Judge: Salvatore Sirna, Case: 21PSCV00043, Date: 2022-10-27 Tentative Ruling

Case Number: 21PSCV00043    Hearing Date: October 27, 2022    Dept: A

Plaintiff ROIC Diamond Hills Plaza, LLC’s MOTION FOR PRELIMINARY INJUNCTION  

Respondent: Defendant Joo Ok Chung

TENTATIVE RULING

Plaintiff ROIC Diamond Hills Plaza, LLC’s Motion for a Preliminary Injunction is GRANTED.

BACKGROUND

Plaintiff ROIC Diamond Hills Plaza, LLC alleges that SOMA USA, Inc.; Joo Ok Chung (Defendant); Myung Ja Cho; Kun-Woong Cho; and Does 1 through 20, inclusive, failed to make payments under a lease for space in a shopping center. The Complaint, filed January 19, 2021, asserts causes of action for:

1.  Breach of Lease

2.  Breach of Written Guaranty of Lease

On September 14, 2022, Plaintiff filed an ex parte application for issuance of writ of attachment and a temporary protective order against Defendant with regards to two of Defendant’s properties in Fontana. On September 19, 2022, the court granted Plaintiff’s writ of attachment but issued a temporary protective order instead of an ex parte right to attach order and order for issuance of writ of attachment. A hearing on Plaintiff’s motion for a preliminary injunction was set for October 4, 2022, and Plaintiff’s application for writ of attachment was designated as the moving papers. On September 30, 2022, the October 4 hearing was continued to October 27 and the parties stipulated that the temporary protective order would remain in full force and effect until Plaintiff’s motion for a preliminary injunction was heard and resolved.

Trial Readiness Conference is set for April 3, 2023. Non-Jury Trial is set for April 10, 2023.

ANALYSIS

Judicial Notice

Defendant requests the court take judicial notice of Executive Order N-33-20 and N-07-21, issued by the Governor of California. This request is granted pursuant to Evidence Code section 452, subdivision (c).

Evidentiary Objections

Defendant raised evidentiary objections to Plaintiff’s declarations and exhibits.  As to those objections, the court rules as follows:

OVERRULED: 1, 3, 4, 5

SUSTAINED: 2

Legal Standard

In deciding whether to issue a preliminary injunction, the court weighs two interrelated factors: “the likelihood the party seeking relief will prevail on the merits,” and the “relative interim harm to the parties if the preliminary injunction is granted or denied.” (People v. Uber Technologies, Inc. (2020) 56 Cal.App.5th 266, 283.)  “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.”  (Butt v. State of California (1992) 4 Cal.4th 668, 678.) 

Discussion

In this case, Plaintiff sought a writ of attachment against two Fontana properties owned by the Defendant to ensure Defendant does not 1) sell or transfer the properties, 2) become judgment proof, and 3) fail to pay estimated damages of $158,143.10. (Pease Decl., ¶ 11, 16-18.)

Plaintiff has established relative interim harm if the preliminary injunction is denied. First, Plaintiff has presented evidence that the potential amount of damages is $67,742.68, at a minimum, for unpaid rent from October 2020 to November 2021, when Plaintiff was able to secure a new tenant. (Pease Decl., ¶ 9-10; Ex. F.)

While Plaintiff also claimed other incurred expenses totaling $90,400.42, the court sustained Defendant’s objection to the supporting documentation for those expenses. (Pease Decl., ¶ 11; Ex. G.) Second, Plaintiff has established that while Defendant owns two properties, Defendant could become judgment proof if the properties are transferred or sold. (Pease Decl., ¶ 14-17.) In a deposition, Defendant listed rental income in the amount of $2,000 from the two houses and a Social Security pension as sources of income. (Ex. I, p. 16.) Defendant also stated Defendant was retired, that Defendant’s music business had been permanently shut down, and that Defendant lost over $200,000 because of the business being closed. (Ex. I, p. 15; Ex. H, p. 6, Ex. M.) Thus, Plaintiff has established a risk of harm in the form of the inability to collect a judgment if Defendant becomes judgment proof by transferring or selling Defendant’s primary sources of income.

While Plaintiff has established Defendant was a guarantor of the lease allegedly breached and that payments were not made for over a year (Pease Decl., ¶ 8-10, Ex. E, p. 6; Ex. F.), Defendant asserted the defenses of failure to mitigate damages, impossibility, impracticability, and force majeure in Defendant’s answer. (Opposition, p. 3; Ex. L., p. 3-5.)

In the original lease, Defendant points to the “Force Majeure” provision in clause 26.5 which waives tenant and landlord liability for failure to perform obligations under the lease “by reason of . . . government preemption of priorities or other controls in connection with a national or other public emergency.” (Ex. A, p. 49.) However, the same clause also includes the provision of “notwithstanding the foregoing, in no event shall the time for payment of Rents be delayed.” (Ex. A, p. 49.) Thus, Defendant would not be likely to prevail on this defense as the obligation to timely pay rent is not excused by the force majeure clause.

In asserting the defenses of impossibility and impracticability, Defendant points to executive orders from the Governor of California that imposed stay-at-home orders during the COVID-19 pandemic from March 19, 2020 to June 11, 2021. (Request for Judicial Notice, Ex. J., Ex. K.) Defendant asserts a loss of $225,000 after Defendant’s business was closed since March 28, 2020. (Opposition, Ex. M, p. 6.) However, Plaintiff has provided evidence that Defendant continued to make payments under the lease until October 2020. (Pease Decl., ¶ 9-10; Ex. F.) Thus, issues of fact remain on whether the COVID-19 pandemic excused Defendant’s performance and these defenses do not eliminate the likelihood that Plaintiff will succeed in establishing Defendant’s liability for breach of lease agreement.

Defendant also contends that Plaintiff failed to provide any admissible evidence that it had suffered the alleged damages of $158,143.10 or attempted to mitigate those damages. However, as noted above, Plaintiff has provided proof of a minimum of $67,742.68 in damages as unpaid rent. Additionally, Plaintiff established that Plaintiff regained exclusive possession of the premises at issue in December 2020 and did not obtain a new tenant until December 2021. (Pease Decl., ¶ 10, Ex. F.) Even if Plaintiff failed to mitigate damages, that would only reduce the recoverable damages and would not reduce Plaintiff’s likelihood of success in establishing Defendant’s liability. (See Blake v. E. Thompson Petroleum Repair Co. (1985) 170 Cal.App.3d 823, 833 [in negligence action, issues of liability and damages can be tried separately with evidence of failure to mitigate damages only relevant in trial for damages].)

Based on the above analysis, the court finds Plaintiff satisfied its burden justifying the imposition of a preliminary injunction.  The risk of harm to Plaintiff from being unable to collect damages if the subject properties are sold or transferred, coupled with the likelihood of Plaintiff’s success in establishing Defendant’s liability under the lease agreement support this result.

Accordingly, Plaintiff’s motion for a preliminary injunction is GRANTED.  Plaintiff to submit a proposed order which complies with this ruling.