This case was last updated from Los Angeles County Superior Courts on 12/10/2020 at 01:20:44 (UTC).

JOSE SAMBOLIN, ET AL. VS LEOBARDO GUERRERO, JR., ET AL.

Case Summary

On 01/30/2020 JOSE SAMBOLIN filed a Contract - Other Contract lawsuit against LEOBARDO GUERRERO, JR . This case was filed in Los Angeles County Superior Courts, Pomona Courthouse South located in Los Angeles, California. The Judge overseeing this case is GLORIA WHITE-BROWN. The case status is Other.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******0082

  • Filing Date:

    01/30/2020

  • Case Status:

    Other

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

GLORIA WHITE-BROWN

 

Party Details

Plaintiff

SAMBOLIN JOSE

Defendants

DTP RESTAURANT VENTURES LLC A CALIFORNIA LIMITED LIABILITY COMPANY

GUERRERO LEOBARDO JR.

THE MICHE GROUP INC. A CALIFORNIA CORPORATION

DOES 1 THROUGH 100 INCLUSIVE

AVILA DIANNA

THE COLTON GROUP INC. A CALIFORNIA CORPORATION

RESTAURANT VENTURES SB INC. A CALIFORNIA CORPORATION

THE COLTEN GROUP

THE MICHE GROUP

RESTAURANT VENTURES SB INC.

RESTAURANT VENTURES S.B. INC.

Attorney/Law Firm Details

Plaintiff Attorney

HUNTER MATTHEW JAMES

Defendant Attorney

JAROSCAK MAUREEN PATRICIA

 

Court Documents

Case Management Statement

12/1/2020: Case Management Statement

Case Management Statement

12/2/2020: Case Management Statement

Case Management Statement

12/4/2020: Case Management Statement

Request for Dismissal

12/7/2020: Request for Dismissal

Case Management Statement

12/7/2020: Case Management Statement

Notice of Entry of Dismissal and Proof of Service

12/9/2020: Notice of Entry of Dismissal and Proof of Service

Case Management Statement

7/27/2020: Case Management Statement

Case Management Statement

8/4/2020: Case Management Statement

Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE; ORDER TO SHOW CAUSE RE: PRELIMINA...)

8/10/2020: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE; ORDER TO SHOW CAUSE RE: PRELIMINA...)

Minute Order - MINUTE ORDER (COURT ORDER)

4/15/2020: Minute Order - MINUTE ORDER (COURT ORDER)

Certificate of Mailing for - CERTIFICATE OF MAILING FOR [MINUTE ORDER (COURT ORDER)]

4/15/2020: Certificate of Mailing for - CERTIFICATE OF MAILING FOR [MINUTE ORDER (COURT ORDER)]

Notice Re: Continuance of Hearing and Order

3/24/2020: Notice Re: Continuance of Hearing and Order

Notice - NOTICE NOTICE OF CONTINUANCE OF OSC RE: PROOF OF SERVICE & MOTION FOR PRELIMINARY INJUNCTION

3/13/2020: Notice - NOTICE NOTICE OF CONTINUANCE OF OSC RE: PROOF OF SERVICE & MOTION FOR PRELIMINARY INJUNCTION

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION; ORDER TO SHOW...) OF 03/16/2020

3/16/2020: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION; ORDER TO SHOW...) OF 03/16/2020

Minute Order - MINUTE ORDER (ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION; ORDER TO SHOW...)

3/16/2020: Minute Order - MINUTE ORDER (ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION; ORDER TO SHOW...)

Memorandum - MEMORANDUM MR. GUERRERO'S MEMORANDUM IN OPPOSITION TO ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION

3/13/2020: Memorandum - MEMORANDUM MR. GUERRERO'S MEMORANDUM IN OPPOSITION TO ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION

Proof of Personal Service

3/13/2020: Proof of Personal Service

Declaration - DECLARATION MR. GUERRERO'S DECLARATION IN OPPOSITION TO MOTION FOR PRELIMINARY INJUNCTION

3/13/2020: Declaration - DECLARATION MR. GUERRERO'S DECLARATION IN OPPOSITION TO MOTION FOR PRELIMINARY INJUNCTION

28 More Documents Available

 

Docket Entries

  • 12/09/2020
  • DocketNotice of Entry of Dismissal and Proof of Service; Filed by Jose Sambolin (Plaintiff)

    Read MoreRead Less
  • 12/08/2020
  • Docketat 08:30 AM in Department J, Gloria White-Brown, Presiding; Case Management Conference - Not Held - Vacated by Court

    Read MoreRead Less
  • 12/07/2020
  • DocketRequest for Dismissal; Filed by Jose Sambolin (Plaintiff)

    Read MoreRead Less
  • 12/07/2020
  • DocketCase Management Statement; Filed by Dianna Avila (Defendant)

    Read MoreRead Less
  • 12/04/2020
  • DocketCase Management Statement; Filed by Jose Sambolin (Plaintiff)

    Read MoreRead Less
  • 12/02/2020
  • DocketCase Management Statement; Filed by Jose Sambolin (Plaintiff)

    Read MoreRead Less
  • 12/01/2020
  • DocketCase Management Statement; Filed by Leobardo Guerrero, Jr. (Defendant)

    Read MoreRead Less
  • 08/10/2020
  • Docketat 10:00 AM in Department J, Gloria White-Brown, Presiding; Case Management Conference - Held - Continued

    Read MoreRead Less
  • 08/10/2020
  • Docketat 10:00 AM in Department J, Gloria White-Brown, Presiding; Order to Show Cause Re: (Preliminary Injunction) - Not Held - Vacated by Court

    Read MoreRead Less
  • 08/10/2020
  • Docketat 10:00 AM in Department J, Gloria White-Brown, Presiding; Order to Show Cause Re: (Preliminary Injunction) - Not Held - Vacated by Court

    Read MoreRead Less
39 More Docket Entries
  • 02/04/2020
  • Docketat 09:00 AM in Department J, Gloria White-Brown, Presiding; Hearing on Ex Parte Application (for Temporary Restraining Order and Order to Show Cause re Preliminary Injunction) - Held - Motion Granted

    Read MoreRead Less
  • 02/04/2020
  • DocketMinute Order ( (Hearing on Ex Parte Application for Temporary Restraining Ord...)); Filed by Clerk

    Read MoreRead Less
  • 02/04/2020
  • DocketOrder ([Proposed]Order on Ex Parte Application for Temporary Restraining Case and Order to Show Cause re Preliminary Injunction); Filed by Jose Sambolin (Plaintiff)

    Read MoreRead Less
  • 01/31/2020
  • DocketEx Parte Application (for Temporary Restraining Order and Order to Show Cause re Preliminary Injunction); Filed by Jose Sambolin (Plaintiff)

    Read MoreRead Less
  • 01/30/2020
  • DocketComplaint; Filed by Jose Sambolin (Plaintiff)

    Read MoreRead Less
  • 01/30/2020
  • DocketCivil Case Cover Sheet; Filed by Jose Sambolin (Plaintiff)

    Read MoreRead Less
  • 01/30/2020
  • DocketSummons (on Complaint); Filed by Jose Sambolin (Plaintiff)

    Read MoreRead Less
  • 01/30/2020
  • DocketNotice of Case Management Conference; Filed by Clerk

    Read MoreRead Less
  • 01/30/2020
  • DocketSummons (on Complaint); Filed by Clerk

    Read MoreRead Less
  • 01/30/2020
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

    Read MoreRead Less

Tentative Rulings

Case Number: 20PSCV00082    Hearing Date: August 10, 2020    Dept: J

HEARING DATE: Monday August 10, 2020

NOTICE: Motion #1: See below[1]

Motion #2: OK[2]

RE: Sambolin v. Guerrero, Jr., et al. (20PSCV00082)

______________________________________________________________________________

1. ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION [C/F 2/10/20]

Responding Party: None (unopposed)

2. ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION

Responding Party: Defendant Dyanna Avila; Defendant Leobardo Guerrero, Jr.

Tentative Ruling

1. See below.

2. The Order to Show Cause Re: Preliminary Injunction is DENIED. The temporary restraining order is dissolved.

 

Background

Plaintiff Jose Sambolin alleges as follows: DTP Restaurant Ventures, LLC (“DTP”) was formed by Plaintiff and Wane Deering (“Deering”) (collectively, “Original Members”) for the purpose of doing a bulk sale acquisition of a business known as Big D’s, which was located at 135 E. 2nd Street, Pomona, CA, including the acquisition of its goodwill, furniture, fixtures, and equipment, and to secure a transfer of its type 47 liquor license. The Original Members adopted an Operating Agreement which provided for the management of DTP by all members and set forth the capital contributions and voting percentages of each of the Original Members. Per the Operating Agreement Plaintiff held 99% of the membership interests and voting rights and Deering held 1% of the member interests and voting rights. The acquisition of Big D’s was completed in February 2018. Plaintiff secured, in his individual name, an assignment of the lease for the Leased Premises via an Assignment and Assumption of Lease and Consent of Lessor (“Lease Assignment”). After concluding the bulk sale purchase of Big D’s, DTP undertook a fairly extensive remodel of the Leased Premises and opened a bar and grill known as DT’s Bar & Grill at the Leased Premises. In or around October 29, 2018, Plaintiff and Deering, on the one hand as sellers, and Leobardo Guerrero, Jr. (“Guerrero”), on the other hand as buyer, entered into a Membership Interest Purchase Agreement (“Purchase Agreement”) wherein Guerrero acquired a 50% interest in DTP for the purchase price of $75,000.00, payable entirely to Plaintiff. Guerrero has only paid Plaintiff $55,000.00. On or about November 2018, DTP began doing business as “The 20/20 Bar and Grill La Casa De Las Micheladas DTP” (“20/20 Pomona”). Dyanna Avila (erroneously sued as Dianna Avila) (“Avila”) is either Guerrero’s wife or girlfriend and became active in the operation of 20/20 Pomona at Guerrero’s insistence. Guerrero and Avila neglected operations, caused 20/20’s manager to serve at their other restaurants while receiving compensation from 20/20 Pomona, failed to account for cash and pay taxes, and were causing checks to be bounced. By September 2019 Plaintiff was excluded from the business and was locked out of the Leased Premises. Guerrero and Avila have closed DTP’s business accounts and are now exclusively in possession of all company income to Plaintiff’s exclusion.

On January 30, 2020, Plaintiff filed a verified complaint, asserting causes of action against Guerrero, Avila, DTP Restaurant Ventures, LLC, The Miche Group, Inc., Restaurant Ventures CB, Inc., The Colton Group, Inc. and Does 1-100 for:

  1. Involuntary Dissolution of Limited Liability Company

  2. Breach of Written Contract

  3. Breach of Fiduciary Duty

  4. Breach of Implied Covenant of Good Faith and Fair Dealing

  5. Account Stated

  6. Open Book Account

  7. Unfair Business Practices

  8. Accounting

  9. Ejectment

  10. Constructive Trust

  11. Declaratory Relief

On February 4, 2020, the “Order on Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction” was filed, wherein Guerrero and Avila were ordered “to deposit all income of DTP into Account No. 642777252 Wells Fargo 20/20 restaurant account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at135 E. 2nd Street, Pomona, California. Said deposited income is not to be withdrawn.”

A Case Management Conference is set for June 26, 2020.

1. Order to Show Cause Re: Preliminary Injunction [C/F 2/10/20]

On January 31, 2020, Plaintiff filed an “Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction.” On February 4, 2020, the court granted the ex parte application, granted the Temporary Restraining Order in part and scheduled an Order to Show Cause Re: Preliminary Injunction for February 10, 2020. The order filed February 4, 2020 indicates that Guerrero and Avila were ordered to deposit all income of DTP Restaurant Ventures, LLC into Account No. 642777252 Wells Fargo 20/20 restaurant checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona California, and that said deposited income was not to be withdrawn. On February 10, 2020, Plaintiff’s counsel and self-represented Defendants were present in court and advised that they had reached a tentative settlement; as such, pursuant to oral stipulation, the OSC was continued to March 16, 2020.

On February 25, 2020, Plaintiff filed an “Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction.” The ex parte application was opposed. On February 26, 2020, the court granted the ex parte application and scheduled an Order to Show Cause Re: Preliminary Injunction for March 16, 2020. The order filed February 26, 2020 indicates that Guerrero and Avila were enjoined/ordered to open and thereafter maintain a checking account in the name of DTP Restaurant Ventures, LLC at an FDIC insured financial institution; provide Plaintiff with equal access to said checking account by providing him the name of the financial institution, account number and access to checks for the account; to deposit all income of DTP Restaurant of DTP Restaurant Ventures, LLC into said checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona, California; that all withdrawals from the separate account ordered established were to be done by check with the consent and signature of both Guerrero and Sambolin; to grant Plaintiff equal access to the leased premises located at 135 E. 2nd Street, Pomona California which is the location where DTP owns and operates the restaurant known as 20/20 Bar and Grill La Casa De Las Micheladas and to grant Plaintiff equal access to the point-of-sale system, along with all financial records, accounts, books, and records of DTP, including those related to 20/20 Bar and Grill La Casa De Las Micheladas.

It appears to the court that Plaintiff’s February 25, 2020 filing supercedes the relief requested in Plaintiff’s January 31, 2020 filing. See February 25, 2020 ex parte application, 5:4-11 [“At the original hearing on the Temporary Restraining Order, held on February 4, 2020, while the Court ordered money to be deposited into a specific account, the account is not believed to be in the name of DTP, which is problematic for obvious reasons because it means that funds are being commingled. Thus, if the court is inclined to grant [the] present relief, it is requested that Defendants be ordered to open a separate account in the name of DTP and deposit all sums in that account and that the signature and consent of both Guerrero and Sambolin be required for any and all withdrawals”]; as such, a substantive ruling will only be made as to the February 25, 2020 filing. The TRO issued on February 4, 2020 is ordered dissolved.

2. Order to Show Cause Re: Preliminary Injunction

Legal Standard

“An injunction is a writ or order requiring a person to refrain from a particular act. It may be granted by the court in which the action is brought, or by a judge thereof; and when granted by a judge, it may be enforced as an order of the court.” (CCP § 525.) “[A]n injunction may be more completely defined as a writ or order commanding a person wither to perform or to refrain from performing a particular act.” (McDowell v. Watson (1997) 59 Cal.App.4th 1155, 1160.)

The courts look to the substance of an injunction to determine whether it is prohibitory or mandatory. (Agricultural Labor Relations Bd. v. Superior Court (1983) 149 Cal.App.3d 709, 713.) A mandatory injunction—i.e., one that mandates a party to affirmatively act, carries a heavy burden: “[t]he granting of a mandatory injunction pending the trial . . . is not permitted except in extreme cases, where the right thereto is clearly established.” (Hagen v. Beth (1897) 118 Cal. 330, 331.)

The purpose of a preliminary injunction is the preservation of the status quo until a final determination of the merits of the action.” (Casmalia Resources, Ltd. v. County of Santa Barbara (1987) 195 Cal.App.3d 827, 832.) “To issue an injunction is the exercise of a delicate power, requiring great caution and sound discretion, and rarely, if ever, should be exercised in a doubtful case.” (Willis v. Lauridson (1911) 161 Cal. 106, 117.)

“In considering whether to issue a preliminary injunction, a court evaluates two interrelated factors: the likelihood plaintiff will prevail on the merits at trial and the interim harm to plaintiff or defendant if the court denies or grants the preliminary injunction. Plaintiff carries the burden of proof and persuasion on these issues.” (Drakes Bay Oyster Co. v. California Coastal Com. (2016) 4 Cal.App.5th 1165, 1171.)

“The trial court’s determination must be guided by a ‘mix’ of the potential-merit and interim-harm factors; 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, 678.) “[A]n injunction should not issue where there is no possibility of success even though its issuance might prevent irreparable harm. . . Where there is indeed no likelihood that the plaintiff will prevail, an injunction favoring the plaintiff serves no valid purpose and can only cause needless harm.” (American Academy of Pediatrics v. Van de Camp (1989) 214 Cal.App.3d 831, 838.)

Discussion

Plaintiff applies for an order to Show Cause why a preliminary injunction should not be granted requiring Guerrero and Avila to (1) open and thereafter maintain a checking account in the name of DTP Restaurant Ventures, LLC at an FDIC insured financial institution; (2) provide Plaintiff with equal access to said checking account, by providing him the name of the financial institution, account number, and access to checks for the account; (3) to deposit all income of DTP Restaurant Ventures, LLC into said checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona, California; (4) that all withdrawals from the separate account ordered established be done by check and the check with the consent and signature of both Guerrero and Sambolin; (5) to grant Plaintiff equal access to the leased premises located at 135 E. 2nd Street, Pomona, California which is the location where DTP owns and operates the restaurant known as 20/20 Bar and Grill La Casa De Las Micheladas; (6) to grant Plaintiff equal access to the point-of-sale system, along with all financial records, accounts, books, and records of DTP including those related to 20/20 Bar and Grill La Casa De Las Micheladas.

Likelihood of Prevailing on the Merits

The burden upon Plaintiff is to show that there is a reasonable likelihood that Plaintiff will prevail on the merits at the time of trial. The court determines that Plaintiff has met this burden.

Plaintiff has asserted causes of action for (1) Involuntary Dissolution of Limited Liability Company, (2) Breach of Written Contract, (3) Breach of Fiduciary Duty, (4) Breach of Implied Covenant of Good Faith and Fair Dealing, (5) Account Stated, (6) Open Book Account, (7) Unfair Business Practices, (8) Accounting, (9) Ejectment, (10) Constructive Trust and (11) Declaratory Relief.

More specifically, Plaintiff’s verified complaint and supporting declaration state: that DTP was formed by the Original Members for the purpose of doing a bulk sale acquisition of a business known as Big D’s, which was located at 135 E. 2nd Street, Pomona, CA, including the acquisition of its goodwill, furniture, fixtures, and equipment, and to secure a transfer of its type 47 liquor license. (Verified Complaint, ¶¶12 and 18; Plaintiff’s Decl., ¶2.) The Original Members adopted an Operating Agreement which provided for the management of DTP by all members and set forth the capital contributions and voting percentages of each of the Original Members. (Verified Complaint, ¶¶12-13, Exh. 2.) Per the Operating Agreement Plaintiff held 99% of the membership interests and voting rights and Deering held 1% of the member interests and voting rights. (Id.) The acquisition of Big D’s was completed in February 2018. (Id., ¶18; Plaintiff’s Decl., ¶2.) Plaintiff secured, in his individual name, an assignment of the lease for the Leased Premises via the Lease Assignment. (Verified Complaint, ¶19, Exhs. 4 and 5; Plaintiff’s Decl., ¶3.) After concluding the bulk sale purchase of Big D’s, DTP undertook a fairly extensive remodel of the Leased Premises and opened a bar and grill known as DT’s Bar & Grill at the Leased Premises. (Verified Complaint, ¶20.)

In or around October 29, 2018, Plaintiff and Deering as sellers and Guerrero as buyer entered into a Purchase Agreement, wherein Guerrero acquired a 50% interest in DTP for the purchase price of $75,000.00, payable entirely to Plaintiff. (Id., ¶21, Exh. 6; Plaintiff’s Decl., ¶4.) Guerrero has only paid Plaintiff $55,000.00. (Verified Complaint, ¶21.) On or about November 2018, DTP began doing business as 20/20 Pomona. (Id., ¶22; Plaintiff’s Decl., ¶4.) Avila, Guerrero’s wife or girlfriend, became active in the operation of 20/20 Pomona at Guerrero’s insistence. (Verified Complaint, ¶23; Plaintiff’s Decl., ¶5.) At one point in time, Guerrero and Avila permitted in excess of $40,000.00 in cash to accumulate without being accounted for, and Plaintiff had to repeatedly request that they account for same. (Id.)

Beginning in September 2019, Guerrero and Avila, over Plaintiff’s objection, took over complete control of DTP and 20/20 Pomona, thereby excluding Plaintiff both from the company and its business. (Plaintiff’s Decl., ¶6.) The banking accounts have been switched to another institution, to which Plaintiff has no access. (Id.) Plaintiff is not even aware of where the accounts are located. (Id.) Plaintiff does not have any access to the finances of either DTP or 20/20 Pomona within which to ensure that the rent and sales taxes are paid. (Id.) Plaintiff has also been denied access to any financial information, books, records, documents, and accounts, including access to the point of sale system. (Id.)

During this time, Guerrero and Avila were causing checks to be bounced as they were not depositing cash from DTP into DTP’s bank accounts. (Verified Complaint, ¶26.) Plaintiff received notification from the California Department of Tax and Fee Administration that the 3rd quarter 2019 sales tax has not been paid and that neither the 4th quarter returned have been filed nor the taxes paid for the 4th quarter of 2019. (Id., ¶30; Plaintiff’s Decl., ¶7.) Plaintiff estimates that the unpaid sales tax exceeds $35,000.00 (Plaintiff’s Decl., ¶7.) The rent is overdue again. (Id.)

In or around September 2019 Plaintiff was completely excluded from the Leased Premises and when he attempted to visit the Leased Premises, the apparent person in charge of operations advised that if Plaintiff did not leave, that he was instructed by Guerrero and Avila to call the police on Plaintiff. (Verified Complaint, ¶31; Plaintiff’s Decl., ¶8.)

Guerrero, in opposition, advises that “[t]he restaurant has had significant financial difficulty and [ ] is now closed with no business or income being generated” (Guerrero Decl., ¶2); Plaintiff “abandoned operation of the restaurant” as of September 2019 (Id., ¶3); since September 2019, Guerrero was the only one who dealt with the restaurant as the company failed and closed, which included the day to day operation of the business, scheduling of employees, ordering of supplies, rent, payment of vendors, and more (Id.); Guerrero has not prevented Plaintiff from having access to the restaurant premises (Id., ¶4); Plaintiff has a key to the premises (Id.); when Plaintiff claimed he lost the key, Guerrero set up a lockbox on the front of the premises which contained a key inside the lockbox and texted a copy of the lockbox code to Plaintiff and Plaintiff’s counsel (Id.); Guerrero has done nothing to interfere with or prevent Plaintiff from having access to or coming and going on the premises as Plaintiff might desire (Id.); although the company previously had a bank account located at Pacific Western Bank, Plaintiff was the sole signatory on that account and withdrew all of the funds from that account when Plaintiff closed it in September 2019 (Id., ¶6); there are no proceeds to deposit from the business (Id., ¶7) and Guerrero is not going to write any checks or disburse any money because there is nothing to disburse (Id.)

Guerrero further advises that on approximately February 28, 2020, he went to Comerica Bank and attempted to open a bank account for the business in order to comply with the court’s February 26, 2020 order (Id., ¶8); that Guerrero presented to the Bank a copy of the Statement of Information filed with the California Secretary of State, which showed that Plaintiff and Guerrero are joint managers of the company (Id., Exh. B); that the Bank refused to open a bank account without the joint signatures of Plaintiff and Guerrero (Id., ¶9); that Guerrero went to Comerica Bank again on March 13, 2020[3] and attempted to open a bank account for the company (Id.); that the Bank refused to open the account without Plaintiff’s signature (Id.); that on March 6, 2020, Plaintiff’s counsel sent Guerrero an email stating that neither he nor Plaintiff would assist him with opening a bank account (Id., ¶11, Exh. D); that Guerrero has informed Plaintiff and Plaintiff’s counsel that they may have full access to the point-of-sale system operated by the business and all financial records, accounts, books, and records for the business, including those for the 20/20 Bar and Grill La Casa De Las Micheladas Pomona location and has never prevented them rom having access to these things (Id., ¶12); that the business records were maintained by Plaintiff prior to October 2019 (Id., ¶13); that Guerrero has kept the records since October 2019 (Id.); that the records have been and are currently kept at 135 East 2nd Street, Pomona, CA 91790 (Id.); that Plaintiff is welcome at any time to have access to the records (Id.) and that Guerrero has not and will not interfere with Plaintiff’s access to records for the business (Id.)

Avila, in opposition, confirms that Avila has no ownership interest in DTP and that, while Avila became involved in the business due to an impending sale of Plaintiff’s membership units to Avila, that sale has never taken place. (Avila Decl., ¶¶3-16.)

Based on the above information, it appears to the court that Plaintiff has not carried his burden of showing that it is “reasonably probable” that Plaintiff will prevail on the merits at trial.

Interim Harm

 

With respect to interim harm, Plaintiff attests that DTP’s income has been misappropriated and not applied to the necessary expenses of DTP such as payment of rent and sales tax. (Plaintiff’s Decl., ¶9.) Plaintiff, further, is personally liable on the Lease Agreement. (Verified Complaint, ¶19.) Plaintiff attests that irreparable injury will occur to DTP and 20/20 Pomona in the loss of the leased premises, which will then preclude it from doing business. (Plaintiff’s Decl., ¶9.)

Again, based on the information submitted above, it appears to the court that Plaintiff has not carried his burden of showing “interim harm.”

The court is inclined to dissolve the temporary restraining order and DENY the request for preliminary injunction.


[1] On January 31, 2020, Plaintiff filed an “Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction.” On February 4, 2020, the court granted the ex parte application, granted the Temporary Restraining Order in part and scheduled an Order to Show Cause Re: Preliminary Injunction for February 10, 2020; Plaintiff’s counsel was ordered to give notice. The order filed February 4, 2020 indicates that Guerrero and Avila were ordered to deposit all income of DTP Restaurant Ventures, LLC into Account No. 642777252 Wells Fargo 20/20 restaurant checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona California, and that said deposited income was not to be withdrawn. The court further ordered that a copy of the order and all supporting papers filed in connection therewith must be served on defendants no later than 1 day before the date set for hearing on the Order to Show Cause. No briefing schedule was set forth in the order. On February 10, 2020, Plaintiff’s counsel and self-represented Defendants were present in court and advised that they had reached a tentative settlement; as such, pursuant to oral stipulation, the OSC was continued to March 16, 2020. Plaintiff’s counsel was ordered to give notice. There is no indication on ecourt that a notice of ruling was filed. However, the court’s March 16, 2020 minute order reflects that “[b]oth parties were previously notified that the matters were to be continued to 4-1-20.” The March 16, 2020 minute order further states that, per Emergency Declaration stated there, the Temporary Restraining Order and Order to Show Cause Re: Preliminary Injunctions were continued to May 4,2020, with Plaintiff’s counsel to provide notice. There is no indication on ecourt that Plaintiff’s counsel provided such notice; however, on March 24, 2020, a “Notice Re: Continuance of Hearing and Order” was filed, in which the court continued the May 4, 2020 hearing, on its own motion, to May 19, 2020; all counsel were provided the notice.

[2] On February 25, 2020, Plaintiff filed an “Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction.” The ex parte application was opposed. On February 26, 2020, the court granted the ex parte application and scheduled an Order to Show Cause Re: Preliminary Injunction for March 16, 2020; Plaintiff’s counsel was ordered to give notice. The order filed February 26, 2020 indicates that Guerrero and Avila were enjoined/ordered to open and thereafter maintain a checking account in the name of DTP Restaurant Ventures, LLC at an FDIC insured financial institution; provide Plaintiff with equal access to said checking account by providing him the name of the financial institution, account number and access to checks for the account; to deposit all income of DTP Restaurant of DTP Restaurant Ventures, LLC into said checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona, California; that all withdrawals from the separate account ordered established were to be done by check with the consent and signature of both Guerrero and Sambolin; to grant Plaintiff equal access to the leased premises located at 135 E. 2nd Street, Pomona California which is the location where DTP owns and operates the restaurant known as 20/20 Bar and Grill La Casa De Las Micheladas and to grant Plaintiff equal access to the point-of-sale system, along with all financial records, accounts, books, and records of DTP, including those related to 20/20 Bar and Grill La Casa De Las Micheladas. The court further ordered that a copy of the order and all supporting papers filed in connection therewith must be served on defendants no later than 10 days before the date set for hearing on the Order to Show Cause. No briefing schedule was set forth in the order. On March 5, 2020, Plaintiff filed proofs of service, which reflected that Guerrero and Avila were personally served with the Order on Ex Parte Application for Temporary Restraining Order and Order to Show Cause re Preliminary Injunction on February 26, 2020.The court’s March 16, 2020 minute order reflects that “[b]oth parties were previously notified that the matters were to be continued to 4-1-20.” The March 16, 2020 minute order further states that, per Emergency Declaration stated there, the Temporary Restraining Order and Order to Show Cause Re: Preliminary Injunctions were continued to May 4,2020, with Plaintiff’s counsel to provide notice. There is no indication on ecourt that Plaintiff’s counsel provided such notice; however, on March 24, 2020, a “Notice Re: Continuance of Hearing and Order” was filed, in which the court continued the May 4, 2020 hearing, on its own motion, to May 19, 2020; all counsel were provided the notice.

[3] Guerrero’s declaration includes an obvious typographical error, in that the date is stated as “March 13, 2014.”

Case Number: 20PSCV00082    Hearing Date: March 16, 2020    Dept: J

HEARING DATE: Monday, March 16, 2020

NOTICE: Motion #1: See below[1]

Motion #2: OK[2]

RE: Sambolin v. Guerrero, Jr., et al. (20PSCV00082)

______________________________________________________________________________

1. ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION [C/F 2/10/20]

Responding Party: None (unopposed, as of 3/11/20, 1:13 p.m.)

2. ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION

Responding Party: None (unopposed, as of 3/11/20, 1:13 p.m.)[3]

Tentative Ruling

1. See below.

2. The Order to Show Cause Re: Preliminary Injunction is GRANTED.

 

Background

Plaintiff Jose Sambolin alleges as follows: DTP Restaurant Ventures, LLC (“DTP”) was formed by Plaintiff and Wane Deering (“Deering”) (collectively, “Original Members”) for the purpose of doing a bulk sale acquisition of a business known as Big D’s, which was located at 135 E. 2nd Street, Pomona, CA, including the acquisition of its goodwill, furniture, fixtures, and equipment, and to secure a transfer of its type 47 liquor license. The Original Members adopted an Operating Agreement which provided for the management of DTP by all members and set forth the capital contributions and voting percentages of each of the Original Members. Per the Operating Agreement Plaintiff held 99% of the membership interests and voting rights and Deering held 1% of the member interests and voting rights. The acquisition of Big D’s was completed in February 2018. Plaintiff secured, in his individual name, an assignment of the lease for the Leased Premises via an Assignment and Assumption of Lease and Consent of Lessor (“Lease Assignment”). After concluding the bulk sale purchase of Big D’s, DTP undertook a fairly extensive remodel of the Leased Premises and opened a bar and grill known as DT’s Bar & Grill at the Leased Premises. In or around October 29, 2018, Plaintiff and Deering, on the one hand as sellers, and Leobardo Guerrero, Jr. (“Guerrero”), on the other hand as buyer, entered into a Membership Interest Purchase Agreement (“Purchase Agreement”) wherein Guerrero acquired a 50% interest in DTP for the purchase price of $75,000.00, payable entirely to Plaintiff. Guerrero has only paid Plaintiff $55,000.00. On or about November 2018, DTP began doing business as “The 20/20 Bar and Grill La Casa De Las Micheladas DTP” (“20/20 Pomona”). Dianna Avila (“Avila”) is either Guerrero’s wife or girlfriend and became active in the operation of 20/20 Pomona at Guerrero’s insistence. Guerrero and Avila neglected operations, caused 20/20’s manager to serve at their other restaurants while receiving compensation from 20/20 Pomona, failed to account for cash and pay taxes, and were causing checks to be bounced. By September 2019 Plaintiff was excluded from the business and was locked out of the Leased Premises. Guerrero and Avila have closed DTP’s business accounts and are now exclusively in possession of all company income to Plaintiff’s exclusion.

On January 30, 2020, Plaintiff filed a verified complaint, asserting causes of action against Guerrero, Avila, DTP Restaurant Ventures, LLC, The Miche Group, Inc., Restaurant Ventures CB, Inc., The Colton Group, Inc. and Does 1-100 for:

  1. Involuntary Dissolution of Limited Liability Company

  2. Breach of Written Contract

  3. Breach of Fiduciary Duty

  4. Breach of Implied Covenant of Good Faith and Fair Dealing

  5. Account Stated

  6. Open Book Account

  7. Unfair Business Practices

  8. Accounting

  9. Ejectment

  10. Constructive Trust

  11. Declaratory Relief

On February 4, 2020, the “Order on Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction” was filed, wherein Guerrero and Avila were ordered “to deposit all income of DTP into Account No. 642777252 Wells Fargo 20/20 restaurant account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at135 E. 2nd Street, Pomona, California. Said deposited income is not to be withdrawn.”

A Case Management Conference is set for June 26, 2020.

1. Order to Show Cause Re: Preliminary Injunction [C/F 2/10/20]

On January 31, 2020, Plaintiff filed an “Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction.” On February 4, 2020, the court granted the ex parte application, granted the Temporary Restraining Order in part and scheduled an Order to Show Cause Re: Preliminary Injunction for February 10, 2020. The order filed February 4, 2020 indicates that Guerrero and Avila were ordered to deposit all income of DTP Restaurant Ventures, LLC into Account No. 642777252 Wells Fargo 20/20 restaurant checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona California, and that said deposited income was not to be withdrawn. On February 10, 2020, Plaintiff’s counsel and self-represented Defendants were present in court and advised that they had reached a tentative settlement; as such, pursuant to oral stipulation, the OSC was continued to March 16, 2020.

On February 25, 2020, Plaintiff filed an “Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction.” The ex parte application was opposed. On February 26, 2020, the court granted the ex parte application and scheduled an Order to Show Cause Re: Preliminary Injunction for March 16, 2020. The order filed February 26, 2020 indicates that Guerrero and Avila were enjoined/ordered to open and thereafter maintain a checking account in the name of DTP Restaurant Ventures, LLC at an FDIC insured financial institution; provide Plaintiff with equal access to said checking account by providing him the name of the financial institution, account number and access to checks for the account; to deposit all income of DTP Restaurant of DTP Restaurant Ventures, LLC into said checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona, California; that all withdrawals from the separate account ordered established were to be done by check with the consent and signature of both Guerrero and Sambolin; to grant Plaintiff equal access to the leased premises located at 135 E. 2nd Street, Pomona California which is the location where DTP owns and operates the restaurant known as 20/20 Bar and Grill La Casa De Las Micheladas and to grant Plaintiff equal access to the point-of-sale system, along with all financial records, accounts, books, and records of DTP, including those related to 20/20 Bar and Grill La Casa De Las Micheladas.

It appears to the court that Plaintiff’s February 25, 2020 filing supercedes the relief requested in Plaintiff’s January 31, 2020 filing. See February 25, 2020 ex parte application, 5:4-11 [“At the original hearing on the Temporary Restraining Order, held on February 4, 2020, while the Court ordered money to be deposited into a specific account, the account is not believed to be in the name of DTP, which is problematic for obvious reasons because it means that funds are being commingled. Thus, if the court is inclined to grant [the] present relief, it is requested that Defendants be ordered to open a separate account in the name of DTP and deposit all sums in that account and that the signature and consent of both Guerrero and Sambolin be required for any and all withdrawals”]; as such, a substantive ruling will only be made as to the February 25, 2020 filing. The TRO issued on February 4, 2020 is ordered dissolved.

2. Order to Show Cause Re: Preliminary Injunction

Legal Standard

“An injunction is a writ or order requiring a person to refrain from a particular act. It may be granted by the court in which the action is brought, or by a judge thereof; and when granted by a judge, it may be enforced as an order of the court.” (CCP § 525.) “[A]n injunction may be more completely defined as a writ or order commanding a person wither to perform or to refrain from performing a particular act.” (McDowell v. Watson (1997) 59 Cal.App.4th 1155, 1160.)

The courts look to the substance of an injunction to determine whether it is prohibitory or mandatory. (Agricultural Labor Relations Bd. v. Superior Court (1983) 149 Cal.App.3d 709, 713.) A mandatory injunction—i.e., one that mandates a party to affirmatively act, carries a heavy burden: “[t]he granting of a mandatory injunction pending the trial . . . is not permitted except in extreme cases, where the right thereto is clearly established.” (Hagen v. Beth (1897) 118 Cal. 330, 331.)

The purpose of a preliminary injunction is the preservation of the status quo until a final determination of the merits of the action.” (Casmalia Resources, Ltd. v. County of Santa Barbara (1987) 195 Cal.App.3d 827, 832.) “To issue an injunction is the exercise of a delicate power, requiring great caution and sound discretion, and rarely, if ever, should be exercised in a doubtful case.” (Willis v. Lauridson (1911) 161 Cal. 106, 117.)

“In considering whether to issue a preliminary injunction, a court evaluates two interrelated factors: the likelihood plaintiff will prevail on the merits at trial and the interim harm to plaintiff or defendant if the court denies or grants the preliminary injunction. Plaintiff carries the burden of proof and persuasion on these issues.” (Drakes Bay Oyster Co. v. California Coastal Com. (2016) 4 Cal.App.5th 1165, 1171.)

“The trial court’s determination must be guided by a ‘mix’ of the potential-merit and interim-harm factors; 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, 678.) “[A]n injunction should not issue where there is no possibility of success even though its issuance might prevent irreparable harm. . . Where there is indeed no likelihood that the plaintiff will prevail, an injunction favoring the plaintiff serves no valid purpose and can only cause needless harm.” (American Academy of Pediatrics v. Van de Camp (1989) 214 Cal.App.3d 831, 838.)

Discussion

Plaintiff applies for an order to Show Cause why a preliminary injunction should not be granted requiring Guerrero and Avila to (1) open and thereafter maintain a checking account in the name of DTP Restaurant Ventures, LLC at an FDIC insured financial institution; (2) provide Plaintiff with equal access to said checking account, by providing him the name of the financial institution, account number, and access to checks for the account; (3) to deposit all income of DTP Restaurant Ventures, LLC into said checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona, California; (4) that all withdrawals from the separate account ordered established be done by check and the check with the consent and signature of both Guerrero and Sambolin; (5) to grant Plaintiff equal access to the leased premises located at 135 E. 2nd Street, Pomona, California which is the location where DTP owns and operates the restaurant known as 20/20 Bar and Grill La Casa De Las Micheladas; (6) to grant Plaintiff equal access to the point-of-sale system, along with all financial records, accounts, books, and records of DTP including those related to 20/20 Bar and Grill La Casa De Las Micheladas.

Likelihood of Prevailing on the Merits

The burden upon Plaintiff is to show that there is a reasonable likelihood that Plaintiff will prevail on the merits at the time of trial. The court determines that Plaintiff has met this burden.

Plaintiff has asserted causes of action for (1) Involuntary Dissolution of Limited Liability Company, (2) Breach of Written Contract, (3) Breach of Fiduciary Duty, (4) Breach of Implied Covenant of Good Faith and Fair Dealing, (5) Account Stated, (6) Open Book Account, (7) Unfair Business Practices, (8) Accounting, (9) Ejectment, (10) Constructive Trust and (11) Declaratory Relief.

More specifically, Plaintiff’s verified complaint and supporting declaration state: that DTP was formed by the Original Members for the purpose of doing a bulk sale acquisition of a business known as Big D’s, which was located at 135 E. 2nd Street, Pomona, CA, including the acquisition of its goodwill, furniture, fixtures, and equipment, and to secure a transfer of its type 47 liquor license. (Verified Complaint, ¶¶12 and 18; Plaintiff’s Decl., ¶2.) The Original Members adopted an Operating Agreement which provided for the management of DTP by all members and set forth the capital contributions and voting percentages of each of the Original Members. (Verified Complaint, ¶¶12-13, Exh. 2.) Per the Operating Agreement Plaintiff held 99% of the membership interests and voting rights and Deering held 1% of the member interests and voting rights. (Id.) The acquisition of Big D’s was completed in February 2018. (Id., ¶18; Plaintiff’s Decl., ¶2.) Plaintiff secured, in his individual name, an assignment of the lease for the Leased Premises via the Lease Assignment. (Verified Complaint, ¶19, Exhs. 4 and 5; Plaintiff’s Decl., ¶3.) After concluding the bulk sale purchase of Big D’s, DTP undertook a fairly extensive remodel of the Leased Premises and opened a bar and grill known as DT’s Bar & Grill at the Leased Premises. (Verified Complaint, ¶20.)

In or around October 29, 2018, Plaintiff and Deering as sellers and Guerrero as buyer entered into a Purchase Agreement, wherein Guerrero acquired a 50% interest in DTP for the purchase price of $75,000.00, payable entirely to Plaintiff. (Id., ¶21, Exh. 6; Plaintiff’s Decl., ¶4.) Guerrero has only paid Plaintiff $55,000.00. (Verified Complaint, ¶21.) On or about November 2018, DTP began doing business as 20/20 Pomona. (Id., ¶22; Plaintiff’s Decl., ¶4.) Avila, Guerrero’s wife or girlfriend, became active in the operation of 20/20 Pomona at Guerrero’s insistence. (Verified Complaint, ¶23; Plaintiff’s Decl., ¶5.) At one time point in time, Guerrero and Avila permitted in excess of $40,000.00 in cash to accumulate without being accounted for, and Plaintiff had to repeatedly request that they account for same. (Id.)

Beginning in September 2019, Guerrero and Avila, over Plaintiff’s objection, took over complete control of DTP and 20/20 Pomona, thereby excluding Plaintiff both from the company and its business. (Plaintiff’s Decl., ¶6.) The banking accounts have been switched to another institution, to which Plaintiff has no access. (Id.) Plaintiff is not even aware of where the accounts are located. (Id.) Plaintiff does not have any access to the finances of either DTP or 20/20 Pomona within which to ensure that the rent and sales taxes are paid. (Id.) Plaintiff has also been denied access to any financial information, books, records, documents, and accounts, including access to the point of sale system. (Id.)

During this time, Guerrero and Avila were causing checks to be bounced as they were not depositing cash from DTP into DTP’s bank accounts. (Verified Complaint, ¶26.) Plaintiff received notification from the California Department of Tax and Fee Administration that the 3rd quarter 2019 sales tax has not been paid and that neither the 4th quarter returned have been filed nor the taxes paid for the 4th quarter of 2019. (Id., ¶30; Plaintiff’s Decl., ¶7.) Plaintiff estimates that the unpaid sales tax exceeds $35,000.00 (Plaintiff’s Decl., ¶7.) The rent is overdue again. (Id.)

In or around September 2019 Plaintiff was completely excluded from the Leased Premises and when he attempted to visit the Leased Premises, the apparent person in charge of operations advised that if Plaintiff did not leave, that he was instructed by Guerrero and Avila to call the police on Plaintiff. (Verified Complain, ¶31; Plaintiff’s Decl., ¶8.)

The motion is not opposed. The court concludes that Plaintiff has carried his burden of showing that it is “reasonably probable” that Plaintiff will prevail on the merits at trial.

Interim Harm

 

With respect to interim harm, Plaintiff attests that DTP’s income has been misappropriated and not applied to the necessary expenses of DTP such as payment of rent and sales tax. (Plaintiff’s Decl., ¶9.) Plaintiff, further, is personally liable on the Lease Agreement. (Verified Complaint, ¶19.) Plaintiff attests that irreparable injury will occur to DTP and 20/20 Pomona in the loss of the leased premises, which will then preclude it from doing business. (Plaintiff’s Decl., ¶9.)

The motion is not opposed. The court concludes that Plaintiff has carried his burden of showing “interim harm.”

The Order to Show Cause Re: Preliminary Injunction, then, is GRANTED.


[1] On January 31, 2020, Plaintiff filed an “Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction.” On February 4, 2020, the court granted the ex parte application, granted the Temporary Restraining Order in part and scheduled an Order to Show Cause Re: Preliminary Injunction for February 10, 2020; Plaintiff’s counsel was ordered to give notice. The order filed February 4, 2020 indicates that Guerrero and Avila were ordered to deposit all income of DTP Restaurant Ventures, LLC into Account No. 642777252 Wells Fargo 20/20 restaurant checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona California, and that said deposited income was not to be withdrawn. The court further ordered that a copy of the order and all supporting papers filed in connection therewith must be served on defendants no later than 1 day before the date set for hearing on the Order to Show Cause. No briefing schedule was set forth in the order. On February 10, 2020, Plaintiff’s counsel and self-represented Defendants were present in court and advised that they had reached a tentative settlement; as such, pursuant to oral stipulation, the OSC was continued to March 16, 2020. Plaintiff’s counsel was ordered to give notice. There is no indication on ecourt that a notice of ruling was filed.

[2] On February 25, 2020, Plaintiff filed an “Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction.” The ex parte application was opposed. On February 26, 2020, the court granted the ex parte application and scheduled an Order to Show Cause Re: Preliminary Injunction for March 16, 2020; Plaintiff’s counsel was ordered to give notice. The order filed February 26, 2020 indicates that Guerrero and Avila were enjoined/ordered to open and thereafter maintain a checking account in the name of DTP Restaurant Ventures, LLC at an FDIC insured financial institution; provide Plaintiff with equal access to said checking account by providing him the name of the financial institution, account number and access to checks for the account; to deposit all income of DTP Restaurant of DTP Restaurant Ventures, LLC into said checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona, California; that all withdrawals from the separate account ordered established were to be done by check with the consent and signature of both Guerrero and Sambolin; to grant Plaintiff equal access to the leased premises located at 135 E. 2nd Street, Pomona California which is the location where DTP owns and operates the restaurant known as 20/20 Bar and Grill La Casa De Las Micheladas and to grant Plaintiff equal access to the point-of-sale system, along with all financial records, accounts, books, and records of DTP, including those related to 20/20 Bar and Grill La Casa De Las Micheladas. The court further ordered that a copy of the order and all supporting papers filed in connection therewith must be served on defendants no later than 10 days before the date set for hearing on the Order to Show Cause. No briefing schedule was set forth in the order. On March 5, 2020, Plaintiff filed proofs of service, which reflected that Guerrero and Avila were personally served with the Order on Ex Parte Application for Temporary Restraining Order and Order to Show Cause re Preliminary Injunction on February 26, 2020.

[3] While the underlying ex parte application was opposed, nothing has been filed since that time by Guerrero and/or Avila.

Case Number: 20PSCV00082    Hearing Date: February 10, 2020    Dept: J

HEARING DATE: Monday, February 10, 2020

NOTICE: See below[1]

RE: Sambolin v. Guerrero, Jr., et al. (20PSCV00082)

______________________________________________________________________________

ORDER TO SHOW CAUSE RE: PRELIMINARY INJUNCTION

Responding Party: None (unopposed, as of 2/5/20, 5:47 p.m.)

Tentative Ruling

The Order to Show Cause Re: Preliminary Injunction is GRANTED.

 

Background

Plaintiff Jose Sambolin alleges as follows: DTP Restaurant Ventures, LLC (“DTP”) was formed by Plaintiff and Wane Deering (“Deering”) (collectively, “Original Members”) for the purpose of doing a bulk sale acquisition of a business known as Big D’s, which was located at 135 E. 2nd Street, Pomona, CA, including the acquisition of its goodwill, furniture, fixtures, and equipment, and to secure a transfer of its type 47 liquor license. The Original Members adopted an Operating Agreement which provided for the management of DTP by all members and set forth the capital contributions and voting percentages of each of the Original Members. Per the Operating Agreement Plaintiff held 99% of the membership interests and voting rights and Deering held 1% of the member interests and voting rights. The acquisition of Big D’s was completed in February 2018. Plaintiff secured, in his individual name, an assignment of the lease for the Leased Premises via an Assignment and Assumption of Lease and Consent of Lessor (“Lease Assignment”). After concluding the bulk sale purchase of Big D’s, DTP undertook a fairly extensive remodel of the Leased Premises and opened a bar and grill known as DT’s Bar & Grill at the Leased Premises. In or around October 29, 2018, Plaintiff and Deering, on the one hand as sellers, and Leobardo Guerrero, Jr. (“Guerrero”), on the other hand as buyer, entered into a Membership Interest Purchase Agreement (“Purchase Agreement”) wherein Guerrero acquired a 50% interest in DTP for the purchase price of $75,000.00, payable entirely to Plaintiff. Guerrero has only paid Plaintiff $55,000.00. On or about November 2018, DTP began doing business as “The 20/20 Bar and Grill La Casa De Las Micheladas DTP” (“20/20 Pomona”). Dianna Avila (“Avila”) is either Guerrero’s wife or girlfriend and became active in the operation of 20/20 Pomona at Guerrero’s insistence. Guerrero and Avila neglected operations, caused 20/20’s manager to serve at their other restaurants while receiving compensation from 20/20 Pomona, failed to account for cash and pay taxes, and were causing checks to be bounced. By September 2019 Plaintiff was excluded from the business and was locked out of the Leased Premises. Guerrero and Avila have closed DTP’s business accounts and are now exclusively in possession of all company income to Plaintiff’s exclusion.

On January 30, 2020, Plaintiff filed a verified complaint, asserting causes of action against Guerrero, Dianna Avila, DTP Restaurant Ventures, LLC, The Miche Group, Inc., Restaurant Ventures CB, Inc., The Colton Group, Inc. and Does 1-100 for:

  1. Involuntary Dissolution of Limited Liability Company

  2. Breach of Written Contract

  3. Breach of Fiduciary Duty

  4. Breach of Implied Covenant of Good Faith and Fair Dealing

  5. Account Stated

  6. Open Book Account

  7. Unfair Business Practices

  8. Accounting

  9. Ejectment

  10. Constructive Trust

  11. Declaratory Relief

On February 4, 2020, the “Order on Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction” was filed, wherein Guerrero and Avila were ordered “to deposit all income of DTP into Account No. 642777252 Wells Fargo 20/20 restaurant account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at135 E. 2nd Street, Pomona, California. Said deposited income is not to be withdrawn.”

A Case Management Conference is set for June 26, 2020.

Legal Standard

“The purpose of a preliminary injunction is the preservation of the status quo until a final determination of the merits of the action.” (Casmalia Resources, Ltd. v. County of Santa Barbara (1987) 195 Cal.App.3d 827, 832.) “To issue an injunction is the exercise of a delicate power, requiring great caution and sound discretion, and rarely, if ever, should be exercised in a doubtful case.” (Willis v. Lauridson (1911) 161 Cal. 106, 117.)

“In considering whether to issue a preliminary injunction, a court evaluates two interrelated factors: the likelihood plaintiff will prevail on the merits at trial and the interim harm to plaintiff or defendant if the court denies or grants the preliminary injunction. Plaintiff carries the burden of proof and persuasion on these issues.” (Drakes Bay Oyster Co. v. California Coastal Com. (2016) 4 Cal.App.5th 1165, 1171.)

“The trial court’s determination must be guided by a ‘mix’ of the potential-merit and interim-harm factors; 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, 678.) “[A]n injunction should not issue where there is no possibility of success even though its issuance might prevent irreparable harm. . . Where there is indeed no likelihood that the plaintiff will prevail, an injunction favoring the plaintiff serves no valid purpose and can only cause needless harm.” (American Academy of Pediatrics v. Van de Camp (1989) 214 Cal.App.3d 831, 838.)

Discussion

Plaintiff applies for an order to Show Cause why a preliminary injunction should not be granted requiring Guerrero and Avila “to deposit all income of DTP into Account No. 642777252 Wells Fargo 20/20 restaurant account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at135 E. 2nd Street, Pomona, California.”

Likelihood of Prevailing on the Merits

The burden upon Plaintiff is to show that there is a reasonable likelihood that Plaintiff will prevail on the merits at the time of trial. The court determines that Plaintiff has met this burden.

Plaintiff has asserted causes of action for (1) Involuntary Dissolution of Limited Liability Company, (2) Breach of Written Contract, (3) Breach of Fiduciary Duty, (4) Breach of Implied Covenant of Good Faith and Fair Dealing, (5) Account Stated, (6) Open Book Account, (7) Unfair Business Practices, (8) Accounting, (9) Ejectment, (10) Constructive Trust and (11) Declaratory Relief.

More specifically, Plaintiff’s verified complaint and supporting declaration state: that DTP was formed by the Original Members for the purpose of doing a bulk sale acquisition of a business known as Big D’s, which was located at 135 E. 2nd Street, Pomona, CA, including the acquisition of its goodwill, furniture, fixtures, and equipment, and to secure a transfer of its type 47 liquor license. (Verified Complaint, ¶¶12 and 18; Plaintiff’s Decl., ¶2.) The Original Members adopted an Operating Agreement which provided for the management of DTP by all members and set forth the capital contributions and voting percentages of each of the Original Members. (Verified Complaint, ¶¶12-13, Exh. 2.) Per the Operating Agreement Plaintiff held 99% of the membership interests and voting rights and Deering held 1% of the member interests and voting rights. (Id.) The acquisition of Big D’s was completed in February 2018. (Id., ¶18; Plaintiff’s Decl., ¶2.) Plaintiff secured, in his individual name, an assignment of the lease for the Leased Premises via the Lease Assignment. (Verified Complaint, ¶19, Exhs. 4 and 5; Plaintiff’s Decl., ¶3.) After concluding the bulk sale purchase of Big D’s, DTP undertook a fairly extensive remodel of the Leased Premises and opened a bar and grill known as DT’s Bar & Grill at the Leased Premises. (Verified Complaint, ¶20.)

In or around October 29, 2018, Plaintiff and Deering as sellers and Guerrero as buyer entered into a Purchase Agreement, wherein Guerrero acquired a 50% interest in DTP for the purchase price of $75,000.00, payable entirely to Plaintiff. (Id., ¶21, Exh. 6; Plaintiff’s Decl., ¶4.) Guerrero has only paid Plaintiff $55,000.00. (Verified Complaint, ¶21.) On or about November 2018, DTP began doing business as 20/20 Pomona. (Id., ¶22; Plaintiff’s Decl., ¶4.) Avila, Guerrero’s wife or girlfriend, became active in the operation of 20/20 Pomona at Guerrero’s insistence. (Verified Complaint, ¶23; Plaintiff’s Decl., ¶5.) At one time point in time, Guerrero and Avila permitted in excess of $40,000.00 in cash to accumulate without being accounted for, and Plaintiff had to repeatedly request that they account for same. (Id.)

Beginning in September 2019, Guerrero and Avila, over Plaintiff’s objection, took over complete control of DTP and 20/20 Pomona. (Plaintiff’s Decl., ¶6.) The banking accounts have been switched to another institution, to which Plaintiff has no access. (Id.) Plaintiff does not have any access to the finances of either DTP or 20/20 Pomona within which to ensure that the rent and sales taxes are paid. (Id.) During this time, Guerrero and Avila were causing checks to be bounced as they were not depositing cash from DTP into DTP’s bank accounts. (Verified Complaint, ¶26.) Plaintiff received notification from the California Department of Tax and Fee Administration that the 3rd quarter 2019 sales tax has not been paid and that neither the 4th quarter returned have been filed nor the taxes paid for the 4th quarter of 2019. (Id., ¶30; Plaintiff’s Decl., ¶7.) The rent is over two months in arrears. (Id.)

In or around September 2019 Plaintiff was completely excluded from the Leased Premises and when he attempted to visit the Leased Premises, the apparent person in charge of operations advised that if Plaintiff did not leave, that he was instructed by Guerrero and Avila to call the police on Plaintiff. (Id. at ¶31; Plaintiff’s Decl., ¶9.)

The motion is not opposed. The court concludes that Plaintiff has carried his burden of showing that it is “reasonably probable” that they will prevail on the merits at trial.

Interim Harm

 

With respect to interim harm, Plaintiff attests that DTP’s income has been misappropriated and not applied to the necessary expenses of DTP such as payment of rent and sales tax. (Plaintiff’s Decl., ¶9.) Plaintiff, further, is personally liable on the Lease Agreement. (Verified Complaint, ¶19.) Plaintiff attests that irreparable injury will occur to DTP and 20/20 Pomona in the lease of the leased premises, which will then preclude it from doing business. (Plaintiff’s Decl., ¶9.)

The motion is not opposed. The court concludes that Plaintiff has carried his burden of showing “interim harm.”

The Order to Show Cause Re: Preliminary Injunction, then, is GRANTED.


[1] On January 31, 2020, Plaintiff filed an “Ex Parte Application for Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction.” On February 4, 2020, the court granted the ex parte application, granted the Temporary Restraining Order in part and scheduled an Order to Show Cause Re: Preliminary Injunction for February 10, 2020; Plaintiff’s counsel was ordered to give notice. The order filed February 4, 2020 indicates that Guerrero and Avila were ordered to deposit all income of DTP Restaurant Ventures, LLC into Account No. 642777252 Wells Fargo 20/20 restaurant checking account, including all income derived from the operation of 20/20 Bar and Grill La Casa De Las Micheladas DTP located at 135 E. 2nd Street, Pomona California, and that said deposited income was not to be withdrawn. The court further ordered that a copy of the order and all supporting papers filed in connection therewith must be served on defendants no later than 1 day before the date set for hearing on the Order to Show Cause. No briefing schedule is set forth in the order. No proof of service has been filed, to date (i.e., as of 2/5/20, 5:49 p.m.)