Judge Salvatore Sirna, Case Number: 23PSCV03469, Date: 2023-12-06 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on a tentative ruling by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Respondent: Defendants Rancho San Jose MHC, LLC, Jonathan K. Romuzga, and Homes by Millennium Inc.

Plaintiff Todd Franssen’s Application for a Preliminary Injunction is DENIED.

This is an action for conversion and fraud arising from a dispute over a mobile home. On October 2, 2023, Plaintiff Todd Franssen was appointed as executor for the estate of Diane Renee Hild, Franssen’s mother. At the time of Hild’s death in May 2023, Hild owned a 1981 Somerset mobile home and rented a space for the mobile home at property owned by Defendant Rancho San Jose Manufactured Home Community, LLC (Rancho San Jose) in Covina. Following Hild’s death, Rancho San Jose’s manager, Defendant Gayle Hyatt, began contacting Franssen regarding missed rent payments. Franssen allegedly promised to pay the past due rent in full once Franssen was appointed executor. While Hyatt initially indicated that this arrangement was acceptable, Hyatt sent Franssen an email on June 12 that requested payment or termination of possession. But Franssen alleges that Hyatt then informed Franssen that the notice was a mere formality and that Rancho San Jose understood payments would be made once Franssen was appointed executor of Hild’s estate.

On September 13, 2023, Franssen received a notice of warehouse lien for the mobile home with a sale date of October 26. On September 27, Franssen’s counsel sent a letter to Rancho San Jose’s counsel that requested an extension of time to pay the warehouse lien. On October 2, the court issued an order appointing Franssen as the executor of Hild’s estate. On October 23, Franssen went to Rancho San Jose’s offices and sought to pay off the warehouse lien with a personal check. Franssen alleged Hyatt told Franssen to wait until Hyatt could confirm the total lien amount from Hyatt’s boss, Defendant Allan Alt, and to make the payment with a cashier’s check. The next day, Hyatt told Franssen that Hyatt would have the total lien amount after 2:30 PM. Later in the afternoon, Hyatt told Franssen that Hyatt still did not know the lien amount. Hyatt also told Franssen that Alt would reach out to Franssen and that the auction for the mobile home had been postponed.

On October 25, 2023, Hyatt told Franssen that Alt would be emailing paperwork to Franssen by the next day. Franssen alleges no paperwork came the next day. On October 27, Hyatt emailed Franssen a proposed settlement agreement that requested Franssen make a payment of $13,074.41 by October 28. Franssen alleges Franssen missed this email and did not learn about it until October 30 when Hyatt emailed Franssen with a notice that the mobile home had been sold and that Franssen had until November 15 to retrieve Hild’s property from mobile home. Franssen alleges Defendants Jonathan K. Romuzga and Homes by Millenium Inc. (HBM) purchased the mobile home without an auction for approximately $5,000 and subsequently listed the mobile home for sale with a listing price of $159,000.

On November 7, 2023, Franssen, as the administrator of Hild’s estate, filed a complaint against Rancho San Jose, Rancho San Jose Covina LLC (Rancho San Jose Covina), Alt, Hyatt, Romuzga, HBM, and Does 1-25, alleging the following causes of action: (1) conversion, (2) intentional interference with prospective economic advantage, (3) violation of Business and Professions Code section 17200 et seq., (4) fraud, and (5) conspiracy.

On November 9, 2023, Franssen filed an ex parte application for a temporary restraining order and preliminary injunction. On November 13, the court denied Franssen’s application for a temporary restraining order and set a hearing for Franssen’s requested preliminary injunction. On November 29, Franssen dismissed Rancho San Jose Covina from the present action.

A hearing on Franssen’s requested preliminary injunction is set for December 6, 2023, and a case management conference is set for April 3, 2024.

Franssen seeks a preliminary injunction to enjoin all defendants from selling, transferring, gifting, exchanging, or possessing Hild’s mobile home. For the following reasons, the court DENIES Franssen’s request.

“[A] court will deny a preliminary injunction unless there is a reasonable probability that the plaintiff will be successful on the merits, but the granting of a preliminary injunction does not amount to an adjudication of the merits.” (Beehan v. Lido Isle Community Assn. (1977) 70 Cal.App.3d 858, 866.) “The function of a preliminary injunction is the preservation of the status quo until a final determination of the merits.” (Ibid.)

In evaluating a party’s request for a preliminary injunction, courts consider “(1) how likely it is that the moving party will prevail on the merits, and (2) the relative harm the parties will suffer in the interim due to the issuance or nonissuance of the injunction.” (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.) “[T]he greater the . . . showing on one, the less must be shown on the other to support an injunction.” (Ibid, quoting Butt v. State of California (1992) 4 Cal.4th 668, 678.) The balancing of harm between the parties also “involves consideration of such things as the inadequacy of other remedies, the degree of irreparable harm, and the necessity of preserving the status quo.” (Husain v. McDonald’s Corp. (2012) 205 Cal.App.4th 860, 867, quoting Abrams v. St. John’s Hospital & health Center (1994) 25 Cal.App.4th 628, 636.)¿The burden of proof is on the plaintiff as the moving party “to show all elements necessary to support issuance of a preliminary injunction.” (O’Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.)

As an initial matter, the court declines to consider the untimely opposition filed by Romuzga and HBM. As the court noted in its minute order setting the briefing schedule, late submissions will not be considered.

In this case, Franssen argues allowing Defendants to proceed with the sale or transfer of the mobile home would cause Franssen great and irreparable harm. But with regards to Rancho San Jose, Hyatt, and Alt, it is unclear how an injunction would prevent such a transfer or sale when Franssen has alleged these Defendants already sold the mobile home to Romuzga and HBM. (Complaint, ¶ 42.) “As a general rule, an injunction lies to prevent threatened injuries and has no application to completed wrongs for the redress of which the plaintiff is relegated to an action at law. Obviously, a completed wrong cannot be corrected by a preliminary injunction, the purpose of which is to preserve the status quo until after final judgment, though the facts be such that the plaintiff is entitled to some form of permanent relief.” (McManus v. KPAL Broadcasting Corp. (1960) 182 Cal.App.2d 558, 563.) Thus, because these Defendants have already committed the alleged wrongful act of selling or auctioning the mobile home, there is nothing for the court to enjoin as to these Defendants.

As to Romuzga and HBM, Franssen argues the sale or transfer of the home to a bona fide purchaser will prevent Franssen from challenging the improprieties of the sale. But Franssen provides no legal authority to support this claim. Furthermore, even if Romuzga and HBM’s sale or transfer of the mobile home could cause great and irreparable harm to Franssen, the court finds injunctive relief would be improper as Franssen failed to demonstrate a likelihood of prevailing on Franssen’s claims against Romuzga and HBM as detailed below.

Franssen’s first cause of action for conversion, second cause of action for intentional interference with prospective economic advantage, third cause of action for unlawful, unfair, or fraudulent business practices, and fifth cause of action for conspiracy all derive from Franssen’s claim that the sale of the mobile home was wrongful and violated Commercial Code section 7210.[1] (Complaint, ¶ 47, 52, 59, 68.) Commercial Code section 7210 lays out the requirements for the enforcement of a warehouse lien and states “[a] warehouse is liable for damages caused by failure to comply with the requirements for sale under this section and, in case of willful violation, is liable for conversion.” (Com. Code, § 7210, subd. (i).)

With regards to purchasers, “[a] purchaser in good faith of goods sold to enforce a warehouse's lien takes the goods free of any rights of persons against which the lien was valid, despite the warehouse’s noncompliance with this section.” (Com. Code, § 7210, subd. (e).) Unlike other good faith purchaser defenses, this section requires a valid warehouse lien. (See Nist v. Hall (2018) 24 Cal.App.5th 40, 46 & fn. 3.) Here, Franssen argues the warehouse lien was invalid because the other Defendants failed to comply with the requirements of Commercial Code section 7210. But Franssen’s argument contradicts the plain language of Commercial Code section 7210, subdivision (e). If noncompliance with Commercial Code section 7210 rendered a warehouse lien invalid, then subdivision (e)’s excusal of noncompliance with this section would be rendered superfluous. (See People v. Arias (2008) 45 Cal.4th 169, 180 [noting the court avoids statutory interpretations that render words superfluous].)

Subdivision (e)’s validity requirement refers to the lien’s compliance with the law, notwithstanding any noncompliance with Commercial Code section 7210. Instead, a warehouse lien’s validity depends upon its compliance with Civil Code section 798.56a, subdivision (e)(1) and Commercial Code section 7209. Civil Code section 798.56a, subdivision (e)(1) authorizes warehouse liens for mobile homes pursuant to Commercial Code section 7209 which describes the general requirements for a warehouse lien. Franssen does not argue the warehouse lien was invalid pursuant to these other provisions. Thus, the court finds the validity of the warehouse lien is not at issue.

For the purposes of determining if a purchase is made in good faith, “good faith” is defined as “honesty in fact and the observance of reasonable commercial standards of fair dealing.” (Com. Code, § 7102, subd. (a)(6).) Here, Franssen failed to allege how Romuzga and HBM were untruthful and failed to observe reasonable commercial standards of fair dealing. Instead, Franssen’s allegations address conduct by the other Defendants.

First, Franssen alleges Hyatt told Franssen that Hyatt wanted Franssen to sell the mobile home to Romuzga. (Complaint, ¶ 25.) But Hyatt’s preference for a purchaser of the mobile home does not convert Romuzga and HBM into bad faith purchasers without additional facts.

Second, Franssen alleges the mobile home was sold to Romuzga and HBM without an actual auction for $5,000. (Complaint, ¶ 42.) But as Commercial Code section 7210, subdivision (e) makes clear, the other Defendants’ alleged failure to comply with the proper lien enforcement procedures does not affect the title of a good faith purchaser. Franssen also suggests Romuzga and HBM were operating in bad faith because they purchased Hild’s mobile home at a private sale instead of a public auction in violation of Commercial Code section 7210, subdivision (b). But while this subdivision requires a public auction for enforcement of warehouse liens, subdivision (a) of the same section also allows a warehouse lien to be enforced by a private sale of goods. Although a warehouse is generally required to enforce its lien through the requirements in subdivision (b), it may also do so pursuant to subdivision (a) if the lien involved “goods stored by a merchant in the course of its business.” (Com. Code, § 7210, subd. (b).)

The Commercial Code defines merchant as “a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.” (Com. Code, § 2104, subd. (1).) Because Franssen alleged Rancho San Jose was in the business of operating a mobile home community and the present lien involves a mobile home “stored” at that community, it appears the exception in subdivision (b) could apply. (Complaint, ¶ 2.) Furthermore, Franssen does not address this distinction or explain why only subdivision (b) is applicable and fails to point to any specific conduct by Romuzga and HBM that establishes they were bad faith purchasers.

Last, to the extent Franssen alleges on information and belief that Romuzga and HBM were part of a conspiracy to deprive mobile home owners of their homes and have done so in the past (See Complaint, ¶ 44), Franssen failed to support this vague and conclusory claim with any further evidence or facts. Thus, Franssen failed to carry the burden of establishing a likelihood of prevailing on the merits.

Based on the foregoing, the court DENIES Franssen’s request for a preliminary injunction.

_____________________________________________________________________________________________________

[1] Franssen erroneously refers to this section as Civil Code section 7210, which does not exist.