2017-00224187-CU-NP

Hawkeye, LLC vs. Donald Khan

Nature of Proceeding: Order to Show Cause Re: Preliminary Injunction

Filed By: King, Daniel A.

The Order to Show Cause re Preliminary Injunction is unopposed and is GRANTED.

On ex parte application by plaintiff Hawkeye, LLC on Dec. 22, 2017, this Court by Judge Rodda, issued its TRO and Order to Show Cause re Preliminary Injunction set for hearing on Jan. 11, 2018.

That order required moving party to serve the Order and the Summons and Complaint on the Defendants by 5:00 pm on Dec. 22, 2017. The proofs of service of process by a registered process server reflect service on Gerald Kahn, d.b.a. SactownSuperSesh and d.b.a. The Royal Dab Show was made on Dec. 21, 2017, while substituted service was made on Donald Kahn d.b.a. SactownSuperSesh and d.b.a. The Royal Dab Show on the same date.

Proof of service of the TRO and Order to Show Cause by FedEx was made on Dec.

22, 2017.

All proofs of service were filed with the Court on Jan. 8, 2018, only three court days before this hearing. Proof of service of the moving papers is required to be filed no later than five calendar days before the time appointed for the hearing. California Rules of Court, Rule 3.1300(c). The Court has nevertheless reviewed all the papers filed by plaintiff.

No Opposition to the Order to Show Cause re Preliminary Injunction by either Gerald Kahn or Donald Kahn has been filed with the Court or received by counsel for the moving party Hawkeye, LLC.

Preliminary Injunction Factors

No further papers have been filed in opposition or in support of the Order to Show Cause re PI since the TRO. However, the standard for issuing a preliminary injunction is the same as the standard for issuing a temporary restraining order. (Cal. Indep. Sys. Operator Corp. v. Reliant Energy Servs. (E.D.Cal. 2001) 181 F.Supp.2d 1111, 1126.)

In deciding whether to issue a preliminary injunction, a court must weigh two “interrelated” factors: (1) the likelihood that the moving party will ultimately prevail on the merits and (2) the relative interim harm to the parties from issuance of the injunction. The greater the plaintiff’s showing on one, the less must be shown on the other to support an injunction. Butt v. State of California (1992) 4 Cal.4th 668, 677-

678. A preliminary injunction may not be granted, regardless of the balance of interim harm, unless it is reasonably probable that the moving party will prevail on the merits. San Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal. App. 3d 438,

442.

Pleadings

Plaintiff Hawkeye, LLC’s unverified Complaint for Trespass, TRO and Injunctive Relief and Fraud was filed on Dec. 21, 2017.

Relevant Facts

On September 12, 2017, Plaintiff became the record owner of the real property that is the subject of this action (the “Property”), in fee. (King. Dec., Exh. B; MacLaughlin

Decl., Exh. D.)

A portion of the Property (the “Premises”) was subject to an existing lease between Plaintiffs predecessor in ownership and Sergey Rozpadmiyk (the “Terminated Lease”). (MacLaughlin Decl., Exh. A.) The Terminated Lease expressly required that any assignment or sublease given by that tenant is ineffective without the written consent of the land owner and the sublease or assignee formally entering into an agreement to assume the obligations of the lease in full. (MacLaughlin Decl., Exh. A Terminated Lease, at 12.1(a), 12.2(a).) That lease was set to terminate on February 26, 2018. (MacLaughlin Decl., Exh. C.)

Plaintiff purchased the property with the intent to take over possession of the units subject to the Terminated Lease and to operate a new business in them. To do so, Plaintiff must obtain a conditional use permit from the City of Sacramento.

(MacLaughlin Decl., ¶ 9.) The Terminated Lease was amended on August 18, 2011 and on February 26, 2015. (MacLaughlin Decl., Exhs. B-C.) Neither amendment changed the provisions restricting the right to assign or sublet the Property.

On December 8, 2017, Plaintiff and Rozpadmiyk entered into an Agreement for Termination of Lease, whereby the lease was terminated. (MacLaughlin Decl., Exh. E.) Upon termination of the Lease, the former tenant confirmed that the Lease had not been assigned or sublet to any party. (Termination Agreement, MacLaughlin Decl., Exh. E, § 7.)

By 3:30 pm on December 8, 2017, Landlord’s agents had caused all entry door locks and the utility cabinets in the Premises to be changed to new keys possessed only by Plaintiff and its property manager. (MacLaughlin Decl., 1113.) Shortly after that agent left the Property, adjoining tenants called to inform them that someone had used force to break the locks and enter the property, despite Plaintiffs ownership and actual possession of the Premises.

When Plaintiffs agent arrived back and summoned the Police, Defendant Khan was present and falsely represented to the police that he had sublet the Premises with the result the officers refused to dispossess him of the property without a Court order. (MacLaughlin Decl., ¶ 15.) Multiple large gatherings have been hosted within the Premises by Defendants for the purpose of selling, buying, and ingesting marijuana products inside the Premises. (MacLaughlin Decl., ¶ 16.) He has refused to surrender the Premises to Plaintiff or to cease throwing the marijuana parties in the Premises, despite repeated demand. (MacLaughlin Decl., ¶ 15.)

Preliminary Injunction

Likelihood that Plaintiff Will Prevail in this Action.

The elements of a cause of action for trespass to land are: (1) Plaintiff’s ownership of the real property; (2) Defendant’s intentional or negligent entry or causing of another to enter; (3) That Plaintiff did not give permission for the entry or the entry exceeded the permission (4) Harm to the Plaintiff caused by the entry or conduct

(Civil Jury Inst. No. 2000.)

Here, Plaintiff is the owner of the property in fee and was in possession at the time

Defendants entered the Premises by force. (King Decl., Exh. A; MacLaughlin Decl., ¶ 8, Exh. D.) Defendant has both entered the Premises and caused others to do so. (MacLaughlin Decl., ¶ ¶ 15-17.) Plaintiff gave no permission for the entry, the use of its real property, or the invitation of others onto it. (MacLaughlin Decl., ¶ 20.) Finally, the property was physically damaged in the trespass and Plaintiff is incurring harm to its interests as landlord, to the quiet use and enjoyment of its tenants in adjoining tenements, and to its business. (MacLaughlin Decl., ¶ ¶ 21-25.) Plaintiff is, as a result, likely to prevail in the instant suit.

Balance of Harms

Plaintiff is faced with several serious harms if the trespass continues, justifying the TRO and Preliminary Injunction. First, because the large gatherings of people exceed the safe-permitted occupancy of the Premises and involves a large number of persons consuming mind-altering substances, it has exposed the attendees to the risk of fire, earthquake, or other calamity compounded by delays in exiting the building caused by the over-sized crowd gathered in it.

Those same conditions have exposed Plaintiff to potential liability to its other tenants on a variety of theories, the possible loss of those leases, and claims that may arise in the event persons on the Property at the invitation of Defendants are otherwise harmed while there.

In the absence of agreements to indemnify, insuring agreements, and evidence that Defendants are financially capable of answering for those damages, Plaintiff is exposed and its legal remedy in damages is inadequate, threatening harm it cannot repair. That is to say nothing of the reputational harm it is suffering as a result of the repeated large parties currently being thrown on its Premises.

Second, Plaintiff purchased this specific property expressly for a business that is subject to requirement it obtain a conditional use permit from the City, and that permit is now threatened by Defendants’ actions in the trespass. (MacLaughlin Decl., ¶ ¶ 9, 24.) If denied, the permit proceeding will effectively end Plaintiffs business and will deprive it of the use of the Property it purchased it for. (MacLaughlin Decl., ¶ ¶ 9, 24.) That loss is irreparable on two fronts. First, it deprives the Plaintiff of its use of its Real Property. (See Real Estate Analytics, LLC v. Vallas (2008) 160 Cal.App.4th 463, 473 (real property is unique and damages are inadequate to compensate for its loss).) Second, it is irreparable because the monetary harm Plaintiff will suffer from the loss of its business, in the form of lost future profits, may well be unrecoverable at law.

On the evidence before it, and in the absence of any opposition from the defendants, the Court grants the requested Preliminary Injunction that the above named Defendants and each of their agents, servants, employees, representatives, and all persons acting in concert or participating with them, are hereby restrained from engaging in, committing, or performing, directly or indirectly, any and all of the following acts:

(a) interfering with Plaintiffs possession of or quiet use and enjoyment of the real

property commonly known as 8530 Fruitridge Road, Suites 10 and 12, Sacramento, California 95826 (the “Premises”) or any portion of the real property commonly known as 8530 Fruitridge Road, Sacramento, California , 95826 (the “Property”) or any part thereof;

(b) entering or remaining on the Premises or the Property;

(c) inviting any other person to enter or remain on the Premises or the Property; or

(d) using the Premises or the Property for any purpose whatsoever, including but not limited to, for the purpose of conducting parties, marijuana sales, or gatherings of any kind, for any reason.

Undertaking

On granting an injunction, the court 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. C.C.P. section 529.

The issuance of a preliminary injunction is conditioned on proof that Plaintiff has posted an undertaking with the Court in the amount of $10,000.00.