Case Number: BC617750 Hearing Date: March 19, 2018 Dept: 53

bonnie duboff , et al. vs. linda schermer , et al., BC617750, MARCH 19, 2018

[Tentative] Order RE: DEFENDANTS’ COUNSEL’S MOTION TO BE RELIEVED AS COUNSEL; DEFENDANTS’ MOTION TO CONTINUE TRIAL; PLAINTIFF’S MOTION TO SANCTION DEFENDANT LINDA SCHERMER FOR FAILURE TO COMPLY WITH COURT ORDER; AND PLAINTIFF’S MOTION FOR PRELIMINARY JUNCTION

Defendants’ Counsel’s Motion to Be Relieved As Counsel is GRANTED. Defendants’ Motion to Continue Trial is GRANTED. Plaintiff’s Motion to Sanction Defendant Linda Schermer for Failure to Comply with Court Order is DENIED. Plaintiff’s Motion for Preliminary Injunction is DENIED.

BACKGROUND

Plaintiff Bonnie Duboff (“Duboff” or “Plaintiff”), on behalf herself and all other limited partners of 245 Spalding Partners, L.P., filed this action against Defendants Linda Schermer (“Schermer”), as Trustee of The Surviving Trustor’s Trust Under The Schermer Family Trust, Linda Schermer as Trustee of The Deceased Trustor’s Trust Under The Schermer Family Trust, and Linda Schermer, as Trustee of The Marital Trust Under The Schermer Family Trust (collectively, “Defendants”).

MOTION TO BE RELIEVED AS COUNSEL

Defendants’ counsel HFL Law Group, APC and James C. Fedalen (“Counsel”) move to be relieved as counsel of record for Defendants. Counsel has complied with the procedural requirements set forth in CRC Rule 3.1362, including serving the moving papers upon the client. Counsel states in the supporting declaration that they are seeking mandatory withdrawal from representation pursuant to Rule 3-700 of the Rules of Professional Conduct. These are sufficient grounds for granting the relief requested. There is no indication that Defendants will be prejudiced as a result of the granting of this motion.

Accordingly, the motion to be relieved as counsel is GRANTED.

MOTION TO CONTINUE TRIAL

Defendants move to continue trial, currently set for March 28, 2018, as a result of Counsel’s withdrawal from representation. The Court finds good cause for a short trial continuance of approximately three months so that Defendants may substitute new counsel. Accordingly, the motion to continue trial is GRANTED and the Court continues trial to: __________________________.

MOTION TO SANCTION DEFENDANT LINDA SCHERMER FOR FAILURE TO COMPLY WITH COURT ORDER

Plaintiff seeks monetary, evidentiary, issue, and terminating sanctions (the “Sanctions Motion”) against Schermer for purported abuses of the discovery process as well as a violation of a court order. As an initial matter, the Court notes that no order was issued in connection with the February 1, 2018 Informal Discovery Conference. Therefore, there is no basis for the imposition of discovery sanctions. Insofar as Plaintiff’s motion is predicated on Schermer’s violation of such an “order,” the motion is denied. The Court likewise denies Plaintiff’s request for monetary sanctions in bringing the Sanctions Motion. Plaintiff also contends that Schermer has failed to produce certain documents in discovery, but as Plaintiff concedes in her reply brief, she is not bringing a motion to compel compliance pursuant to Code of Civil Procedure section 2031.320. Accordingly, the Court declines to impose sanctions against Schermer absent a noticed motion seeking such compliance. The Court notes that Schermer seeks sanctions against Plaintiff for bringing the Sanctions Motion pursuant to Code of Civil Procedure section 2023.010, subdivision (h) and section 2023.030, subdivision (a). Those sections authorize imposing monetary sanctions on one who makes, unsuccessfully and without substantial justification, a motion to compel or limit discovery. Since Plaintiff’s motion is admittedly not a motion to compel or to limit discovery, the Court declines to issue sanctions therefor.

For the foregoing reasons, Plaintiff’s Motion to Sanction Defendant Linda Schermer for Failure to Comply with Court Order is DENIED. Because the Court did not need to consider any of the parties’ evidence in making this ruling, Defendants’ evidentiary objections are DENIED AS MOOT.

MOTION FOR PRELIMINARY INJUNCTION

The purpose of a preliminary injunction is to preserve the status quo pending final resolution upon a trial. (See Scaringe v. J.C.C. Enterprises, Inc. (1988) 205 Cal.App.3d 1536.) The status quo has been defined to mean the last actual peaceable, uncontested status which preceded the pending controversy. (14859 Moorpark Homeowner’s Assn. v. VRT Corp. (1998) 63 Cal.App.4th 1396. 1402.) Preliminary injunctive relief requires the use of competent evidence to create a sufficient factual showing on the grounds for relief. (See, e.g., ReadyLink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1016; Ancora-Citronelle Corp. v. Green (1974) 41 Cal.App.3d 146, 150.) Injunctive relief may be granted based on a verified complaint only if it contains sufficient evidentiary, not ultimate, facts. (See Code Civ. Proc. § 527(a).) For this reason, a pleading alone rarely suffices. (Weil & Brown, California Procedure Before Trial, 9:579, 9(ll)-21 (The Rutter Group 2007).) The burden of proof is on the plaintiff as moving party. (O’Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.) A plaintiff seeking injunctive relief must show the absence of an adequate damages remedy at law. (Code Civ. Proc. § 526(4); Thayer Plymouth Center, Inc. v. Chrysler Motors (1967) 255 Cal.App.2d 300, 307.)

A. Evidentiary Objections

The Court rules on Defendants’ evidentiary objections to the declarations submitted in support of Plaintiff’s motion for preliminary injunction as follows:

Objections to the Declaration of Stephen Weisskopf: Nos. 1, 3, 4, and 5 are overruled; Nos. 2, 6, 7, and 8 are sustained.

Objections to the Declaration of Bonnie Duboff (attached as an exhibit to the Declaration of Stephen Weisskopf): Nos. 1, 2, 3,4, 9, 14, 16, 18, 22, 23, and 24 are overruled; Nos. 5, 6, 7, 8, 10, 11, 12, 13, 15, 17, 19, 20, and 21 are sustained

Objections to the Declaration of Stephen Donnell (attached as an exhibit to the Declaration of Stephen Weisskopf): all objections are overruled

B. Interim Harm

The trial court considers two factors in determining whether to issue a preliminary injunction: (1) the likelihood the plaintiff will prevail on the merits of its case at trial, and (2) the interim harm the plaintiff is likely to sustain if the injunction is denied as compared to the harm the defendant is likely to suffer if the court grants a preliminary injunction. (Code Civ. Proc. § 526(a); Husain v. McDonald’s Corp. (2012) 205 Cal.App.4th 860, 866-67.) The balancing of harm between the parties “involves consideration of such things as the inadequacy of other remedies, the degree of irreparable harm, and the necessity of preserving the status quo.” (Husain, supra, 205 Cal.App.4th at 867.) Thus, a preliminary injunction may not issue without some showing of potential entitlement to such relief. (Doe v. Wilson (1997) 57 Cal.App.4th 296, 304.) Therefore, the Court first looks at whether Plaintiff has shown inadequacy of other remedies, the degree of irreparable harm to the parties, and the necessity of preserving the status quo.

Plaintiff contends that an “imminent threat of irreparable harm” exists, namely that in January 2018, Schermer received a proposal from a financial institution to encumber the building with a $5.4 million loan. (Weisskopf Decl., ¶ 14, Ex. 13.) Plaintiff asserts that Schermer has failed to do any return-on-investment or payback analysis for such an incredibly large loan, and that failure to conduct this analysis is “reckless and fiscally irresponsible behavior.” (Motion, p. 14: 14-15.) Defendants, on the other hand, contend that there is no evidence showing that the loan would threaten the partnership’s ownership of the building or that incurring debt in order to renovate the building is somehow inappropriate. The Court agrees. There is no dispute that the building is in need of certain repairs, and that there are vacancies in the building. The parties disagree on whether the repairs and renovations will solve the vacancy problem. However, the existence of this dispute is not sufficient evidence that taking on this loan would lead to irreparable harm to Plaintiff or to the partnership. The Court also finds that there is no showing of inadequacy of other remedies. Thus, consideration of the second preliminary injunction factor weighs against granting the motion.

C. Likelihood of Success on the Merits

Plaintiff’s evidence in support of the “likelihood of success on the merits” factor mirrors the evidence she submitted in support of her motion for summary judgment. Notwithstanding the evidentiary issues presented by Defendants’ evidentiary objections, the Court finds that Plaintiff has not shown likelihood of success on the merits that outweighs the lack of irreparable harm. Although Plaintiff contends that the building’s high vacancy rate, the building’s state of disrepair, and Schermer’s intentions of making expensive improvements to the building evidence Schermer’s self-dealing and gross negligence, Schermer asserts that the state of disrepair existed before she became the manager of the building and that is one reason for the vacancy rate. Schermer also asserts that her planned improvements, though expensive, are necessary to fix the vacancy rate problem. Similarly, though Plaintiff claims that Schermer has misappropriated funds, Schermer asserts that the evidence shows that Schermer was entitled to certain management fees as well as entitled to live rent-free in the building. Based on the foregoing, Plaintiff’s motion for preliminary injunction is DENIED.

Defendants are ordered to give notice of this ruling.

DATED: March 19, 2018

_____________________________

Hon. Howard L. Halm

Judge of the Superior Court