Janet K Harris vs Ryan Darrell Reed et al

Case Number

24CV00367

Case Type

Hearing Date / Time

Fri, 07/26/2024 - 10:00

Nature of Proceedings

CMC; Motion for Preliminary Injunction

Tentative Ruling

For the reasons set forth herein, plaintiff Janet K. Harris’s motion for preliminary injunction is granted. Plaintiff shall prepare a proposed formal order. The order shall not take effect until plaintiff files a written undertaking in the amount of $1,000.00 to indemnify defendants for any damages defendants may sustain if the court finally determines that plaintiff is not entitled to the injunction. Plaintiff shall file a written undertaking, in the amount of $1,000.00, no later than July 30, 2024.

Background:

This action commenced on January 24, 2024, by the filing of the complaint by plaintiff Janet Harris (“plaintiff”) against defendants Coast Supply Co. and Ryan Darrell Reed (“Reed;” collectively “defendants”). On February 28, 2024, plaintiff filed her first amended complaint (“FAC”) setting forth causes of action for: (1) Recission of Contract; (2) Breach of Contract; (3) Conversion; (4) Civil Theft; (5) Return of Funds Paid to Unlicensed Contractor; and (6) Unfair Business Practices.

As alleged in the FAC:

Plaintiff hired defendants to install floors and cabinets at plaintiff’s home and provided defendants with an initial $40,000.00 deposit for the work. (FAC, ¶ 1.) The deposit was in excess of the $1,000.00 deposit cap imposed by law. (Ibid.) Defendants repeatedly broke their promises to move forward with the projects, and insisted that plaintiff pay an additional $40,000.00 deposit before defendants would order the cabinetry materials. (Ibid.) Plaintiff cancelled the parties arrangement and requested the return of her initial deposit, which defendants have wrongfully kept. (Ibid.)

Defendant Reed is an owner/shareholder of Coast Supply Co. and is listed as its sole executive officer and director in public filings with the Secretary of State. (FAC, ¶ 5)

Coast Supply Co., through Reed, is licensed by the California Contractors State License Board (“CLSB”) to provide contracting services for the installation of flooring and floor coverings. (FAC, ¶ 15.) Defendants are not licensed to engage in contracting services regarding the installation of cabinetry, nor have defendants acquired a joint venture license with any person or entity licensed for such work. (FAC, ¶ 16.)

Plaintiff seeks rescission of the agreement, monetary damages, attorneys’ fees, punitive damages, and injunctive relief enjoining defendants from engaging in the collection of deposits in excess of the lesser of $1,000.00 or ten percent of the total amount to be charged to defendants’ customers and engaging in unlicensed work relating to the installation of cabinetry. (FAC, Prayer for Relief.)

On March 18, 2024, defendants filed their answer to the FAC setting forth a general denial and 20 affirmative defenses.

Plaintiff now seeks a preliminary injunction as follows:

Preliminarily enjoin Defendants from (i) accepting an advanced deposit for the provision of contractor services in amounts greater than the limits set by Business & Professions Code section 7159.5, subdivision (a)(3); and (ii) performing any work for which a C-6 license (cabinetry) from the CLSB is required, without having first obtained that license or other form of approval from CLSB.

On July 9, 2024, defendants filed a notice of non-opposition to plaintiff’s motion for preliminary injunction. Defendants are requesting that the hearing on the motion be continued to a date after the parties August 8, 2024, mediation through the court’s CMADRESS program.

Analysis:

“(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, plaintiff has provided evidence and argument relevant to the pertinent factors. As indicated above, defendants do not oppose the request for a preliminary injunction and effectively concede that plaintiff is entitled to the relief requested. As such, an injunction will issue upon the terms requested by plaintiff.

Although defendants request a continuance until after the date set for mediation, they have provided no reason for doing so. The injunction essentially orders that defendants not violate already existing laws. No continuance will be granted.

            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.)

Although defendants did not request that a bond be ordered, the court must order plaintiff to post an adequate bond upon issuing the preliminary injunction.

Neither party has suggested an amount of the undertaking. The court has considered all of the reasonably foreseeable damages that may be proximately caused by the issuance of the preliminary injunction and finds them to be minimal. The amount of bond shall be $1,000.00, to be posted within five court days.

This order shall not preclude either party from moving for modification or dissolution under Code of Civil Procedure section 533, which 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.”