Love Lambs II LLC, et al. v. Ravindra K. Pande, et al.
Case No: 18CV01552
Hearing Date: Tue May 29, 2018 9:30

Nature of Proceedings: Order to Show Cause Why a Preliminary Injunction Should Not Issue and TRO

OSC re preliminary injunction

ATTORNEYS:

Mack S. Staton of Mullen & Henzell LLP for plaintiffs Love Lambs II, LLC and Courtney Fishkin

Service is not yet complete on defendants

RULING:

The OSC cannot go forward on its merits. The Court has not yet acquired jurisdiction over the defendants, and service of the TRO and OSC were not accomplished within the time required by Code of Civil Procedure section 527. As a result, the TRO must be dissolved. However, as described below, it may be reissued upon receipt of a declaration pursuant to Section 527(d)(5), and the OSC may then again be set for hearing. Court records do not show that any such declaration has yet been submitted by plaintiffs. However, there remains ample time to do so prior to the May 29 hearing on the original OSC. Should plaintiffs choose to do so, they should simultaneously provide the Court with a proposed order reissuing the TRO and OSC.

Note to Counsel: The Court has consolidated this case with Casa Blanca Beach Estates Owners’ Association v. Ravindra K. Pande, et al., #18CV01752; the lead case is the lower numbered case, to wit: #18CV01552; any orders requested in this case should follow the same dates as have been set in that case.

Background

In an underlying action involving an easement dispute brought by Ravindra Pande against the owner of neighboring property (plaintiffs herein, referred to collectively as Love Lambs) his neighbors and the homeowners’ association within which both properties were located (the plaintiff in Case No. 18CV01752), the trial court found against Pande, and awarded plaintiffs an easement to the detriment of Pande’s adjacent property, and also awarded Love Lambs $120,167.99 in attorneys’ fees and costs. That ruling was affirmed on appeal on February 26, 2018.

On February 21, 2018, while the appeal was pending, Kiran Pande (Ravindra Pande’s sister) filed articles of incorporation for an entity called SBB Villas LLC (SBBV) with the California Secretary of State. The next day, Ravindra Pande transferred his property to SBBV, in exchange for an amount (< $5 million) that was significantly below the property’s fair market value (> $8 million). The property was believed to have been Ravindra Pande’s only significant asset. On March 16, 2018, the trial court granted Pande’s counsel’s motion to be relieved as counsel, and on March 14, 2018, that counsel (Allen & Kimbell) filed an action against the Pandes seeking in excess of $75,000 in unpaid fees, costs, and interest.

Love Lambs II filed this action against Ravindra Pande, Kiran Pande, and SBBV on March 27, 2018, alleging causes of action for (1) actual fraudulent transfer, and (2) constructive fraudulent transfer. A First Amended Complaint was filed on April 10, 2018, adding causes of action for civil conspiracy and declaratory relief to set aside the transfer. On May 2, 2018, the Court issued an initial TRO preventing defendants from transferring or otherwise encumbering the property, or from transferring, depleting, removing, secreting, or moving the proceeds from the sale of the property, pending a hearing on the preliminary injunction. The order also set an OSC re preliminary injunction, and required the OSC to be served on defendants by May 4, 2018. When service was not made, plaintiffs made a second ex parte application for TRO and preliminary injunction on May 7, 2018, seeking the same prohibitory orders. The TRO was granted, and the OSC issued on May 9, 2018. Plaintiffs had provided telephonic notice to defendants of the ex parte hearing, and the papers were provided to them via both e-mail and service upon their last known addresses. The hearing on the OSC was set for May 29.

Just as occurred in Case No. 18CV01752, Love Lambs had difficulty in serving summons, complaint, the TRO, and the OSC upon defendants. On May 18, 2018, orders for service of the individual defendants by publication, and an order for service of the entity defendant by service upon the Secretary of State, were issued.

ANALYSIS:

The OSC cannot go forward on its merits on 5/29. The Court has not yet acquired jurisdiction over the defendants, and service of the TRO and OSC were not accomplished within the time required by Code of Civil Procedure section 527. As a result, the TRO must be dissolved. However, as described below, it may be reissued upon receipt of a declaration pursuant to Section 527(d)(5), and the OSC may then again be set for hearing. Court records do not show that any such declaration has yet been submitted by plaintiffs. However, there remains ample time to do so prior to the May 29 hearing on the original OSC.

In its relevant parts, Code of Civil Procedure section 527 provides:

(c) No temporary restraining order shall be granted without notice to the opposing party, unless both of the following requirements are satisfied:

(1) It appears from facts shown by affidavit or by the verified complaint that great or irreparable injury will result to the applicant before the matter can be heard on notice.

(2) The applicant or the applicant’s attorney certifies one of the following to the court under oath:

(A) That within a reasonable time prior to the application the applicant informed the opposing party or the opposing party’s attorney at what time and where the application would be made.

(B) That the applicant in good faith attempted but was unable to inform the opposing party and the opposing party’s attorney, specifying the efforts made to contact them.

(C) That for reasons specified the applicant should not be required to so inform the opposing party or the opposing party’s attorney.

(d) In case a temporary restraining order is granted without notice in the contingency specified in subdivision (c):

(1) The matter shall be made returnable on an order requiring cause to be shown why a preliminary injunction should not be granted, on the earliest day that the business of the court will admit of, but not later than 15 days or, if good cause appears to the court, 22 days from the date the temporary restraining order is issued.

(2) The party who obtained the temporary restraining order shall, within five days from the date the temporary restraining order is issued or two days prior to the hearing, whichever is earlier, serve on the opposing party a copy of the complaint if not previously served, the order to show cause stating the date, time, and place of the hearing, any affidavits to be used in the application, and a copy of the points and authorities in support of the application. The court may for good cause, on motion of the applicant or on its own motion, shorten the time required by this paragraph for service on the opposing party.

(3) When the matter first comes up for hearing, if the party who obtained the temporary restraining order is not ready to proceed, or if the party has failed to effect service as required by paragraph (2), the court shall dissolve the temporary restraining order.

(4) The opposing party is entitled to one continuance for a reasonable period of not less than 15 days or any shorter period requested by the opposing party, to enable the opposing party to meet the application for a preliminary injunction. If the opposing party obtains a continuance under this paragraph, the temporary restraining order shall remain in effect until the date of the continued hearing.

(5) Upon the filing of an affidavit by the applicant that the opposing party could not be served within the time required by paragraph (2), the court may reissue any temporary restraining order previously issued. The reissued order shall be made returnable as provided by paragraph (1), with the time for hearing measured from the date of reissuance. No fee shall be charged for reissuing the order.

Plaintiff obtained the TRO pursuant to Section 527(c), after complying with subdivisions (c)(1) and (c)(2)(A). As a result, plaintiff was required to serve the complaint, OSC, and all supporting papers, upon defendants within the time set forth in Section 527(d)(2). Clearly, that did not happen, since plaintiff was forced to seek court orders authorizing service of the individual defendants by publication, and service of the entity defendant by service upon the Secretary of State.

Service by publication is complete on the 28th day following the first day of publication. (Code Civ. Proc., § 425.50, subd. (c); Gov. Code, § 6064.) Service upon the Secretary of State is complete 10 days after delivery to the Secretary of State. (Corps. Code, § 1702, subd. (a).) Since the orders allowing such service were only obtained on May 18, service by publication could not yet have been completed, and no proof of service showing service of the entity defendant by serving the Secretary of State has yet been filed, and is unlikely to be completed prior to the scheduled hearing date. To have been timely completed prior to the May 29, hearing date, service upon the Secretary of State would have had to have been accomplished no later than May 19.

As a result of the failure to complete service within the time mandated by Section 527(d)(2), the Court is required to dissolve the TRO. (Code Civ. Proc., § 527, subd. (d)(3).) However, pursuant to Section 527(d)(5), the TRO could be immediately reissued should plaintiff file an affidavit explaining the reasons that the defendants could not be served within the time required by Section 527(d)(2). As of this point in time, no such affidavit has been submitted, although there is ample time for plaintiff to do so prior to the May 29 hearing on the OSC. Should plaintiffs choose to provide the affidavit, they should also provide the Court with a proposed order reissuing the TRO and setting a new hearing on the OSC re preliminary injunction, similar to the order originally executed by the Court on May 9, such that the Court could execute it and set new dates seamlessly.