Peter D Slaughter vs Steven P Fairly

Case Number

Case Type Civil Law & Motion

Hearing Date / Time Fri, 07/31/2026 - 10:00 Nature of Proceedings Hearing: Application for TRO and OSC Preliminary Injunction Tentative Ruling For the reasons set forth herein, the application for a preliminary injunction is denied. The temporary restraining order issued on June 11, 2026, is dissolved.

Background: This action commenced on June 3, 2026, by the filing of the complaint by plaintiff Peter D. Slaughter ("Slaughter"), Trustee of the William L. Wagner, Sr. and Margie L. Wagner Revocable Trust/Survivor's Trust, aka as the William L. Wagner, Sr. Survivor's Trust (the "Trust") ("plaintiff"), against defendant Steven P. Fairly ("Fairly") and Borealis Shelter Company, LLC ("Borealis") for: (1) Judicial Dissolution of Limited Liability Company pursuant to Corporations Code section 17707.03; (2) Declaratory Relief; (3) Injunctive Relief; and (4) Appointment of Receiver.

As alleged in the complaint: Slaughter is, and at all relevant times was, either co-trustee or the sole successor trustee of the Trust, which succeeded to the 50 percent membership interests previously held by William L. Wagner ("W. Wagner") and Margie L. Wagner in Borealis. (Compl., P. 1.) Fairly owns a 50 percent membership interest in Borealis. (Compl., P. 2.) Borealis was formed for the purpose of owning and developing certain real property in Lancaster, California, including property commonly known as VAC Avenue J10 12th Street W., and VIC 12th Street W.

Avenue J-10. (Compl., P.P. 8, 9.) Those properties involve utility infrastructure, easement rights, ingress and egress rights, development entitlements, and related operational matters material to Borealis' business. (Compl., P. 10.) The properties are subject to recorded easement agreements governing access, roadway use, utility infrastructure, drainage facilities, and fire access rights. (Compl., P. 11.) Borealis' Operating Agreement designated W. Wagner as the initial manager of Borealis. (Compl., P. 12.)

The Operating Agreement further provides that successor managers are to be appointed by a "Majority In Interest" of the members. (Compl., P. 13.)

Following the death of W. Wagner, on February 11, 2023, disputes arose between the members of Borealis concerning governance authority, management authority, succession rights, operational authority, development authority, easement rights, and authority to act on behalf of Borealis. (Compl., P. 14.) Those disputes have materially impaired the parties' ability to manage and operate Borealis in accordance with the Operating Agreement. (Ibid.) The ownership structure of Borealis is effectively divided evenly between plaintiff's interest and Fairly's interest, resulting in the absence of any functioning majority capable of resolving material governance disputes. (Compl., P. 15.)

No undisputed successor manager has ever been appointed pursuant to the Operating Agreement. (Compl., P. 16.) Fairly has expressly disputed the authority of plaintiff and Thomas Brooks to act on behalf of Borealis. (Compl., P. 17.) (Note: The complaint contains no explanation of who Thomas Brooks is or his relation to this action.) Because ownership interests are effectively divided equally between plaintiff and defendant, no majority presently exists that is capable of resolving material governance disputes or appointing an undisputed successor manager. (Compl., P. 18.)

Plaintiff alleges that unilateral interference with recorded easement systems affecting Borealis property could materially impair property value, development opportunities, utility access, title marketability, and ongoing operations associated with Borealis. (Compl., P. 19.) Plaintiff also alleges that Fairly has asserted that he may restrict, deny, alter, or control certain access and easement rights affecting the A3 property, which benefit the adjacent properties, notwithstanding recorded easement agreements affecting those properties. (Compl., P. 20.)

Plaintiff is informed and believes that Fairly has challenged or disputed rights relating to ingress and egress, roadway access, utility infrastructure, and related easement interests serving Borealis property and adjacent parcels. (Ibid.)

Plaintiff seeks: (1) A decree judicially dissolving Borealis; (2) Appointment of a receiver, provisional manager, or other neutral fiduciary; (3) Temporary, preliminary, and permanent injunctive relief; (4) An Order restraining Fairly, and all persons acting in concert with him, from: (a) interfering with recorded easement rights, (b) obstructing ingress and egress affecting Borealis property, (c) undertaking construction, excavation, grading, demolition, permitting, or similar activity affecting Borealis property, (d) communicating with governmental agencies on behalf of Borealis without authority of the Court or a receiver, (e) transferring, encumbering, leasing, or otherwise disposing of Borealis assets outside the ordinary course, and (f) holding himself out as possessing exclusive authority to act on behalf of Borealis; (5) Judicial declarations concerning governance and authority issues; and (6) An accounting. (Compl., Prayer for Relief.)

On June 8, 2026, plaintiff filed an Ex Parte Application for temporary restraining order and order to show cause re preliminary injunction. As a result of that Application, on June 11, 2026, the Court set a hearing to show cause why a preliminary injunction should not issue for July 31, 2026, set a briefing schedule, and granted a temporary restraining order through the preliminary injunction hearing. On July 15, 2026, Fairly filed his opposition to the application for preliminary injunction.

Analysis: "(a) An injunction may be granted in the following cases: "(1) When it appears by the complaint that the plaintiff is entitled to the relief demanded, and the relief, or any part thereof, consists in restraining the commission or continuance of the act complained of, either for a limited period or perpetually. "(2) When it appears by the complaint or affidavits that the commission or continuance of some act during the litigation would produce waste, or great or irreparable injury, to a party to the action. "(3) When it appears, during the litigation, that a party to the action is doing, or threatens, or is about to do, or is procuring or suffering to be done, some act in violation of the rights of another party to the action respecting the subject of the action, and tending to render the judgment ineffectual. "(4) When pecuniary compensation would not afford adequate relief. "(5) Where it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief. "(6) Where the restraint is necessary to prevent a multiplicity of judicial proceedings. "(7) Where the obligation arises from a trust." (Code Civ. Proc., Sec. 526, subd. (a).)

"A preliminary injunction may be granted at any time before judgment upon a verified complaint, or upon affidavits if the complaint in the one case, or the affidavits in the other, show satisfactorily that sufficient grounds exist therefor. No preliminary injunction shall be granted without notice to the opposing party." (Code Civ. Proc., Sec. 527, subd. (a).)

" 'The general purpose of a preliminary injunction is to preserve the status quo pending a determination on the merits of the action. [Citation.] " 'The granting or denial of a preliminary injunction does not amount to an adjudication of the ultimate rights in controversy. It merely determines that the court, balancing the respective equities of the parties, concludes that, pending a trial on the merits, the defendant should or . . . should not be restrained from exercising the right claimed by him [or her].' " [Citation.]' (SB Liberty, LLC v. Isla Verde Assn., Inc. (2013) 217 Cal.App.4th 272, 280.)

"In deciding whether to issue a preliminary injunction, a trial court must evaluate two interrelated factors: (i) the likelihood that the party seeking the injunction will ultimately prevail on the merits of his claim, and (ii) the balance of harm presented, i.e., the comparative consequences of the issuance and nonissuance of the injunction. [Citations.] The scope of available preliminary relief is necessarily limited by the scope of the relief likely to be obtained at trial on the merits." (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 441-442.)

"The trial court's determination must be guided by a "mix" of the potential-merit and interim-harm factors; the greater the plaintiff's showing on one, the less must be shown on the other to support an injunction." (Butt v. Superior Court, supra, 4 Cal.4th at p. 678.)

Plaintiff's motion rests on the incorrect assumption that the Trust, or Slaughter, is a member of Borealis. "With respect to a transfer, in whole or in part, of a transferable interest, all of the following apply: (1) A transfer is permissible. (2) A transfer does not by itself cause a member's dissociation or a dissolution and winding up of the activities of a limited liability company. (3) Subject to Section 17705.04, a transfer does not entitle the transferee to do any of the following: (A) Vote or otherwise participate in the management or conduct of the activities of a limited liability company. (B) Except as otherwise provided in subdivision (c) and Section 17704.10, have access to records or other information concerning the activities of a limited liability company." (Corp. Code, Sec. 17705.02, subd. (a), italics added.)

"A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled; provided, however, that the pledge or granting of a security interest, lien, or other encumbrance in or against any or all of the transferable interest of a transferor shall not cause the transferor to cease to be a member or grant to the transferee or to anyone else the power to exercise any rights or powers of a member, including, without limitation, the right to receive distributions to which the member is entitled." (Corp. Code, Sec. 17705.02, subd. (b), italics added.)

"When a person is dissociated as a member of a limited liability company all of the following apply: (1) The person's right to vote or participate as a member in the management and conduct of the limited liability company's activities terminates. (2) If the limited liability company is member-managed, the person's fiduciary duties as a member end with regard to matters arising and events occurring after the person's dissociation. (3) Subject to Section 17705.04 and Article 10 (commencing with Section 17710.01), any transferable interest owned by the person immediately before dissociation in the person's capacity as a member is owned by the person solely as a transferee." (Corp. Code, Sec. 17706.03, subd. (a).)

Section 6.10 of the operating agreement, attached as Exhibit A to Slaughter's declaration, provides: "A prospective transferee (other than an existing Member) of a Membership Interest may be admitted as a Member with respect to such Membership Interest ("Substituted Member") only (1) on the unanimous vote of the other Members in favor of the prospective transferee's admission as a Member, and (2) on such prospective transferee executing a counterpart of this Agreement as a party hereto. Any prospective transferee of a Membership Interest shall be deemed an Assignee, and, therefore, the owner of only an Economic Interest until such prospective transferee has been admitted as a Substituted Member.

Except as otherwise permitted in the Act, any such Assignee shall be entitled only to receive allocations and distributions under this Agreement with respect to such Membership Interest and shall have no right to vote or exercise any rights of a Member until such Assignee has been admitted as a Substituted Member. Until the Assignee becomes a Substituted Member, the Assigning Member will continue to be a Member and to have the power to exercise any rights and powers of a Member under this Agreement, including the right to vote in proportion to the percentage interest that the Assigning Member would have had in the event that the assignment had not been made."

There is no evidence before the court that has any tendency to show that plaintiff is a member of Borealis or has any authority to act on behalf of Borealis. Plaintiff is simply a transferee of an interest in Borealis. Receiving an interest in an LLC does not automatically confer member status or grant the transferee any power to exercise any rights or powers of a member of the LLC. Fairly, as the only active member of Borealis, has every right to conduct business, subject to duties owed to plaintiff as the transferee of an interest, on behalf of Borealis. As such, plaintiff has failed to show that he has a reasonable likelihood that he will prevail on his claims. As such, the order to show cause for preliminary injunction will be denied.

Further, and in the alternative, the application will be denied because plaintiff has failed to show the probability of any harm should Fairly continue to operate Borealis. The motion, and plaintiff's declaration, do not even clearly explain what the purpose of Borealis' business is. There are only vague references to Borealis owning properties that are subject to easement agreements. As far as harms, plaintiff makes vague and incomplete references to disputed access rights, an application to demolish some unknown structure, Fairly asserting unilateral authority (which, as explained above, he is entitled to do), unknown "development activities," and other activities that do not demonstrate to the court that plaintiff is likely to suffer any harm.

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