2012-00129930-CU-MC

Michael J Guttridge vs. Aurora Capital LLC

Nature of Proceeding: Motion for Temporary Injunction and Declaratory Relief

Filed By: Dove, Ellen C.

Defendants’ “Motion for Temporary Injunction and Declaratory Relief” is DENIED for
the reasons stated in the opposition papers and stated below.

Moving counsel is admonished because the notice of motion fails to comply with Code
of Civil Procedure §1010 and CRC Rule 3.1110(a) and because the moving papers
also fail to comply with CRC Rules 2.111(3), 3.1110(b)(3)-(4) and 3.1113(d), (e) and
(f). In light of these numerous violations and particularly the 26-page memorandum of
points and authorities, the Court seriously considered dropping this motion from
calendar without even considering its merits.

Although the notice of motion provided notice of the Court’s tentative ruling system as
required by Local Rule 1.06(D), the notice does not comply with that rule. Moving
counsel is directed to review the Local Rules, effective 1/1/2013.

This is an action by plaintiff Guttridge for dissolution of a limited liability company
(“LLC”) pursuant to Corporations Code §17351 et seq. Defendants filed an answer to
the verified complaint on 5/8/2013 and also asserted several affirmative defenses.

According to defendants’ notice of motion, they are seeking here “an order for attorney
fees and sanctions against plaintiff” and also “injunctive and declaratory relief”
“pursuant to California Code of Civil Procedure sections 3368,” although there is no
such statute. (Not. of Mot., p.1:23-25.) According to the moving memorandum of points and authorities, defendants “strongly
oppose[ ] the plaintiff’s wish to terminate the LLC and liquidate its only, and highly
valuable, assert,” a large parcel of land ripe for development. (Mov. Memo. P&A,
p.1:20-21.) Defendants insist that plaintiff has negligently and/or deliberately failed in
numerous respects to proceed with the development and to maximize the LLC’s return
on its investment. (Id., at p.1:23-p.2:29.) By this motion defendants “are seeking (1)
injunctive relief to remove [plaintiff] from the position of project manager of the [LLC];
(2) an order denying dissolution of the LLC, without the agreement of all investor
parties…; (3) an order preserving the status quo and confirming [plaintiff’s] obligations
and personal guarantees regarding the outstanding loans [plaintiff] created against the
property; and (4) a declaration fixing the investor members’ interest of 68% as a result
of the 2004 settlement agreement between the parties.” (Id., at p.3:1-6.)

Plaintiff opposes the motion, asserting numerous procedural and substantive
objections to the relief sought by defendants’ motion.

At the outset, the Court notes that injunctive relief is generally not available to prevent
the breach of a contract or where it will require continuing judicial intervention to
regulate the relationship of the parties to a business operation over a sustained period
of time. (Code Civ. Proc. §526(b)(5); Oceanside Community Assn. v. Oceanside Land
Co. (1983) 147 Cal.App.3d 166, 176-177; Klein v. Chevron U.S.A. (2012) 202
Cal.App.4th 1342, 1362.) For these reasons alone, the Court is inclined to deny the
present motion.

Regardless, “[T]he issuance of an injunction involves ‘…the exercise of a delicate
power, requiring great caution and sound discretion, and rarely, if ever, should [it] be
exercised in a doubtful case. [Citations.]’” (Paiva v. Nichols (2008) 168 Cal.App.4th
1007, 1021-1022 (citing Fleishman v. Sup. Court (2002) 102 Cal.App.4th 350, 355-
356).) Among the factors to be considered when injunctive relief is sought is whether
the moving party will, absent such relief, suffer great or irreparable harm for which
pecuniary compensation would not afford adequate relief. (See, e.g., Code Civ. Proc.
§526(a)(2), (4); Jessen v. Keystone Sav. & Loan (1983) 142 Cal.App.3d 454, 457.)
Additionally, it is well establish that the party seeking a preliminary injunction must
show with admissible evidence at least a reasonable likelihood of prevailing on the
merits at trial. (Fleishman, at 355-356 [“Before issuing a preliminary injunction, the trial
court must ‘carefully weigh the evidence…”].)

This Court holds that defendants have failed to carry their burden of demonstrating a
reasonable probability of prevailing at trial for at least two independent reasons. First,
while defendants submitted three separate declarations in support of this motion, all of
plaintiff’s numerous objections to each of these declarations are sustained. Even a
cursory review of these declarations reveals that a majority of the assertions therein
are conclusory, lack foundation and/or constitute improper opinion testimony or
inadmissible hearsay. This alone leaves the bulk of defendants’ legal arguments
without any evidentiary support. Second, as noted above, this action was instituted by
plaintiff in order to dissolve the LLC as provided in Corporations Code §17351 et seq.
and to date, defendants sole responsive pleading was an answer. No cross-complaint
or other pleading seeking some other affirmative relief has been filed. Since the
applicable Corporations Code provisions entitle plaintiff to dissolution as a matter of
right, it is difficult if not impossible to perceive how defendants could even theoretically
prevail on the merits at trial. Indeed, given the parties’ current pleadings, it is virtually
impossible to conclude that anyone other than plaintiff will prevail at trial and thus, the present motion must be denied.

Aside from the not insignificant failure of defendants to support with the present motion
with appropriate evidence, the Court finds no imminent or immediate threat of any
(irreparable) harm to defendants’ interests which might otherwise justify granting some
injunctive relief here. The only admissible evidence before the Court indicates there is
no existing or currently contemplated contract for the sale of the subject property. This
too is fatal to the present motion for injunctive relief.

Additionally, the Court is not persuaded that under the circumstances here defendants
are without adequate legal remedies inasmuch as Corporations Code §17351 et seq.
affords defendants with certain legal rights if they desire to avoid the LLC’s dissolution.
In light of these rights, there is no need for the Court to exercise its discretionary power
to grant extraordinary equitable relief under the circumstances here.

Finally, while defendants suggest they are merely interested in preserving the status
quo, their request (1) to remove plaintiff from the project manager position; (2) for an
order denying dissolution of the LLC; (3) for an order confirming plaintiff’s obligations
and personal guarantees; and (4) for a declaration fixing defendants’ interest at 68% of
the LLC, on its face, goes far beyond merely maintaining the status quo. In fact, the
Court questions whether any of this requested relief can be granted at this stage of the
proceedings, particularly since most of this relief would be diametrically opposed to the
relief sought by plaintiff’s complaint, dissolution of the LLC.

For all these reasons as well as others set forth in the opposition papers, defendants’
“Motion for Temporary Injunction and Declaratory Relief” must be and hereby is denied
in its entirety.

This minute order is effective immediately. No formal order or other notice is required.
(Code Civ. Proc. §1019.5; CRC Rule 3.1312.)