Opinion
D069719
06-29-2017
RFG-SJG, LLC et al., Plaintiffs and Appellants, v. R.S. BILLS, INC. et al., Defendants and Respondents.
David A. Kay for Plaintiffs and Appellants. Kimball, Tirey & St. John and Rebecca J. Fortune for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2016-00000202-CU-BC-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Joel. R. Wohlfeil, Judge. Dismissed. David A. Kay for Plaintiffs and Appellants. Kimball, Tirey & St. John and Rebecca J. Fortune for Defendants and Respondents.
Plaintiff and Appellant RFG-SJG, LLC (RFG) appeals an order denying its application for a preliminary injunction, which sought to prevent the sale of real property located on University Avenue in San Diego (subject property) by its owner, defendant and respondent R.S. Bills, Inc. (Bills), to codefendant and co-respondent Cypress Development, Inc. (Cypress). The court denied RFG's application after finding the issue of whether RFG could exercise a right of first refusal (ROFR) to buy the subject property had been litigated and resolved against RFG in a related unlawful detainer action brought by Bills, which judgment RFG has appealed to the appellate division of the superior court.
In connection with the instant appeal, RFG in early February 2016 filed both a petition to transfer the unlawful detainer action to this court and a petition for writ of supersedeas/mandate directing the trial court to vacate its order denying RFG's application for preliminary injunction. This court on February 10, 2016 denied both petitions. Bills thereafter transferred the subject property to Cypress. As we explain, RFG's appeal of the denial of its application for preliminary injunction is moot and, thus, dismissed.
BACKGROUND
In December 2009, RFG entered into a five-year written lease with Bills (subject lease). RFG operated a "quick lube service station" on the subject property. The subject lease required RFG to pay all rent on the first of the month and to pay all property taxes when they became due. The subject lease provided that RFG's failure to pay rent or property taxes would result in a "default" under the subject lease. An addendum to the subject lease provided RFG with the ROFR to purchase the subject property. By its terms, the ROFR could not be exercised " 'during the period of time any [r]ent is unpaid (without regard to whether notice thereof is given [l]essee [RFG])' " or " 'during the time [l]essee is in [b]reach of this [subject l]ease.' "
On or about October 21, 2014, RFG executed an amendment to the subject lease (amendment), acknowledging that it had not exercised its first, five-year option to renew the subject lease. The amendment further deleted the ROFR and converted RFG's tenancy to month-to-month.
In August 2015, Bills served RFG with a 60-day notice to terminate its tenancy. When RFG did not vacate the subject property, Bills filed its unlawful detainer action titled R.S. Bills, Inc. v. RFG-SJG, LLC (Super. Ct. San Diego County, 2015, No. 37-2015-00034594-CL-UD-CTL) (UD action). RFG's answer to the UD action asserted myriad defenses, including that Bills " 'breached the terms of the lease's [ROFR].' "
Extensive discovery was conducted in connection with the UD action. Trial of the UD action commenced on December 21, 2015. The following day, the court provided the parties with an oral statement of decision (SOD).
In the SOD, the court found that, during the five-year term, RFG continually defaulted on the subject lease, as RFG was "always late" paying rent; that RFG also failed to pay the property taxes as required under the subject lease; that despite RFG's defaults, Bills's principal, Robert Bills, was "patient" with RFG until 2014, when Bills determined it needed to "[]part company" with RFG and sell the subject property; and that RFG's principal, David Gong (David), was not credible. The court also found that RFG was "in violation of the lease" and, thus, "in default," inasmuch as RFG "[h]adn't paid the taxes and hadn't paid the October rent"; that because RFG was "having a hard time" financially, it was unable to pay for improvements to increase its business; that under the subject lease, RFG was not entitled to a "notice of default or a notice of -- of the right to cure"; and that RFG never exercised its option to purchase the subject property during the five-year term of the subject lease.
The court in its SOD further found that, when RFG entered into the amendment, it had its proverbial eyes "open" to the fact that the ROFR was eliminated; and that David "knew that [the ROFR] was deleted from the [amendment]." The court found the amendment provided RFG with significant benefits, including "not being charged holdover rent which would have been 150 percent," and being able to pay rent "month-to-month." The court also found from the evidence that it was "pretty obvious" RFG "was unable to come anywhere near purchasing" the subject property in light of its financial position. Thus, the court concluded Bills was "forthwith" entitled to possession of the subject property.
The record shows within days after the court issued its SOD, and even before judgment was entered in favor of Bills in the UD action, RFG filed the underlying action asserting causes of action for injunctive relief, specific performance, breach of contract, and declaratory relief. In connection with the underlying action, RFG moved ex parte and obtained a temporary restraining order preventing Bills from selling the subject property to Cypress pending the hearing on the application for a preliminary injunction.
As noted ante, the trial court denied RFG's application for a preliminary injunction and, in so doing, dissolved the temporary restraining order. The court found RFG was unlikely to prevail on the merits of its claim that it was entitled to exercise the ROFR to purchase the subject property, ruling on this issue as follows: "[The UD action] fully and fairly litigated the issue of the viability of the [ROFR] as an affirmative defense to the eviction proceedings. The judgment and [SOD] demonstrates that both sides presented evidence and argument. The Court, the Honorable John S. Meyer, made an informed decision based on this evidence, finding that the . . . [ROFR] was not viable for a number of reasons. As a result, [RFG is] barred from relying on [the ROFR] in this action as well.
"Even assuming the judgment in the [UD action] did not have preclusive effect, the Court independently finds that the evidence presented by the parties demonstrates that [RFG is] barred from exercising the [ROFR] set forth [in] . . . the lease addendum. Among other things, this evidence demonstrates that Plaintiff RFG[] was in default such that it was prohibited from exercising the [ROFR]. Further, this evidence establishes that by signing the [amendment], [RFG] acknowledged the deletion of [the ROFR] from the [l]ease."
As noted ante, this court on February 10, 2016 denied RFG's petitions both to transfer the UD action to this court and for writ of supersedeas/mandate directing the trial court to vacate its order denying RFG's application for preliminary injunction. The following day, Bills transferred the subject property to Cypress.
On our own motion, we sought and obtained, and have reviewed, supplemental briefing from the parties regarding why this appeal should not be dismissed including on the ground it was moot because Bills already has transferred the subject property to Cypress.
DISCUSSION
It is a well-settled principle that a court of review only decides "actual controversies." (See Finnie v. Town of Tiburon (1988) 199 Cal.App.3d 1, 10.) Thus, "an action which originally was based upon a justiciable controversy cannot be maintained on appeal if the questions raised therein have become moot by subsequent acts or events. As succinctly stated in Consol. etc. Corp. v. United A. etc. Workers (1946) 27 Cal.2d 859, 863, the appellate court cannot render opinions ' ". . . upon moot questions or abstract propositions, or to declare principles or rules of law which cannot affect the matter in issue in the case before it. It necessarily follows that when, pending an appeal from the judgment of a lower court, and without any fault of the defendant, an event occurs which renders it impossible for this court, if it should decide the case in favor of plaintiff, to grant him [or her] any effectual relief whatever, the court will not proceed to a formal judgment, but will dismiss the appeal." ' [Citations.] The principles set out above apply also to instances involving preliminary injunctions. For example, in Bernard v. Weaber (1913) 23 Cal.App. 532, the plaintiffs unsuccessfully sought a preliminary injunction to restrain defendant city treasurer from issuing street improvement bonds; the bonds were issued and plaintiffs appealed. In dismissing the appeal as moot the appellate court reasoned that reversal of the judgment could not afford the plaintiffs relief because the issuance of an injunction restraining the defendant from 'doing that which he has already done, would be an idle and frivolous act, since such decision would have no binding authority and would not affect the legal rights of the parties.' (Id., at p. 535.)" (Ibid.)
Here, the record unambiguously shows Bills transferred the subject property to Cypress after this court denied RFG's petition for writ of supersedeas/mandate directing the trial court to vacate its order denying RFG's application for preliminary injunction. Accordingly, a reversal of the order would have no practical effect because we cannot compel the trial court to enjoin an event that has already occurred. (See Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 208 [noting "[a]n appeal from an order denying a temporary restraining order or preliminary injunction will not be entertained after the act sought to be enjoined has been performed"); Giles v. Horn (2002) 100 Cal.App.4th 206, 227 [noting the rule a court of review only decides actual controversies "has been regularly employed where injunctive relief is sought and, pending appeal, the act sought to be enjoined has been performed"].)
DISPOSITION
The appeal is dismissed as moot. As such, the parties' request for oral argument is also moot. In dismissing the appeal, we offer no opinion on the merits of the underlying case. Bills to recover its costs of appeal.
BENKE, Acting P. J. WE CONCUR: HUFFMAN, J. DATO, J.