JHVS Group, LLC v. Slate

Filed 12/2/24

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

JHVS GROUP, LLC et al., F087324 Plaintiffs and Respondents, (Super. Ct. No. MCV090283) v.

SHAWN SLATE et al., OPINION Defendants and Appellants.

APPEAL from an order of the Superior Court of Madera County. Brian Enos, Judge. Lewis Brisbois Bisgaard & Smith, Sean M. Higgins, and Greg L. Johnson for Defendants and Appellants. Gilmore Magness Janisse and David M. Gilmore for Plaintiffs and Respondents. -ooOoo- Shawn Slate and Dina Slate (the Slates) appeal from a preliminary injunction issued against them, Randy Hayer, and SVN Executive Commercial Advisors (SVN). JHVS Group, LLC and its members, Jasanjot Singh and Harshana Kaur, (collectively JHVS) sought the preliminary injunction to prevent a foreclosure sale after a business and land deal fell apart. The Slates contend the trial court erred in issuing the preliminary injunction both as to them and on the merits generally. For the reasons set forth below, we reverse the order as it applies to the Slates.

FACTUAL AND PROCEDURAL BACKGROUND On September 11, 2023, JHVS filed a lawsuit against defendants the Slates, Hayer, and SVN. The complaint laid out the history of the failed real estate and business transaction. According to the complaint, JHVS purchased a 66.4-acre pistachio orchard in Chowchilla from the Slates on August 28, 2022, for roughly $2.6 million. Hayer and SVN served as the brokers for both parties. The sales agreement valued the pending 2022 crop at $729,600 and noted that crop would be owned by JHVS. JHVS provided a $700,000 down payment, and the Slates agreed to carry a loan for $1,889,600. Under what was alleged to be an unsigned modification to this original agreement, JHVS agreed to pay $5,235.33 per month in interest payments. In addition to these payments, JHVS owed five payments of $35,000, allegedly coinciding with expected crop payments, and any unpaid balance was due one year after the close of escrow. The Slates also agreed to continue farming the property for at least the first year. The complaint alleged, however, that at the time the agreement was negotiated, the Slates and Hayer knew of material information they did not disclose and falsely answered questions raised about water rights. JHVS stated that the Slates never provided information about the 2021 harvest and, despite valuing the 2022 harvest at over $700,000, the actual value came in at $125,000 and could not reasonably have been estimated at more than $400,000. The complaint further alleged that the Slates misrepresented the actual costs needed to maintain the property and, when asked whether the property was subject to restrictions under the Sustainable Groundwater Management Act (Wat. Code, § 10720 et seq.), affirmatively and wrongly stated no such restrictions applied to the property. Following the sale, JHVS allegedly fell behind on its payments. Thus, on July 31, 2023, the Slates recorded a notice of default. The complaint alleged that JHVS would not