Sep 27, 2021
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TENTATIVE RULINGS                                                                UPDATED 
LAW & MOTION CALENDAR
Wednesday, September 15, 2021, 2:00 p.m. ****SEE BELOW REGARDING DATE & TIME CHANGE!!**
Courtroom 19 – Hon. Gary Nadler
3055 Cleveland Avenue, Santa Rosa
 
PLEASE NOTE: In accordance with the Order of the Presiding Judge issued June 14, 2021, a party or representative of a party may appear personally in Courtroom 19 or may appear remotely through Zoom. Social distancing among members of the public is no longer required and capacity shall be the normal courtroom capacity. Masks shall be required for all in person appearances.  CourtCall is not permitted for this calendar.

If the tentative ruling is accepted, no appearance is necessary unless otherwise indicated. 

The tentative rulings will become the ruling of the Court unless a party desires to be heard.  If you desire to appear and present oral argument, YOU MUST NOTIFY Judge Nadler’s Judicial Assistant by telephone at (707) 521-6602 and all other opposing parties of your intent to appear, and whether that appearance is in person or via Zoom, no later 4:00 p.m. the court day immediately preceding the day of the hearing.

**UPDATE: HEARINGS AS TO ANY CONTESTED TENTATIVE RULING WILL OCCUR ON FRIDAY, SEPTEMBER 17 AT 9:30 A.M. IN DEPT. #19
 
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PLEASE NOTE: The Court WILL provide a Court Reporter for this calendar. If there are any concerns, please contact the Court at the number provided above.
 
 
 
1.    MCV-251413, Department Stores National Bank v. Mendrin
 
            Plaintiff’s Motion to vacate dismissal and to enter judgment under terms of stipulated settlement is granted.
 
         Plaintiff seeks to recover payment on a Macy’s credit card account which Plaintiff alleges that it owns, with rights to collect any debt on it from Defendant, that Defendant incurred a debt on the account, and that Defendant failed to pay.
 
          After Defendant answered, on June 22, 2020 Plaintiff filed a notice of conditional settlement of the entire action, stating that the parties entered  into a settlement agreement providing for dismissal upon satisfactory completion of specified terms. It adds that Plaintiff will file a request for dismissal no later than November 3, 2021.
 
        On March 22, 2021, Plaintiff filed a written stipulated agreement signed by both Plaintiff and Defendant. This states that the court is to retain jurisdiction pursuant to CCP section 664.6; and that “Plaintiff will not request that judgment be entered so long as Defendant is not in default with the payment plan set forth herein”. The stipulated agreement sets forth specific terms regarding Defendant’s payment of the “Judgment Amount,” a total of $4,364.91 in monthly installments, but allows Defendant upon timely paying the first $3,274 in monthly installments to deduct the remainder; that Defendant must pay a minimum of $272.84 on or before the 19th day of each and every month beginning June 2020, with the amount of each monthly payment amount to decrease to $272.76 starting with the payment of May 2021 and with a final payment of $272.63 in September 2021; and it adds that “[i]f Defendant fails to make full and timely payment of any installment or if any payment is reversed, then Defendant will not be entitled to any deduction, the full remaining balance will be due, and Plaintiff shall be entitled to enter judgment for the Judgment Amount plus court costs pursuant to a memorandum of costs” with the costs “limited to Plaintiff’s fee for filing the complaint; Plaintiff’s fee for service of process; fees (including any reporter fee that the court may require at the time a motion or application is filed) for any motion, application and/or order that has been granted, including the motion or application to enforce this Agreement,” plus Defendant’s first appearance fee if Plaintiff had advanced that, less credit for payments made.
        On April 16, 2021, Plaintiff filed a request for dismissal of the action without prejudice and Order on Settlement Agreement and Stipulation for Judgment (“the Order”). Both specifically state that the court is to retain jurisdiction of the action to re-open the action and enter judgment, pursuant to CCP section 664.6 and the Order adds that the “action is dismissed under conditions stipulated by the parties, with the court retaining jurisdiction under [CCP] Section 664.6.” It adds, further, that the court approves the settlement and order that judgment be entered upon the application of plaintiff pursuant to stipulation in the even the defendant shall default on any of the terms of the settlement….” It requires the application for entry of judgment to include a declaration, under penalty of perjury, showing the default and balance due.
 
           This motion seeks to vacate the dismissal and for entry of judgment.  Plaintiff shows that Defendant is in default under the terms, having failed to make any payment since July 16, 2020, and having paid only $545.68. Plaintiff seeks entry of judgment for the Judgment Amount, with the balance still owed consisting of $3,819.23 plus costs of $370, for a total judgment of $4,189.23.
 
           When a party seeks to enforce a stipulated settlement entered in writing or orally before the court, the court “may enter judgment pursuant to the terms of the settlement.” CCP §664.6. When ruling on a CCP §664.6 motion, the court is a trier of fact and its ruling will be upheld if based on “substantial evidence.” Fiore v. Alvord (1985) 182 Cal.App.3d 561, 566.  As explained in Hines v. Lukes (2008) 167 Cal.App.4th 1174, at 112, “[t]he court retains jurisdiction to enforce a settlement under the statute even after a dismissal, but only if the parties requested such a retention of jurisdiction before the dismissal. (Citation) Such a request must be made either in a writing signed by the parties or orally before the court.”        
 
           The court in Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, at 797 emphasized that before “judgment can be entered, two key prerequisites must be satisfied.” These are contract formation and a writing signed by the parties with the material terms. Id. As with other contracts, if there is no meeting of the minds on the material terms, then no contract has been formed. Id., 797. Absent such a contract, there is no settlement agreement which the court may enforce. Id. Section 664.6 only applies to agreements made in writing and signed by the parties, or orally before the court. Weddington, supra, 809-810.
 
           The modern trend is in favor of carrying out the parties’ intentions by enforcing contracts, and it disfavors finding contracts unenforceable due to uncertainty. See Larwin-Southern California, Inc. v. JGB Investment Co. (1979) 101 Cal.App.3d 626, at 641. The court in Larwin-Southern stated that neither law nor equity requires every term and condition to be set forth in the contract and that the court may look to “the usual and reasonable terms found in similar contracts” and it may infer unexpressed provisions from the writing, the circumstances, custom, and usage, as long as they do not alter the terms of the agreement. Id. “At bottom,” the court said, “if the parties have concluded a transaction in which it appears that they intend to make a contract, the court should not frustrate their intention if it is possible to reach a fair and just result, even though this requires a choice among conflicting meanings and the filing of some gaps the parties have left.” Id.   
 
          Plaintiff demonstrates that the parties entered into a written settlement agreement; the terms are set forth in the copy of the settlement filed in  this action; Plaintiff demonstrates specifically that Defendant has breached the terms and how, being in default as set forth above. Plaintiff is therefore entitled to entry of judgment in its favor with the terms as requested, as set forth in the settlement terms above. 
 
           The motion and declaration satisfy the requirements of CCP section 664.6 and also comply with the substantive and procedural requirements of the dismissal and the related Order as set forth above. Pursuant to the authority governing such motions where the court retains jurisdiction pursuant to CCP section 664.6, as well as the express terms of the Settlement, Dismissal, and Order, this court retains jurisdiction to grant the relief requested despite the dismissal.
 
            The court GRANTS the motion to vacate dismissal and enter judgment according to the Settlement and CCP section 664.6.
 
           Plaintiff shall prepare and serve a proposed order consistent with this tentative ruling within five days of the date set for argument of this matter.  Opposing counsel shall inform the preparing counsel of objections as to form, if any, or whether the form of order is approved, within five days of receipt of the proposed order. The preparing party shall submit the proposed order and any objections to the court in accordance with California Rules of Court, Rule 3.1312.
 
 
2.    MCV-255152, Mical Seafood, Inc. v. Santa Rosa Seafood Retail

          The Motion to Set Aside Default is granted.
 
          Plaintiff filed this action to collect money which Defendant allegedly owed for goods and services rendered. 
 
          Defendant failed to appear, causing Plaintiff to seek entry of a default on June 7, 2021, with a default judgment following.
 
      Defendant now moves the court to set aside the default and default judgment pursuant to CCP section 473. Defendant claims that he calendaredthereceipt of the summons and complaint, and thus the deadline for responding, incorrectly, causing his attorney to try to file the answer a few days too late. 
 
           CCP §473(b) allows plaintiffs and defendants to set aside dismissals or defaults. This motion must normally be made within a reasonable time, not to exceed 6 months from the date the order was entered. CCP §473(b). The motion must be brought within 6 months and the grounds for seeking the relief do not affect the deadline. Arambula v. Union Carbide Corp. (2005) 128 Cal.App.4th 333, 345. According to CCP § 473(d), the court may also correct clerical mistakes or set aside any void judgment or order.     The motion “shall be accompanied by a copy of the answer or other pleading proposed to be filed… otherwise the application shall not be granted….” CCP section 473(b).
 
           An order setting aside the default is discretionary where based on mistake, inadvertence, surprise, or excusable neglect. Id. There is also a policy in favor of hearing cases on their merits and the motion to vacate should be granted if Defendants show a credible, excusable explanation. Elston v. City of Turlock (1985) 38 Cal.3d 227. The provision should be liberally construed in order to afford relief. See, e.g., Goodson v. Bogerts, Inc. (1967) 252 Cal.App.2d 32; Hansen v. Hansen (1961) 190 Cal.App.2d 327; Reed v. Williamson (1960) 185 Cal.App.2d 244.
 
           The provision of this section authorizing court to relieve party from judgment taken against him through his mistake, inadvertence, surprise or excusable neglect is remedial in its nature and is to be liberally construed so as to dispose of cases on their merits.  Ramsey Trucking Co. v. Mitchell (1961) 188 Cal.App.2d Supp. 862.
 
           “Surprise” is “some condition or situation in which a party... is unexpectedly placed to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against.” Credit Managers Ass’n of So. Calif. v. National Independent Business Alliance (1984) 162 Cal.App.3d 1166, 1173.
 
      “Excusable neglect” comes down to whether the moving party has shown a reasonable excuse for the default. Davis v. Thayer (1980) 113 Cal.App.3d892, 905. The moving party must show that the default would not have been avoided through ordinary care Elms v. Elms (1946) 72 Cal.App.2d 508, 513. The test ultimately is thus one of reasonable diligence. Jackson v. Bank of America (1983) 141 Cal.App.3d 55, 58. A showing that the defendant was unable to understand what he was served with is sufficient to justify relief. Kesselman v. Kesselman (1963) 212 Cal.App.2d 196, 207-208. Another valid basis is if the defendant mislaid or misfiled the papers and as a result failed to obtain an attorney in time. Bernards v. Grey (1950) 97 Cal.App.2d 679, 683-686. Simply forgetting about the lawsuit or being too “busy” is not adequate. Andrews v. Jacoby (1919) 39 Cal.App. 382, 383-384.
 
           The motion is clearly timely, filed only just over one month after the default. Defendant’s declaration explains that he calendared the receipt of the summons and complaint, and thus the deadline for responding, incorrectly, causing his attorney to try to file the answer a few days too late. Defendant attaches a copy of the proposed answer, stating a meritorious defense based on the assertion that his business never entered into the agreement on which Plaintiff basis its claim. He shows that he served the answer on Plaintiff on June 9, 2021, the date he claims that he tried to file the answer. This was two days after Plaintiff had entered the default. The evidence shows diligence and supports Defendant’s explanation.
 
           The court grants the motion. Defendant shall file the answer within 10 days of the date of service of this order.
 
           Defendant shall prepare and serve a proposed order consistent with this tentative ruling within five days of the date set for argument of this matter. Opposing counsel shall inform the preparing counsel of objections as to form, if any, or whether the form of order is approved, within five days of receipt of the proposed order. The preparing party shall submit the proposed order and any objections to the court in accordance with California Rules of Court, Rule 3.1312.
 
 
3.    MCV-255815, American Express National Bank v. Pedro
 
           The Motion for Judgment on the Pleadings is granted without leave to amend.
 
           Plaintiff filed this action to collect a debt which Defendant allegedly owes on a credit-card account. Plaintiff originally filed this action in the City and County of San Francisco, but Plaintiff then moved to transfer venue to this county based on Defendant’s residence.  The venue motion was granted on March 15, 2021.
 
           Defendant answered on February 1, 2021.
 
          Plaintiff filed the motion for judgment on the pleadings but after the hearing on August 18, 2021, the motion was continued because there was no proof of service or other demonstration of notice to Defendant.
 
           After the initial hearing, Plaintiff filed an amended notice of motion with the correct details of the current, new, hearing. It includes the full moving papers. Plaintiff also filed a proof of service showing proper service on Defendant, as required, by Federal Express Overnight Delivery, on August 30, 2021. Service and notice therefore appear to be proper and complete. 
 
           No other party has filed any papers regarding this motion. 
 
            A motion for judgment on the pleadings is basically the same as a general demurrer but is brought after the time to bring a demurrer has expired. CCP §438 ; Lance Camper Mfg. Corp. v. Republic Indem. Co. of America (1996) 44 Cal.App.4th 194, 198.
 
           When brought by a plaintiff, a motion for judgment on the pleadings must be based on the assertion “that the complaint states facts sufficient to constitute a cause or causes of action against the defendant and the answer does not state facts sufficient to constitute a defense to the complaint.”  CCP §438(c)(1)(A). If the court grants leave to amend, it must allow 30 days to do so, under CCP section 438(h)(2).
 
           Otherwise, the rules governing demurrers generally apply. Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999. As with a demurrer, the motion must rest on the face of the pleading and on matters judicially noticeable. Consolidated Fire Protection Dist. v. Howard Jarvis Taxpayers’ Assn. (1998) 63 Cal.App.4th 211, 219; Blank v. Kirwan (1985) 39 Cal.3d 311, 318.
 
           The complaint asserts common counts, specifically open book account, account stated, and money lent, for a total due of $7,414.44. The complaint, using the standard form allegations, states facts sufficient to constitute a cause of action for these common counts since they show all of the necessary elements of a common count: Defendant became indebted to Plaintiff for a certain stated sum for some consideration, and Defendant has failed to pay the sum on demand. Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460; Allen v. Powell (1967) 248 Cal.App.2d 502, 510; see 4 Witkin, Cal.Proc. (5th Ed.2008, March 2020 Update) Pleading, section 557.
 
          The answer expressly states that it “does not dispute the fact that the balance of $7,414.44 is due and owed by Defendant.” He only states that Plaintiff offered him a chance to make payments and he wants “the chance to comply and diminish the balance in due course of time as agreed upon.” Accordingly, the answer fails to state facts sufficient to constitute a defense to the complaint which, as stated above, states valid causes of action.
 
            The court grants the motion without leave to amend.  
 
            The moving party shall prepare and serve a proposed order consistent with this tentative ruling within five days of the date set for argument of this matter. Opposing counsel shall inform the preparing counsel of objections as to form, if any, or whether the form of order is approved, within five days of receipt of the proposed order. The preparing party shall submit the proposed order and any objections to the court in accordance with California Rules of Court, Rule 3.1312.
 
 
4.    SCV-263268, Antonopoulous v. Mid-Century Insurance Company
 
          The Motion to Enforce Settlement Agreement is granted in part, and denied in part. The court finds that Plaintiffs are entitled to entry of judgment in their favor pursuant to the Settlement Agreement between the parties, but that the judgment amount must be the “low” figure of $250,000. The court therefore grants the motion to the extent that Plaintiffs are entitled to entry of judgment in their favor pursuant to the Settlement but denies the motion to the extent that Plaintiffs seek a judgment for the “high” amount of $2 million.  The court instead determines that Plaintiffs are entitled to a judgment only for the “low” figure of $250,000. 
 
A.   Procedural Posture
 
          As alleged by Plaintiffs, Defendant Mid-Century Insurance Company issued an insurance policy (“the Policy”) covering Plaintiffs’ real property at 2130 Vintage Circle, Santa Rosa (“the Property”) with a period covering April 8, 2017 to April 8, 2018, but that Defendant improperly cancelled the Policy without notice to Plaintiffs on October 3, 2017, just 6 days before a fire destroyed the home on the Property. 
 
           Defendant brought a motion for summary judgment or summary adjudication and Plaintiffs brought a counter motion for summary adjudication on the issue of the duty to provide coverage. The trial court in November 2019 denied Defendant’s motion and granted Plaintiffs’ motion on the issue of the duty of providing coverage. Defendant appealed that decision.
 
          The parties entered into a Stipulated Judgment in March 2020, with the court entering it on May 18, 2020. The Judgment states that the parties had entered into a Settlement Agreement (“the Settlement”) and that the Settlement calls for entry of a stipulated judgment. The parties stipulated to the dismissal of the second cause of action for breach of the covenant of good faith and fair dealing and to entry of judgment in favor of Plaintiffs to the amount of $1,111,500.00 on the first cause of action, with each party to bear its own costs and attorneys’ fees. It adds that it is “without prejudice to the parties’ right to be heard on appeal.”
 
            Defendant thereafter filed an appeal of the Stipulated Judgment on June 10, 2020.
 
          The court of appeal in April 2021 subsequently affirmed the order denying Defendant’s motion but reversed the order granting Plaintiffs’ motion and directed that “[t]he stipulated judgment for plaintiffs shall be set aside,” with each side to bears its own costs on appeal.” The remittitur was filed in this court on June 30, 2021.
 
          Plaintiffs move the court to enforce the Settlement Agreement and to enter judgment in accordance with it, claiming that aside from the Stipulated Judgment, the Settlement involves a “high/low structure” by which should Defendant appeal and not obtain a reversal of the Stipulated Judgment, Plaintiffs would be entitled to payment of $2 million but should Defendant obtain a reversal of the Stipulated Judgment, then Plaintiffs would be entitled to payment of only $250,000. They contend that the results of the appeal demonstrate that Defendant did not actually obtain a reversal of the Stipulated Judgment because the court of appeal only directed that it be “set aside,” and that Defendant did not obtain a complete victory on its appeal. 
 
          Defendant opposes the motion, agreeing that the court should enter judgment in accord with the Settlement but contending that the court must do so using the low figure of $250,000 because Defendant’s appeal resulted in a reversal of the Stipulated Judgment. 
 
B.   Objections
 
          Defendant objects to statements in the Larsen declaration that Defendant was “seeking a reversal of the stipulated judgment” and the consideration of Defendant’s opening brief on appeal. It contends that these are improper extrinsic evidence of intent which this court may not consider unless the terms of the agreement are ambiguous, here inapplicable.
 
        These objections are unpersuasive and, in any case, they and the evidence they address do not alter the outcome of this motion. The court overrules these objections. 
 
C.   Analysis
 
           When a party seeks to enforce a stipulated settlement entered in writing or orally before the court, the court “may enter judgment pursuant to the terms of the settlement.” CCP §664.6. When ruling on a CCP §664.6 motion, the court is a trier of fact and its ruling will be upheld if based on “substantial evidence.” Fiore v. Alvord (1985) 182 Cal.App.3d 561, 566. As explained in Hines v. Lukes (2008) 167 Cal.App.4th 1174, at 112, “[t]he court retains jurisdiction to enforce a settlement under the statute even after a dismissal, but only if the parties requested such a retention of jurisdiction before the dismissal. (Citation) Such a request must be made either in a writing signed by the parties or orally before the court.”        
 
            The court in Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, at 797 emphasized that before “judgment can be entered, two key prerequisites must be satisfied.” These are contract formation and a writing signed by the parties with the material terms. Id. As with other contracts, if there is no meeting of the minds on the material terms, then no contract has been formed. Id., 797. Absent such a contract, there is no settlement agreement which the court may enforce. Id. Section 664.6 only applies to agreements made in writing and signed by the parties, or orally before the court. Weddington, supra, 809-810.
 
            The modern trend is in favor of carrying out the parties’ intentions by enforcing contracts, finding contracts unenforceable due to uncertainty is disfavored. See Larwin-Southern California, Inc. v. JGB Investment Co. (1979) 101 Cal.App.3d 626, at 641. The court in Larwin-Southern noted that neither law nor equity requires every term and condition to be set forth in the contract and that the court may look to “the usual and reasonable terms found in similar contracts” and it may infer unexpressed provisions from the writing, the circumstances, custom, and usage, as long as they do not alter the terms of the agreement. Id. “At bottom,” the court said, “if the parties have concluded a transaction in which it appears that they intend to make a contract, the court should not frustrate their intention if it is possible to reach a fair and just result, even though this requires a choice among conflicting meanings and the filing of some gaps the parties have left.” Id.    
 
          There is no dispute that the parties entered into the Settlement, which is written and a copy of which is attached to the moving papers. There is also no dispute about the enforceability, the terms, or that it involves a “high/low structure” by which should Defendant appeal and not obtain a reversal of the Stipulated Judgment, Plaintiffs would be entitled to payment of $2 million but should Defendant obtain a reversal of the Stipulated Judgment, then Plaintiffs would be entitled to payment of only $250,000.
 
          The dispute here revolves around the interpretation of the terms, specifically whether the decision of the court of appeal amounts to a “reversal” of the Stipulated Judgment under the Settlement terms. The key language on which both sides rely is set forth in section 1(A), (C), (D), as follows, with emphasis added:
 
“A.       The Parties are awaiting a decision on the Writ Petition from the Court of Appeal[.] At the time this Settlement Agreement is executed, the Parties, by and through their counsel, will sign a Stipulated Judgment in the form attached hereto as Exhibit A ("Stipulated Judgment"). If the Court of Appeal does not address the Writ Petition on its merits, the Parties shall file the original Stipulated Judgment with the Superior Court of California, County of Sonoma.
         Thereafter, Defendant shall have the right, but not the obligation, to pursue an appeal from the Stipulated Judgment. In the event Defendant … pursues an appeal and does not obtain a reversal of the Stipulated Judgment, Defendant shall pay to Plaintiffs the sum of two million dollars and zero cents ($2,000,000.00) …. In the event Defendant obtains a reversal of the Stipulated Judgment, Defendant shall pay to Plaintiffs the sum of two hundred fifty thousand dollars and zero cents ($250,000.00)….
 
C.      If the Court of Appeal issues a decision on the merits of the Writ Petition which is in Plaintiffs' favor and which is not reversed by the Supreme Court of California, Defendant shall pay to Plaintiffs the sum of $2,000,000.00, plus simple interest running thereon at the legal rate of ten percent (10%) beginning the day after the decision on the merits of the Writ Petition is issued and accruing until the date of payment….
 
D.       If the Court of Appeal issues a decision on the merits of the Writ Petition which is in Defendants’ favor and which is not reversed by the Supreme Court of California, Defendant shall pay to Plaintiffs the sum of Fifty Thousand Dollars and Zero Cents ($50,000.00).”
 
           To summarize the proceedings before this court, Defendant’s motion for summary judgment or summary adjudication was denied in the trial court, and Plaintiffs’ motion for summary adjudication on the issue of the duty to provide coverage was granted.  In the trial court, Defendant was unsuccessful, and Plaintiffs were successful.  Upon review by the Court of Appeal, the order denying Defendant’s motion was affirmed, but the court reversed the order granting Plaintiffs’ summary adjudication motion as to the issue of duty.  In doing so, the court provided that “[t]he stipulated judgment for plaintiffs shall be set aside.”  Antonopoulos v. Mid-Century Insurance Co. (2021) 63 Cal.App.5th 580 at 603.
 
        The agreement between the parties was premised upon the reversal of the Stipulated Judgment: on appeal, if Defendant was not successful in obtaining a reversal of the Stipulated Judgment, it would owe $2,000,000.  On the other hand, if successful, it would owe only $250,000.
 
         Plaintiffs analogize to federal authority, specifically 28 U.S.C. 2106, for the proposition that “reverse” and “set aside” are not synonymous, citing language that “The Supreme Court or other court of appellate jurisdiction may affirm, modify, vacate, set aside or reverse any judgment….” They admit that the California Code of Civil Procedure does not use the term “set aside,” citing CCP section 475 which uses the language “reversed or affected.”  
 
          CCP section 43 is the analogous California provision and, as both parties agree, in contrast to the federal provision it does not mention “set aside” in the list. It states, in full,
         “The Supreme Court, and the courts of appeal, may affirm, reverse, or modify any judgment or order appealed from, and may direct the proper judgment or order to be entered, or direct a new trial or further proceedings to be had. In giving its decision, if a new trial be granted, the court shall pass upon and determine all the questions of law involved in the case, presented upon such appeal, and necessary to the final determination of the case. Its judgment in appealed cases shall be remitted to the court from which the appeal was taken.”
 
           The California Supreme Court noted in Cowdery v. London & San Francisco Bank (1903) 139 Cal. 298, at 303, that ‘To reverse is “to overthrow; set aside; make void; annul; repeal; revoke: as, to reverse a judgment, sentence, or decree” [Citation], or, “to change to the contrary, or to a former condition” [Citation].’ It also noted, at 305, that ‘“The rule is well settled in this state that, upon the reversal of a judgment, a sale to the plaintiff of the defendant's property for the satisfaction of the judgment in whole or in part will be set aside….” [Citation.]’ This indicates that a “reversal” and “set aside” go hand in hand.
 
        Similarly, the court in Norman I. Krug Real Estate Investments, Inc. v. Praszker (1994) 22 Cal.App.4th 1814, at 1823, noted that ‘“reversal” connotes the affirmative rejection of a judgment.  “To reverse a judgment, according to Webster's dictionary, means to over-throw it by a contrary decision, to make it void, to undo or annul it for error.” [Citation.]’
 
          Finally, Gapusan v. Jay (1998) 66 Cal.App.4th 734, at743, explained that ‘ “ ‘[A]n unqualified reversal remands the cause for a new trial [citation], and places the parties in the trial court in the same position as if the cause had never been tried, with the exception that the opinion of the court on appeal must be followed so far as applicable.’ [Citations.]” [Citation.]’
 
          Defendant is persuasive that here the Settlement’s use of the expression “reversal” is equivalent to the use of “set aside” in the decision from the court of appeal. The terms appear to have the same meaning and use in California law and in the context of this case, the effect of setting aside the Stipulated Judgment as a result of Defendant’s appeal appears to be the same as a reversal of it.  Defendant’s appeal challenged the order denying its motion for summary judgment or summary adjudication, the order granting Plaintiff’s motion for summary adjudication in Plaintiff’s favor on the dispositive issue of Defendant’s duty, and challenged the Stipulated Judgment in Plaintiff’s favor. The court of appeal affirmed the order denying Defendant’s motion but only because it found that the trial court correctly determined that the factual disputes meant that Defendant could not prevail as a matter of law, leaving the issue open. At the same time, the court of appeal found that Plaintiffs, similarly, were not entitled to a ruling in their favor as a matter of law on the issue of the duty as specified. It expressly stated that “[t]he order granting summary adjudication for plaintiffs on the issue of Mid-Century’s duty to cover their loss is reversed. The stipulated judgment for plaintiffs shall be set aside.” That issue of duty at the very least has the potential for being dispositive of these claims and the Stipulated Judgment in favor of Plaintiffs was inherently related to a determination of the issue of duty in favor of Plaintiffs. The court of appeal overturned both. Moreover, after the appeal, the parties were put back in the same position as before the orders and Stipulated Judgment, as Defendant claims and contrary to Plaintiff’s argument. There was no longer a judgment in favor of Plaintiffs and both sides were left facing trial of the dispositive issues.
 
           As a result, although Plaintiffs are entitled to entry of judgment in his favor pursuant to the Settlement Agreement, the judgment amount must be the “low” figure of $250,000. The court therefore grants the motion to the extent that Plaintiffs are entitled to entry of judgment pursuant to the Settlement Agreement, but denies the motion to the extent that Plaintiffs seek a judgment for the “high” amount of $2 million. The court instead determines that Plaintiffs are entitled to a judgment only for the “low” figure of $250,000. 
 
           Defendant shall prepare and serve a proposed order consistent with this tentative ruling within five days of the date set for argument of this matter. Opposing counsel shall inform the preparing counsel of objections as to form, if any, or whether the form of order is approved, within five days of receipt of the proposed order. The preparing party shall submit the proposed order and any objections to the court in accordance with California Rules of Court, Rule 3.1312.
 
 
5.    SCV-264355, Rogel v. R.W. Zurking Corp
 
          Plaintiffs move for an order compelling Defendants to permit entry on the premises which is the subject of this lawsuit, pursuant to a demand for inspection served on June 18, 2021. The request provides that “Plaintiff’s expert will inspect interior and exterior of property, grading and crawlspace, take moisture readings and mold samples from the air of the interior and exterior of the subject property. The testing activity will not permanently alter or destroy the subject property. No destructive testing will be performed.” 
 
           The Motion to Compel Inspection of Real Property is granted; the Request for sanctions is denied.
 
           Plaintiffs complain that they rented from Defendants an apartment at 3737 Sonoma Ave #1, Santa Rosa (“the Property”), which Defendants owned and managed, but that Defendants knowingly or negligently maintained the Property in a substandard, uninhabitable condition and, after Plaintiffs complained, Defendants eviction them in retaliation. Plaintiffs allege that the Property in particular suffered from a mold infestation which damaged Plaintiffs’ personal property and harmed Plaintiffs themselves, Plaintiffs informed Defendants and asked Defendants to remedy the situation, and Defendants instead evicted Plaintiffs and improperly retained their security deposit. 
 
           Defendants filed a cross-complaint against Plaintiffs for breaching the lease agreement by failing to maintain the Property as required and failing to notify Defendants of the mold promptly.
 
           On October 26, 2020, this court partly granted Defendants’ motion for summary judgment or adjudication. The court denied the motion as to summary judgment and the causes of action abased on retaliatory eviction. However, it granted the motion for summary adjudication as to the causes of action for Breach of Implied Warranty of Habitability, Violation of Statutory Duties, Negligence, and Bad-Faith Retention of Security Deposit. The court found that these causes of action were all based on the allegations that Defendants were at fault for the mold infestation. The court also found that Defendants had established that the mold in the Property originated from Plaintiffs’ items, and was not the fault of Defendants, and that Plaintiffs had failed to rebut this or demonstrate a triable material issue of fact regarding the mold infestation, its sources or cause, or fault therefor. However, at the same time, the court denied Defendants’ motion for summary judgment or summary adjudication on their own cross-complaint against Plaintiffs, finding that Defendants had failed to demonstrate facts supporting all elements of each cause of action, based on the claims that Plaintiffs were at fault for, or in some way caused or allowed, the mold infestation.
 
           The parties have also engaged in several discovery disputes and motions. Trial has twice been continued from an original date in October 2020 and a pending motion for summary judgment or summary adjudication regarding the remaining causes of action based on retaliatory eviction has also been continued. These continuances have resulted, at least in part, from ongoing discovery issues. 
 
           Plaintiffs served Defendants with a Demand for Permission to Enter on Property for the Property on June 18, 2021, with Defendants serving an objection on June 23, 2021.
 
          Plaintiffs move the court to compel Defendants to allow Plaintiffs to enter and inspect the Property, arguing that Defendants have refused to allow this as requested in the Demand for Permission to Enter on Property. They note that they had originally requested to inspect the Property in February 2020 but that the inspection was continued due to closures and restrictions resulting from Covid-19.
 
           Defendants argue that because this court granted summary adjudication on Plaintiffs’ causes of action based on the claims that Defendants were at fault for the mold infestation, the inspection is not related to any remaining issues and therefore improper.
 
         In reply, Plaintiffs point out that the causes and nature of the mold infestation are still at issue because this court denied Defendants’ motion for summary judgment or adjudication as to Defendants’ cross-complaint, based on allegations that Plaintiffs were at fault for causing or allowing the mold infestation. As a result, they reason, an inspection is still warranted. 
 
           CCP section 2017.010 states that “any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action...if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” It adds that this may include, among others, “the existence, description, nature, custody, condition, and location of any… land or other property.”  A party accordingly may serve a request for inspection of property in accordance with CCP section 2031.010, et seq.
 
           Contrary to Defendants’ argument, the nature and condition of the Property is still directly relevant to this litigation and the inspection requested is reasonably likely to lead to admissible evidence. Were it not for the pending cross-complaint against Plaintiffs, Defendants would be correct, since the inspection and condition of the Property have no bearing on Plaintiff’s remaining claims based on retaliatory eviction. This court expressly noted that the eviction claim is not directly related to the condition of the Property since it is based on Defendants’ alleged retaliation against Plaintiffs for complaining about the mold or requesting that it be resolved. However, as noted above, this court denied Defendants’ motion for summary judgment or adjudication as to their cross-complaint, leaving those causes of action pending. They are directly based, at least in part, on the condition of the Property, given that Defendants claim that Plaintiffs caused damage by allowing or causing the mold infestation and delaying before bringing it to Defendants’ attention. 
 
           Defendants’ effort to use the ruling of summary adjudication as to Plaintiffs’ claims improperly construes the import of the ruling on that motion. This court did not make any evidentiary or issue ruling as such which narrow or bind the issues subsequent to that ruling beyond granting summary adjudication as to the specific causes of action. Nothing about the ruling is an adjudication or determination that Plaintiffs cannot dispute Defendants claims regarding the mold, only that, in the context of the motion against Plaintiffs’ complaint, Defendants at that time had met their burden and Plaintiffs had failed to raise a triable material issue in dispute. The ruling was limited solely to the viability of Plaintiffs’ causes of action in the context of that motion and the court did not find that Plaintiffs could not present, or were forbidden from presenting, evidence to refute Defendants’ claims, only that Plaintiffs did not present evidence to raise a triable issue regarding their claims.
 
           Defendants improperly rely on CCP section 437c(n)(1), ignoring the relevant provisions here, which are subdivisions (n)(2) and (3). These state, in full,
 
           “(2) In the trial of the action, the fact that a motion for summary adjudication is granted as to one or more causes of action, affirmative defenses, claims for damages, or issues of duty within the action shall not bar any cause of action, affirmative defense, claim for damages, or issue of duty as to which summary adjudication was either not sought or denied.
            (3) In the trial of an action, neither a party, a witness, nor the court shall comment to a jury upon the grant or denial of a motion for summary adjudication.”
 
           Moreover, CCP section 437(c) is clear about exactly what a court does when it grants summary judgment or summary adjudication. It states that when the court grants summary judgment it finds “that the action has no merit or that there is no defense to the action or proceeding.” CCP section 437c(a). A ruling granting summary adjudication is limited to adjudication of one or more causes of action, affirmative defenses, claims for punitive damages, or issues of duty if the party contends that the cause of action has no merit or that there is no defense to the cause of action, or that an affirmative defense has no merit, or that there is no merit to a claim for damages “as specified in” CC section 3294, or that a party did or did not owe a duty. CCP section 437c(f)(1). For summary adjudication, each issue must entirely dispose of one or more 1) causes of action, 2) claims for punitive damages, 3) affirmative defenses, or 4) issues of duty. CCP section 437c(f)(1). A ruling on a motion for summary judgment is not a ruling on the facts or evidence, or issues beyond those specified, and is not a ruling on what evidence may later be obtained or introduced or what facts will ultimately be established at trial. Catalano v. Superior Court (2000) 82 Cal.App.4th 91, 97-98;  Rooz v. Kimmel (1997) 55 Cal.App.4th 573, 593. As the court in Catalano explained,
 
           “Although a claim for punitive damages is specifically set forth as an area which may properly be the subject of summary adjudication, in keeping with the purposes of Code of Civil Procedure section 437c, subdivision (f), a grant of summary adjudication in this area must cover the entire claim. The purpose of the enactment of Code of Civil Procedure section 437c, subdivision (f) was to stop the practice of piecemeal adjudication of facts that did not completely dispose of a substantive area.” [Italics added].
 
           This principle applies to any motion for summary judgment or adjudication. For example, in a motion seeking summary adjudication of a claim for punitive damages, a court may not grant summary adjudication as to some facts which may support a claim for punitive damages; the court may only grant a motion as to the entire claim for punitive damages. Catalano, supra. The court in Roos, supra, similarly explained, that on a motion for summary adjudication, a court has
 
           “no authority… to find that ‘[n]o triable issues of fact remain’ with respect to the delineated issues of fact.  The new statute states “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”  (Code Civ. Proc., § 437c, subd. (f)(1).)  Here, the law and motion judge did not purport to “completely dispose of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” Instead, he at most found there was no triable issue with respect to certain issues of fact.  The court did not purport to draw a legal conclusion from those facts which conclusively disposed of a cause of action or an issue of duty.”
 
           Defendants also claim that ordering the inspection will force Defendants to violate the law regarding the rights of their current tenants. This argument also is unpersuasive.   Defendants rely on CCP section 2031.010(a) but ignore the fact that it expressly allows a party to inspect the land or property “in the possession, custody, or control of any other party to the action.” In this case, despite that fact that Defendants have currently leased the Property to other tenants, the Property remains ultimately in their custody or control. They also rely on Civil Code section 1954, governing a landlord’s rights to enter dwelling property, but again ignore subdivision (a)(4), despite quoting it in their brief, which expressly allows entry “Pursuant to court order.”
 
           Finally, Plaintiffs correctly note that this motion and the circumstances differ from their earlier ex parte application. It is not an ex parte application, resolving the key issues which this court noted on the ex parte application regarding the need or urgency at that time, and it is based on different evidence with details describing the inspection. It also specifies non-destructive testing.
 
            Both sides seek monetary sanctions here. Plaintiff’s motion is persuasive and Defendants’ position lacks substantial justification. 
 
         The court shall impose monetary sanctions on the losing party unless that party acted with substantial justification, or other circumstances make sanctions unjust. CCP §§2023.010, 2023.030. However, neither the notice of motion nor the caption provides notice that Plaintiffs seek sanctions. In order to obtain sanctions, the moving party must state in the notice of motion that the party is seeking sanctions, identify against whom the party seeks the sanctions, and specify the kind of sanctions. CCP section 2023.040.
 
           The court therefore denies the requests for sanctions.
 
           In conclusion, the court grants the motion to compel the inspection but denies the requests for sanctions. 
 
          Plaintiff shall prepare and serve a proposed order consistent with this tentative ruling within five days of the date set for argument of this matter. Opposing counsel shall inform the preparing counsel of objections as to form, if any, or whether the form of order is approved, within five days of receipt of the proposed order. The preparing party shall submit the proposed order and any objections to the court in accordance with California Rules of Court, Rule 3.1312.
 
 
6.    SCV-266793, Motzkus v. Kardum
 
           Plaintiffs’ Motion for Leave to File Third Amended Complaint is granted.
 
           Defendants’ Motion to Strike Punitive Damages from Second Amended Complaint is dropped. This motion is moot in light of the decision to grant the motion to strike. This is without prejudice to Defendants bringing any demurrer or motion challenging the sufficiency of the new Third Amended Complaint.
 
           This matter is a landlord-tenant dispute over property located at 483 Bettencourt Street, Sonoma, CA (“the Property”), rented by plaintiffs Elizabeth Motzkus aka Elizabeth Meyers (“Meyers”) and Rex Motzkus (“Motzkus”)(together “Plaintiffs”).  Meyers signed a lease agreement for the Subject Property for the initial term of June 1, 2009, through May 31, 2010.  Jennifer Powell signed as the owner of the Property as agent for Karen Kardum.  Karen Kardum died leaving George A. Kardum Jr., as Trustee of the George A. Kardum Jr. Trust, as the lessor of the lease.  Meyers alleges that upon moving into the premises she began to discover a long list of conditions that made the premises uninhabitable, including rat, mice, and raccoon infestation, a broken air conditioning system, inadequate water pressure, and a faulty electrical system.  Plaintiffs allege that when they requested repairs, Defendants threatened eviction and refused to make any repairs.
 
           Plaintiffs also allege that Defendants raised the rent without complying with Civil Code section 827 and that when Meyers got engaged with Motzkus and wanted him to move in, Defendants raised the rent by $200 every 6 months.  Also, Defendants required Plaintiffs to pay rent in cash, despite Civil Code §1947.3, in order to falsely claim that Plaintiffs did not pay rent.  Finally, when Plaintiffs put their request for rat abatement in writing, Defendants retaliated with a 60-day notice to terminate the tenancy.
 
          Defendants demurred to the original complaint and this court, after the hearing on October 21, 2020, sustained the demurrers in part and overruled it in part. The court sustained the demurrers to the First cause of action for declaratory relief because it did not specify how Defendants failed to comply with CC section 827. It also sustained the demurrers to the Fourth cause of action for fraud because Plaintiffs failed to allege actions to conceal defective conditions, facts showing knowledge of the conditions, or facts supporting an intent to defraud. The court overruled the demurrers to the Second cause of action for retaliation, Third cause of action for nuisance, and Fifth cause of action for breach of contract. The court gave Plaintiffs leave to amend. Plaintiffs filed their first amended complaint (“FAC”) on November 9, 2020.
 
           Defendants demurred again to the first and fourth causes of action on the ground that the FAC fails to state facts sufficient to constitute a cause of action and they moved to strike the claim for punitive damages. After a continuance, the court heard both matters on April 7, 2021. It sustained the demurrer with leave to amend as to both the first cause of action for declaratory relief because the allegations on their face indicated that the claim was untimely, and the fourth cause of action for fraud on the basis that Plaintiffs pleaded it with sufficient particularity. It granted the motion to strike with leave to amend.
 
         Plaintiffs filed their second amended complaint (“SAC”) on April 29, 2021. The SAC is substantially the same as the FAC, with the same four identified causes of action and same fundamental allegations regarding the same series of events and the same alleged wrongdoing. However, in it Plaintiffs have added a new paragraph 22 alleged that they discovered within the last 3 years that Defendants “actually knew” about many of the conditions rendering the Property uninhabitable prior Plaintiff Meyers signing the lease.      
 
           Defendants on July 16, 2021 answered the SAC and filed their own cross-complaint against Plaintiffs for breach of contract, claiming that Plaintiffs failed to pay all the rent owed.
 
           Defendants brought four motions to compel responses to written discovery requests but these were dropped before the May 2021 hearing date.
 
          Plaintiffs seek leave to amend their complaint again and file a third amended complaint (“TAC”). Defendants have filed a statement that they do not oppose this motion. They wish to name Rhiannon Stuckey (“Stuckey”), a minor child, as a Plaintiff; add additional causes of action; add additional detailed allegations regarding the events, Defendants’ wrongdoing and knowledge, government inspections, bases for punitive damages; remove redundant or changed allegations; and make various organizational or other format or wording changes to clean up the pleading. The TAC will be based on the same fundamental alleged events, transactions, and wrongdoing, but will involve additional details, causes of action, and legal theories.
 
         Defendants once again move to strike the claim for punitive damages. They seek to strike ¶¶37 and 54, as well as specified language in ¶57(c) regarding punitive damages based on allegations of retaliatory threats and issuance of a 60-day notice as well as alleged fraud. Plaintiffs oppose this motion.
 
A.   Leave to Amend
 
           Under CCP section 473(a)(1), amendments are left to the sound discretion of the trial court. Judicial policy favors amendment to allow resolution of all potential claims and disputes between parties, so such motions are examined liberally. Nestlé v. Santa Monica (1972) 6 Cal.3d 920, 939. As long as the motion is “timely” and will not prejudice a party, it is normally an abuse of discretion to refuse to allow amendment if the denial will deprive a party of a meritorious claim or defense. Morgan v. Sup.Ct. (1959) 172 Cal.App.2d 527, 530; Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 596.  
 
            Normally delay alone is not a sufficient reason to deny amendment, unless the delay has resulted in prejudice to another party. Hirsa v. Sup.Ct. (Vickers) (1981) 118 Cal.App.3d 486, 490. Prejudice exists where the amendment would require delaying trial so as to cause a loss of critical evidence, added costs of preparation, increased discovery burdens, and similar problems. Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488. There is in fact a strong policy in favor of granting leave to amend. Nestle v. Santa Monica (1972) 6 Cal.3d 920, 939. The policy of liberally allowing parties to amend pleadings applies to allowing them to amend at any time up to and including trial, absent prejudice. Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.
 
           Although proximity to trial date is not necessarily dispositive, it is clearly a factor. An amended complaint may start a new round of pleadings and require an answer. CCP section 471.5. Courts have interpreted this, however, as only applying where the complaint makes substantive changes such as changing or adding causes of action, legal theories, new damages, or the core facts. Carrasco v. Craft (1985) 164 Cal.App.3d 796, 808-809; see also Leo v. Dunlap (1968) 260 Cal.App.2d 24, 27; Ford v. Sup.Ct. (1973) 34 Cal.App.3d 338, 343. In such situations, the case will no longer be “at issue” and could result in a continuance or loss of the trial date.
 
           Plaintiffs, now represented by counsel, explain that their attorney, upon substituting in as attorney or record, discovered numerous details which needed to be included, and which support additional causes of action which Plaintiffs themselves had not stated, as well as a basis for adding the minor child, Starkey, as a Plaintiff. They point out that no trial date has been set, the pleadings are still not settled, and the fundamental events and nature of the claims and allegations remain unchanged. As a result, there is no threat of prejudice. Finally, Defendants have filed a statement expressly declaring that they do not oppose this motion.
 
            The court therefore grants the motion for leave to amend.
 
B.   Motion to Strike
  
            In light of the decision to grant Plaintiffs’ motion for leave to amend, the motion to strike is moot and is accordingly dropped. 
 
           Plaintiffs shall prepare and serve a proposed order consistent with this tentative ruling within five days of the date set for argument of this matter. Opposing counsel shall inform the preparing counsel of objections as to form, if any, or whether the form of order is approved, within five days of receipt of the proposed order. The preparing party shall submit the proposed order and any objections to the court in accordance with California Rules of Court, Rule 3.1312.
 
 
7.    SCV-267440, Vaccaro v. Western Progressive, LLC
 
           Defendants’ Demurrer is overruled in part and sustained in part. The demurrer is overruled as to the fifth cause of action to the extent that the cause of action is viable only in that it seeks solely to postpone the foreclosure pending compliance. The demurrer is sustained without leave to amend as to all other causes of action.
 
           Plaintiff filed this action for sole possession of real property which Plaintiff allegedly owns at 9688 Barnett Valley Road, Sebastopol (“the Property”) as well as related damages, claiming that Defendants have wrongfully and unlawfully foreclosed on a deed of trust (“DOT”) securing, against the Property, a loan (“the Loan”) with a promissory note (“the Note”).
 
          Defendants demurred on the ground that the complaint fails to state facts sufficient to constitute a cause of action, arguing that Plaintiff has no valid cause of action based on his allegations and that the judicially noticeable instruments, in any case, demonstrate that Defendants indeed have the requisite beneficial interest and authority to foreclose. This court sustained the demurrer in full with leave to amend after the hearing of April 14, 2021.
 
           Plaintiff filed his First Amended Complaint (“FAC”) on May 20, 2021, with allegations substantially the same as those in the original complaint. Plaintiff alleges that Defendants violated the Homeowners’ Bill of Rights (“HBOR”) and related provisions, while negligently and fraudulently handling foreclosure proceedings against real property which Plaintiff owns at 9688 Barnett Valley Road, Sebastopol.[1] Plaintiff complains that Defendants claimed to be beneficiaries of the Loan secured the DOT against the Property and wrongly instituted foreclosure proceedings without demonstrating that they indeed have a beneficial interest or authority to foreclose.   Plaintiff contends, generally, that Defendants “cannot show proper receipt, possession transfer, negotiations, assignment and ownership of Plaintiff’s original Promissory Note and Deed of Trust, resulting in imperfect security interests and claims” (¶¶15, 17); Defendants, in seeking to foreclose, have falsely claimed to be holders of a beneficial interest in the DOT and concealed facts showing their claim to be false, and have concealed the fact that the Loan was securitized (¶¶21-30, 40-41, 55-62, 69-73, 100-103, 115-116, 124-128, 141, 151-156); Defendants have negligently or otherwise improperly defrauded Plaintiff by concealing the above information; and Defendants prepared and recoded the instruments without the requisite factual or legal basis (¶¶108-109). With the exception of the fifth cause of action, all causes of action are based on these same basic allegations. In the fifth cause of action for violation of the Homeowners Bill of Rights (“HBOR”), however, Plaintiff complains that Defendants failed to comply with the due diligence requirement of contacting Plaintiff or notifying him prior to recording the Notice of Default (“NOD”) (¶¶76-91). He otherwise offers no explanation as to why Defendants lack such an interest or authority aside from generally claiming that they cannot show such a right or interest.
           
           Defendants again demur to the FAC, and separately to each cause of action therein, on the ground that fails to state facts sufficient to constitute a cause of action. They seek judicial notice of various recorded instruments on the Property, including the DOT, assignment of the DOT, substitution of trustee, notice of default (“NOD”), and notice of trustee’s sale (“NOS”). They argue that Plaintiff has no valid cause of action based on his allegations and that the judicially noticeable instruments, in any case, demonstrate that Defendants indeed have the requisite beneficial interest and authority to foreclose. 
 
         Plaintiff opposes the demurrer, arguing that he has set forth a claim based on violation of Civil Code section 2923.5, that Defendants cannot establish any ownership interest or other authority which might give them the right to foreclose, and have fraudulently claimed to have such an interest or authority.
 
           A demurrer can only challenge a defect appearing on the face of the complaint, exhibits thereto, and judicially noticeable matters. CCP section 430.30;Blank v. Kirwan (1985) 39 Cal.3d 311, 318. The grounds for a demurrer are set forth in CCP section 430.10. One of the grounds, in subdivision (e), is the general demurrer that the pleading fails to state facts sufficient to constitute a cause of action.
Demurrer for failure to state facts sufficient to constitute a cause of action is a general demurrer, which must fail if there is any valid cause of action. CCP §430.10(e); Quelimane Co., Inc. v. Steward Title Guar. Co. (1998) 19 Cal.4th 26, 38; Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078. 
 
A. Request for Judicial Notice
 
           The documents for which Defendants seek judicial notice, all recorded instruments regarding the Property, are properly judicially noticeable. Although the court cannot judicially notice any factual assertions in them, it may properly judicially notice the documents, that they say what they say, and their purported effect. The court, with the above limitation, grants the request.
 
B.   Timeliness of Opposition
 
           Defendants correctly argue in their reply that the opposition was filed one day late, eight court days before the hearing instead of the required nine. However, in this instance this is immaterial. Defendants have had sufficient time to reply. More importantly, because this is a demurrer based on the allegations and judicially noticeable matters and the opposition provides only legal argument and the court may not ignore the law or correct application thereof merely because asserted in an untimely opposition, the opposition is here does not alter the outcome. The court’s ruling would be the same regardless of whether the court considers the opposition or not.
 
C.   The Fifth Cause of Action
 
           The Fifth Cause of Action is based on violation of the provisions in HBOR at Civil Code sections 2923.5 and 2923.55 requiring that the mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent send to the borrower specified written information about options to seek protection, and wait 30 days after making initial contact with the borrower or 30 days after attempting to do so through due diligence. Section 2923.5 (a)(1)(A) states that the foreclosing party must wait until “Either 30 days after initial contact is made as required by paragraph (2) or 30 days after satisfying the due diligence requirements as described in subdivision (e).” Subdivision (e) specified what is required, stating, in pertinent part,
 
           “(e) A notice of default may be recorded… [despite a failure to contact the borrower] provided that the failure to contact the borrower occurred despite the due diligence of the mortgage servicer. For purposes of this section, “due diligence” shall require and mean all of the following:
            (1) A mortgage servicer shall first attempt to contact a borrower by sending a first-class letter that includes the toll-free telephone number  made available by HUD to find a HUD-certified housing counseling agency.
           (2)(A) After the letter has been sent, the mortgage servicer shall attempt to contact the borrower by telephone at least three times at different hours and on different days. Telephone calls shall be made to the primary telephone number on file.
           (B) A mortgage servicer may attempt to contact a borrower using an automated system to dial borrowers, provided that, if the telephone call is answered, the call is connected to a live representative of the mortgage servicer.
           (C) A mortgage servicer satisfies the telephone contact requirements of this paragraph:
           (i) If it determines, after attempting contact pursuant to this paragraph, that the borrower's primary telephone number and secondary telephone number or numbers on file, if any, have been disconnected.
           (3) If the borrower does not respond within two weeks after the telephone call requirements of paragraph (2) have been satisfied, the mortgage servicer shall then send a certified letter, with return receipt requested.
            (4) The mortgage servicer shall provide a means for the borrower to contact it in a timely manner, including a toll-free telephone number that will provide access to a live representative during business hours.
           (5) The mortgage servicer has posted a prominent link on the homepage of its Internet Web site, if any, to the following information:
           (A) Options that may be available to borrowers… and instructions to borrowers advising them on steps to take….
           (B) A list of financial documents borrowers should collect and be prepared to present….
           (C) A toll-free telephone number…to discuss options for avoiding foreclosure….
(D) The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.” 

            The requirements and definition of due diligence in Civil Code section 2923.55 are substantially similar.
 
           The court in Mabry v. Superior Court (2010) 185 Cal.App.4th 208, at 214 and 223, ruled that a party may enforce Civil Code section 2923.5 by private right of action and that “if section 2923.5 is not complied with, then there is no valid notice of default, and without a valid notice of default, a foreclosure sale cannot proceed.” However, the Mabry court determined, at page 235, that a cause of action to enforce section 2923.5 only exists to postpone a foreclosure sale, not to undo one or seek monetary remedies, stating, at 214, that “[t]he right of action is limited to obtaining a postponement of an impending foreclosure to permit the lender to comply with section 2923.5.” It also ruled, at page 214, that a declaration of compliance under section 2923.5(b) may simply track the statutory language and need not specify the details and methods of contact used. At page 233, the court added that the declaration need not be under oath, stating that ‘[t]he idea that this “declaration” must be made under oath must be rejected.’ Finally, the court noted the distinction between the requirement of providing the declaration and the requirement of actually making contact, indicating that each requirement may support a cause of action if violated. See also Magdaleno v. Indymac Bancorp, Inc. (E.D.Cal.2011) 853 F.Supp.2d 983, 991-992. As a result, the Mabry court explained, where the Plaintiff actually alleged that the Defendant had failed to make the required contact, the Plaintiff may have a valid cause of action, if limited to postponing foreclosure pending compliance. 
 
           Plaintiff alleges that Defendants failed to contact him or notify him in any way as specified, or provide the required toll-free number. This is sufficient to support a cause of action but only to the extent that it may postpone the foreclosure proceedings until Defendants have complied. The court overrules the demurrer to this cause of action to the extent that it is limited to postponing any foreclosure proceedings.
 
D.   Remaining Causes of Action
 
            As indicated above, all of the causes of action except the fifth are premised on the claim that Defendants lack the requisite ownership or other interest in the Note and DOT, and thus the authority to foreclose.
 
            Although a party must have an ownership interest in the note and its attendant right to foreclose, or be acting as an agent of one with such an interest, in order to foreclose, authority is settled that a foreclosing entity need not show actual authorization. See Gomes v. Countrywide Home Loans (2001) 192 Cal.App.4th 1149; Debrunner v. Deutsche Bank National Trust Co. (2012) 204 Cal.App.4th 433; Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256. As set forth in the above authority, the burden is on Plaintiff to allege something that actually negates authority to foreclose, rather than merely claiming a lack of such authority in a general, conclusory fashion. See also Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 513.
 
           In Gomes v. Countrywide Home Loans (2001) 192 Cal.App.4th 1149, at 115, the court ruled that a borrower may not bring a preemptive lawsuit to stop non-judicial foreclosure based on an unsupported allegation that the beneficiary did not authorize the trustee to foreclose. 
 
           Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256 reached a result somewhat similar to that in Gomes, but noted that judicially noticeable recorded documents demonstrated the authority to foreclose by revealing that Defendants were in fact the trustee and had authority as nominee of the lender. The court further explained that “[g]iven the presumption of regularity, if plaintiff contended the sale was invalid because HSBC had no authority to conduct the sale, the burden rested with plaintiff affirmatively to plead facts demonstrating the impropriety” and the trustee does not have the burden of showing that it has the authority to foreclose. The court held that the borrower has the burden of proving lack of authority, so has the burden of alleging facts showing lack of authority, if the borrower is to prevail on such an action.
 
           As with the previous demurrer to the original complaint, Plaintiff’s allegations are insufficient to set forth a valid cause of action on this basis. The allegations are essentially unchanged from those in the original complaint which this court found insufficient and they do nothing more than assert a general, conclusory claim that Defendants, or their agents, or their principals on whose behalf they may be acting, lack any ownership interest or other authority which may give them a right to foreclose. Plaintiff’s allegations are quintessentially improper attempt to shift the burden to Defendants. Moreover, as Defendants argue, the judicially noticeable instruments demonstrate their interest and authority to foreclose. Given that this is the basis for all of the causes of action except the fifth cause of action for violation of HBOR, this affects all of those causes of action. 
 
           Moreover, even if Plaintiff’s allegations were true and sufficient to support a claim based on Defendants’ lack of an interest or authority to foreclose, the alleged misrepresentation of authority, of concealment about the lack thereof, cannot support any cause of action based on fraud or negligent misrepresentation in any form, specifically causes of action one, three, and six. The allegations themselves on their face do not demonstrate that the alleged concealment of, or misrepresentation regarding, facts about Defendants’ interest and right to foreclose, in any way induced Plaintiff to change positions in reliance on the alleged misrepresentation or concealment.
 
            The court sustains the demurrer without leave to amend to every cause of action except the fifth cause of action on this basis.
 
E.   Conclusion
 
           The court overrules the demurrer to the fifth cause of action as set forth above but sustains the demurrers without leave to amend as to all other causes of action.
 
           Defendants shall prepare and serve a proposed order consistent with this tentative ruling within five days of the date set for argument of this matter. Plaintiff shall inform the preparing counsel of objections as to form, if any, or whether the form of order is approved, within five days of receipt of the proposed order. The preparing party shall submit the proposed order and any objections to the court in accordance with California Rules of Court, Rule 3.1312.
 
 
8.    SCV-268046, Mangrum v. Ghoreishi
 
            Benchmark Insurance Company (“BIC”) moves for an order allowing them to intervene on behalf of their insured, Tyrone Barber Construction, Inc. The motion is granted.
 
       Plaintiff complains that she entered into contacts with Defendants The Kohan Group, Inc. (“Kohan”) and Barber Construction, Inc. (“Barber Construction”) by which Defendants agreed to construct improvements on an office building for a dentistry office at 1301 South Point Boulevard, Petaluma (“the Project”) but that Defendants failed to fulfill their contractual obligations regarding the Project.  Plaintiff alleges that Defendant Barber Construction entered into a sub-contract with Defendant Lacayo Mechanical LLC (Lacayo LLC) for the “HVAC system” in the Project, which was improperly and incorrectly installed.   She alleges that Defendant Mohsen Ghoreishi (“Ghoreshi”) is an officer of Kohan, Defendant Tyrone Barber (“Barber”) is an officer and sole director of Defendant Barber Construction, and Defendant Milton Lacayo is a managing member of Lacayo LLC. Collectively, Kohan and Ghoreishi are “the Kohan Defendants,” Barber and Barber Construction are the “Barber Defendants,” and Lacayo and Lacayo Mechanical are the “Lacayo Defendants.” Plaintiff alleges that the status of both Barber Construction and Lacayo Mechanical is suspended.
 
          Plaintiff entered the defaults of Defendants Lacayo Mechanical on May 13, 2021, “Milton Lacayo, an individual” on May 24, 2021, “Tyrone Barber, an individual” on June 4, 2021, and Barber Construction on June 9, 2021. The Kohan Defendants answered on June 9, 2021 and filed a cross-complaint against all of the other Defendants.
 
           This matter is now on calendar for the Motion for Leave to Intervene by Benchmark Insurance Company as Insurer for Tyrone Barber Construction, Inc.  Benchmark Insurance Company (“BIC”) seeks to intervene on behalf of its insured, Barber Construction. There is no opposition.
 
           California Code of Civil Procedure section 387 sets forth the basic standards for party intervention, including intervention as of right in section 387(d)(1) and permissive intervention in section 387(d)(2). 
 
           Joinder is compulsory where the nonparty seeking to intervene claims an interest in the property or transaction and is in such a situation that any judgment in the would-be intervenor’s absence “may as a practical matter impair or impede his ability to protect that interest.” CCP section 387(d)(1). As the statute itself says in subdivision (d)(1),
 
           “The court shall, upon timely application, permit a nonparty to intervene in the action or proceeding if either of the following conditions is satisfied:
(A) A provision of law confers an unconditional right to intervene.
           (B) The person seeking intervention claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person's ability to protect that interest, unless that person's interest is adequately represented by one or more of the existing parties.”
 
            An insurer’s subrogation right, for example, is an interest “relating to the property or transaction” that would support intervention. Hodge v. Kirkpatrick Develop., Inc. (2005) 130 Cal.App.4th 540, 548-549. 
 
           By contrast, a party may intervene, and the court has discretion to allow intervention, where the intervenor demonstrates 1) a “direct and immediate” interest in the outcome of the litigation; and 2) the intervention will not enlarge the issues; and 3) the reasons for the intervention outweigh the opposition. CCP section 387(d) (2). Truck Ins. Exch. v. Sup.Ct. (1997) 60 Cal.App.4th 342, 346; Reliance Ins. Co. v. Sup.Ct. (2000) 84 Cal.App.4th 383, 386. Subdivision (d)(2) states, in full, “[t]he court may, upon timely application, permit a nonparty to intervene in the action or proceeding if the person has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both.
 
           Insurance Code section 11580, setting forth required provisions in insurance policies containing liability provisions, requires at subdivision (b) that all such policies contain provisions that the insolvency or bankruptcy of the insured will not release the insurer from payment for damages, and that when a judgment is secured against the insured, an action may be brought against the insurer to recover on the judgment. Therefore, under Ins. Code section 11580, a party which has prevailed in an action against an insured may subsequently file a direct action against the insurer to recover within the terms of the insurance policy. Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2006) 136 Cal.App.4th 212, 223. The court in Kaufman & Broad, at page 216, expressly held that
 
          “when an insurance company seeks to provide a defense in pending litigation for a corporation that has been suspended for nonpayment of its taxes, the insurance company must intervene in the action to protect its own interests and those of its insured. The insurance company may not answer and litigate the lawsuit in the name of the suspended corporation without intervening in the case.”
 
            Accordingly, an insurer generally has a right to intervene in an action against an insured, and may do so when there is a judgment against the insured.   Reliance Ins. Co. v. Sup.Ct. (2000) 84 Cal.App.4th 383, 386-387. As the court explained in Reliance Insurance:
 
           “An insurer's right to intervene in an action against the insured, for personal injury or property damage, arises as a result of Insurance Code section 11580. Section 11580 provides that a judgment creditor may proceed directly against any liability insurance covering the defendant, and obtain satisfaction of the judgment up to the amount of the policy limits. [Citation.] Thus, where the insurer may be subject to a direct action under Insurance Code section 11580 by a judgment creditor who has or will obtain a default judgment in a third party action against the insured, intervention is appropriate. [Citation.] The insurer may either intervene in that action prior to judgment or move under Code of Civil Procedure section 473 to set aside the default judgment. [Citation.] Where an insurer has failed to intervene in the underlying action or to move to set aside the default judgment,
           the insurer is bound by the default judgment. [Citation.”]
 
            The insurer has standing to set aside the default judgment against its insured. Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 884-885. 
 
           BIC here seeks to intervene on behalf of Barber Construction, its insured, in order to defend itself against the liability for a judgment against the insured. It has provided a proposed complaint in intervention asserting defenses against the claims which Plaintiff and Cross-Complainants, the Kohan Defendants, have asserted against the insured. BIC asserts, as Plaintiff alleges, that the insured is a suspended corporation unable to defend itself in this action. BIC clearly has a right to intervene in this instance. 
 
           The court notes that Plaintiff has already entered the default of the insured but the Kohan Defendants, as Cross-Complainants, have not entered the default of the insured on their cross-complaint against it.   This does not, however, affect BIC’s right to intervene.
 
           The court grants the motion.
 
           The moving party shall prepare and serve a proposed order consistent with this tentative ruling within five days of the date set for argument of this matter. Opposing counsel shall inform the preparing counsel of objections as to form, if any, or whether the form of order is approved, within five days of receipt of the proposed order. The preparing party shall submit the proposed order and any objections to the court in accordance with California Rules of Court, Rule 3.1312.
 
 
9.    SCV-268102, Peckham v. Leon
             
            UPDATE: Notice of Settlement was filed 9/14/21 motion is dropped from calendar.  Tentative Ruling is moot.

            Preliminary Injunction GRANTED, as explained herein.
 
        Plaintiff Lamar Peckam, individually and derivatively, previously brought an ex parte application for a temporary restraining order (“TRO”) and orderto show cause (“OSC”) re: preliminary injunction. This court granted both, although denying the application to the extent of barring Defendant Sarah Leon from “breaching” her “fiduciary duties.” 
 
         Plaintiff also sought a preliminary injunction barring Defendant from breaching fiduciary duties to Plaintiff and the Company or exercising managerial control over, or acting on behalf of, the Company; and requiring her to turn over all keys, access codes, documents, records, or any other property or information” and the like belonging to, or used by, Plaintiff or the Company. 
 
          At the hearing on the OSC for preliminary injunction on April 14, 2021, the court granted the application for preliminary injunction.
 
          After Defendant answered and filed her own cross-complaint on July 6, 2021, on July 14, 2021 the parties filed a stipulation to set aside the order granting the request for preliminary injunction (“the Order”) and requested that it be rescheduled for a hearing on a later date. The stipulation explains and demonstrates that prior to the April 14, 2021 hearing, the parties had entered into a written stipulation to continue the hearing in order to allow more time for informal resolution but, because of an error in filing, the stipulation was not actually filed in time to prevent the court hearing and granting the injunction, but both parties has thought that the matter was already being continued. On August 11, 2021, the court granted the order, upon signed stipulation of both parties, to vacate the injunction Order and reset the hearing on the OSC for September 15, 2021.
 
         Plaintiff complains that Defendant Leon (“Leon”), Plaintiff’s adult daughter, has mismanaged and improperly diverted assets of, Peckham & Daughter, P.C. (“the Company”), a law firm which Plaintiff and Defendant created and jointly own. He alleges that, now in his 70s, he was beginning to slow down in his work and therefore agreed to Leon’s requests to form the Company, so she could follow in his footsteps, and allow her to manage it for them, with Plaintiff and Leon each being a 50% shareholder, but that “almost immediately” after becoming an officer and shareholder and obtaining her shares in the Company, Leon abandoned the practice of law. Despite that, she continues to draw a $90,000 annual salary and has kept full control over all financial record-keeping and client database system, while failing to process payroll in a timely manner, failing to provide necessary financial information to the Company’s accountants for tax returns and other purposes, and avoiding any substantive work in law which she had promised to do in return for the salary, and in effect providing no meaningful services to the Company but instead hindering its functioning. 
 
         This matter is again on calendar for Plaintiff’s requested OSC and motion for preliminary injunction barring Defendant from breaching fiduciary duties to Plaintiff and the Company or exercising managerial control over, or acting on behalf of, the Company; and requiring her to turn over all keys, access codes, documents, records, or any other property or information” and the like belonging to, or used by, Plaintiff or the Company. There is no opposition. 
 
A.           Preliminary Injunction Law
 
           The ultimate purpose of a preliminary injunction is to preserve the status quo. Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 528. The court may only grant such a preliminary injunction where the Plaintiff has a right to equitable relief if the case goes to trial. Voorhies v. Greene (1983) 139 Cal.App.3d 989, 995-998. CCP §526 lists the specific circumstances where an injunction would be appropriate. These grounds include whether Plaintiff appears entitled to the requested relief, whether the requested relief includes a prayer to restrain the actions at issue, whether continued activity would create waste or great or irreparable injury to a party, and whether a party is about to do something regarding the subject matter of the action and tending to render judgment ineffectual, among others. CCP §526(a).
 
           As is usual with all injunctions, a preliminary injunction will issue only if there is no adequate legal remedy. CCP § 526.   The party seeking the injunction must show an imminent threat of irreparable injury, often equated with an “inadequate legal remedy.” CCP section 526(a)(2); Korean Philadelphia Presbyterian Church v. Cal. Presbytery (2000) 77 Cal.App.4th 1069, 1084. 
 
           The requirement that the injury be “imminent” simply means that the party to be enjoined is, or realistically is likely to, engage in the prohibited action. Korean Philadelphia Presbyterian Church, supra. The court should not grant the injunction if the conduct or injury complained of is not occurring. Cisneros v. U.D. Registry, Inc. (1995) 39 Cal.App.4th 548, 574.   The irreparable injury will exist if the party seeking the injunction will be seriously injured in a way that later cannot be repaired. People ex rel. Gow v. Mitchell Bros., Etc. (1981) 118 Cal.App.3d 863, 870-871.
 
           The party seeking a preliminary injunction must also demonstrate a reasonable probability of success. See CCP section 526(a)(1); San Francisco Newspaper Printing Co., Inc. v. Sup.Ct. (Miller) (1985) 170 Cal.App.3d 438, 442. Plaintiff must make a prima facie showing that he is entitled to relief under these standards, but need not rise to the requirements for a final determination.  Triple A Machine Shop, Inc. v. State of California (1989) 213 Cal.App.3d 131, 138. Scaringe v. J.C.C. Enterprises, Inc. (1988) 205 Cal.App.3d 1536, at 1543, provides an example of how to determine whether the plaintiff has satisfied this requirement. The plaintiff in Scaringe sought to halt construction that would block his view. The court stated that in order to show a reasonable probability of success, the plaintiff had to demonstrate an enforceable servitude or CCRs.
 
           The court must conduct a two-prong equitable balancing test, weighing the probability of prevailing on the merits against the determination as to who is likely to suffer greater harm. Robbins v. Sup.Ct. (1985) 38 Cal.3d 199, 206. Shoemaker v. County of Los Angeles (1995) 37 Cal.App.4th 618, 633. This determination involves a mix of the two elements, and the greater the Plaintiff’s showing on one element, the weaker it may be on the other. Butt v. State of Calif. (1992) 4 Cal.4th 668, 678. 
 
           If the court grants a preliminary injunction, it must require an undertaking or a cash deposit. CCP § 529. The amount must cover any damages to defendant if the court finally determines that plaintiff was not entitled to the injunction. CCP § 529; see Top Cat Productions, Inc. v. Michael’s Los Feliz (2002) 102 Cal.App.4th 474, 478. The court should thus determine the potential likely harmful effect of the injunction as the basis for the amount. Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 14. The court should include lost profits or other damages as well as costs of defense, but should not consider the strength of plaintiff’s case on this point. Abba Rubber, supra, 15-16.
 
B.           Irreparable Injury
 
            There is a threat of irreparable harm where there is an “inadequate legal remedy” or where the injury cannot be readily repaired or undone. CCP § 526(a)(2); see People ex rel. Gow v. Mitchell Brothers’ Santa Ana Theater (1981) 118 Cal.App.3d 863, 870-871.
 
         Normally loss of money is not an irreparable injury that would support a preliminary injunction because there will normally be an adequate legal remedy.   Doyka v. Sup.Ct. (1991) 233 Cal.App.3d 1134, 1136. However, a party may obtain a preliminary injunction preventing a party from receiving funds to which it is not entitled. Mitsui Manufacturers Bank v. Texas Commerce Bank-Fort Worth (1984) 159 Cal.App.3d 1051, 1057-1058. A plaintiff may also obtain a preliminary injunction to prevent dissipation of specific, identifiable funds, which again is distinct from a general claim for damages. See Heckmann v. Ahmanson (1985) 168 Cal.App.3d 119, 136.    
 
           Showing that an injunction is necessary to prevent waste will therefore also satisfy this element and provide a proper basis for a preliminary injunction. CCP §526(a). 
 
           Courts may also enjoin the unlawful interference with lawful business. See Uptown Enterprises v. Strand (1961) 195 Cal.App.2d 45, 51.
 
           Plaintiff alleges, asserts in this motion, and provides evidence demonstrating, that Leon’s conduct is jeopardizing the law business which Plaintiff had previously established, specifically interfering with his handling of clients’ cases and other legal work; alienating Company employees by failing to pay them; exposing the Company to liability for failing to pay employees or file tax returns on time; preventing the Company from meeting its financial obligations. All of these may cause waste and injuries which may not be easily remedied through simple monetary damages.
 
           Plaintiff has met this element.   
 
C.           Likelihood of Success on the Merits
 
           Plaintiff provides evidence supporting all of his allegations and arguments in support of this motion, as set forth above. This consists primarily of his own declaration, which support the facts as alleged and set forth above. He also includes e-mails showing that he asked Leon on January 30, 2021 for financial information regarding the Company in order to handle a transition, to which Leon replied that she would not respond to Plaintiff about the information personally and that he would instead “be hearing from my representative.” He provides another e-mail from him to Leon showing that on March 8, 2021 he asked her to provide income and expenses statements needed to obtain a loan or the Company would be unable to make a timely loan application. He thus shows a likelihood of success on the merits.
 
           Plaintiff partly bases this action on his right to inspect records under Corporations Code section 1601, which gives all shareholders of a corporation the right to inspect and copy the corporation’s records. It states, in pertinent part,
 
          “(a) The accounting books and records and minutes of proceedings of the shareholders and the board and committees of the board of any domestic corporation, and of any foreign corporation keeping any such records in this state or having its principal executive office in this state, shall be open to inspection upon the written demand on the corporation of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to such holder's interests as a shareholder or as the holder of such voting trust certificate.
           ...(b) Such ... right of inspection includes the right to copy and make extracts. The right of the shareholders to inspect the corporate records may not be limited by the articles or bylaws.”
 
           This law is based on the principle that a shareholder has an interest in the assets and dealings of the corporation and must be able to protect this interest. Hobbs v. Tom Reed Gold Mining Co. (1913) 164 Cal.497. 
 
           Plaintiff also alleges and shows that he is one of the two directors of the Company. Corps. Code section 1602 governs the right of directors to corporate documents. It states that “[e]very director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the corporation of which such person is a director.... [T]he right of inspection includes the right to copy and make extracts.” Unlike a shareholder, who does not, as mentioned have “unfettered” access rights, a director does seem to have such rights. The statute clearly states that a director “shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind....” Emphasis added.
 
           Directors of a corporation owe a fiduciary duty to both the corporation and the corporation’s stockholders. Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1037; Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 106-110, Small v. Fritz Companies, Inc. (2003) 30 Cal.4TH 167,179 (“Officers and directors owe fiduciary duties to stockholders”). This duty ultimately is derived from common law but has also been codified in Corp. Code section 309. Berg & Berg, supra; Lehman, supra; Jones, supra. As the court explained in Berg & Berg,
 
           “It is without dispute that in California, corporate directors owe a fiduciary duty to the corporation and its shareholders and now as set out by statute, must serve “in good faith, in a manner such director believes to be in the best interests of the corporation and its shareholders.” (Corp.Code, § 309, subd. (a).) This duty—generally to act with honesty, loyalty, and good faith—derived from the common law.  [Citation.]”
 
           The elements of the cause of action for breach of fiduciary duty are 1) a fiduciary duty; 2) breach of the duty; and 3) damage caused by the breach.  Charnay v. Cobert (2006) 145 Cal.App.4th 170, 182; Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086.
 
           Plaintiff’s evidence, as set forth above, repeating the allegations in the complaint, demonstrates that Leon has breached these duties to him as a director and as a shareholder, as well as to the Company itself. 
 
            Plaintiff has shown a probability of success on the merits. 
 
D.        Balancing Test
  
           Both factors support issuance of an injunction. The likelihood of injury to Leon from the injunction seems insignificant by comparison to the injuries to Plaintiff and the Company without it, and much less irreparable. 
 
E.        Status Quo

Issuance of an injunction would serve to preserve the status quo. 


F.         Undertaking
 
           As noted above, if the court grants a preliminary injunction, it must require an undertaking or a cash deposit. CCP section 529. The amount must cover any damages to defendant if the court finally determines that plaintiff was not entitled to the injunction. CCP section 529; see Top Cat Productions, Inc. v. Michael’s Los Feliz (2002) 102 Cal.App.4th 474, 478. The court should thus determine the potential likely harmful effect of the injunction as the basis for the amount. Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 14. The court should consider lost profits or other damages as well as costs of defense where trial is necessary to defeat the preliminary injunction, but should not consider the strength of plaintiff’s case on this point. Abba Rubber, supra, 15-16. The court also has the authority to waive the bond requirement if it finds that the plaintiff is indigent or unable to obtain sufficient sureties, but the court must weigh all relevant factors. CCP section 995.240
 
           The court may find that the party to be enjoined has waived the right to an undertaking if substantial evidence indicates that it has consciously and knowingly failed or refused to argue the point, at least as a result of a tactical decision. Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 740. However, mere failure to ask for an undertaking, alone, has been found to be insufficient to show such waiver. Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 10 (in ordinary tort actions, the bond requirement is mandatory, not discretionary). 
 
           Although the court could potentially find that Leon has waived the right to a bond, Plaintiff fails to address this. As such, a bond is required. The court finds a bond of $10,000 to be reasonable and that it is required.
 
           Plaintiff shall prepare and serve a proposed order consistent with this tentative ruling within five days of the date set for argument of this matter. Opposing counsel shall inform the preparing counsel of objections as to form, if any, or whether the form of order is approved, within five days of receipt of the proposed order. The preparing party shall submit the proposed order and any objections to the court in accordance with California Rules of Court, Rule 3.1312.
 
 
10. SPR-095583, Matter of Thomas Kelly Jr. Trust
 
Matter continued to November 12, 2021 at 9:30 a.m. in Department #19. 
 
 
 
***This is the end of these tentative rulings.***



[1] Plaintiff filed two similar lawsuit against other different defendants alleging similar wrongdoing regarding other real property which he allegedly owned, SCV-262428 and 261099. He was also the defendant an a nuisance abatement action which the County filed regarding that property, SCV-265146.

 

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