Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court for Los Angeles County No. MC019410, Carlos P. Baker, Jr., Judge.
Law Office of John J. Uribe and John J. Uribe for Defendants and Appellants.
Dion-Kindem & Crockett, William E. Crockett, Steven R. Skirvin and Melanie Gardner-Pawlak for Plaintiff and Respondent.
WILLHITE, J.
Defendants Equus Sanctuary (Equus), a California nonprofit corporation, and Linda Moss, the founder of Equus, appeal from an order granting a preliminary injunction sought by Dreamcatcher Wild Horse and Burro Sanctuary, Inc. (also a California nonprofit corporation), enjoining defendants from, among other things, using or claiming ownership of the name Equus, Equus Rescue Sanctuary, Equus Horse Rescue Sanctuary, or any combination thereof. We affirm the order.
BACKGROUND
In 1994, Moss founded a nonprofit horse rescue and sanctuary that was incorporated as Equus Rescue and Sanctuary (ERS). ERS filed for Chapter 11 bankruptcy protection in 2001. At that time, Moss and ERS were involved in various disputes with, among others, a major benefactor of ERS. A bankruptcy trustee was appointed to manage the nonprofit, which at that time sheltered approximately 365 horses, most of which were old and/or infirm, and a significant number of other animals. The sanctuary was thought to be the largest horse rescue operation in the country, and one of the largest in the world. It required $30,000 per month just to feed the animals.
After examining all aspects of the nonprofit, the trustee concluded it would be in the best interest of the bankruptcy estate and the creditors to turn over the operation of the sanctuary to another nonprofit and enter into a global agreement to resolve pending litigation and creditor claims. The interested parties, including Moss, entered into various agreements, stipulations, and/or waivers, the end result of which was that the nonprofit United Pegasus Foundation (UPF) took over certain defined assets of the ERS bankruptcy estate, including all of the animals, the trade name “Equus Rescue and Sanctuary, ” and ERS’s donor list. Moss, in turn, waived any claim to those assets. After the bankruptcy court approved the global agreement, UPF assigned all of its rights to the ownership of ERS -- including the name “Equus Rescue and Sanctuary” -- to Dreamcatcher, the plaintiff in this case. Dreamcatcher moved the horses being housed by ERS to its 1200 acre horse and burro sanctuary in Northern California, and shortened the ERS name to “Equus Sanctuary.” The bankruptcy case ultimately was closed on November 9, 2007.
In June 2003 -- less than a year after the assets of ERS were transferred to UPF (and then to Dreamcatcher) and Moss signed a waiver of any claim to those assets -- Moss incorporated another nonprofit corporation to operate a horse sanctuary in Southern California, and named it “Equus Sanctuary” (this corporation, which we refer to as Equus in this opinion, and Moss are the defendants in this action). Apparently, Equus was raided in June 2008 by Los Angeles County animal control officers, who found several starving or severely injured horses and other animals at the sanctuary. The manager of Equus, Janice Damiani (also known as Janice Ridgeway or Janis Ridgeway), who also was on the board of directors and was Equus’s agent for service of process, was arrested and charged with several counts of animal cruelty.
On the day of the raid, a mass e-mail was sent out, strongly criticizing the raid and the animal control officers. The e-mail encouraged readers to call “Linda of Equus” (it provided Moss’s cell phone number) or “the sanctuary office number” (the number it provided was the telephone number for ERS/Dreamcatcher). After the e-mail was sent, ERS/Dreamcatcher received numerous calls and correspondence, including death threats, from people who believed that ERS/Dreamcatcher was responsible for the mistreatment of animals at Equus and/or believed that ERS/Dreamcatcher was the same organization as Equus and had been shut down due to the raid. In the two weeks following the e-mail, donations to ERS/Dreamcatcher, which are critical for its operations, virtually ceased; for example, ERS/Dreamcatcher received only $302.50 in the two weeks after the e-mail was sent, contrasted with almost $10,000 it received during the comparable two weeks in the previous month.
On July 9, 2008, less than a month after the e-mail was sent, Dreamcatcher filed the instant lawsuit against Equus, Moss, and Damiani. In the operative first amended complaint, filed July 22, 2008, Dreamcatcher alleges that Moss and Equus illegally used the Equus name and the mailing list that Dreamcatcher acquired through the bankruptcy case to deceive the public into thinking that Equus was the same as ERS/Dreamcatcher and to divert donations meant for ERS/Dreamcatcher to Equus. Dreamcatcher asserted claims for unfair competition, intentional interference with economic relationships, civil conspiracy to interfere with economic relationships, declaratory relief, and an accounting. Dreamcatcher sought a temporary restraining order, preliminary injunction, and permanent injunction enjoining defendants from: using the name Equus, Equus Rescue Sanctuary, or Equus Horse Rescue Sanctuary, or any similar name; using the mailing list for any reason; representing that defendants have any affiliation with ERS/Dreamcatcher; advertising using the name Equus, Equus Rescue Sanctuary, or Equus Horse Rescue Sanctuary, or any similar name; and using or claiming ownership of any assets listed in the bankruptcy order. Dreamcatcher also sought restitution under the unfair competition cause of action, damages and punitive damages for the intentional interference and conspiracy claims, declaratory relief, and an order requiring an accounting.
Dreamcatcher was unable to serve Damiani because she was incarcerated. Therefore, the case went forward only against Moss and Equus, and we will address only those claims directed at those two defendants.
On July 24, 2008, Dreamcatcher applied ex parte for issuance of a temporary restraining order and an order to show cause for issuance of a preliminary injunction. Dreamcatcher submitted in support of its application the declaration of its director, Barbara Clarke, who explained that the cessation of donations caused by the confusion resulting from Defendants’ use of the Equus name and the raid on Equus’s facilities, threatened the lives of hundreds of animals because ERS/Dreamcatcher was unable to pay for food or other essential items to support its horse and burro sanctuary. The trial court granted the application, and issued a temporary restraining order enjoining defendants from using or claiming ownership of the Equus name, operating a website using “equussanctuary” in the web address, representing that defendants have any affiliation with ERS/Dreamcatcher, or advertising using the Equus name. The court also ordered defendants to show cause why a preliminary injunction should not be issued, and set a briefing schedule.
Defendants opposed issuance of the preliminary injunction, arguing that the trial court lacked subject matter jurisdiction, that the action was barred by section 425.15 of the Code of Civil Procedure, and that Dreamcatcher had no likelihood of prevailing on the merits because the name “Equus Sanctuary” was not an asset of ERS that was transferred to Dreamcatcher in the bankruptcy proceedings. The trial court granted Dreamcatcher’s application and issued a preliminary injunction prohibiting Equus and Moss from: using or claiming ownership of the name Equus, Equus Rescue Sanctuary, or Equus Horse Rescue Sanctuary or any combination thereof; owning and operating any website using those names or any combination thereof; using the ESR mailing lists or contacting donors listed therein; representing to anyone that they have any affiliation with Dreamcatcher or its horse and burro rescue sanctuary; claiming ownership of any assets of Equus, Equus Rescue Sanctuary, or Equus Horse Rescue Sanctuary or any combination thereof; or advertising using Equus, Equus Rescue Sanctuary, or Equus Horse Rescue Sanctuary or any combination thereof.
Defendants timely filed a notice of appeal from the order granting the preliminary injunction.
DISCUSSION
On appeal, defendants contend that this case arises under or is otherwise related to the ERS bankruptcy proceeding over which the bankruptcy court has exclusive jurisdiction, and therefore the trial court lacked jurisdiction to hear the case. Defendants also contend that, even if the trial court had jurisdiction, it abused its discretion in granting the preliminary injunction because Dreamcatcher is not likely to prevail on the merits and there is no danger of impending harm that could not be remedied by an award of money damages. Neither contention has merit.
Defendants also state, in a footnote without any argument, that the trial court may be without jurisdiction under Code of Civil Procedure section 425.15. Because this point is not presented under a separate heading in the appellants’ opening brief, and is not supported by argument, it is forfeited. (Cal. Rules of Court, rule 8.204(a)(1)(B); see, e.g., In re Mark B. (2007) 149 Cal.App.4th 61, 67, fn. 2.)
A. The Trial Court Has Jurisdiction
In arguing that the trial court was without jurisdiction, defendants first contend that the issue in dispute in this case is whether Dreamcatcher (through UPF) obtained the trade name “Equus Sanctuary” from the bankruptcy estate, which defendants contend is an issue subject to the exclusive jurisdiction of the bankruptcy court under section 1334(e)(1) of title 28 of the United States Code because it involves a dispute over property of the bankruptcy estate. Defendants misapprehend what is in dispute in this case. Dreamcatcher does not contend that it received the trade name “Equus Sanctuary” from the bankruptcy estate. As its counsel told the trial court in response to defendants’ argument at the hearing on the order to show cause, Dreamcatcher “has not made any representation that it owns the name Equus Sanctuary. [Dreamcatcher] has indicated that through the bankruptcy court proceedings and the applicable stipulations and orders thereafter, [Dreamcatcher] owns -- now owns the name Equus Rescue and Sanctuary, not Equus Sanctuary.... [¶] The basis of our complaint is that by defendant[s] using a name that is... suspiciously and maliciously similar to [Dreamcatcher’s] name... it’s an intentional act to interfere with [Dreamcatcher’s] Equus.” In other words, there is no dispute in this case about what property Dreamcatcher received from the bankruptcy estate. Both parties agree that the trade name Dreamcatcher received was Equus Rescue and Sanctuary. Therefore, defendants’ first contention necessarily fails.
Defendants actually cite to subdivision (d) of title 28, section 1334, but the provision to which they refer is now found in subdivision (e)(1).
Relying upon section 157 of title 28 of the United States Code, defendants next contend the case must be referred to the bankruptcy court because it is a case “arising under title 11 [of the United States Code, i.e., the title governing bankruptcy] or arising in or related to a case under title 11.” Defendants’ reliance is misplaced. Section 157 is not a jurisdictional statute. Instead, the statute relates to procedures each district court may put in place to refer to bankruptcy judges cases over which the district court has assumed jurisdiction. The jurisdictional statute is found at section 1334 of title 28, which provides that federal district courts have exclusive jurisdiction over all cases under title 11, but only concurrent jurisdiction over civil cases “arising under title 11, or arising in or related to cases under title 11.” (28 U.S.C. § 1334(a), (b); see also In re Harris Pine Mills (9th Cir. 1995) 44 F.3d 1431, 1434.) Thus, regardless whether the claims in this case are characterized as “core” or “non-core” (see 28 U.S.C. § 157(b)) -- an issue that is extensively argued by the parties -- a federal court would have only concurrent, not exclusive, jurisdiction over those claims if they were brought before the federal court; the state court is not deprived of jurisdiction even if the claims relate to the bankruptcy case. Section 157 does not assist defendants here.
We note, also, that the bankruptcy case is closed. Defendants cite no authority explaining why, in that circumstance, the bankruptcy court retains exclusive jurisdiction over the matter.
Finally, defendants contend the trial court does not have jurisdiction because the documents related to the transfer of ERS’s assets, which were approved by the bankruptcy court, expressly provided that the bankruptcy court had exclusive continuing jurisdiction over disputes regarding those documents. This final contention suffers from the same defect as defendants’ first contention, namely, defendants’ assertion that this case involves a dispute over what trade name was transferred. There is no such dispute. Because resolution of this case does not require an interpretation or enforcement of any of the documents related to the transfer of ERS’s assets, any reservation of jurisdiction in the bankruptcy court (even if that reservation survived the closing of the bankruptcy case) simply does not apply.
B. The Trial Court Did Not Abuse Its Discretion
We turn now to defendants’ challenge to the trial court’s issuance of the preliminary injunction. “In determining whether to issue a preliminary injunction, the trial court considers two related factors: (1) the likelihood that the plaintiff will prevail on the merits of its case at trial, and (2) the interim harm that the plaintiff is likely to sustain if the injunction is denied as compared to the harm that the defendant is likely to suffer if the court grants a preliminary injunction. [Citation.] ‘The latter factor involves consideration of such things as the inadequacy of other remedies, the degree of irreparable harm, and the necessity of preserving the status quo.’ [Citation.] [¶] The determination whether to grant a preliminary injunction generally rests in the sound discretion of the trial court. [Citation.] ‘Discretion is abused when a court exceeds the bounds of reason or contravenes uncontradicted evidence. [Citation.]’ [Citation.]” (14859 Moorpark Homeowner’s Assn. v. VRT Corp. (1998) 63 Cal.App.4th 1396, 1402.) If the trial court abused its discretion in ruling on either of the pertinent factors, we must reverse the order granting the injunction. (Id. at p. 1403.)
Defendants argue that the injunction in this case was a mandatory injunction, which is subject to stricter scrutiny on appeal. They are incorrect. An order enjoining a party from continuing to use a trade name that is alleged to interfere with another party’s rights does not transform a prohibitory injunction into a mandatory one. (See 6 Witkin, Cal. Procedure (5th ed. 2008) Provisional Remedies, § 279, pp. 221-222, citing Jaynes v. Weickman (1921) 51 Cal.App. 696.)
Defendants argue the trial court abused its discretion in finding that Dreamcatcher was likely to prevail on the merits because there was no evidence that Dreamcatcher ever obtained the trade name “Equus Sanctuary” -- either through the bankruptcy proceedings or through use. Once again, defendants misapprehend the nature of Dreamcatcher’s claims. Those claims are not dependent upon Dreamcatcher having obtained or used the trade name “Equus Sanctuary” -- although there was evidence presented to the trial court that, in fact, Dreamcatcher did use that name. Rather, Dreamcatcher’s claims allege that defendants intentionally used a name that is deceptively similar to the trade name Dreamcatcher acquired (as to which Moss waived any claim of ownership) in order to divert charitable donations meant for ERS/Dreamcatcher to defendants. To prevail on those claims, Dreamcatcher must prove that it acquired and used a trade name that was exclusively identified with its operations, that defendants used a name that is sufficiently similar to Dreamcatcher’s trade name to cause confusion among donors or others, and (at least for the intentional interference and conspiracy claims) that defendants intended to cause such confusion. (See, e.g., Academy of Motion Picture, etc. v. Benson (1940) 15 Cal.2d 685; Ball v. American Trial Lawyers Assn. (1971) 14 Cal.App.3d 289.)
There was substantial evidence before the trial court to support its finding that Dreamcatcher was likely to prevail on the merits. Moss herself declared that ERS had been operating a horse rescue and sanctuary under the trade name “Equus Rescue and Sanctuary” since 1994. Dreamcatcher presented evidence that it acquired that trade name in 2003, and used it, or a shortened version of it, thereafter. Thus, there was evidence that, for at least nine years before Moss started her new horse rescue operation, “Equus Rescue and Sanctuary” was identified with the horse sanctuary Dreamcatcher acquired and operated. Dreamcatcher also presented evidence that Moss participated in the negotiations that resulted in the transfer of ERS’s assets and therefore she knew that Dreamcatcher owned the “Equus Rescue and Sanctuary” trade name when she chose the name “Equus Sanctuary” for her new horse rescue operation, indicating that defendants’ conduct was intentional. Finally, Dreamcatcher presented evidence that it received threatening telephone calls and correspondence, and that donations to ERS/Dreamcatcher virtually ceased, after news reports surfaced about the raid on Equus and the charges of animal cruelty. This evidence clearly shows that defendants’ use of that name caused confusion among Dreamcatcher’s donors and other members of the public. In light of this evidence, we conclude the trial court did not abuse its discretion when it found that Dreamcatcher satisfied the likelihood of prevailing factor.
With regard to the second factor the trial court must consider when determining whether to issue a preliminary injunction -- the interim harm to Dreamcatcher if the injunction is not granted compared to the harm to defendants if the injunction is granted -- defendants argue there was no likelihood of interim harm to Dreamcatcher because any injury caused by defendants’ conduct had already occurred and was not likely to recur, and any injury Dreamcatcher suffered could be remedied by an award of monetary damages. Defendants cite to no evidence in support of its assertions, and we find none in the record. In fact, the evidence in the record is to the contrary. The evidence shows that defendants continued to use the name “Equus Sanctuary” even after the trial court issued a temporary restraining order prohibiting them from using that name. Moreover, Dreamcatcher presented evidence that, if the confusion caused by defendants’ use of the name “Equus Sanctuary” continues and donations continue to be diverted or withdrawn, the lives of hundreds of animals under Dreamcatcher’s care will be threatened because Dreamcatcher will be without adequate funds to feed or house them. An award of monetary damages at the conclusion of the lawsuit is not an adequate remedy for this injury. In short, we find the trial court did not abuse its discretion by finding in favor of Dreamcatcher and granting the preliminary injunction.
DISPOSITION
The order granting a preliminary injunction is affirmed. Dreamcatcher shall recover its costs on appeal.
We concur: EPSTEIN, P.J., SUZUKAWA, J.