COYOTE AVIATION CORPORATION, ET. AL. v. CITY OF REDLANDS, ET. AL.

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According to the TAC, on September 5, 2000, Coyote Aviation signed a lease with the City to lease land with an agreement to construct and operate an aviation complex at Redlands Municipal Airport. (TAC ¶¶ 11-12.) As alleged, the signed lease separated the ownership of the land from the ownership of any improvements constructed on it, such that the City owned its land, and Coyote Aviation would own the improvements constructed on the land. Plaintiffs explicitly told the City that the lease would never authorize the City to seize Plaintiffs’ property and this understanding was memorialized in Paragraph 21.1. (TAC ¶¶ 15-16, 22-23.)

While the lease stated the land encompassed 36,000 square feet, the City later claimed the square footage was 53,658 and increased Plaintiffs’ rent, who dutifully paid the new rates despite no new contract being drafted, finalized, or signed as required by Paragraph 27 of the existing lease. The City charged Plaintiff twice the scheduled rent and more than double what they charged another tenant. (TAC ¶¶ 17-18.) Plaintiffs constructed a 16-hanger bay aviation complex complete with plumbing, electrical, concrete foundation, metal structure, and numerous other improvements. (TAC ¶¶ 19, 22.)

Plaintiffs paid for the costs of the improvements, and still pay all taxes, repair costs, and test costs on all improvements and alterations. (TAC ¶¶ 26-29.) In 2016, the City commissioned a study of the airport and its income-generating options. The Report identified the ability for the City to generate income by constructing hangars and leasing them out, but the City faced funding challenges. Consequently, the report recommended acquiring hangars that had been privately constructed by individuals and entities, such as Plaintiffs’, which the City could then rent out and capture that revenue. (TAC ¶¶ 33-36.)

In 2020, the parties began a dispute over whether Plaintiffs had exercised their option to extend the lease. (TAC ¶42.) In January 2020, the City Airport Supervisor informed Plaintiffs they had effectively applied for the extension. (TAC ¶44.) Plaintiffs filed again in June 2020 for the extension, but the City did not respond. (TAC ¶45.) In September 2020, Plaintiffs were told the City did not consider their request to be an “effective” request to extend the lease. (TAC ¶47.) Meanwhile, the City ordered an appraisal of Plaintiffs’ property. (TAC ¶58.)

Emails show the City estimated it could generate at least $87,552 annually at the beginning and potentially $100,000 with rent increases if it acquired Plaintiffs’ hangar complex. (TAC ¶69.) Towards the end of March 2024, Plaintiffs were evicted. The City also removed and damaged Plaintiffs’ property, including Coyote Aviation signage that was affixed to the hangar complex and other items. (TAC ¶135.) On June 26, 2024, this Court (Hon. Judge Garza) granted Plaintiffs’ previous ex parte application for temporary restraining order (“TRO”). (Jun. 26, 2024 Min.

Order.) On August 2, 2024, the Court terminated the TRO after full briefing and hearing. (Aug. 2, 2024 Min. Order.) On October 2, 2025, Defendants filed a Motion for Judgment on the Pleadings as to causes of action 1 and 4, which was ultimately denied. (Nov. 10, 2025 Min. Order.) On December 8, Plaintiffs and Defendants filed separate motions for summary judgment/adjudication. Plaintiffs’ motion was ultimately denied in full, while Defendants’ motion was granted in part, with summary adjudication granted as to Plaintiffs’ IIED claim.

On January 29, Plaintiffs filed the underlying ex parte Application for TRO, which was granted by the Court on January 30. In their ex parte motion, Plaintiffs alleged that the City was threatening to destroy the hanger and the belongings. On February 20, this Court ordered Plaintiff to file a $10,000 bond related to the TRO. (Feb. 20, 2026 Min. Order.) Bond was posted on February 25, 2026.

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On March 19, 2026, the Court granted the ex parte application to continue the trial date, and continued the trial dates, with the trial readiness set on May 14, 2026, and the trial continued to May 27, 2026. The Court’s minute order and March 19, 2026, order do not demonstrate discovery cutoff or discovery motion deadlines were extended to coincide with the continued trial date. The Court’s March 19, 2026, order specifically states: “[A]ny discovery and motion deadlines will not be continued to the new trial date.” (Emphasis in original.)

On March 26, 2026, this Court granted the parties leave to file supplemental briefing related to the TRO. On April 30, 2026, both parties filed supplemental briefing and declarations related to the TRO. On May 5, 2026, the parties submitted another ex parte joint stipulation to continue trial, which the Court granted on May 6, 2026. The TRO as well as a motion to compel filed by City are scheduled to be heard on Thursday, May 7. The first motion before the Court is the City’s motion to compel Coyote’s compliance with the City’s request for production, set three.

While the motion is noticed as being brought by all Defendants and the opposition is noticed as being brought by all Plaintiffs, the discovery at issue was propounded by the City on Plaintiff Coyote, so these are the only relevant parties. The City claims that Coyote agreed to produce relevant, non-privileged documents to RFP No. 24, but failed to produce Chase Bank statements from January 2025 through May 2025, and bank statements from its Wells Fargo Account. The City’s motion was filed on February 20, 2026, and set for hearing on April 7, 2026 past the March 30, 2026 trial date.

The City did not file any motion to have the hearing advanced to be heard at least 15 days before the March 30, 2026 trial date. Plaintiff’s opposition correctly raises the issue that this motion is set for hearing past the deadline for discovery motions to be heard as provided for in Code of Civil Procedure section 2024.020, and that the Court’s continuance of the trial date did not continue discovery-related dates to coincide with the new trial date. Therefore, Plaintiff Coyote argues, the motion is untimely.

Coyote asserts that it also has provided the documents at issue, so the motion is moot. Finally, Plaintiff Coyote contends that the mootness of the motion was raised with defense counsel, but the motion remains on calendar. On reply, the City does not address Plaintiff Coyote’s timeliness argument. Instead, it argues that the fact Plaintiff produced additional documents after the motion was filed confirms the motion was necessary. The City complains that Plaintiff has not produced Wells Fargo documents.

DISCUSSION

Timeliness Issue Code of Civil Procedure section 2024.020, subdivision (a), provides: “Except as otherwise provided in this chapter, any party shall be entitled as a matter of right to complete discovery proceedings on or before the 30th day, and to have motions concerning discovery heard on or before the 15th day, before the date initially set for the trial of the action.” (Emphasis added.) Here, trial in this matter was set for March 30, 2026. Therefore, motions related to discovery were required to be heard on or before March 16, 2026. Fifteen days before the March 30 trial date was Sunday, March 15, 2026, therefore the deadline fell on the next court day closer to the trial date. (Code Civ. Proc., §§ 2016.060, 2024.020, subd. (a).) The motion at issue was set for hearing on April 7, 2026, well-past the discovery motion cut-off date.

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In Pelton-Shepherd Industries, Inc. v. Delta Packaging Products, Inc. (2008) 165 Cal.App.4th 1568, 1586 (Pelton-Shepherd), the Court held, “[A] party who notices a discovery motion to be heard after the discovery motion cutoff date does not have a right to have the motion heard.” Code of Civil Procedure section 2024.050 provides for a discovery motion to be heard after the discovery motion cutoff date provided the Court grants such leave, which requires a separate motion to be brought under section 2024.050.

The Pelton-Shepherd Court found that “[b]y simply hearing the motion to compel without first deciding whether discovery should be reopened for that purpose under all of the relevant circumstances, the trial court ‘transgresse[d] the confines of the applicable principles of law’ [citation] and thereby abused its discretion.” (Pelton- Shepherd, supra, 165 Cal.App.4th at p. 1588.) Here, the motion is untimely because it was set for hearing after the discovery motion cutoff date as discussed above.

The City also has failed to seek leave under section 2024.050 to have the Court grant leave to hear the motion past the motion deadline cutoff date.

MOTION TO CONTINUE PRELIMINARY INJUNCTION

DISCUSSION Statement of the Law. “The general purpose of a preliminary injunction is to preserve the status quo pending a determination on the merits of the action.” (SB Liberty, LLC v. Isla Verde Assn., Inc. (2013) 217 Cal.App.4th 272, 280; see also Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 353.) A preliminary injunction is a drastic and extraordinary remedy that should not be granted unless the movant, by a clear showing, carries the burden of persuasion. (Mazurek v.

Armstrong (1997) 520 U.S. 968, 972.) Code of Civil Procedure, section 526, provides for the issuance of a preliminary injunction in a variety of situations, including where irreparable harm will result to the applicant if the injunction is not granted. (Code of Civil Procedure, sect. 526, subd. (a)(2).) The party seeking injunctive relief must support the request with competent evidence, either by verified complaint or by declaration. (Code of Civil Procedure, sect. 527, subd. (a); see Bank of America National Trust & Savings Ass’n v.

Williams (1948) 89 Cal.App.2d 21, 23.) “The test most commonly applied by courts in determining whether to issue a preliminary injunction considers the following two interrelated factors: (a) the likelihood that the plaintiff will succeed on the merits at trial; (b) the interim harm that the plaintiff will suffer if the injunction is not issued compared to the interim harm that the defendant will suffer if it is. The latter factor involves consideration of such things as the inadequacy of the other remedies, the degree of irreparable harm, and the necessity of preserving the status quo.” (14859 Moorpark Homeowner's Assn. v.

VRT Corp. (1998) 63 Cal.App.4th 1396, 1402.) “[T]he more likely it is that plaintiffs will ultimately prevail, the less severe must be the harm that they allege will occur if the injunction does not issue. This is especially true when the requested injunction maintains, rather than alters, the status quo.” (King v. Meese (1987) 43 Cal.3d 1217, 1227.) The mix of these two factors should guide the court in its exercise of discretion, with the greater the showing on one of the factors, making it so that less may be shown on the other. (Butt v State of Calif. (1992) 4 Cal.4th 668, 678.)

Both elements must be established before a preliminary injunction is granted. (Ibid.) A trial court, however, “must deny a motion for a preliminary injunction if there is no reasonable likelihood the moving party will prevail on the merits.” (SB Liberty, LLC v. Isla Verde Assn., Inc., supra, 217 Cal.App.4th at 280.)

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If the Court decides to issue the preliminary injunction, it must require an undertaking or, alternatively, allow a cash deposit. (Code of Civil Proc. §§529, 995.710). The undertaking is designed to compensate the defendants in the event, however unlikely, that the preliminary injunction is finally determined to be unjustified. (Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 14.) The purpose of the security is to compensate the party wrongfully restrained or enjoined. (Top Cat Productions, Inc. v.

Michael’s Los Feliz (2002) 102 Cal.App.4th 474, 478.) To determine the amount of the bond, the Court must consider all potential damage caused by the granting of the injunction, including damage to business or property and defense costs associated with defeating the injunction after trial. (Abba Rubber Co., supra, 235 Cal.App.3d at 15.) “[T]he granting, denying, dissolving, or refusing to dissolve a preliminary or temporary injunction rests in the sound discretion of the trial court upon a consideration of all the particular circumstances of each individual case.” (McCoy v.

Matich (1954) 128 Cal.App.2d 50, 52; see also Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 527; IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69.) “The discretion, however, should be exercised in favor of the party most likely to be injured.” (McCoy v. Matich (1954) 128 Cal.App.2d 50, 52.) “All orders granting or refusing either a temporary restraining order or a preliminary injunction are directly appealable.” (Courtesy Temp. Serv. v. Camacho (1990) 222 Cal.App.3d 1278, 1286; Code Civ.

Proc., § 904.1, subd. (f).) Appellate review is limited to whether the trial court’s decision was an abuse its discretion. (SB Liberty, LLC v. Isla Verde Assn., Inc., supra, 217 Cal.App.4th at 280-281.)

Analysis. Plaintiff bears “the burden of demonstrating both likely success on the merits and the occurrence of irreparable harm before a final judgment could be entered.” (Savage v. Trammel Crow Co. (1990) 223 Cal.App.3d 1562, 1571.) As analyzed below, Plaintiff has demonstrated that it has a chance of succeeding on the merits for the two claims it has left (Conversion and Breach of Contract) and that destruction of the hanger would result in irreparable harm. Request for Judicial Notice. Along with their opposition, Defendants request judicial notice of three documents – the judgment in the unlawful detainer action, the TRO in place currently in this case, and dismissal of the third cause of action.

Under Evidence Code section 452, subdivisions (d), judicial notice may be taken of “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States.” (Evid. Code, § 452, subd. (d).) The Court grants judicial notice of all documents. Whether Plaintiffs Will Prevail on the Merits. Conversion. Cause of action one is for conversion, which the California Supreme Court has described as the wrongful exercise of dominion over the property of another. (Lee v.

Hanley (2015) 61 Cal.4th 1225, 1240.) The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages. (Ibid.) Plaintiffs seek to establish the first element, right to possession, by relying on paragraph 21.1 of the lease, which states that “[i]mmediately upon the expiration of the Term or earlier termination of the Lease, Tenant shall peaceably and quietly vacate the Property and deliver possession of the same to City, with all Tenant’s improvements and alterations removed from the

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Property and with the Property surrendered in the same or better condition as it existed at the time of approval of this Lease.” (Pl. Supp. Brief at 5; G. Brown Decl. Ex. A.) Plaintiffs do not put forward any other authority for possession or ownership control. This provision, however, is not enough to establish, definitively, possession or ownership control, though a jury may find it does. “A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” (Civ.

Code, § 1636.) As such, “[t]he fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties.” (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264.) On the other hand, “[i]f the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it.” (Civ. Code, § 1649; see also Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264-1265.)

Here, the provision that Plaintiffs rely on addresses termination of the lease. It states simply that at the time the tenancy ends, Plaintiffs were obligated to leave the leased space “with all Tenant’s improvements and alterations removed from the Property and with the Property surrendered in the same or better condition as it existed at the time of approval of this Lease.” (G. Brown Decl. Ex. A.) It does not say explicitly that Plaintiffs have ownership of any improvements or alterations, nor does the lease specifically define the terms. (Ibid.)

As such, Plaintiffs have not equivocally established ownership or a possessory interest in the improvements. At the same time, however, Defendants do not definitely establish that Plaintiffs cannot prevail on the merits. Defendants rely on the fact that the judgment in the unlawful detainer action was affirmed, but the Court of Appeal, Fourth District, in confirming the trial court decision, specifically referenced the fact that: The judgment stated that it only granted possession of the Property to the City.

It further provided, “This Judgment is not an adjudication of any of the defendants’ ownership interests in the alterations, improvements, fixtures, or units that exist on the Property. This Judgment grants possession to the City only, and in no way forecloses or otherwise precludes any defendant in this action from commencing a separate civil action to determine its ownership interests, if any, in the structures, alterations, improvement, fixtures or units that exist on the Property.” (Coyote Aviation Corp. v.

City of Redlands (2025) 111 Cal.App.5th 955, 972; see also Def. Ex. 1.)

Further, although Defendants argue that Plaintiffs waived any rights to possession by failing to remove the at-issue property within a reasonable time, as is required by law, the cases cited by Defendants do include language that if a tenant has a lease, once that lease is terminated, the tenant has a limited time afterwards to remove its property. (See, e.g. Trabue Pittman Corp. v. County of Los Angeles (1946) 29 Cal.2d 385, 394, stating that where “trade fixtures...are not removed during the term of the tenancy or within a reasonable time thereafter, they remain part of the realty.”) None of the cases cited by Defendants discuss the claim of conversion.

As such, the Court finds that there is a likelihood that the Plaintiffs will prevail on their claim of conversion. Breach of Contract. The elements for breach of contract are: 1) the formation of a contract, 2) plaintiff’s performance or excuse for nonperformance, 3) defendant’s breach, and 4) damages. (Lotz v.

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Connell (1969) 273 Cal.App.2d 286, 290; Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821; Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 968; Jade Fashion & Co., Inc. v. Harkham Industries, Inc. (2014) 229 Cal.App.4th 635, 645.) The parties do not deny that a contract was formed (G. Brown Decl. Ex. A), but, similar to the conversion claim, neither party prevents definitive evidence that Plaintiffs will prevail on the merits, or that it has no likelihood that it will prevail on the merits.

Plaintiffs argue and present evidence that they were denied access to remove their belongings as should be their right under the contract, resulting in Defendants’ breach. (Pl. Supp. Brief at 8.) They have presented evidence their personal property is still located on City’s property. H. Cohen Decl. ¶4; J. Phillips Decl. ¶3.) Defendants, on the other hand, argue that because Plaintiffs themselves have breached the contract, by being holdover tenants, they are excused from any breach. (Def. Supp.

Brief at 10.) First, a hold-over tenancy is presumed to continue under the same terms contained in the expired lease except as those terms may have been modified by the landlord and tenant. (Smyth v. Berman (2019) 31 Cal.App.5th 183, 192.) “[O]nly terms from the expired lease that are presumed to carry forward into a holdover tenancy are the ‘essential’ terms of that lease.” (Ibid.) Second, the premise that a breaching party absolves the other party from performance is not absolute. “When a party’s failure to perform a contractual obligation constitutes a material breach of the contract, the other party may be discharged from its duty to perform under the contract.” (Brown v.

Grimes (2011) 192 Cal.App.4th 265, 277 (emphasis added).) As such, Plaintiffs may succeed on the merits of either claim.

Irreparable Harm In addition to considering the likelihood that Plaintiff will prevail on the merits, the Court must also consider whether Plaintiff will suffer irreparable harm. Irreparable harm is often related to the “inadequate legal remedy.” Relief is unlikely unless someone will be significantly hurt in a way that cannot later be repaired. (People ex rel. Gow v. Mitchell Brothers’ Santa Ana Theater (1981) 118 Cal.App.3d 863, 870-871.) “Typically, the trial court’s evaluation of the relative balance of harms compares the interim harm the plaintiff is likely to sustain if the injunction is denied to the harm the defendant is likely to suffer if the preliminary injunction is issued.” (Tulare Lake Canal Co. v.

Stratford Public Utility Dist. (2023) 92 Cal.App.5th 380, 396.) “These harms can include, where appropriate, harms to the public interest. [Citation.] They typically do not, however, include harms that can be fully compensated by the payment of damages.” (Kings County Farm Bureau v. State Water Resources Control Bd. (2025) 115 Cal.App.5th 782, 814.) Here, Defendant argues that Plaintiffs seek only monetary damages, but Plaintiffs present evidence that there are airplanes and related items that continue to reside at the property and that it is not easily movable. (H.

Cohen Decl. ¶4; J. Phillips Decl. ¶¶3-4.) If those items were to be destroyed and Plaintiff is successful in their claims, it is true that they would receive money damages, but they would also receive the ability to properly move their items, something they claim they are unable to do now. Further, Plaintiffs’ potential monetary damages would significantly increase if the property, specifically the airplanes, were destroyed. Lastly, Defendants argue that they will continue to experience harm by not being able to change the property because it “prevents the City from abating nuisances, dangerous conditions, or other safety hazards at the Property; and impairs the City’s exercise of its police and regulatory powers.” (Def.

Supp. Brief at 8.) Although, Mr. Boatman submitted a declaration discussing the

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alleged impairment of the City’s powers, the statements are conclusory and fail to clearly state any evidence in support. The preliminary injunction went into effect on February 20, 2026, however, the City has failed to present any specific instances of the City’s powers being impeded by the injunction. The current preliminary injunction does not restrict City’s ability to do these things, however. It only prevents the City from altering, remodeling, demolishing, dismantling, disassembling, or otherwise destroy, the aircraft hangar and related structures or allow a third party to do the same. (Def. Ex. 2.) As such, Defendants can still take actions regarding the hanger, as long as it does not destroy the hanger or any property at issue in this case.

RULING

The Court rules as follows: 1. Denies City’s motion to compel is untimely under Code of Civil Procedure section 2024.020, and the City failed to file a motion under Code of Civil Procedure section 2024.050 to have the motion heard past the discovery motion deadline; 2. Grants City’s Request for Judicial Notice as it relates to the Preliminary Motion; 3. Grant’s Plaintiff’s Motion for Preliminary Injunction, extending the current injunction; 4. Sets an OSC: Re review of the current injunction for August 7, 2026 at 9:00 a.m; and 5. Orders Plaintiffs as the prevailing parties to give formal notice of the Court’s rulings.

Dated: May 7, 2026

____________________________ Judge Nicole Quintana Winter

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