Opposition ObjectionsCal. Super. - 6th Dist.December 4, 2020\OOONONUI-bUJNt-t NNNNNNNNNt-tt-tt-tt-tt-tt-tt-tt-tt-tt-t OONONUl-kUJNHOKOOONONUI-5WNHO 200V373828 Santa Clara - Civil S. Ve DIEMER & WEI LLP Electronically Filed KATHRYN s. DiEMER, #133977 by S”per'°r cw” °f CA, JULIA M. WEI, #218005 County 0f Santa Clara, HENRY CHUANG, #250628 on 12/7/2020 9:39 AM 55 S. Market Street, Ste. 1420 Reviewed By: S. Vera San JOSE, California 951 13 . . case #Zocv373828 Telephone: (408) 971-6270 / Facsunlle: (408) 971-6271 Envelope: 541 9963 Attorney for Interest Party Private Capital Investments SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA Unlimited Jurisdiction 1999 STONE LLC, Case N9; 20CV373828 Plaintiff, OPPOSITION EX PARTE APPLICATION VS“ Date: TBD PG CAPITAL, LLC A SERIES 0F REPJR Tlmei 8315A-M- INVESTMENTS, LLC, A NEVADA LIMITED Dept: TBD LIABILITY COMPANY; FRANCES LAVINIA Judge: TBD PAPAPIETRO, TRUSTEE 0F THE FRANCES LAVINIA PAPAPIETRO SEPARATE PROPERTY TRUST DATED AUGUST 27, 2018, PLM LOAN MANAGEMENT SERVICES, INC. DOES ONE through TWENTY FIVE, inclusive Defendants. MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Plaintiff 1999 Stone, LLC (“1999 Stone”) is seeking a temporary restraining order t0 prevent the foreclosure 0f a property after 1999 Stone defaulted 0n the loan. Plaintiff 1999 Stone does not dispute that it defaulted 0n the loan and that the lender has acted in appropriately. Plaintiff does not contend that the foreclosure itself is wrongful, that the lender violated any lending laws, 0r that the lender is not entitled t0 foreclose. Plaintiff s only contentions are that the covid-19 pandemic prohibits all foreclosure sales and that there may be some issues with the notice. However, Plaintiff does not point t0 a single regulation, rule, 0r statute that prohibits foreclosure sale. This is for a simple reason, none exist. The Governor, Legislature, and local authorities have all reviewed the Fa Opposition to EX Parte Application \OOONONUI-bUJNt-t NNNNNNNNNt-tt-tt-tt-tt-tt-tt-tt-tt-tt-t OONONUl-kUJNHOKOOONONUI-5WNHO impact 0f covid and none have prohibited foreclosure sales. At most, they have suggested that foreclosure sales be delayed. The only foreclosure prohibition has been through the courts and was limited t0 judicial foreclosures. As Plaintiff has breached the loan agreement and there is n0 foreclosure prohibition, Defendant respectfully requests that the Court deny the ex parte application. II. FACTUAL BACKGROUND On 0r around June 14, 2019, 1999 Stone executed a promissory note in the amount 0f $1,000,000 (“Loan”). The Loan was secured against 1999 Stone Avenue, San Jose CA (“Property”). The Property is an industrial site and the Loan was for a business purpose. RJN A, EXh A. On August 1, 2020, the Loan matured pursuant t0 its term and Plaintiff failed t0 make payment. Accordingly, 0n August 20, 2020, a Notice 0f Default was issued (“NOD”). The recorded NOD was mailed by certified first class mail t0 the Property and t0 545 W. Santa Inez Avenue, Hillsborough, CA 94010 0n August 24, 2020. Chuang Dec. EXh A. The recorded NOD was mailed by certified first class mail once again t0 1726 Rogers Avenue, San Jose, CA 951 12. Chuang Dec. EXh B. On November 23, 2020, the Notice 0f Trustee Sale (“NTS”) was recorded. On the same day, the NTS was posted 0n the gate 0f the Property. Chuang Dec. EXh C. The recorded NTS was mailed by certified first class mail t0 the Property, 545 W. Santa Inez Avenue, Hillsborough, CA 94010, and 1726 Rogers Avenue, San Jose, CA 951 12 0n November 24, 2020. Chuang Dec. Exh D. On December 3, 2020, Plaintiff’s counsel, Jim Roberts, contacted Elizabeth Godbey at PLM Loan Services, Inc. (“PLM”) t0 notify her 0f this application and Damon Bowers 0f Private Capital Investments (“PCI”). Plaintiff contends that PCI is the representative 0f the defendants in this matter as it acts as the servicer. In response, counsel for PCI contacted Mr. Roberts asking for the paperwork. Mr. Roberts did not provide the paperwork for the complaint 0r the motion until around 1 pm and continued t0 supplement his application around 3:45 pm. Chuang Dec. EXh E. Mr. Roberts confirmed that Civil Local Rule 16 requires the application t0 be served before 10 am. the day before the hearing and was notified 0f that by PCI. In a telephone discussion around 3:30 pm that same day, Mr. Roberts stated that he believed he was sufficiently close in time in providing the documents that he sufficiently complied with the service requirement and that he would be Opposition to EX Parte Application \OOONONUI-bUJNt-t NNNNNNNNNt-tt-tt-tt-tt-tt-tt-tt-tt-tt-t OONONUl-kUJNHOKOOONONUI-5WNHO proceeding with the application 0n December 4, even though there was n0 file endorsed copy 0f the complaint 0r a case number for this matter. III. LEGAL ARGUMENT A. Plaintiff Failed t0 Give Proper Notice. Civil Local Rule 16 is clear, “Notice and service 0f the application must be provided as required by the Rules 0f Court by n0 later than 10:00 am. the court day before the ex parte application is submitted with proof 0f notice filed with the application.” Plaintiff very carefully does not allege that it complied with this rule and instead obfuscate by alleging that it notified by telephone before 10:00 A.M. Application Pg. 4. Plaintiff concedes the notice was by telephone and does not allege any mail, fax, 0r e-mail service was completed. Indeed, the e-mails are clear, Plaintiff did not serve the application until well after the deadline in Violation 0f the local rules and Defendants’ due process rights. Plaintiff has n0 reason for this unreasonable delay and failed t0 meet the requirements 0f this court. This is even more egregious given that Plaintiff has failed t0 provide a case number and apparently has been unable t0 file the complaint. Plaintiff also is unable t0 demonstrate any exceptional circumstances t0 justify a shorter time for notice 0r why notice should not be provided. CRC 3.1204. Plaintiff concedes that the foreclosure sale is set for December 16, 2020. Plaintiff could provide proper notice and still have an ex parte heard prior t0 the sale. There is n0 justification for depriving Defendants 0f their due process rights and t0 hold this hearing without proper notice. B. PCI Requests Leave t0 Specially Appear for this Hearing. Although not named in the lawsuit, Plaintiff gave notice t0 PCI 0f this litigation and ex parte alleging that PCI is the representative 0f the Defendants. PCI is the servicer 0f the Loan and seeks leave 0f Court t0 appear as an interested party solely for the purposes 0f opposing this motion and any Order t0 Show Cause re: Preliminary Injunction. C. Standard for a Temporary Restraining Order. It is black letter law that the primary purpose 0f a preliminary injunction is t0 preserve the status quo until a court can make a final determination 0n the merits 0f the action. “The general Opposition to EX Parte Application \OOONONUI-bUJNt-t NNNNNNNNNt-tt-tt-tt-tt-tt-tt-tt-tt-tt-t OONONUl-kUJNHOKOOONONUI-5WNHO purpose 0f such an injunction is the preservation 0f the status quo until a final determination 0f the merits 0f the action.” Continental Baking C0. v. Katz, (1968) 68 Cal.2d 512, 528. A temporary restraining order [“TRO”] is properly granted 0n an ex parte notice in order t0 maintain the status quo 0r t0 prevent irreparable injury pending a hearing 0n the application for a preliminary injunction. C.C.P. §527( c); see also 6 Witkin, Cal.Procedure 5th ed. Provisional Remedies, §284-285, p. 224- 225. Preliminary injunctions are extraordinary remedies that are not t0 be routinely granted. San Francisco v. Mkt. SR. C0., 96 Cal.App.2d 648, 655 (1950). California courts 100k t0 two interrelated factors t0 decide whether t0 issue a TRO and/or preliminary injunction: 1) the likelihood that the plaintiff will succeed 0n the merits 0f its claims at trial; and (2) the harm that the plaintiff is likely t0 suffer if the TRO and/or preliminary injunction does not issue, balanced against the harm that the defendant is likely t0 suffer if the TRO is issued. “In deciding whether t0 issue a preliminary injunction, a trial court weighs two interrelated factors; the likelihood the moving party ultimately will prevail 0n the merits, and the relative interim harm t0 the parties from the issuance 0r nonissuance 0f the injunction.” Hunt v. Superior Court, ( 1999) 21 Cal.4th 984, 999. See also Shoemaker v. County 0fL0s Angeles, (1995) 37 Cal.App.4th 618. An inability t0 demonstrate either element warrants denial. See Yu v. University ofLa Verne, 196 Cal.4th 779, 787 (201 1). When addressing these factors, the plaintiff must prove the likelihood that it will suffer immediate and irreparable harm due t0 the inadequacy 0f other legal remedies. Triple A Machine Shop v. California, (1989) 213 Cal.App.3d 131, 138. D. Plaintiff Cannot Demonstrate Irreparable Harm. Plaintiff is unable t0 demonstrate irreparable harm. CCP § 526(a)(2) lists the traditional consideration 0f “irreparable harm.” Irreparable harm is often related t0 the “inadequate legal remedy” but it is also a separate consideration. There must be something more than a mere dispute. Relief should be denied unless someone will be significantly hurt in a way that cannot be later repaired. People ex rel. Gow v. Mitchell Brothers’ Sam‘a Ana Theater, (1981) 118 Cal.App.3d 863, 870-871. While residences are typically considered t0 be unique and therefore potentially lead t0 irreparable harm, that is not the case for investment properties. In Jessen v. Keyston Savings & Loan Assn, 142 Cal.App3d 454, 458, the Court found that when there is an investment property Opposition to EX Parte Application \OOONONUI-bUJNt-t NNNNNNNNNt-tt-tt-tt-tt-tt-tt-tt-tt-tt-t OONONUl-kUJNHOKOOONONUI-5WNHO marketed at an established price, “the loss 0f unit[s] may be adequately compensated in damages and will create n0 great 0r irreparable harm.” Plaintiff has attempted t0 sell the Property and as such, there is a marketed price. Further, the fact that Plaintiff is attempting t0 sell the Property indicates that Plaintiff is simply t0 seeking t0 recoup its investments in the Property. Along with the fact that the Property is simply just an investment for Plaintiff, Plaintiff cannot claim that it is an occupant 0f the Property as it is leased t0 Mr. Chen’s family business. Chen Dec. 1H5 As there is another party occupying this commercial property, there is n0 possibility 0f the Property being a primary residence. E. Plaintiff Cannot Demonstrate Likelihood 0f Success. 1. N0 Regulations Prohibit Foreclosure Sales. Plaintiff’s first and second causes 0f action essentially state that the C0Vid-19 related restrictions prevent a foreclosure sale. However, every branch 0f government and agency who has issued restrictions have chosen not prohibit foreclosure sales. For example, Plaintiff contends the governor’s orders bars outdoor gatherings t0 the extent that the foreclosure sale cannot occur. The Governor has explicitly chosen not t0 ban foreclosure sale and instead simply “requested [lenders] t0 implement an immediate moratorium 0n foreclosures out 0f a substantial decrease in household 0r business income which were caused by the C0Vid-19 pandemic.” RJN B, Executive Order N-28- 20(5). Foreclosures sales have been conducted in Santa Clara County and neighboring counties. Similarly, the legislature also passed a comprehensive bill in dealing with the C0Vid-19 pandemic, the “Tenant, Homeowner, and Small Landlord Relief and Stabilization Act 0f 2020” 0r AB 3088. The legislature there modified and expanded some foreclosure protections but did not prohibit foreclosure sales even though it largely prohibited evictions until February 2021. The new protections offer d0 not impact Plaintiff as this is a business purpose loan that is secured in second position. CiV §2924.15. At the judicial level, the courts have also declined t0 prohibit non-judicial foreclosures. Emergency Rule 2 only prohibited judicial foreclosures and the courts chose not t0 address non- judicial foreclosures. T0 circumvent this issue, Plaintiff alleges that the restrictions 0f access t0 the courthouse will limit the foreclosure proceedings. However, as Plaintiff concedes, the foreclosure is Opposition to EX Parte Application \OOONONUI-bUJNt-t NNNNNNNNNt-tt-tt-tt-tt-tt-tt-tt-tt-tt-t OONONUl-kUJNHOKOOONONUI-5WNHO taking place in a public space outside the courthouse. There is n0 need for any party t0 access the court itself. On the local level, Plaintiff’s concedes that Santa Clara County confirmed that it permits outdoor gatherings with a maximum 0f 100 people. Roberts Dec. EXh. 7, Pg 1 “Outdoor Gatherings”. Plaintiff does not provide any support that the foreclosure sale, 0r any foreclosure sale in history, has ever attracted more than 100 people. T0 circumvent this, Plaintiff strangely seems t0 allege that the foreclosure sale will occur indoors. However, this is simply factually incorrect. As the NTS provides, the sale will occur “at the gated North Market Street entrance”, an explicitly outdoor location. Finally, Plaintiff contends that Governor Newsom’s new order restricts all private gathering. However, Plaintiff seems t0 be intentionally misleading the Court 0n the effective date 0f the new order. Plaintiff argues that it “will g0 into effect within 48 hours in Santa Clara County.” Supplemental Opposition Pg. 2. The order itself explicitly states that it “will g0 into effect within 48 hours in regions with less than 15% ICU availability.” The Bay Area is not one 0f those regions, nor in fact are any 0f the regions currently. None 0f the restrictions prevent a foreclosure sale and every single body 0f government that has enacted restrictions has declined t0 prevent a foreclosure sale. 2. PLM Complied With All Notice Requirements Plaintiff’s only argument specifically targeting this Loan and this specific foreclosure sale is that PLM failed t0 comply with the notice requirement as Mr. Chen personally had not seen 0r been made aware 0f the NOD 0r NTS. This statement is directly contradictory t0 the affidavits 0f service and picture 0f the NTS posted at the Property. Chuang Dec., EXh A-D. There are multiple declarations 0f mailing related t0 the NOD t0 demonstrate compliance and there are declarations 0f mailing and posting relating t0 the NTS. CiV 2924b(e) provides that an affidavit 0f mailing certified first class mail is “conclusive presumption 0f mailing.” PLM has provided affidavits 0f mailing 0f the NOD and NTS by certified first class mail. As a matter 0f law, such an affidavit is conclusive that mailing occurred. Accordingly, Plaintiff s argument is without merit. Opposition to EX Parte Application \OOONONUI-bUJNt-t NNNNNNNNNt-tt-tt-tt-tt-tt-tt-tt-tt-tt-t OONONUl-kUJNHOKOOONONUI-5WNHO IV. CONCLUSION Plaintiff does not dispute that it defaulted 0n the Loan and that the Loan has matured. Plaintiff does not allege that the Loan violated any laws 0r that the lender has violated any consumer protections. Plaintiff’s argument fundamentally boils down t0 a contention that all foreclosure sales are barred in Santa Clara County, and likely in all 0f California. Every single branch 0f government has declined t0 enact such a bar even though various emergency rules, ordinances, and legislation has been enacted t0 deal with the C0Vid-19 pandemic. There simply is n0 support for Plaintiff’s idea a defaulting borrower is entitled t0 stop a foreclosure sale without repayment 0f the loan. Plaintiff is unable t0 demonstrate any irreparable harm. It is unable t0 demonstrate any likelihood 0f success as it is entitled t0 none 0f the protections 0f the laws cited. Accordingly, PCI requests the ex parte be denied. Dated: December 4, 2020 Diemer & Wei, LLP By: /s/ Henry Chuang Henry Chuang Attorney for Private Capital Investment Opposition to EX Parte Application
