Case Number: KC068239 Hearing Date: May 09, 2016 Dept: O

Provident Group – Pomona Properties, LLC v. Solsource, LLC (KC068239)

Plaintiff Provident Group – Pomona Properties, LLC’s MOTION FOR PRELIMIANRY INJUNCTION

Respondent: Defendant Solsource, LLC

TENTATIVE RULING

Plaintiff Provident Group – Pomona Properties, LLC’s motion for preliminary injunction is GRANTED in part.

EVIDENTIARY OBJECTIONS:
Defendant’s evidentiary objections to the Declaration of David A. Braden are overruled. Mr. Braden, as the Vice President of Capstone On-Campus Management, LLC, the present property manager for Plaintiff, attests that he has personal knowledge of the facts in his declaration.

Defendant’s evidentiary objections to the Declaration of Debra W. Lockwood are overruled. Ms. Lockwood, as the President and CFO of Provident, attests that she has personal knowledge of the facts in her declaration.

Defendant’s evidentiary objections to the Declaration of James Bertonis are overruled. Mr. Bertonis appears to have special knowledge, skill, experience, training or education sufficient to qualify him as an expert on the subject to which his testimony relates. (Ev C § 720(a).)

MOTION FOR PRELIMINARY INJUNCTION:
Plaintiff Provident Group – Pomona Properties, LLC ( “Provident”) moves the court pursuant to CCP § 527 for an order enjoining Defendant Solsource, LLC (“Solsource”) from the following: (1) interfering with Provident’s effort to acquire a replacement Satellite Television and Internet Protocol Service provider and/or (2) holding itself out to third parties as being under contract with Provident and/or (3) withholding certain applicable technical information necessary to allow provident to replace Solsource with another Satellite Television and Internet Protocol Service provider.

An injunction may be granted “[w]hen 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.” (CCP § 526(a)(3).) The purpose of a preliminary injunction is to preserve the status quo pending a determination on the merits of the claim. (Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 528.) In deciding whether to issue a preliminary injunction, a trial court weighs two interrelated factors: the likelihood the moving party ultimately will prevail on the merits, and the relative interim harm to the parties from the issuance or nonissuance of the injunction. A trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim. (Hunt v. Superior Court (1999) 21 Cal. 4th 984, 999-1000.) Proof of facts is ordinarily made by affidavits or declarations. (CCP § 2009.)

LIKELIHOOD OF SUCCESS ON THE MERITS:
Provident, in support of its motion, submits the following evidence:

Solsource materially breached the service agreement by failing to provide a guaranteed download and upload speed. (Kim, Decl. ¶ 5, Exh. A, Calvaruso Decl. ¶ 6, Exh. A, Evanowski Decl. ¶ 5, Exh. A, Smith Decl. ¶ 5, Exh. A, Hamad Decl. ¶ 5, Exh A.)

Provident retained an expert in telecommunications systems, Mr. Bertonis of Azurecomm. Mr. Betonis, through his inspection process, concluded that the internet system for the subject property was predicated on a designed system with inadequate equipment for the wireless access points. (Bertonis Decl., ¶ 9.) Mr. Bertonis also found that 56% of the testing resulted in failure under the terms of the service agreement. (Id., ¶ 16.)

On September 21, 2015, counsel for Provident sent a letter (“Default Letter”) to Solsource, setting forth the problems with Solsource’s performance and breaches under the operative service agreement. (Lockwood Decl., Exh. J.) The Default Letter served to satisfy the notice and opportunity to cure provisions set forth at Section 4.2 and elsewhere within the operative service agreement. (See Lockwood Decl., Exh. A, Service Agreement ¶ 4.2 – If either party shall be in material breach of a provision of this Agreement and such breach shall not be cured within 30 days after receipt of written notice thereof, then, in addition to all other remedies available to it, the non-breaching party may elect to terminate this Agreement.”)

Solsource failed to cure the defaults and as a result, on December 24, 2015, Provident sent a formal letter to Solsource (“Termination Letter”) formally terminating the agreement with Solsource. (Lockwood Decl., Exh. L.) Despite receiving the Termination Letter, Solsource has failed and refused to cooperate with provident in transitioning to a new service provider. (Id., Exh. M.) Moreover, Solsource has interfered, and continues to interfere, with Provident’s attempts to replace Solsource’s services with a new third party service provider. (Id. ¶¶ 25-26, Exhs. N-P.)

Provident has met its burden of demonstrating a likelihood of prevailing on the merits. The evidence demonstrates that Solsource breached the operative service agreement; Provident terminated the operative service agreement when Solsource failed to cure the breach after notice; and that Solsource has interfered, and continues to interfere, with Provident’s attempts to replace Solsource’s services with a new third party service provider.

INADEQUATE LEGAL REMEDY OR IRREPARABLE HARM:
While the court has broad discretion in ruling on an application for preliminary injunction, such discretion must be exercised in light of the following interrelated factors: (1) Who will suffer greater injury: Are plaintiffs likely to suffer greater injury from denial of the injunction than defendants are likely to suffer if it is granted? (Shoemaker v. County of Los Angeles (1995) 37 Cal.App.4th 618, 633); and (2) Probable outcome at trial: Is there a reasonable probability that plaintiffs will prevail on the merits? (Robbins v. Sup.Ct. (County of Sacramento) (1985) 38 Cal.3d 199, 206.)

It appears that Provident, as well as its tenants, will suffer irreparable harm if the injunction is not granted. Provident submits evidence that the internet service at the subject property is inadequate, and that a number of student-tenants have reported to Provident and/or to the management that they do not intend to renew their housing at the subject property as a result of the poor service, failure and breaches by Solsource. (Branden Decl. ¶¶ 8-10. Exhs. A-B; Lockwood Decl., ¶ 27.)

However, the third item of injunctive relief sought is vague and unsupported by the evidence. Provident seeks an order enjoining Solsource from “withholding certain applicable technical information necessary to allow Provident to replace Solsource with another satellite television and internet protocol service provider.” Provident, however, does not specify the “applicable technical information.” While the service agreement between the parties provides that upon termination, the internal premises equipment and all its appurtenance become the property of Provident, it does not require Solsource to provide any “applicable technical information” as sought by Provident. (See Motion, Lockwood Decl., Exh. A, Service Agreement ¶ 4.3 – “Immediately upon termination, the internal premise equipment and all its appurtenances shall automatically become the property of the Owner [Provident], with such equipment defined as all components of the video and network system from and including the outlet fact plate, to each IDF and MDF of buildings, constituting a contiguous video network distribution system.”) The court declines to grant the third clause of the requested order.

BOND REQUIREMENT:
If the preliminary injunction is granted, the court must require an undertaking (CCP § 529), or allow a cash deposit in lieu thereof (CCP § 995.710). The court will hear from the parties regarding the amount of bond.