Estrellas Land Holding LLC vs Valley Heart Ranch LLC et al

Case Number

22CV02689

Case Type

Hearing Date / Time

Fri, 10/25/2024 - 10:00

Nature of Proceedings

Motion to Withdraw Consent to Preliminary Injunction

Tentative Ruling

For the reasons set forth herein, the motion of Estrellas Land Holding, LLC to withdraw consent to preliminary injunction, for hearing on preliminary injunction, and for bond, is denied.

Background:

This action commenced on July 13, 2022, by the filing of the original complaint by plaintiff Estrellas Land Holding, LLC (“ELH”). ELH filed the operative third amended complaint (“TAC”) on September 10, 2024, against Valley Heart Ranch, LLC (“Valley Heart”), Darrell W. Becker (“Darrell”), Kirsten K. Becker (“Kirsten”), Manifest Building Inc. dba Ecolawn SB (“Ecolawn”), and Javier Construction Inc. (“Javier”), setting forth causes of action for: (1) breach of contract, (2) quiet title to easement, (3) declaratory relief, and (4) professional negligence. (Note: Due to common surnames, some defendants will be referred to by their given names for clarity. No disrespect is intended.)

As alleged in the TAC:

On November 21, 2018, ELH purchased the real property located at 2560 Whitney Avenue, Summerland. (TAC, ¶ 2.) After purchasing the property, ELH began construction of a new residence and other improvements to the property, as there were already plans submitted and a building permit granted by the County of Santa Barbara. (Ibid.) This included the construction of a new driveway for ingress and egress to the property, the instillation of a surface water drainage system, landscaping, and the installation of a utility junction box serving 2560 Whitney, located in an existing right of way. (Ibid.)

Valley Heart is operated and managed by Darrell and Kirsten who are currently living in a house at 2556 Whitney. (TAC, ¶ 3.) 2560 Whitney and 2556 Whitney share a common boundary line with 2556 Whitney generally bordering the western boundary of 2560 Whitney. (TAC, ¶ 4 & Exh. 2.)

On October 22, 2020, ELH’s agent received verbal authorization, from the prior owner of 2556 Whitney, to install a utility junction box at a location chosen by Southern California Edison, on the north side of the easement. (TAC, ¶ 5.) Approximately 21 months after receiving the approval, Darrell approached ELH with a proposal concerning the relocation of the utility box. (Ibid.)

On February 2, 2022, ELH’s agent met with Darrell regarding the relocation of the utility box and Darrell stated he wanted the utility box relocated 2 feet over and set up so that it could be used by both 2556 Whitney and 2560 Whitney. (TAC, ¶ 6.) Darrell also agreed to pay half the cost to relocate the utility box. (Ibid.) Darrell agreed that if the utility box was relocated, and hookups provided for 2556 Whitney, he would provide consent to the utility companies to start providing service to 2560 Whitney. (Ibid.)

Pursuant to the agreement with Darrell, ELH moved the utility box, at its own expense, to the agreed upon location of February 23, 2022. (TAC, ¶ 7.) The location was documented in a text message from Darrell and on a video in which Darrell spray painted the exact location where he wanted the utility box moved. (Ibid.) ELH also provided the hookups necessary for 2556 Whitney to connect to the utility box as Darrell had requested. (Ibid.)

Once the utility box was relocated, ELH requested that the utility companies servicing the 2560 Whitney property connect the utilities to the 2560 Whitney property and begin running electricity and gas to the property. (TAC, ¶ 8.) In response, representatives of the utility companies informed ELH that they could not activate the utility lines running to 2560 Whitney until all owners of the properties through which the utility lines ran consented to their activation. (TAC, ¶ 9.) All of the neighboring property owners, except Valley Heart, gave authorization. (Ibid.)

Darrell demanded that ELH consent to a proposed modification of the Valley Heart site, including a new, larger house, an accessory dwelling unit, a sport court, a free-standing underground garage, retaining walls, and various other improvements that would require massive grading and site modification on the 2556 Whitney property. (TAC, ¶ 11.) At the time, Valley Heart had already submitted a draft plan, to perform extensive grading to 2556 Whitney, and Darrell informed ELH that unless ELH signed a consent form for the planned project, and agreed not to appear at public hearings, Darrell would not sign the utility companies’ authorization forms so that no electric service could be provided to 2560 Whitney. (Ibid.)

Darrell has continued to breach his agreement with ELH by refusing to sign the authorizations allowing the utilities to be connected to the residence at 2560 Whitney. (TAC, ¶¶ 11, 12.)

On November 18, 2022, Valley Heart filed its cross-complaint for: (1) breach of contract, (2) breach of covenant of good faith and fair dealing, (3) breach of agreement to negotiate agreement, (4) trespass, (5) nuisance - easement, (6) nuisance - drainage, and (7) declaratory relief.

On August 16, 2023, Valley Heart filed an ex parte application for temporary restraining order and order to show cause re: preliminary injunction. By way of the ex parte application, Valley Heart sought to enjoin ELH from performing any work on Valley Heart’s property including landscaping, grading, excavating, or instillation of any utility lines or other utility service systems.

At the hearing on the ex parte application, on August 17, 2023, counsel for ELH and Valley Heart appeared. Counsel for ELH represented that ELH would not oppose the ex parte application provided that the restraining order expressly states that it can be modified by the court to permit construction work by ELH on Valley Heart’s property for good cause shown. ELH did not request that Valley Heart be required to post an undertaking. The August 17, 2023 order provides:

“IT IS ORDERED that Plaintiff and Cross-Defendant Estrellas Land Holding, LLC (“ ‘Estrellas’ ”), its members, officers, agents, representatives, employees and contractors, and anyone acting on Estrellas’ behalf or under Estrellas’ direction or supervision, shall be and hereby are restrained and enjoined  from performing any construction work on 2556 Whitney, including but not limited to landscaping, grading, excavating or installation of any utility lines or other utility service systems, absent further order of the Court. This order is issued without prejudice to Estrella’s ability to later seek a modification of the order to permit construction work on 2556 Whitney for good cause shown.”

On September 6, 2024, ELH filed an ex parte application to dissolve the temporary restraining order and order to show cause re: preliminary injunction. On September 10, 2024, the ex parte was denied.

ELH filed the present motion on September 25, 2024, to withdraw consent to the preliminary injunction, for a hearing on the preliminary injunction, and for an order that Valley Heart post a bond.

Valley Heart opposes the motion.

The trial confirmation conference, in this action, is scheduled to take place less than three months away, on January 17, 2025.

Analysis:

As an initial matter: “All electronic documents must be in text searchable format and must comply with the formatting and content requirements of the California Rules of Court for electronic documents, including particularly CRC 3.1110(f)(4) requiring electronic bookmarks.” (Super. Ct. Santa Barbara County, Local Rules, rule 1012 (c)(1).)

“Unless they are submitted by a self-represented party, electronic exhibits must include electronic bookmarks with links to the first page of each exhibit and with bookmark titles that identify the exhibit number or letter and briefly describe the exhibit.” (Cal. Rules of Court, rule 3.110 (f)(4).)

“Compliance with all of the formatting requirements for electronic documents is extremely important for the court’s timely consideration of e-filed documents. In cases of noncompliance, the court may, in its discretion, order any, or all, of the following in addition to any other sanction permitted by law: (i) the noncomplying document to be stricken as improperly filed; (ii) the continuance of the hearing to which the noncomplying document pertains; or, (iii) the imposition of monetary sanctions for violation of the California Rules of Court or these Local Rules, following adequate notice and an opportunity to be heard.” (Super. Ct. Santa Barbara County, Local Rules, rule 1012 (c)(2).)

Neither party included electronic bookmarks that comply with the above authority as required. In particular, the declaration of Darrell, in support of Valley Heart’s opposition, is 167 pages long including its 18 exhibits. While the court considered striking the non-complying documents submitted by both parties, the court will refrain from doing so this time. Counsel is reminded to comply with the California Rules of Court as well as the Local Rules in any future filings with the court.

            Injunction

“(a) An injunction may be granted in the following cases:

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

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

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

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

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

“(6) Where the restraint is necessary to prevent a multiplicity of judicial proceedings.

“(7) Where the obligation arises from a trust.” (Code Civ. Proc., § 526, subd. (a).)

“A preliminary injunction may be granted at any time before judgment upon a verified complaint, or upon affidavits if the complaint in the one case, or the affidavits in the other, show satisfactorily that sufficient grounds exist therefor. No preliminary injunction shall be granted without notice to the opposing party.” (Code Civ. Proc., § 527, subd. (a).)

“ ‘The general purpose of a preliminary injunction is to preserve the status quo pending a determination on the merits of the action. [Citation.] “ ‘The granting or denial of a preliminary injunction does not amount to an adjudication of the ultimate rights in controversy. It merely determines that the court, balancing the respective equities of the parties, concludes that, pending a trial on the merits, the defendant should or ... should not be restrained from exercising the right claimed by him [or her].’ ” [Citation.]’ (SB Liberty, LLC v. Isla Verde Assn., Inc. (2013) 217 Cal.App.4th 272, 280.)

“In deciding whether to issue a preliminary injunction, a trial court must evaluate two interrelated factors: (i) the likelihood that the party seeking the injunction will ultimately prevail on the merits of his claim, and (ii) the balance of harm presented, i.e., the comparative consequences of the issuance and nonissuance of the injunction. [Citations.] The scope of available preliminary relief is necessarily limited by the scope of the relief likely to be obtained at trial on the merits.” (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 441-442.)

“The trial court’s determination must be guided by a “mix” of the potential-merit and interim-harm factors; the greater the plaintiff’s showing on one, the less must be shown on the other to support an injunction.” (Butt v. Superior Court, supra, 4 Cal.4th at p. 678.)

Here, the court was not required to engage in the balancing of respective equities because the parties affirmatively stipulated to the preliminary injunction. However, had it done so, the preliminary injunction would have been granted.

As summarized, ELH now makes the following arguments:

(1) The preliminary injunction order is void because the court did not require an undertaking, and

(2) Good cause exists to dissolve the preliminary injunction.

Code of Civil Procedure section 533 provides: “In any action, the court may on notice modify or dissolve an injunction or temporary restraining order upon a showing that there has been a material change in the facts upon which the injunction or temporary restraining order was granted, that the law upon which the injunction or temporary restraining order was granted has changed, or that the ends of justice would be served by the modification or dissolution of the injunction or temporary restraining order.”

The court will address ELH’s two arguments in reverse order than presented because it makes sense to do so.

            Changed Circumstances

To the extent the ELH argues it has withdrawn consent for the preliminary injunction: That is not grounds for dissolving the preliminary injunction. Parties cannot enter into a stipulation, obtain an order, and then simply state that they no longer agree to the stipulation. Good cause is required.

ELH argues, “Since the Preliminary Injunction Order was entered, there have been many changes in circumstances warranting the modification of the Valley Heart Application.” (Motion, p. 8, ll. 12-13.) Those alleged changed circumstances include:

(1) The Stop Work Order for 2560 Whitney was rescinded by the County of Santa Barbara on August 8, 2023. (Ardnt Decl., ¶ 5 & Exh. A.)

(2) The County of Santa Barbara approved ELH’s proposed site plans for construction of, among other things, access and utility improvements on 2556 Whitney. (Ardnt Decl., ¶ 6 & Exh. B.)

(3) Valley Heart admitted that: 1. ELH received permission to place a utility junction box on their property; 2. The Court will likely determine that ELH should have an easement by necessity for ingress and egress over Valley Heart’s property; 3. ELH’s property is landlocked and ELH cannot access its property without crossing a portion of Valley Heart’s property; and 4. ELH should have an easement by necessity for public utilities over a portion of Valley Heart’s property. (Ardnt Decl., ¶ 8 & Exh. D.)

Despite ELH’s representation that “the Court denied the ELH [ex parte] Application on September 10, 2024 on grounds that the Court did not believe an emergency existed warranting ex parte relief” (Motion, p. 3, ll. 3-5), ELH’s ex parte application was argued on the merits by counsel. Although the court did note that it did not see any exigency in ELH’s request, the ex parte application was decided on the merits following substantive argument of counsel. The court noted that the central dispute in this case remains. That dispute is, in essence, the details of the scope and precise location of the utility easements, ELH’s access over Valley Heart’s property, and the breach of any agreement regarding these issues. That dispute remains unresolved and is currently at issue.

ELH’s motion is, essentially, a motion for reconsideration of the ruling on the ex parte application.

“When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.” (Code Civ. Proc., § 1008, subd. (a).)

“The party seeking reconsideration must provide not just new evidence or different facts, but a satisfactory explanation for the failure to produce it at an earlier time.” (Glade v. Glade (1995) 38 Cal.App.4th 1441, 1457.)

ELH has not provided any “new or different facts, circumstances, or law” that would warrant the court changing its order denying ELH’s previous application to dissolve the temporary restraining order. ELH’s motion based on “good cause” will be denied for the same reason that the ex parte application was denied.

Undertaking

“On granting an injunction, the court or judge must require an undertaking on the part of the applicant to the effect that the applicant will pay to the party enjoined any damages, not exceeding an amount to be specified, the party may sustain by reason of the injunction, if the court finally decides that the applicant was not entitled to the injunction. Within five days after the service of the injunction, the person enjoined may object to the undertaking. If the court determines that the applicant’s undertaking is insufficient and a sufficient undertaking is not filed within the time required by statute, the order granting the injunction must be dissolved.” (Code Civ. Proc., § 529, subd. (a).)

“[A]n injunction does not become effective until an undertaking is required and furnished [citation], and must be dissolved if an undertaking is not filed within the time allowed by statute (§ 529, subd. (a)). Since an undertaking is an indispensable prerequisite to the issuance of a preliminary injunction, regardless of whether the party to be restrained has reminded the court to require the applicant to post one, the restrained party does not waive its right to that statutorily-mandated protection by failing to affirmatively request it.” (Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 10.) “[T]he trial court’s function is to estimate the harmful effect which the injunction is likely to have on the restrained party, and to set the undertaking at that sum.” (Id. at p. 14.)

As noted above, ELH argues that the preliminary injunction is invalid because an undertaking was not filed.

Valley Heart argues that ELH waived the requirement of an undertaking.

It should be noted that ELH did not argue that the preliminary injunction was void, for lack of an undertaking, in its ex parte application or in its argument at the hearing on the ex parte application. ELH presents no excuse for not making the argument as part of its ex parte application. As this is, in reality, a motion for reconsideration, ELH is required to explain its failure to address the argument earlier. The argument will be rejected for ELH’s failure to do so.

In the alternative, the argument fails on other substantive grounds.

“Anyone may waive the advantage of a law intended solely for his benefit.” (Civ. Code, § 3513.)

ELH argues that it did not consent to a waiver in writing, and therefore it is not waived pursuant to Code of Civil Procedure section 995.230, which provides: “The beneficiary of a bond given in an action or proceeding may in writing consent to the bond in an amount less than the amount required by statute or may waive the bond.” By its plain language, this code section states that the beneficiary of a bond may in writing consent to the bond in an amount less than the amount required by statute. It does not say that a waiver need be in writing. “Nonetheless, given the existence of Civil Code section 3513 and “ ‘the established rule that rights conferred by statute may be waived’ ” [citation], we conclude it is not necessary that we decide these issues of statutory construction.” (Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 741.)  “In summary, the injunction bond requirement of section 529 can be waived or forfeited by the party to be enjoined.” (Id. at p. 744.)

The intent to waive may be expressed in words, either oral or written, or implied by a party's conduct. (Id. at p. 745.)

Here, ELH’s conduct resulted in a waiver or forfeiture of the undertaking. The combination of failing to request one in the first place, the agreeing to a stipulation for preliminary injunction that did not include a requirement for an undertaking, the failure to request an undertaking since the preliminary injunction was ordered over 14 months ago, and the failure to include the argument in the ex parte application, all demonstrate that ELH intended to waive the requirement of an undertaking.

“In view of the facts and circumstances which gave rise of the execution of the stipulation, and considering the length of time which had elapsed during which no complaint was made by the petitioners concerning the lack of any bond, they must be deemed to have waived any rights which theretofore they may have had in that regard.” (City of Los Angeles v. Superior Court in and for Los Angeles County 91940) 15 Cal.2d 16, 23.)

ELH’s motion will be denied in its entirety.