Judge: Nick A. Dourbetas, Case: 2022-01243056, Date: 2022-09-30 Tentative Ruling

Motion for Preliminary Injunction

Plaintiffs Na Wu (Wu), Yi Shang (Shang), Guowen Liu (Liu), and Xiafang Yi’s (Yi) (collectively, plaintiffs) motion for preliminary injunction is GRANTED in part and DENIED in part, as follows. (See Integrated Dynamic Solutions, Inc. v. VitaVet Labs, Inc. (2016) 6 Cal.App.5th 1178, 1183-1184 [factors].)

The motion is GRANTED to the extent it seeks a preliminary injunction enjoining defendants Crestview Dr Laguna Beach, LLC (Crestview LLC), Mohamed Shaaban (Shaaban), Doaa Fathallah (Fathallah), and 77 Chianti, LLC (Chianti LLC) (collectively, the Shaaban defendants), and their agents, associates, employees, or any person/entity acting in concert with them or under their direction, from transferring any ownership interest, including title thereto and any accompanying rights to use, possess, and/or occupy (1) the Crestview property, commonly known as 2361 Crestview Drive, Laguna Beach, CA 92651; and/or (2) the Chianti property, commonly known as 77 Chianti, Irvine, CA 92618.

The motion is DENIED to the extent it seeks a preliminary injunction enjoining the Shaaban defendants from removing plaintiffs’ personal property from the Crestview property and/or the Chianti property.

A bond is mandatory. (Code Civ. Proc., § 527, subd. (a).) The parties are ORDERED to be ready to discuss the amount of the bond at the time of the hearing on this matter. Neither side has yet addressed the issue of a bond or suggested an amount. (See Oiye v. Fox (2012) 211 Cal.App.4th 1036, 1061-1062, and Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 14-15 [considerations in setting bond amount].)

Crestview property:

Wu and Shang have demonstrated a probability of prevailing on the merits of their sixth cause of action for quiet title, which seeks to quiet title to the Crestview property. (See Code Civ. Proc., §§ 761.020, 762.010, 762.020 [elements]; see also 3/4/22 Shang Decl. ¶¶ 2-6, Ex. 1; 3/21/22 Wu Decl. ¶¶ 4-5, Ex. 1; Verified SAC ¶¶ 147, 155-172, 251-257, Exs. P-S.) The balance of interim harms favors the issuance of the preliminary injunction. (See Glynn v. Marquette (1984) 152 Cal.App.3d 277, 280 [it is assumed every piece of real property is unique and that a remedy of damages is inadequate]; see also Fonteno v. Wells Fargo Bank, N.A. (2014) 228 Cal.App.4th 1358, 1380 [legal remedy of damages is generally inadequate in real property disputes].)

The key allegation here is that defendants have taken title to the Crestview property via a forged quitclaim deed recorded on 5/3/18 (hereinafter, the 5/3/18 quitclaim deed). Wu and Shang have demonstrated that their signatures on this quitclaim deed purporting to transfer title to the Crestview property from Wu and Shang to Production Capital, LLC (Production Capital), were in fact forged. Wu’s and Shang’s declarations show that they were in China on 4/27/18, the date they purportedly personally appeared before defendant and notary public Daniel Petta (Petta) in Los Angeles County, California and signed the 5/3/18 quitclaim deed. (See Verified SAC ¶ 162, Ex. Q [5/3/18 quitclaim deed]; 3/4/22 Shang Decl. ¶¶ 2-6, Ex. 1; 3/21/22 Wu Decl. ¶¶ 4-5, Ex. 1; see also Verified SAC ¶¶ 147, 155-172, 251-257, Exs. P-S.) Wu’s and Shang’s declarations, which directly attest to the fact that they were out of the country and did not sign the subject quitclaim deed before Petta on 4/27/18, are sufficient to overcome the rebuttable presumption arising from Petta’s notary public certificates of acknowledgement attached to the subject quitclaim deed. (See Civ. Code, § 1190; Evid. Code, §§ 602, 604, 1451 [rebuttable presumption].)

A forged deed is void and does not divest the rights of the original owner as to subsequent transferees such as the Shaaban defendants, even if the Shaaban defendants may have taken title to the property as bona fide purchasers. (See OC Interior Services, LLC v. Nationstar Mortgage, LLC (2017) 7 Cal.App.5th 1318, 1332 (OC Interior Services) [a forged deed does not divest the rights of the original owner even as to a subsequent bona fide purchaser]; La Jolla Group II v. Bruce (2012) 211 Cal.App.4th 461, 477 (La Jolla Group II) [a deed is void ab initio if the grantor’s signature is forged].)   

The Shaaban defendants contend that Wu and Shang are estopped from denying the validity of the 5/3/18 quitclaim deed because they were “at least aware” of this forged deed. They have failed to establish this assertion. Contrary to defendants’ contentions, there is no fatal or suspicious inconsistency between Wu’s original and “updated” declarations. She does not declare that she herself personally and directly paid the property taxes for the Crestview property at all times in her original declaration, and her updated declaration stating that she relied on defendant Joseph Tang (Tang) to pay the property taxes for the Crestview property from 2019 and thereafter does not conflict with her prior declaration. (Compare 3/4/22 Wu Decl., with 6/27/22 Wu Decl.) 

As for the Shaaban defendants’ reliance on the triple-hearsay 12/26/21 letter authored by attorney Richard Jacobs (7/7/22 Shaaban Decl. ¶ 12, Ex. C), Mr. Jacobs has submitted a declaration stating, among other things, that he has no knowledge regarding who owns the Crestview property; that he has never conducted any research regarding title thereto; that he “ha[s] no knowledge whether Tang or Wu were tenants at the Crestview Property or owners”; and that “[he] simply did what [he] was directed to do by Robl.” (7/13/22 Jacobs Decl. ¶ 8; see id., in passim; see also 7/13/22 Tang Decl. ¶¶ 2-4.)

The Shaaban defendants’ reliance on the 2/20/20 letter from the Orange County Tax Assessor to Wu and Shang (see 9/19/22 Ivy Decl. ¶ 3, Ex. A) is equally unavailing. Nothing in this letter suggests Wu and/or Shang knew about the forged quitclaim deed transferring the Crestview property to Production Capital from nearly two years before the date of that letter.

The various documents purportedly found in a box at the Crestview property (see 9/19/22 Supp. Opp. at pp. 4-5) also do not help defendants, as nothing demonstrates that plaintiffs placed them there or even knew of any the documents purportedly showing the transfer of the property to Production Capital.

Furthermore, in order to invoke equitable estoppel to prevent a property owner from denying the validity of a forged instrument, “it must be established that the party to bear the loss was, at a minimum, negligent.” (WFG National Title Insurance Company v. Wells Fargo Bank, N.A. as Trustee for Park Place Securities, Inc. Asset-Backed Pass-Through Certificates, Series 2005-WCW2 (2020) 51 Cal.App.5th 881, 892 (WFG).) The elements for negligence are the existence of a duty, breach, causation, and damages. (Id. at p. 893.) Defendants have failed to establish any of these elements with competent evidence.

Chianti property:

Yi has demonstrated a probability of prevailing on the merits of her eighth cause of action for quiet title, which seeks to quiet title to the Chianti property. (See Code Civ. Proc., §§ 761.020, 762.010, 762.020 [elements]; see also 3/4/22 Yi Decl. ¶ 5; 7/13/22 Yi Decl. ¶ 3; verified SAC ¶¶ 148, 174-187, 260-266, Exs. T-W.) She has also shown the balance of interim harms favors the issuance of the preliminary injunction. (See Glynn v. Marquette, supra, 152 Cal.App.3d at p. 280; see also Fonteno v. Wells Fargo Bank, N.A., supra, 228 Cal.App.4th at p. 1380.)

The key allegation under this claim is that defendants have taken title to the Chianti property via a forged quitclaim deed recorded on 2/9/18 (hereinafter, the 2/9/18 quitclaim deed). Yi has demonstrated that her signature on this quitclaim deed purporting to transfer title to the Chianti property from Yi to Knightsbridge Entertainment, Inc. (Knightsbridge) was in fact forged. Yi’s declarations show that she was in China on 1/22/18, the date she purportedly personally appeared before Petta in Los Angeles County, California and signed the 2/9/18 quitclaim deed. (3/4/22 Yi Decl. ¶ 5; 7/13/22 Yi Decl. ¶ 3.) Indeed, Yi has never even been the United States. (7/13/22 Yi Decl. ¶ 3.) This is sufficient to overcome the rebuttable presumption arising from Petta’s notary public certificate of acknowledgement attached to the 2/9/18 quitclaim deed.

The Shaaban defendants argue Yi is estopped from denying the validity of the 2/9/18 quitclaim deed because she was at least aware of this forged deed. As with their estoppel argument discussed above with respect to the Crestview property, defendants have failed to establish this assertion.  

First, with respect to defendants’ reliance on the triple-hearsay 2/7/18 letter by Robert Abramoff, Mr. Abramoff has submitted a declaration establishing that this letter is a complete and total fabrication. (7/13/22 Abramoff Decl. ¶¶ 1-5; see 7/13/22 Yi Decl. ¶ 6.)

As for the various documents produced by the escrow company used by a subsequent transferee (and not Yi) to facilitate the sale of the Chianti property from that transferee to the Shaaban defendants (see 9/19/22 Supp. Opp. at pp. 4-5), as well as the documents purportedly found in some box at the Crestview property (see ibid.), none of these documents competently suggest Yi was aware of the forged 2/9/18 quitclaim deed.

Finally, even if defendants’ showing was sufficient to establish that Yi was aware of the 2/9/18 quitclaim deed, which it is not, mere awareness is not enough for equitable estoppel. Defendants must establish negligence, but have failed to submit any competent evidence doing so. (See WFG, supra, 51 Cal.App.5th at pp. 892-893.)

Personal property. By this motion, plaintiffs seek a preliminary injunction that, among other things, enjoins the Shaaban defendants from removing or otherwise converting their personal property located at the Crestview and Chianti properties.

The motion is denied to the extent it seeks this relief because plaintiffs have not alleged a claim for conversion/other theory of liability with respect to any personal property located at the Chianti property. And, although plaintiffs Wu and Liu have alleged a claim for conversion with respect to their personal property located at the Crestview property (the 13th cause of action), they have not met their burden to demonstrate that said personal property is unique or that money damages would not be an adequate remedy. (See Tahoe Keys Property Owners’ Assn. v. State Water Resources Control Bd. (1994) 23 Cal.App.4th 1459, 1471, 28 Cal.Rptr.2d 734 [“In general, if the plaintiff may be fully compensated by the payment of damages in the event he prevails, then preliminary injunctive relief should be denied”]; see also Pacific Decision Sciences Corp. v. Superior Court (2004) 121 Cal.App.4th 1100, 1110.)

Requests for judicial notice:

Plaintiffs’ request for judicial notice filed on 3/4/22 (ROA No. 87) is GRANTED as to the existence and legal effect of exhibits H-N only, and otherwise DENIED. (See Yvanova v. New Century Mortg. Corp. (2016) 62 Cal.4th 919, 924, fn. 1 [court may “take judicial notice of [the documents’] existence and contents, though not of disputed or disputable facts stated therein”]; see also Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6 [denying request where judicial notice is neither necessary, helpful, or relevant].)

Plaintiffs’ request for judicial notice filed on 3/21/22 (ROA No. 181) is DENIED in its entirety.

Plaintiffs’ request for judicial notice filed on 6/27/22 (ROA No. 288) is GRANTED as to existence and legal effect of exhibits H-M only, and otherwise DENIED.

Plaintiffs’ request for judicial notice filed on 9/19/22 (ROA No. 432) is DENIED.

Objections:

The court declines to rule on defendants’ objections (ROA No. 169) filed in support of their opposition, as they are immaterial to the disposition of this motion.

Improper supplemental filings. Plaintiffs have filed numerous “updated” and supplemental filings with respect to this motion for preliminary injunction, including a set of “updated” motion papers, a second reply to the opposition filed in response to the “updated” motion, and, if this were not bad enough, a voluminous set of surreply papers, consisting of yet another “supplemental” brief and no less than four volumes of evidence in support of this surreply. The Shaaban defendants too have engaged in this unpermitted conduct by filing a late, “supplemental” opposition brief and additional evidence, in support of their opposition filed in response to the updated moving papers.

No authority provides for the filing of such supplemental briefs/evidence absent leave of court. (See Bozzi v. Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 765.) 

Although the court has considered all of these filings, the court will not tolerate this behavior going forward. The parties should not expect the court to consider any such surreplies/supplemental papers filed without leave of court in the future.

Plaintiffs shall give notice of all of the above.