Judge: Stephen I. Goorvitch, Case: 24STCV09841, Date: 2024-04-26 Tentative Ruling

Case Number: 24STCV09841    Hearing Date: April 26, 2024    Dept: 82

L and R Auto Parks, Inc. v. Ocean Blue Investments, LLC, et al.

Case No. 24STCV09841

Ex Part Application for Temporary Restraining Order and OSC re: Preliminary Injunction

INTRODUCTION

            Plaintiff L and R Auto Parks, Inc. (“Plaintiff”) filed this action against Ocean Blue Investments, LLC (“Ocean Blue”) and Illusion Holdings, LLC (“Illusion Holdings”).  Plaintiff, which manages parking facilities, alleges that Defendants unlawfully terminated their agreement.  Plaintiff seeks a temporary restraining order requiring Defendants to terminate their current parking manager and re-install Plaintiff as the parking manager pending trial.  Plaintiff’s ex parte application is denied because Plaintiff does not establish a reasonable likelihood of success on the merits or irreparable harm. 

BACKGROUND

Plaintiff alleges as follows: For the last 60 years, Plaintiff and its affiliate entities have owned and operated parking garages and surface lots across downtown Los Angeles.  (Complaint ¶ 1.)  In 2003, Plaintiff sold one property to Defendants, and the terms of the sale required Defendants to lease back to Plaintiff a surface parking lot.  (Id., ¶ 3.)  In 2010, Plaintiff sued Defendants for a breach of the lease and purchase and sale agreement.  (Id., ¶ 5.)  The case settled.  (Ibid.)  Per the settlement agreement, the parties would enter into a 15-year management agreement, a copy of which is attached to Plaintiff’s contract.  (Id., ¶ 6.)  Plaintiff alleges that this agreement affords a “possessory interest” in the property.  (Ibid.)  Even if so, the management agreement contains a termination clause.  (Id., Exh. #3, ¶ 10.1.) 

Plaintiff concedes the following facts: For approximately 11 years, Plaintiff failed to charge Defendants for certain expenses, viz., those relating to increases in minimum wage.  (Declaration of Kevin Litwin, ¶ 2.)  Plaintiff sought reimbursement for four years of these expenses, totaling $167,657.88.  (Ibid.)  Defendant refused to pay the invoice.  (Id., ¶ 3.)  Therefore, Plaintiff took matters into its own hands and began making deductions from its monthly payments to Defendants.  (Ibid.)  Plaintiff’s first deduction was $13,954.52.  (Ibid.)

According to Plaintiff, Defendants locked Plaintiff out of the property and barred it from carrying out its management responsibilities.  According to Defendants, they exercised their termination option based upon Plaintiff’s breach of the agreement.  Plaintiff now seeks a temporary restraining order prohibiting Defendants from “[i]nterfering with Plaintiff’s possessory interest in and access to the parking garage,” and “[i]nterfering with Plaintiff’s parking management responsibilities and other related business activities on the property.”  In other words, Plaintiff asks this court to require Defendants to terminate Plaintiff’s replacement and re-install Plaintiff as the parking management company until the matter is resolved.

LEGAL STANDARD

The purpose of a provisional relief is to preserve the status quo pending a decision on the merits.  (Major v. Miraverde Homeowners Ass’n. (1992) 7 Cal. App. 4th 618, 623.)  The court considers two factors, including “(1) the likelihood that the plaintiff will prevail on the merits, and (2) the relative balance of harms that is likely to result from the granting or denial of interim injunctive relief.”  (White v. Davis (2003) 30 Cal.4th 528, 553-54.)  The factors are interrelated, with a greater showing on one permitting a lesser showing on the other.  (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.)  However, the party seeking an injunction must demonstrate at least a reasonable probability of success on the merits.  (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 73-74.)  The party seeking injunctive relief  bears the burden of demonstrating both a likelihood of success on the merits and the occurrence of irreparable harm.  (Savage v. Trammell Crow Co. (1990) 223 Cal.App.3d 1562, 1571.) Irreparable harm may exist if the plaintiff can show an inadequate remedy at law.  (Code Civ. Proc. § 526(a).)

DISCUSSION

            As an initial matter, Plaintiff does not seek to maintain the status quo.  Instead, Plaintiff seeks a mandatory temporary restraining order (and preliminary injunction) that would impose affirmative obligations upon Defendants to terminate their current parking manager and restore Plaintiff to that position.  The issuance of mandatory injunctions is subject to the same analysis as prohibitory injunctions.  (See Ryland Mews Homeowners Assn. v. Munoz (2015) 234 Cal.App.4th 705, 711.)  However, a mandatory injunction “is rarely granted and subject to stricter review on appeal.”  (Board of Supervisors v. McMahon (1990) 219 Cal.App.3d 286, 295.) 

            Plaintiff does not establish a reasonable likelihood of success on the merits.  Plaintiff concedes that it failed to account for approximately 11 years of expenses due to its own negligence and not through any fault of Defendants.  When Defendants failed to reimburse these expenses, Plaintiff concedes that instead of filing a lawsuit to recover these amounts under the contract, it took matters into its own hands and simply withheld money owed under the contract.  Plaintiff identifies nothing in the contract that permits them to withhold expenses years after they were incurred.  To the contrary, the contract permits Plaintiff to deduct these expenses only “on the 25th day of the month in which such fee is earned.”  (See id., Exh. #3, ¶¶ 5.1 & 5.2.)  Plaintiff does not account for its own failures to keep accurate records and provide accurate income and expense statements to Defendants, as required by the contract.  (See id., Exh. #3, ¶¶ 7.1 & 7.2.)  The contract permits Defendants to terminate Plaintiff for not paying them and breaching other material terms.  (See Complaint, Exh. #3, ¶ 10.1.)  For these reasons, the court cannot conclude that Plaintiff has established a reasonable likelihood of success on the merits.

            Nor has Plaintiff established irreparable harm.  Plaintiff has an adequate remedy at law for monetary damages.  Plaintiff argues that it will suffer irreparable harm to its business operations: “In locking Plaintiff out of the Property and handling those customers to a competitor, Defendants are destroying Plaintiff’s entire business operation at the Property that goes back for decades.”  (Plaintiff’s Ex Parte Application, p. 14:9-10.)  Plaintiff does not establish to the satisfaction of the court that customers select parking services based upon the identity of the parking management company.  In other words, Plaintiff does not eliminate the prospect that customers select parking services based upon the location and physical layout of the parking lot, as well as the amount of the parking fees. 

CONCLUSION AND ORDER

             Based upon the foregoing, Plaintiff’s ex parte application is denied.  Plaintiff’s counsel shall provide notice and file proof of service with the Court.