Zhu vs. Wu

9. 30-2025-01514516 1. Case Management Conference 2. Motion for Preliminary Injunction Zhu vs. Wu Plaintiffs Shujun Zhu and Blue Gum Warehouse, LLC (“Plaintiffs”) move for a preliminary injunction and asks the Court for an order: (1) enjoining Defendants Ji Wu, John Chung-Ching Tu, and Peakland Warehouse 1315, Inc. from interfering with Plaintiff Shujun Zhu’s exercise of 56.7% of the voting rights in Blue Gum Warehouse, LLC, (2) suspending and enjoining Defendants’ voting and governance rights in Blue Gum Warehouse, LLC during the pendency of this action, (3) enjoining the dissipation or transfer of Blue Gum Warehouse, LLC assets, and (4) mandating preservation of all financial records of Blue Gum Warehouse, LLC, Peakland Management Anaheim, Inc., and Peakland Warehouse 1315, Inc., and requiring Defendants to maintain and not destroy, alter, conceal, or transfer any books, records, bank statements, ledgers, leases, or other financial documents relating to Blue Gum Warehouse, LLC.

Defendants Ji Wu, John Chung-Ching Tu, and Blue Gum Warehouse, LLC (“Defendants”) oppose the motion.

The Motion is GRANTED in part and DENIED in part, as follows:

The Motion is GRANTED as to Plaintiff’s request to mandate the preservation of all financial records of Blue Gum Warehouse, LLC, Peakland Management Anaheim, Inc., and Peakland Warehouse 1315, Inc., and requiring Defendants to maintain and not destroy, alter, conceal, or transfer any books, records, bank statements, ledgers, leases, or other financial documents relating to Blue Gum Warehouse, LLC.

The Motion is DENIED as to the other requests.

A. Preliminary Injunction

“An injunction is a writ or order requiring a person to refrain from a particular act.” (Code Civ. Proc., § 525.) “It may be granted by the court in which the action is brought, or by a judge thereof; and when granted by a judge, it may be enforced as an order of the court.” (Code Civ. Proc., § 525.)

Pursuant to Code of Civil Procedure section 527:

“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. No preliminary injunction shall be granted without notice to the opposing party.” (Code Civ. Proc., § 527(a).)

“A trial court may grant a preliminary injunction upon a showing that (1) the party seeking the injunction is likely to prevail on the merits at trial, and (2) the interim harm to that party if an injunction is denied is greater than the [interim] harm the [opposing party] is likely to suffer if the ... injunction is issued.” (Integrated Dynamic Solutions, Inc. v. VitaVet Labs, Inc. (2016) 6 Cal.App.5th 1178, 1183 [internal quotations omitted].)

“These two showings operate on a sliding scale: ‘[T]he more likely it is that [the party seeking the injunction] will ultimately prevail, the less severe must be the harm that they allege will occur if the injunction does not issue.’ [Citation.]” (Integrated Dynamic Solutions, Inc. v. VitaVet Labs, Inc. (2016) 6 Cal.App.5th 1178, 1183.)

The burden is on 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.)

“Although preliminary injunctions are generally designed to preserve the status quo pending a determination on the merits of the action, [citation], they are not so limited.” (Integrated Dynamic Solutions, Inc. v. VitaVet Labs, Inc. (2016) 6 Cal.App.5th 1178, 1183–1184 [internal quotations and citations omitted].) “A court also has the power to issue a preliminary injunction that mandates an affirmative act that changes the status quo [citation], but should do so only in those extreme cases where the right thereto is clearly established.” (Id., at 1184.)

“Although the status quo for these purposes can be easily defined as the last actual peaceable, uncontested status which preceded the pending controversy [citation], determining whether a particular order alters the status quo can be more difficult.” (Integrated Dynamic Solutions, Inc. v. VitaVet Labs, Inc. (2016) 6 Cal.App.5th 1178, 1184 [internal quotations and citations omitted].)

Importantly, a ruling on an application for preliminary injunction is NOT an adjudication on the merits of the ultimate rights in controversy. (Shoemaker v. County of Los Angeles (1995) 37 Cal.App.4th 618, 625 [the “decision [on the preliminary injunction] does not constitute a final adjudication of the ultimate rights in controversy.”].) It merely represents the trial court’s discretionary decision whether defendant should be restrained from exercising a claimed right pending trial. (Cohen v. Board of Supervisors (9185) 40 Cal.3d 277, 286.)

B.

Analysis

Here, the Court find that the sliding scale weighs in favor of denying the motion.

Based on the evidence submitted by both parties, the Court is not positioned to make any determinations on the merits of the facts of the case and therefore cannot determine the likelihood that the Plaintiffs will prevail on the merits of this case at trial In fact, Plaintiff failed to address the causes of action alleged in the Complaint and therefore has not sufficiently address the likelihood that Plaintiff will prevail at trial.

Even so, the moving and opposing papers submit conflicting evidence wherein both parties claim to be the rightful party in control. When considering the conflicting evidence, the Court is not positioned to determine who is the credible party, who owns the majority shares, and who committed any wrongdoings.

Plaintiff cites to Meyberg v. Superior Court of Los Angeles County (1942) 19 Cal.2d 336, 341 for his contention that “Courts of equity have power to protect the voting rights of shareholders as an incident of property ownership” and “[i]f a court of equity has the power to enjoin the voting of stock it also has the power to restrain unlawful interference with a stockholder's right to vote stock owned by him.”

While this may be true, the Court still is not persuaded that Plaintiff has established that he truly controls 56.7% of the voting rights pursuant to the Operating Agreement of Blue Gum Warehouse LLC.

Plaintiff argues that he control 56.7% of the voting rights based on his $1.5 million in capital contributions to the company. The Operating Agreement of Blue Gum Warehouse LLC and the

related Articles of Incorporation, however, show that Plaintiff only has a 30% ownership interest and therefore 30% of the voting rights. In his Complaint, Plaintiff alleges that “[a]t all times relevant to the events alleged herein, Plaintiff was the owner of a 35% membership interest in Blue Gum.” (Complaint, ¶ 6.) Although, the Court notes that this is not a verified Complaint. Moreover, Plaintiff’s Verified Petition for Writ of Mandate signed on 12/18/2024 states that “Petitioner Zhu is the owner of record of 35% of the issued and outstanding membership interests in Blue Gum.” (Verified Petition, ¶ 5.)

While Plaintiff argues that he has contributed 56.7% of the capital to the company, Plaintiff does not show proof of an agreement with the corporation and/or its members or managements that he contributed the additional capital in exchange for additional ownership or voting interest. The evidence before the Court shows no agreements or meeting of the minds that would establish that the additional capital was contributed in exchange for additional shares. Similarly, the Operating Agreement appears to show that such interest must only be memorialized by a Certificate of Membership Interest. Plaintiff does not present such a Certificate of Membership Interest that establishes his claimed 56.7% interest in the company.

Accordingly, the Court is not positioned to determine whether either Plaintiff is likely to succeed on the merits of the claims asserted in the operative complaint

Additionally, the Court is not persuaded that the interim harm to that Plaintiff if an injunction is denied is greater than the interim harm the Defendants are likely to suffer if the injunction is issued. The only harm that Plaintiff alleges will occur appears to have already occurred. On reply, Plaintiff provided evidence of what appears to be a Grant Deed that transfers the property at issue from Blue Gum Warehouse, LLC to Waterwind LLC. Both parties contend that they will lose their voting power if the Court rules against them – making the harm equal. [Optional to include: The Court is not prepared to disturb the status quo of the operation of Blue Gum Warehouse, LLC pending a determination on the merits of the action.]

Given the above, the Motion is GRANTED as to Plaintiff’s request to mandate the preservation of all financial records of Blue Gum Warehouse, LLC, Peakland Management Anaheim, Inc., and Peakland Warehouse 1315, Inc., and requiring Defendants to maintain and not destroy, alter, conceal, or transfer any books, records, bank statements, ledgers, leases, or other financial documents relating to Blue Gum Warehouse, LLC.

The Motion is DENIED WITHOUT PREJUDICE as to the other requests.

Plaintiff’s requests for judicial notice are GRANTED.

Defendants to give notice.

11. 30-2024-01377570 1. Motion to Enforce Settlement

Zhang vs. Zhang Plaintiff, Junhua Zhang, moves for an order to enforce the settlement agreement entered into between Plaintiff and Defendant, Junli Zhang, pursuant to Code of Civil Procedure section 664.6, and award of attorney’s fees in the amount of $1,400 against Defendant.

Code of Civil Procedure section 664.6(a) states: (a) If parties to pending litigation stipulate, in a writing signed by the parties outside of the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If the