BIG HORN 1, LLC. VS URSO

1. CASE # CASE NAME HEARING NAME HEARING RE: MOTION FOR ORDER CVPS2400400 BUXBAUM VS MCFARLAND REQUIRING DEFENDANTS TO PAY EXPENSES OF PROOF Tentative Ruling: No tentative ruling. Hearing was continued to 9.11.26.

2. CASE # CASE NAME HEARING NAME HEARING RE: MOTION FOR BIG HORN 1, LLC. VS CVPS2509973 PRELIMINARY INJUNCTION BY BIG URSO HORN 1, LLC. Tentative Ruling: The purpose of a preliminary injunction is to preserve the status quo pending trial on the merits. In order to issue a preliminary injunction, the Court must balance the parties’ interests. In balancing the parties’ interests, the Court must exercise discretion “in favor of the party most likely to be injured . . . .” (Robbins v. Superior Court (1985) 38 Cal.3d 199, 205.)

The Court is to consider two interrelated factors: 1) which party will suffer the greater injury from denial of the injunction (Shoemaker v. County of Los Angeles (1995) 37 Cal.App.4th 618, 633); and, 2) is there a reasonable probability that plaintiffs will prevail on the merits at trial. (Robbins, supra, 38 Cal.3d at 206.) “The trial court’s determination must be guided by a ‘mix’ of the potential-merit and interimharm factors; the greater the plaintiff’s showing on one, the less must be shown on the other to support an injunction.” (Butt v.

State of California (1992) 4 Cal.4th 668, 678.) It is the plaintiff’s burden to “show all elements necessary to support issuance of a preliminary injunction.” (O’Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.)

Balance of Hardships: First, we must consider the injury to both parties should the injunction be granted or denied. Irreparable harm is often related to an “inadequate legal remedy,” meaning the damages remedy is inadequate because some immeasurable harm is threatened. Courts will not ordinarily grant injunctive relief unless someone will be significantly hurt in a way that cannot later be repaired. (People ex rel. Gow v. Mitchell Brothers’ Santa Ana Theater (1981) 118 Cal.App.3d 863, 870-871.)

However, irreparable harm “does not mean ‘injury beyond the possibility of repair or beyond possible compensation in damages.’” (Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach (2014) 232 Cal.App.4th 1171, 1184.) Injunctions will rarely be granted (absent specific statutory authority) where a suit for damages provides an adequate remedy. (See Thayer Plymouth Ctr., Inc. v. Chrysler Motors Corp. (1967) 255 Cal.App.2d 300, 307.)

In support of the motion, Plaintiff cites Dennis v. Overholtzer (1960) 179 Cal.App.2d 110, where the Court of Appeals affirmed an order requiring a tenant to deposit rental proceeds he owed on the property at issue with the county clerk during the pendency of the action. The present dispute is different. Defendant is not a tenant paying rent on a property owned by Plaintiff, as in Dennis v. Overholtzer. As the court noted in denying the motion to appoint a receiver, Plaintiff has not provided any evidence “demonstrating that the property is in danger of being lost, removed, or materially injured.” (7/1/26 Minute Order.)

Also, in ruling on the previous motion, the court noted: “Plaintiff has not explained why an injunction ordering Defendant to deposit rental proceeds into escrow and to keep proper accounting would not be sufficient to protect Plaintiff’s interests to the extent any rents are being wrongfully withheld.” (7/1/26 Minute Order.)

Plaintiff cites this statement from the court in explaining why it now is bringing a motion for preliminary injunction. However, before the court can order such an injunction, Plaintiff must demonstrate irreparable harm if the injunction is not granted. Plaintiff argues it will suffer irreparable injury if the injunction is not granted because Follmer will continue to “obtain exclusive possession and control of proceeds generated by the jointly owned property” and he “may transfer, spend, conceal, or commingle them with other assets, making them difficult to trace and potentially unavailable for later distribution.” (Mot. p.9:22-23, 26-27.) Plaintiff argues this would require BH1 to later account for the money owed and “attempt to reconstruct years of transactions and recover funds that may no longer exist.” (Mot. p.10:3-4.)

In Opposition to the motion, Defendant argues instituting Plaintiff’s desired escrow mechanism “would create substantial interim harm” because Defendant currently utilizes the rental income to pay the property’s taxes, insurance, homeowners’ association dues, and other property carrying costs. (Opp. p.5:9-11.) “In general, if the plaintiff may be fully compensated by the payment of damages in the event he prevails, then preliminary injunctive relief should be denied.” (Tahoe Keys Property Owners' Assn. v.

State Water Resources Control Bd. (1994) 23 Cal.App.4th 1459, 1471.) The harm Plaintiff complains about is speculative. Without the requested injunction, Follmer will continue to receive rent proceeds for the property. However, Plaintiff’s concern that Follmer may transfer, spend, conceal, or commingle those funds is speculative. There is no evidence of imminent or irreparable damage should the court deny the instant motion. Mutaguchi’s declaration is devoid of any evidence of imminent or irreparable injury to BH1. “An injunction cannot issue in a vacuum based on the proponents’ fears about something that may happen in the future.

It must be supported by actual evidence that there is a realistic prospect that the party enjoined intends to engage in the prohibited activity.” (Korean Philadelphia Presbyterian Church v. California Presbytery (2000) 77 Cal.App.4th 1069, 1084.) There is no such evidence here.

Plaintiff again argues Defendant’s accounting cannot be relied upon because “it consists of nothing more than a self-generated Excel spreadsheet devoid of any supporting documentation.” (Mot. p.10:7-8.) In response, Defendant argues Plaintiff “concedes that an adequate remedy exists to determine any alleged misappropriation through an accounting.” (Opp. p.6:23-24.) Again, Plaintiff has not provided any evidence demonstrating it will suffer irreparable harm if the court does not grant the instant motion.

Likelihood of Prevailing: An injunction should not be issued where there is no possibility of success even though its issuance might prevent irreparable harm. (Choice-in-Education League v. Los Angeles Unified School District (1993) 17 Cal.App.4th 415, 422.) With respect to the judicial foreclosure cause of action, Plaintiff argues Defendants have defaulted on their obligations under the Promissory Note for the principal balance of $750,000. (Comp. ¶26.) Plaintiff argues the entire unpaid balance of the secured obligation became due and owing under the terms of the Promissory Note and Deed of Trust. (Mot. p.7:1-2.)

In Opposition, Defendant argues Follmer was not the original obligor under the Promissory Note, which was executed by Urso and not Follmer. Instead, Follmer acquired his interest in the property through a conveyance from Urso subject to the Deed of Trust. Defendant notes that Plaintiff has not provided any written agreement that obligates Follmer to the Deed of Trust. In support of the motion, Mutaguchi provides a copy of the Grant Deed transferring Urso’s 50% interest in the property to Follmer and Burton (Exhibit 6). Defendant is correct that this document does not demonstrate Follmer is obligated under the Deed of Trust. Without this evidence, Plaintiff has not demonstrated a likelihood of success on this cause of action against Follmer.

Plaintiff also brings a quiet title claim. Plaintiff seeks to quiet title to the 50% undivided interest that was originally deeded to Urso and then transferred to Follmer and Burton. Plaintiff argues the agreement between BH1 and Urso prohibited Urso from transferring his interest in the property without BH1’s consent, meaning the transfer to Follmer and Burton was improper. The Tenant in Common Agreement is attached to Mutaguchi’s declaration and states: “Each Tenant in Common shall have the right to transfer, partition and encumber its Interest in the Property” subject to various provisions. (Exhibit 2.)

Transfers are subject to a right of first offer to the other tenant in common. (Exhibit 2, §6.3(a).) Mutaguchi testifies Urso conveyed his 50% interest to Follmer and Burton without BH1’s knowledge which constituted a breach of the Tenant in Common Agreement. (Mutaguchi Decl. ¶5.) Defendant claims BH1, through Mutaguchi, knew Urso conveyed his interest to Follmer and then never challenged that transfer until seven years later when initiating this lawsuit. (Opp. p.7:20-21.) However, Follmer’s declaration does not explicitly provide evidence of when Mutaguchi learned of the transfer from Urso to Follmer.

Based on the evidence before the court, it is more likely than not Plaintiff will succeed on the quiet title claim.

With respect to the accounting claim, Plaintiff argues Follmer owes BH1 a duty to account for all rents, issues, and profits received from the jointly owned property as a tenant in common. First, Defendant Follmer has presented evidence that he has provided Plaintiff with an accounting. (Follmer Decl. Ex. 6.) Plaintiff challenges the sufficiency of that accounting but, at the very least, it is likely Plaintiff will succeed on this claim as Defendant has acknowledged the necessity of providing an accounting.

Plaintiff also brings a breach of fiduciary duty claim against Defendants. This claim is not likely to be successful as Plaintiff both argues Follmer owes Plaintiff a fiduciary duty but also does not/should not have any interest in the property. By Plaintiff’s own evidence, Plaintiff’s positions are contradictory and not likely to be successful.

Plaintiff also brings a claim for conversion of the rental proceeds. Mutaguchi testifies he has not received any rent proceeds from Urso, Follmer, or Burton. (Mutaguchi Decl. ¶8.) Defendant does not provide any evidence to the contrary. There is a reasonable probability of Plaintiff’s success on this claim. The same evidence also indicates Plaintiff will likely be successful on the unjust enrichment claim as Defendant has received all rental income and not given any to Plaintiff.

Plaintiff has demonstrated a reasonable probability of success on the merits of some of its claims. However, since Plaintiff has not demonstrated any imminent threat or irreparable harm if the court does not order the injunction. Plaintiff’s damages are solely monetary and can be recovered as damages.

Plaintiff’s Motion for Preliminary Injunction DENIED.

Case Management Conference confirmed for 8.25.26.