
Cal.4th 668, 678; The Right Side
Coalition v. Los Angeles Unified School District (2008) 160 Cal.App.4th 336
[reversing denial of preliminary injunction based solely on balancing of
hardships without considering probability of prevailing].) The plaintiff must make some showing of each
factor. (Jessen v. Keystone Savings & Loan Association (1983) 142 Cal.App.3d
454, 459.) A court may not issue a
preliminary injunction if the plaintiff cannot possibly prevail on the merits
even if a strong showing of irreparable harm has been made. (Butt
v. State, (1992) 4 Cal.4th 668, 677-678.)
On the first factor, a preliminary
injunction may not issue unless the judge is persuaded that it is “reasonably
probable” that the plaintiff will prevail on the merits. (San
Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal.App.3d
438, 442.) The judge does not determine
the merits of the action or decide that the plaintiff necessarily will
prevail. The judge only determines
whether there is a reasonable probability that the plaintiff will prevail. (Youngblood
v. Wilcox (1989) 207 Cal.App.3d 1368, 1372.)
For the second factor, “irreparable harm”
means that the defendant’s act constitutes an actual or threatened injury to
the personal or property rights of the plaintiff that cannot be compensated by
a damages award. (Brownfield v. Daniel Freeman Marina Hospital (1989) 208 Cal.App.3d
405, 410.) A plaintiff is not required
to wait until suffering actual harm; threatened harm is enough. (Southern
Christian Leadership Conference v. Al Malaikah Auditorium Co. (1991) 230
Cal.App.3d 207, 223.)
The issue of irreparable harm
is closely related to the issue of damages as an adequate remedy at law. Monetary loss will not constitute irreparable
harm unless the plaintiff also shows that the defendant is insolvent or unable
to pay damages. (Friedman v Friedman (1993) 20 Cal.App.4th 876, 890.) While both residential and commercial real
property are considered unique for purposes of irreparable harm (see Civ. Code §3387), damages may
adequately compensate property owned for investment property which has an
established value, and the foreclosing entity is solvent. (Jessen
v. Keystone Savings & Loan Assn. (1983) 142 Cal.App.3d 454, 458.) Where the owner intends to use the investment
property and not simply sell it, money damages may not suffice, and irreparable
harm may justify injunctive relief. (Id.)
The showing must demonstrate
the specific harm claimed; mere allegations of irreparable injury are
insufficient. (Leach v. City of San Marcos (1989) 213 Cal.App.3d 648, 661 [“A mere allegation
that such injury will result is not sufficient.”]) Conclusory
statements, lay opinion, and attorney declarations will not suffice. The irreparable harm must be imminent; a mere
possibility or fear of harm is insufficient.
(Korean Philadelphia Presbyterian
Church v. California Presbytery (2000) 77 Cal.App.4th 1069, 1084.) The court’s ruling on a preliminary injunction
is not an adjudication of the merits, is not a trial, and does not require a
statement of decision. (Cohen v. Board of Supervisors, (1985) 40
Cal.3d 277, 286; People v. Landlords
Professional Services, Inc., (1986) 178 Cal.App.3d 68, 70-71.) The Court is not required to state its
reasons for granting or denying a preliminary injunction; a cursory statement
is sufficient. (City of Los Altos v. Barnes, (1992) 3 Cal.App.4th 1193, 1198.)
1. Likelihood of Success
Plaintiffs demonstrate they have a reasonable likelihood of
success on their claims. Plaintiffs’
first amended complaint (“FAC”) sets forth nine causes of action: (1) quiet
title, (2) reformation of instrument—grant deed, (3) reformation of
instrument—deed of trust, (4) declaratory relief, (5) injunctive relief, (6)
intentional interference with prospective economic advantage, (7) negligent
interference with prospective economic advantage, (8) interference with
contractual relations, and (9) recission.
a.
Quiet Title, Declaratory
Relief, and Injunctive Relief
In order to successfully allege a cause of action for quiet title,
a complaint must set forth: (1) a legal description of the property and its
street address or common designation; (2) the title of the plaintiff and the
basis of the title; (3) the adverse claims to the title of the plaintiff; (4)
the date as of which the determination is sought; and (5) a prayer for the
determination of the title of the plaintiff against the adverse claims. (C.C.P. §761.020.)
“To qualify for declaratory relief, a party would have to
demonstrate its action presented two essential elements: (1) a proper subject
of declaratory relief, and (2) an actual controversy involving justiciable
questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC
(2013) 213 Cal.App.4th 872, 909, quotation marks and brackets omitted.)
A cause of action for reformation requires the following: (1) fraud,
or mutual mistake of the parties, or a mistake of one party known or suspected
by the other; (2) form of agreement pled verbatim or generally according to
legal effect; and (3) contract does not express parties’ actual intent. (C.C.P. §3399; Shupe v. Nelson (1967)
254 Cal.App.2d 693, 700 [stating mutual mistake is failure of written instrument
to express true intent of parties due to inadvertence of both of them].)
Defendants argue a plaintiff in a quiet title action who alleges
that a grant deed to the defendant is void is challenging the legal title and
is required to prove a right to the title by a preponderance of the evidence. (Murray v. Murray (1994) 26 Cal.App.4th
1062.) Defendants argue the layout and
physical appearance of the building make it appear that Parcels A and B are one
building. (Decl. of Haron ¶2; Decl. of
Roshawn ¶2.) Defendants argue Plaintiffs
cannot prevail on their claim for reformation of instruments because both
parties understood the transaction was for Parcels A and B. (Opposition, pg. 7.) Defendants argue in all communications leading
up to the execution of the Purchase Agreement, Haron stated, and George
acknowledged, that the $2.6 million purchase price was for the entire Building. (Decl. of Haron ¶4.) Defendants argue both the grant deed and the
short form deed of trust included legal descriptions that expressly defined the
Building as Parcels A and B and listed the APN numbers for both parcels, as did
the escrow instructions provided months before closing. (Opposition pg. 6, Exhs. G, J; Decl. of
Haron, Exh. A.) Defendants’ reliance on the
appearance of the building and the legal descriptions of Parcels A and B does not
demonstrate Plaintiffs understood at all times the sale transaction wasfor both
Parcels A and B, and that Plaintiffs are not likely to prevail at trial on
their claims.
Plaintiffs demonstrate they have a reasonable likelihood of
success on their claims for quiet title, declaratory relief, and reformation. Plaintiffs argue they are likely to prevail on the merits of their
title claim because the Purchase Agreement specifically identifies “THE REAL
PROPERTY to be acquired is 19438 & 19444 W. BUSINESS CENTER DR” bearing
“Assessor’s Parcel No. 2783025069 (‘Property’),” the Purchase Agreement does
not refer to Parcel A as property that would be conveyed thereunder, Parcel A
has a separate and distinct business address of 19450 Business Center Drive,
and Parcel B Grant Deed clearly identifies the property being transferred as
“Property commonly known as 19438 and 19444 West Business Center Drive,
Northridge, CA 91324.” (Ex Parte
Application, pg. 9.) Plaintiffs argue
the Helmandis knew they were purchasing only Parcel B, not Parcel A. (Id.)
Plaintiffs further demonstrate that Chicago Title, in addition to handling
the Sale of Parcel B to the Helmandi Defendants, handled Plaintiffs’ Exchange
Agreement in its 1031 tax deferred exchange transaction and Plaintiffs replaced
Parcel B with the exchange purchase of property known as 11018 W. Los Angeles
Avenue, Moorpark, CA, and erred while inputting Parcel B’s legal description by
mistakenly including the legal description of Parcel A in the escrow
documentation, which auto populated to all escrow and title forms, including
the exchange documentation. (Decl. of
Lovelace ¶¶6-11; Decl. of Nelson ¶¶4-6.)
Further, the Qualified Exchange Accommodation Agreement lists that the
Relinquished Property was “19438-19444 Business Center Drive, Northridge, CA,”
the IPX Client Accounting Statement for the exchange identifies the
Relinquished Property as “19438-19444 Business Center Drive, Northridge, CA,”
and the Assignment of Relinquished Property Sale Agreement identifies the
Relinquished Property as “19438-19444 Business Center Drive, Northridge, CA.” (Supp.-Decl. of Debra ¶5, Exhs. 1, 2, 3.)
b.
Intentional and
Negligent Interference with Economic Advantage, Interference with Contract, and
Conversion
The elements of a cause of action for interference with
prospective economic advantage are: (1) Economic relationship existing between
the plaintiff and third party; (2) probability of future economic benefit to
the plaintiff; (3) defendant’s knowledge of the relationship; (4) defendant’s
intentional acts designed to disrupt the relationship; (5) defendant engaged in
an independently wrongful act in disrupting the relationship beyond just
inducing disruption of economic advantage; (6) actual disruption of the
relationship; and (7) economic harm to the plaintiff caused by the acts. (Youst v. Longo (1987) 43 Cal.3d
64, 71.)
The elements of a cause of action for interference with contract
are: (1) valid contract between plaintiff and third party; (2)
Defendant’s knowledge of that; (3) Defendant’s intentional acts designed to
induce disruption of the relationship; (4) actual disruption; and (5) resulting
damage. (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.)
The
elements of a conversion are: (1) the plaintiff’s ownership or right to
possession of the property at the time of the conversion; (2) the defendant’s
conversion by a wrongful act or disposition of property rights; and (3)
damages. (Farmers Insurance Exchange v. Zerin
(1997) 53 Cal.App.4th 445, 451-452.)
Plaintiffs demonstrate they have a reasonable likelihood of
success on their claims for intentional and negligent interference with
economic advantage, interference with contract, and conversion. Plaintiffs argue the
Purchase Agreement and Grant Deed pertain to the sale of only Parcel B, so Defendants
cannot legitimately claim any interest in Parcel A, and Defendants’
interference with Plaintiffs’ Tenants—both with respect to the Tenants’ payment
of rents and Defendants’ claim to ownership of Parcel A—support a claim for conversion
of the rents due to Plaintiffs and interference with Plaintiffs’ lease with Tenants
and Plaintiffs’ pending sale of Parcel A to Tenants. (Ex Parte Application, pg. 10.)
c.
Recission
A contract may be rescinded based upon a mistake, whether of law
or of fact, which materially affects an essential element of the contract. (Reid v. Landon (1958) 166 Cal.App.2d 476,
483.) Generally, material mistakes
concern the nature of transaction, the identity of the parties, the identity of
things to which the contract relates, or the occurrence of collateral events. (Odorizzi v. Bloomfield School District
(1966) 246 Cal.App.2d 123, 130; Donovan v. RRL Corp. (2001) 2 Cal.4th
261, 278-279 [auto dealership’s lack of knowledge regarding typographical error
in newspaper’s advertised price of car constituted mistake of fact].)
In Donovan v. RRL Corp., the defendant automobile dealer
advertised a used automobile for sale in a newspaper, but, because of
typographical and proofreading errors made by the newspaper, the advertisement
listed a price significantly less than the intended sales price. (Donovan v. RRL Corp. (2001) 26 Cal.4th
261.) The Donovan plaintiff
attempted to purchase the automobile by tendering the advertised price, which
the dealer refused. (Id. at pg. 268.)
The California Supreme Court affirmed
the trial court’s finding of rescission of the contract on grounds of
unilateral mistake in the advertised price. (Id. at pg. 281.)
Defendants reiterate their argument in opposition that both
parties knew Plaintiffs were selling the Building and the escrow instructions,
signed by both parties, demonstrates parties agreed the transaction was for
Parcels A and B. (Opposition, pg. 8;
Decl. of Haron ¶4.) Defendants further
argue Chicago Title Company employees Nelson’s and Lovelace’s declarations do
not demonstrate their personal knowledge as to whether the parties to the
transaction were selling the Building or only half of the building. (Opposition, pg. 8.)
Plaintiffs demonstrate they have a reasonable likelihood of
success on alternative claim for recission.
Plaintiffs argue even if the Helmandis were to state a colorable claim
to Parcel A, they will be unable to prevail as the error in the legal
description was caused by the title company involved, which did not conform to
the intent of the Plaintiffs in selling Parcel B to Defendants. (Ex Parte Application, pg. 9; Reply, pg. 5; Donovan,
26 Cal.4th at pg. 281.)
2. Balancing of Harm
Plaintiffs argue
irreparable harm will certainly result if this Court does not grant injunctive
relief because real property is unique and monetary compensation will not
afford relief to Plaintiffs if Defendants are allowed to sell Parcel B. (Ex Parte Application, pg. 7; Fonteno v.
Wells Fargo Bank, N.A. (2014) 228 Cal.App.4th 1358, 1380; see Wilkison
v. Wiederkehr (2002) 101 Cal.App.4th 822, 830 [noting “the legal
remedy of damages is generally inadequate in real property disputes”];
Civ. Code §3387.) Plaintiffs argue on
November 4, 2022, they discovered a commercial property listing by the Helmandi
Defendants on LoopNet.com displaying Parcel B for sale for $3,300,000. (Supp.-Decl. of Debra ¶10; RJN Exh. X.) Plaintiffs argue if Defendants are allowed to
sell Parcel B, Plaintiffs’ alternative relief for recission will be made
difficult and result in additional fees and costs to Plaintiff to name the new
buyer of the property as an additional party and result in a waste of judicial
resources. (Ex Parte Application, pg. 7.) Plaintiffs argue on balance, Defendants will
suffer no or minimal harm in being enjoined from, (a) selling or encumbering
Parcel B, and (b) marketing or listing Parcel B for sale in any manner as there
appears to be no material basis upon which Defendants can make a meritorious
claim to Parcel A. (Id.)
Defendants state
they agree to take down the listing of Parcel B and not list the property for
sale while this case is pending.
(Opposition, pg. 9; Decl. of Roshawn ¶9.) Defendants do not challenge Plaintiffs’
argument that Defendants will suffer no or minimal harm in being enjoined from
selling or encumbering Parcel B and marketing or listing Parcel B for
sale. (See Opposition.)
The
Court finds Plaintiffs have met their burden of demonstrating that if an
injunction is not issued enjoining Defendants from (1) selling or encumbering Parcel B, and (2) marketing
or listing Parcel B for sale in any manner, imminent irreparable harm
may result. Plaintiffs demonstrated that
Defendants listed Parcel B for sale after this Court’s denial of the original
TRO as to Parcel A rents. (Ex Parte
Application, pg. 2; Supp.-Decl. Debra ¶10; RJN Exh. X.) Defendants’ listing of Parcel B shortly after
the denial of the TRO demonstrates Defendants require a judicial order to
maintain the status quo.
Based on the foregoing, Plaintiffs’
motion for a preliminary injunction is granted.
Dated:
January 5, 2023
Hon. Monica Bachner
Judge of the Superior Court