Judge Theresa M. Traber, Case Number: 23STCV24766, Date: 2024-01-05 Tentative Ruling

Judge: Theresa M. Traber, Case: 23STCV24766, Date: 2024-01-05 Tentative Ruling

Case Number: 23STCV24766 Hearing Date: February 22, 2024 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: February 22, 2024 TRIAL DATE: NOT SET

CASE: David Oday, et al. v. 118 Wadsworth Avenue Homeowners Association, et al.

CASE NO.: 23STCV24766

HEARING ON ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION

MOVING PARTY: Plaintiffs David Oday and Lakota Patrick Ford

RESPONDING PARTY(S): Defendants 118 Wadsworth Avenue Homeowners Association; Carl Kubitz

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is a breach of contract and habitability defect action filed on October 11, 2023. Plaintiffs allege Defendants refused to replace the roof of Plaintiff’s condominium, causing extensive water damage and mold throughout the unit. Plaintiffs also allege Defendants improperly issued special assessments in violation of the operative covenants, conditions, and restrictions on the property, and retaliated against Plaintiffs for raising these issues.

The Court granted Plaintiffs’ ex parte application for a temporary restraining order on December 14, 2023, and now rules on an Order to Show Cause Re: Preliminary Injunction.

TENTATIVE RULING:

The Court issues the following preliminary injunction:

Defendant 118 Wadsworth Avenue Homeowners Association, its employees, agents, including Tier 1 Collections, or any other persons acting with it or on its behalf is enjoined from:

1) Proceeding with any further action under the Notice of Delinquent Assessment, recorded against the real property located at 118 Wadsworth Ave., Unit 8, Santa Monica, California 90405, assessor’s parcel number 42880017-043 (the “Subject Property”), on November 21, 2023, as document number 20230807916 in the official records of Los Angeles County;

2) Filing any further notices of delinquent assessments or sale of the Subject Property to satisfy any alleged delinquent assessments relating to the assessments identified in the Notice of Delinquent Assessment recorded on November 21, 2023; except that Defendant One Eighteen Wadsworth Avenue Homeowners’ Association may assert as cross-claims in this action any causes of action arising from the assessments in dispute, and may take all measures which are necessary prerequisites to asserting those claims, including serving the relevant Notices described in Civil Code sections 5705 and 5710.

3) From taking any action of any kind concerning the Subject Property, including but not limited to, interfering with, non-judicially foreclosing on, or selling or otherwise disposing of the land or premises, based on the Notice of Delinquent Assessment, recorded on November 21, 2023;

4) For an order enjoining Defendant One Eighteen Wadsworth Avenue Homeowners’ Association from taking any further action to collect based on the Notice of Delinquent Assessment, recorded on November 21, 2023;

5) For an order staying any non-judicial foreclosure action based on the Notice of Delinquent Assessment, recorded on November 21, 2023.

Plaintiffs are ordered to post an undertaking in the amount of $70,416.09 within 30 days of this order pursuant to Code of Civil Procedure sections 529 and 1030.

DISCUSSION:

On December 12, 2023, Plaintiffs applied ex parte for a temporary restraining order enjoining Defendants from proceeding with collection or non-judicial foreclosure on the subject property. Following a hearing on the matter, the Court granted the application, scheduled a hearing on an Order to Show Cause Re: Preliminary Injunction, and issued a Temporary Restraining Order pending this hearing which restrained and enjoined Defendant 118 Wadsworth Avenue Homeowners Associations and its employees, agents, or other persons acting with it or on its behalf from:

1) Proceeding with any further action under the Notice of Delinquent Assessment, recorded against the real property located at 118 Wadsworth Ave., Unit 8, Santa Monica, California 90405, assessor’s parcel number 4288-017-043 (the “Subject Property”), on November 21, 2023, as document number 20230807916 in the official records of Los Angeles County;

(2) Filing any further notices of delinquent assessments or selling the subject property to satisfy any alleged delinquent assessments;

(3) From taking action of any kind concerning the subject property, including but not limited to, interfering with, non-judicially foreclosing on, or selling or otherwise disposing of the land or premises; and

(4) Taking any further action to collect alleged delinquent assessments.

(December 14, 2023 Minute Order.) The Court also stayed Defendant’s non-judicial foreclosure action pending this hearing. (Id.)

The Court ordered Defendant 118 Wadsworth Avenue Homeowners Association to appear to show cause why a preliminary injunction should not be ordered restraining Defendant, its employees, agents, including Tier 1 Collections, or any other persons acting on its behalf from:

(1) Proceeding with any further action under the Notice of Delinquent Assessment, recorded against the real property located at 118 Wadsworth Ave., Unit 8, Santa Monica, California 90405, assessor’s parcel number 4288-017-043 (the “Subject Property”), on November 21, 2023, as document number 20230807916 in the official records of Los Angeles County;

(2) Filing any further notices of delinquent assessments or selling the subject property to satisfy any alleged delinquent assessments;

(4) For a temporary restraining order rescinding Defendant 118 Wadsworth Avenue Homeowners’ Association Notice of Delinquent Assessment;

(5) For a temporary restraining order enjoining Defendant 118 Wadsworth Avenue Homeowners’ Association from taking any further action to collect alleged delinquent assessments; and

(6) For a temporary restraining order staying the non-judicial foreclosure action. Moreover, during the pendency of this action:

(7) Defendant 118 Wadsworth Avenue Homeowners Association’s Notice of Delinquent Assessment is rescinded;

(8) Defendant 118 Wadsworth Avenue Homeowners Association’s Notice of Delinquent Assessment non-judicial foreclosure action is stayed.

(Id.) The Court set a briefing schedule for opposition and reply briefs, which the parties complied with. The Court held a hearing on the motion for preliminary injunction on January 5, 2024, when Defendant raised new arguments regarding the proper scope of a preliminary injunction raising contentions and citing authorities not previously briefed by Defendant. Further, it was revealed by Plaintiff’s counsel that he never received Defendant’s opposition brief filed on December 22, 2023, and, thus, did not have an opportunity to respond to Defendant’s request that the Court impose a bond requirement.

After reviewing the initial papers and considering the arguments presented at the January 5, 2024 hearing, the Court ruled that Plaintiffs had demonstrated that they are entitled to a preliminary injunction because they had demonstrated (1) a substantial risk of irreparable harm arising from the threat of nonjudicial foreclosure represented by Defendant’s collections action. (January 5, 2024 Minute Order p. 9) and (2) because Plaintiff Oday had demonstrated a likelihood of success on the merits of his breach of contract claim. (Id. p. 11.) The Court ordered, however, that Items (4) and (7) of Plaintiffs’ request for preliminary injunction be stricken because they constituted mandatory injunctive relief that was not justified by the evidence presented. (Id.) The Court requested further briefing from the parties regarding the proper scope of the injunction and the request for a bond requirement, declined to issue the injunction pending that supplemental briefing, set the matter for further hearing, and ordered that the temporary restraining order remain in force through the date of the further hearing. (Id. pp. 11-12.)

The parties served and filed their supplemental briefing pursuant to the Court’s order. The Court has reviewed these papers, and now sets forth its ruling on the scope of the injunction and the bond issue as set forth below.

Scope of Injunction

Defendant proposes that the Court issue the following injunction to preserve Defendant’s right to assert a cross-claim for judicial foreclosure:

(1) Upon issuance of this preliminary injunction order, the Plaintiffs shall at all times meet the following conditions:

a. Plaintiffs shall pay any and all newly levied assessments pursuant to Civil Code §5600;

b. Plaintiffs shall stay current on their mortgage to any prevent any default which may cause the foreclosure by any other creditor on the property known as 118 Wadsworth Ave., Unit 8, Santa Monica, California 90405 (“Subject Property”);

c. Plaintiffs shall keep current on their property taxes for Subject Property and not allow for any delinquencies that will cause the County to commence foreclosure proceedings; and

d. Plaintiffs shall not engage in any new violations of the Association’s Governing Documents (Civil Code §4150) while the preliminary injunction is in effect which may cause for new assessments to be levied onto the Subject Property;

e. Plaintiffs shall immediately post their bond or may make a cash deposit with the Court (CCP §995.710) with the court in the amount of $77,091.09; and

(2) Defendant Association and its collection vendor Tier One shall be enjoined from posting a notice of sale pursuant to Civil Code §2924.8.

(3) Excluded from the preliminary injunction order are as follows: Defendant Association shall be entitled to serve any and all notices that are not a Notice of Sale (Civil Code §2924.8) so that it may pursue any and all causes of action that may arise from Plaintiffs delinquent assessments, and specifically Defendants may complete the process with serving the relevant Notices described in Civil Code §5705 and Civil Code §5710.

(4) Defendant Association may make a motion to dissolve the injunctive order at any time Plaintiff fails to meet the conditions of this Order.

(Defendant’s Supp. Opp. p.8:27-9:22.)

Defendant’s proposed injunction imposes only limited restrictions on Defendant’s conduct while placing extensive limitations on Plaintiffs, as if Defendant were the party seeking a preliminary injunction. Moreover, Defendant offers little explanation for this proposed scope and has instead devoted most of its brief to repeating the arguments raised in opposition to the injunction itself and previously rejected by the Court. The Court did not invite further briefing on whether an injunction was warranted, and these portions of Defendant’s supplemental briefing fall entirely outside the scope of the Court’s January 5 order. Further still, the Court considered these arguments when they were raised in the original opposition and found them unpersuasive. The Court finds, moreover, that the injunction proposed by Defendant is an overbroad solution to the issues it seeks to address.

In reply, Plaintiffs offer the following counterproposal:

Defendant One Eighteen Wadsworth Avenue Homeowner’s Association is enjoined from:

5) For an order staying the non-judicial foreclosure action based on the Notice of Delinquent Assessment, recorded on November 21, 2023.

(Supp. Reply p. 3:1-16.)

Plaintiffs’ proposed injunction appears to miss the point of Defendant’s arguments as presented in the previous hearing. Defendant’s chief objection to the originally proposed injunction, as argued, was that it would bar Defendant from serving notices which are a necessary prerequisite to asserting cross-claims for judicial foreclosure, pursuant to Civil Code sections 5705 and 5710. Although Plaintiffs’ proposal constrains its restriction on further Notices of Delinquent Assessment to only the assessments that are presently in dispute, this proposal does not appear to preserve Defendant’s ability to complete those prerequisites, because it restricts Defendant from taking any further action on the subject property under Item (2). The Court therefore will modify Item (3) of this proposal to further state “except that Defendant One Eighteen Wadsworth Avenue Homeowners’ Association may assert as cross-claims in this action any causes of action arising from the assessments in dispute, and may take all measures which are necessary prerequisites to asserting those claims, including serving the relevant Notices described in Civil Code sections 5705 and 5710.” The Court also revises Item (2) to limit it to actions taken “based on the Notice of Delinquent Assessment, recorded on November 21, 2023.”

Undertaking

Defendants requested that the Court require Plaintiffs to post an undertaking in the amount of $77,091.09, representing the outstanding assessments on the property set forth in the Notice of Delinquent Assessment. (See RJN Exh. 2.) Code of Civil Procedure section 529 requires that, when an injunction is granted, “the court or judge must require an undertaking on the part of the applicant to the effect that the applicant will pay to the party enjoined any damages, not exceeding an amount to be specified, the party may sustain by reason of the injunction, if the court finally decides that the applicant was not entitled to the injunction.” (Code Civ. Proc. § 529(a).)

Defendant argues that Plaintiffs should not be permitted to address the bond issue in supplemental reply because Plaintiffs’ counsel purportedly misrepresented that Plaintiffs were not served with the original opposition. Defendant provides no evidence demonstrating that Plaintiffs’ counsel made any misrepresentations to the Court. Defendant is not in a position to opine on whether Plaintiffs’ counsel received the original opposition, only whether it was sent. That Defendant’s counsel did not receive a bounce-back notification when service was attempted is not evidence of receipt: it is instead the absence of evidence. (See Declaration of Maria Kao ISO Supp. Opp. ¶¶ 2-3.) The Court is therefore not persuaded that it should reject the supplemental reply brief.

In any event, Plaintiffs’ supplemental brief does not object to an order requiring that a bond be posted. Plaintiffs merely dispute the proper amount of the bond, stating that Plaintiff Oday made a payment of $6,675.00 on December 22, 2023, after the motion had been filed. (See Declaration of Scott Kalter ISO Reply [not Supplemental Reply] ¶ 4, Exh. 3.) Plaintiffs contend that this payment reflected assessments which are not being challenged and should therefore be subtracted from the bond sought by Defendants. The Court concurs.

The Court therefore orders Plaintiffs to post a bond in the amount of $70,416.09 pursuant to Code of Civil Procedure section 529.

CONCLUSION:

Accordingly, the Court issues the following preliminary injunction:

Defendant 118 Wadsworth Avenue Homeowners Association, its employees, agents, including Tier 1 Collections, or any other persons acting with it or on its behalf is enjoined from:

6) Proceeding with any further action under the Notice of Delinquent Assessment, recorded against the real property located at 118 Wadsworth Ave., Unit 8, Santa Monica, California 90405, assessor’s parcel number 42880017-043 (the “Subject Property”), on November 21, 2023, as document number 20230807916 in the official records of Los Angeles County;

7) Filing any further notices of delinquent assessments or sale of the Subject Property to satisfy any alleged delinquent assessments relating to the assessments identified in the Notice of Delinquent Assessment recorded on November 21, 2023; except that Defendant One Eighteen Wadsworth Avenue Homeowners’ Association may assert as cross-claims in this action any causes of action arising from the assessments in dispute, and may take all measures which are necessary prerequisites to asserting those claims, including serving the relevant Notices described in Civil Code sections 5705 and 5710.

8) From taking any action of any kind concerning the Subject Property, including but not limited to, interfering with, non-judicially foreclosing on, or selling or otherwise disposing of the land or premises based on the Notice of Delinquent Assessment, recorded on November 21, 2023;

9) For an order enjoining Defendant One Eighteen Wadsworth Avenue Homeowners’ Association from taking any further action to collect based on the Notice of Delinquent Assessment, recorded on November 21, 2023;

10) For an order staying the non-judicial foreclosure action based on the Notice of Delinquent Assessment, recorded on November 21, 2023.

Plaintiffs are ordered to post an undertaking in the amount of $70,416.09 within 30 days of this order pursuant to Code of Civil Procedure sections 529 and 1030.

Moving Parties to give notice.

IT IS SO ORDERED.

Dated: February 22, 2024 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.