888 ZHU LLC vs. LUCKY DONG 168, INC.

May 8, 2026 Dept. 9 Tentative Rulings

4. 26CV0466 888 ZHU LLC vs. LUCKY DONG 168, INC. Preliminary Injunction

This case involves an alleged agreement to sell the restaurant business known as Hong Kong Inn – Defendant is the current owner, and Plaintiff is a former owner and is seeking to buy the restaurant.

According to the Motion, the parties entered into a written purchase agreement in 2024, wherein Defendant agreed to sell the restaurant to Plaintiff. Plaintiff states that on February 25, 2024, Defendant accepted from Plaintiff a cash payment of $66,000 for the purchase of the business and executed a written receipt confirming that the $66,000 cash payment was received for the purchase of the business. Plaintiff states it proceeded with escrow and participated in the process of transferring the ABC license.

After accepting Plaintiff’s payment and executing the written agreement and escrow documents, Plaintiff states that Defendant refused to proceed with completion of the sale. Defendant attempted to rescind the transaction by returning the cash payment. Plaintiff states it did not consent to rescission and demanded performance of the agreement. Plaintiff states Defendant has refused to proceed with escrow and has indicated an intent to sell or transfer the business to another buyer.

California courts decide motions for preliminary injunction by evaluating the moving party’s likelihood of success on the merits and by weighing the interim harm that the moving party is likely to sustain if the injunction is denied against the harm the opposing party is likely to suffer if the injunction is granted. (IT Corp. v. County of Imperial (1987) 35 Cal.3d 63, 69.) The purpose of a preliminary injunction is to preserve the status quo pending final adjudication. (White v. Davis (2003) 30 Cal.4th 528, 554.) When the injunction is sought to prevent an act that would render the ultimate judgment ineffectual, injunctive relief is particularly appropriate because the court’s equitable power exists to prevent irreparable injury and to preserve its ability to grant complete relief at the conclusion of the case. (IT Corp., supra, 35 Cal.3d at 73– 74.)

The Court agrees that a preliminary injunction is appropriate. Plaintiff has established the purchase agreement exists and Defendant does not dispute that. Whether or not the agreement was rescinded is a factual dispute. When weighing the harm, Defendant argues that Plaintiff will “suffer absolutely no harm” if the injunction is denied. (Opp. p. 6) However, the Court disagrees – if the preliminary injunction is denied and Defendant sells the business, there is significant harm to Plaintiff because it would not be possible to uphold the agreement. If the preliminary injunction is granted, the harm to Defendant is continuing to operate the business and not being able to sell to a third party, making it more likely that Defendant will suffer no harm. For these reasons, the Court grants the preliminary injunction.