Judge Theresa M. Traber, Case Number: 24STCV00859, Date: 2024-02-23 Tentative Ruling

Judge: Theresa M. Traber, Case: 24STCV00859, Date: 2024-02-23 Tentative Ruling

Case Number: 24STCV00859 Hearing Date: March 21, 2024 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: March 21, 2024 TRIAL DATE: NOT SET

CASE: Wilton Holdings & Management LLC v. 8210 Sunset, LLC et al.

CASE NO.: 24STCV00859

ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION

MOVING PARTY: Plaintiff Wilton Holdings & Management LLC

RESPONDING PARTY(S): Defendant 8210 Sunset, LLC; Intervenor Herbalcure Corporation.

CASE HISTORY:

· 01/12/24: Complaint filed.

· 02/28/24: Complaint in Intervention filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is a breach of contract and wrongful eviction action. Plaintiff alleges that it subleased a commercial property from Defendants to operate a cannabis business. The property allegedly had serious structural and habitability defects which Defendants neither disclosed nor remedied. Plaintiffs further allege that Defendants subsequently locked Plaintiffs out of the property without formally terminating the lease agreement.

The Court granted Plaintiff’s ex parte application for a temporary restraining order on January 18, 2024, and now rules on an Order to Show Cause Re: Preliminary Injunction.

TENTATIVE RULING:

Plaintiff’s Motion for Preliminary Injunction is GRANTED.

Defendants are enjoined from denying Plaintiff access to the subject property, interfering with Plaintiff’s quiet enjoyment and use of the premises, or changing locks or otherwise obstructing access to the premises pending the conclusion of this action.

DISCUSSION:

On January 18, 2024, Plaintiff applied ex parte for a temporary restraining order enjoining Defendants from denying Plaintiff access to the subject property, interfering with Plaintiff’s quiet enjoyment and use of the premises, or changing locks or otherwise obstructing access to the premises. The Court granted the application pending a hearing on a preliminary injunction, and issued an order to show cause why Defendants should not be so enjoined pending resolution of this action. (January 19, 2024 Order to Show Cause.) The Court set a briefing schedule for initial moving papers, which were to be filed on January 25, 2024, with opposition and reply papers to be served and filed per code. (Id.) The Court subsequently granted Herbalcure Corporation leave to intervene, and set a supplemental briefing schedule for Intervenor’s opposition and Plaintiff’s reply brief regarding the injunction. (February 23, 2024 Minute Order.) All parties complied with the briefing schedule, and the Court now rules on the Order to Show Cause.

Legal Standard

A party may request a preliminary injunction “by obtaining and serving an order to show cause,” as Plaintiff has in this case, “when a temporary restraining order is sought.” (Cal. Rule of Court 3.1150(a).)

“An injunction is a writ or order requiring a person to refrain from a particular act.” (Code Civ. Proc. § 525.) “A preliminary injunction may be granted at any time before judgment upon a verified complaint, or upon affidavits if the complaint in the one case, or the affidavits in the other, show satisfactorily that sufficient grounds exist therefor.” (Code Civ. Proc.§ 527(a).) An injunction may be granted in the following cases:

(1) When it appears by the complaint that the plaintiff is entitled to the relief demanded, and the relief, or any part thereof, consists in restraining the commission or continuance of the act complained of, either for a limited period or perpetually.

(2)¿When it appears by the complaint or affidavits that the commission or continuance of some act during the litigation would produce waste, or great or irreparable injury, to a party to the action.

(3)¿¿When it appears, during the litigation, that a party to the action is doing, or threatens, or is about to do, or is procuring or suffering to be done, some act in violation of the rights of another party to the action respecting the subject of the action, and tending to render the judgment ineffectual.

(4) When pecuniary compensation would not afford adequate relief.

(5) Where it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief.

. . . .

(Code Civ. Proc. § 526(a)(1)-(5).)

In deciding whether to issue a preliminary injunction, two factors must be considered prior to issuing a preliminary injunction: (1) the balance of the harm to the applicant should the injunction not issue, compared to the harm to the enjoined party should the injunction issue; and (2) whether the applicant is ultimately likely to prevail on the merits. (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 441-442.) A trial court has broad discretionary powers to grant or deny a request for a preliminary injunction if it does not act capriciously. The court should exercise its judgment in favor of the party most likely to be injured. (Robbins v. Superior Court (1985) 38 Cal.3d 199, 205.) In addition, the two factors are interrelated: the greater the Plaintiff’s showing as to one of the factors, the less that must be shown as to the other factor. (Butt v. State of California (1992) 4 Cal.4th 668, 678.)

Analysis

Plaintiff seeks a preliminary injunction enjoining Defendants from denying Plaintiff access to the subject property, interfering with Plaintiff’s quiet enjoyment and use of the premises, or changing locks or otherwise obstructing access to the premises.

As the central issue here is whether Plaintiff, Defendants, or Intervenor are entitled to control of a parcel of real property, the Court first addresses whether Plaintiff is likely to succeed on the merits of its claims.

1. Likelihood of Success

Plaintiff contends that it is likely to succeed on the merits of its claim for breach of the assignment agreement which sublet the property to Plaintiff.

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

Defendants, as the master tenants of the property, entered an agreement with Plaintiff on June 27, 2023 assigning the rights of subtenancy from Boulevard Nightlife Group, LLC, also a party to that agreement, to Plaintiff from June 27, 2023 to August 31, 2026. (Declaration of Brandon Leopoldus ¶¶ 4-5 Exh. 2.) Plaintiff contends that it complied with the terms of the agreement by delivering a security deposit in the form of a $16,500 check sent on March 13, 2023 and $16,500 in cash delivered in person to Defendant Kermani in April 2023. (Declaration of Maria Camacho ISO Mot. ¶ 5.)

In opposition, Defendants claim that Plaintiff did not provide any evidence of insurance coverage, as required by paragraphs 8.2 and 8.4 of the underlying sublease agreement, before February 7, 2024. (Declaration of Elan Kermani ISO Opp. ¶ 7.) Defendants also claim that Plaintiff failed to take possession of the premises and failed to pay rent. (Id. ¶ 8.) Defendant Kermani’s statements are bare conclusions without specific facts nor supporting documentation. Defendants concede that they entered a new lease agreement with Herbalcure in October 2023. (Kermani Decl. ¶ 8.) However, although the sublease agreement permits Defendants to terminate the subtenant’s right to possession for breach of the sublease, the express language of the sublease states that Defendants may do so “by any lawful means.” (Kermani Decl. Exh. A. ¶ 13.2(a).) A lessor may only lawfully retake possession of a leasehold via an action for unlawful detainer pursuant to Code of Civil Procedure section 1161 et seq. Thus, even if Defendants had offered evidence to support their claim that Plaintiff breached the sublease, they have conceded that they did not lawfully terminate Plaintiff’s subtenancy. The Court therefore finds that Plaintiff has demonstrated a likelihood of success on the merits.

2. Balance of Harms

“Irreparable harm” arises when monetary damages would not be sufficient to remedy the injury. (Wind v. Herbert (1960) 186 Cal.App.2d 276, 285; Code Civ. Proc. § 526(a)(4).) Injuries rising from wrongs of “continuing character” may also constitute “irreparable harm.” (People ex rel. Gow v. Mitchell Bros.’ Santa Ana Theater (1981) 118 Cal.App.3d 863, 871.) An injunction preventing disposal of property is proper if disposal would render the final judgment ineffectual. (Code Civ. Proc. § 526(a)(3); Wilkins v. Oken (1958) 157 Cal.App.2d 603, 606-607.) Real property is presumptively unique such that the loss of possession cannot be adequately relieved by monetary damages. (See Civ. Code § 3387.)

This case concerns the disposition of a parcel of real property. As the Court stated, the central issue to be resolved regarding the injunction as with the action is which of the parties is entitled to possession of the property. Thus, no matter what ruling the Court issues, one party will be deprived of control of the property, and thus will suffer an injury to their right to the property which cannot be remedied by money damages. However, Herbalcure’s right to the property is based on the claim that Plaintiff’s right to the property has been terminated. As discussed above, Plaintiff’s right to the property was not lawfully terminated because no proceeding for unlawful detainer was ever commenced. Herbalcure therefore received no right to the property through a sublease because Defendants lacked lawful possession of the property and, thus, had no possessory rights to convey to Herbalcure via the sublease. Thus, although Herbalcure might be deprived of possession in fact, the balance of harms weighs in favor of Plaintiff because, according to the evidence, Plaintiff is the only party with the right to possession.

Conclusion

Plaintiff has demonstrated a likelihood of success on the merits of its breach of contract claim. As the undisputed facts demonstrate that Defendants did not lawfully terminate Plaintiff’s sublease, the balance of harms weighs in favor of granting the injunction because Herbalcure has no right to the subject property.

CONCLUSION:

Accordingly, Plaintiff’s Motion for Preliminary Injunction is GRANTED.

Moving Party to give notice.

IT IS SO ORDERED.

Dated: March 21, 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.