Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County, Super. Ct. No. 05CC00047 Stephen J. Sundvold, Judge.
W. Patrick O’Keefe, Jr., Baker and Baker, and William E. Baker, Jr., for Plaintiffs and Appellants.
Palmieri, Tyler, Wiener, Wilhelm & Waldron, Michael H. Leifer, Norman J. Rodich, Erin Balsara, Bullard, Brown & Beal and Timothy W. Brown for Defendants and Respondents.
OPINION
SILLS, P. J.
The condominium owners (the Owners) of the Shady Hollow Condominiums filed an action against the Rohrs Family Trust, owner of the ground underlying the project, resisting the rent adjustment pursuant to the ground lease. The Owners appeal from the pendent lite order requiring them to pay increased rent, claiming the order is an invalid mandatory injunction. We agree and reverse.
FACTS
The Rohrs Trust (the Trust) was created in 1961 by John and Vera Rohrs. The Trust owned about 18 acres of undeveloped real property in Santa Ana. In 1974 it entered into an agreement with Warmington Development, Inc. to develop the property into leasehold condominiums. Warmington constructed 150 condominium units in two phases – 83 in phase 1 and 67 in phase 2. The Trust leased all the units to Warmington, who assigned its interest to each condominium purchaser. The phase 1 leases provide for a monthly ground rent of $42, and the phase 2 leases provide for a monthly ground rent of $44. Both sets of leases provide that the ground rent will be adjusted in 30 years “by multiplying the fair market value of the leased land at highest and best use as improved . . . by eight percent (8%) . . . .” The leases further provide that if the parties cannot agree on the adjusted rental, the matter shall be determined by arbitration according to the procedure spelled out in the leases. “Pending the final decision of such adjusted rental, Lessee[s] shall pay to Lessor the amount of rent previously payable . . . .”
In early 2005, the Trust advised the Owners that the ground rent for each unit would increase to $2000 per month. The Owners objected, and the Trust demanded arbitration. In February 2005, the Owners filed this action against the Trust. The second amended complaint, which is the operative pleading, claims the leases are ambiguous about (1) the definition of “leased land,” (2) a formula for dividing the value of the total land among the 150 units, and (3) the meaning of the term “highest and best use as improved.” The Owners ask for a judicial determination of these ambiguities so the arbitrators can be instructed how to compute the fair market value of the leased land on which the increased rental amount will be based. The second amended complaint also alleges the rental adjustment clause is unenforceable because it is an unconscionable contract of adhesion; it prays for reformation and injunctive relief. The Trust filed a cross-complaint against the Owners for breach of contract, unjust enrichment and declaratory relief.
The complaint also contains allegations that Warmington’s successor, Cambridge Financial Management, Inc. (Cambridge), and the Trust fraudulently failed to convey the common area of the condominium complex to the homeowners’ association in fee. Cambridge’s demurrer to those causes of action was sustained and Cambridge was dismissed. We affirmed Cambridge’s dismissal in Baxley v. Cambridge Financial Management (June 6, 2007, G037032 [unpub. opn.]).
In February 2007, the Trust filed a motion for interim rent, explaining that the Owners had been paying the original rent during the litigation, as provided by the lease. The Trust claimed there was no dispute that the rent would be adjusted; the only issue was how much it would increase. It urged an interim rent order because “[o]therwise, the back rent owed by plaintiffs (which will continue to accrue until this litigation is finally resolved) will itself become so large that plaintiffs will be facing a lump-sum payment that will likely put many of them into danger of immediate default.” The Trust emphasized it was not asking for a mandatory injunction or a final determination of the rent amount. “The [Trust is] simply asking for the Court to provide a ruling regarding the rental adjustment amount on an interim basis. . . . The [Trust is] not seeking an order for Plaintiffs to pay rent, but simply a determination of an interim rental amount.” The Trust asked for interim rent based on the lowest comparable sales, which it calculated to be $1305 per month per unit.
The court granted the motion in the amount of $600 per unit per month, effective April 1, 2007. The court ordered the Owners to pay rent to Cambridge Management Company (the usual rent collection vehicle), which was directed to “hold $180 of each $600 payment in an interest bearing trust account. These funds shall not be distributed without an order from this Court.” At the hearing, the trial court observed, “[U]nder the circumstances, as the court views the potentials of this case, to not impose an interim rent, to allow the case to proceed to trial, to appeal, with the passage of an additional year or two or three, before these plaintiffs sit down and have to start writing checks, I think the default potential is astronomically larger by not imposing interim rent. [¶] The equitable powers of the court are being exercised more to protect the plaintiffs, than the defendants.” The court continued, “I think interim rent is necessary to keep the plaintiffs, or as many of them as possible, in their homes. That is the primary reason that I feel obligated to impose it at this point in time.” The Owners filed a timely appeal from the order.
DISCUSSION
The Owners contend the order is, in effect, a mandatory injunction and is thus subject to certain statutory requirements. We agree.
Although the Trust argues it merely requested a determination of an interim rent amount, not injunctive relief, the trial court went beyond a determination of the amount and directly ordered the Owners to pay the increased rent. The court’s order to pay increased rent is a provisional order, i.e., an order pending final litigation of the issues in the lawsuit. Provisional remedies are listed in the Code of Civil Procedure and consist of attachment, claim and delivery, injunction, and deposit in court. (§ 481.010 et seq.; § 511.010 et seq.; § 525 et seq.; § 564 et seq.; & § 572 et seq.) “[T]here are no provisional remedies available to litigants in civil contract actions apart from those set forth in [the Code of Civil Procedure].” (Friedman v. Friedman (1993) 20 Cal.App.4th 876, 884.)
All statutory references are to the Code of Civil Procedure.
An injunction is an order “commanding a person either to perform or to refrain from performing a particular act.” (McDowell v. Watson (1997) 59 Cal.App.4th 1155, 1160; § 525.) The court clearly ordered the Owners to pay $600 per month, thus changing the status quo by requiring them to perform an affirmative act which they are not otherwise obligated to do. This is a mandatory injunction. (Davenport v. Blue Cross of California (1997) 52 Cal.App.4th 435, 446-448.) Whether the court denominated the order as an injunction does not matter; it is the substance of the order that determines its effect. (Id. at p. 447.)
The Trust argues the trial court had the broad equitable power to issue the interim rent order without the necessity of following the guidelines for injunctive relief. It cites section 187, which provides, “When jurisdiction is . . . conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this code.”
But the court’s inherent powers are limited when the Legislature has provided a specific procedure to address the problem at hand. (Citizens Utilities Co. v. Superior Court (1963) 59 Cal.2d 805, 812-813; Warren v. Schecter (1997) 57 Cal.App.4th 1189, 1199.) Here, the statutes regulating injunctive relief provide a provisional remedy for the Trust. “[A]lthough courts of equity have broad powers, they may not create totally new substantive rights under the guise of doing equity.” (Friedman v. Friedman, supra, 20 Cal.App.4th at p. 886.)
Because the interim order was a preliminary injunction, the trial court erred in failing to require a bond. When a court grants a preliminary injunction, it “must require an undertaking on the part of the applicant to the effect that the applicant will pay to the party enjoined any damages, not exceeding an amount to be specified, the party may sustain by reason of the injunction, if the court finally decides that the applicant was not entitled to the injunction.” (§ 529, subd. (a).) Without a bond, the preliminary injunction is void. (City of South San Francisco v. Cypress Lawn Cemetery Assn. (1992) 11 Cal.App.4th 916, 920; Northpoint Homeowners Assn. v. Superior Court (1979) 95 Cal.App.3d 241, 246.)
The Trust argues if we determine the interim rent order is an injunction, we should remand so the trial court can order it to post a bond. But we find even if a bond is posted, the preliminary injunction cannot be upheld.
A preliminary injunction may issue if the applicant makes a showing “that sufficient grounds exist therefor.” (§ 527, subd. (a).) Because an injunction is based in equity, the applicant must show that the legal remedy of damages “would not afford adequate relief” (§ 526, subd. (a)(4)) or that “it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief” (§ 526, subd. (a)(5)). (Pacific Decision Sciences Corp. v. Superior Court (2004) 121 Cal.App.4th 1100, 1110.) An applicant must also show it will suffer some “great or irreparable injury” if the requested injunction does not issue (§ 526, subd. (a)(2)), more so than the other party would suffer if the injunction did issue. (Robbins v. Superior Court (1985) 38 Cal.3d 199, 206.)
The Trust failed to make any showing of inadequate legal remedy or irreparable harm when it moved the trial court for an interim rent order. It argued when the increased rent amount was finally determined, many of the Owners would owe such a large sum of back rent that they would be unable to pay the judgment. But under the terms of the lease, the obligation to pay the amount of back rent to the Trust is fully secured by the Owners’ interests in the property. Thus the harm the Trust alleges is merely a delay in collecting the back rent. The Owners, on the other hand, are harmed by the interim order because under the lease they are not obligated to pay any increased rent until the amount is finally determined by the arbitration process.
The Trust correctly points out that one of the factors supporting the issuance of an injunction is a showing the applicant is likely to prevail at trial. (Butt v. State of California (1992) 4 Cal.4th 668.) It argues the trial court was convinced it would ultimately receive a rental increase and there is support for that conclusion in the record. We do not disagree with the Trust on this point. But the likelihood of success on the merits, standing alone, is not enough to justify an order changing the status quo pending trial.
The Trust filed two requests for judicial notice advising us that during the pendency of this appeal, the trial court has granted motions eliminating the Owners’ causes of action for unconscionability and reformation and excluding certain evidence proffered by the Owners. The Trust claims this evidence is relevant because it reinforces the trial court’s conclusion that it will prevail at trial. But we review the trial court’s ruling for correctness as of the time of the order, on the record of matters that were before the court at that time. (In re Zeth S. (2006) 31 Cal.4th 396, 405.) Accordingly, we deny the requests for judicial notice.
The decision to issue a preliminary injunction is subject to the broad discretion of the trial court, and “[a]ppellate review is limited to whether the trial court’s decision was an abuse of discretion. [Citation.]” (Butt v. State of California, supra, 4 Cal.4th at pp. 677-678.) An abuse of discretion is more likely to be found when the preliminary injunction is mandatory. “‘Where . . . the preliminary injunction mandates an affirmative act that changes the status quo, we scrutinize it even more closely for abuse of discretion. “The judicial resistance to injunctive relief increases when the attempt is made to compel the doing of affirmative acts. A preliminary mandatory injunction is rarely granted, and is subject to stricter review on appeal.”’ [Citation.] The granting of a mandatory injunction pending trial ‘“is not permitted except in extreme cases where the right thereto is clearly established.”’ [Citation.]” (Shoemaker v. County of Los Angeles (1995) 37 Cal.App.4th 618, 625.) Although the trial court felt it was exercising its equitable powers in favor of the Owners, its order does not meet the standards of a mandatory preliminary injunction and was an abuse of discretion.
DISPOSITION
The order for interim rent is reversed. Appellants are entitled to costs of appeal.
WE CONCUR: RYLAARSDAM, J., MOORE, J.