BALERNO CASTLE, LLC, et al. v. JUVENTINO ROSALES, et al.

hearing date and time, counsel's contact information, and the identity of the party submitting. · Unless all parties submit by email to this tentative ruling, the parties should arrange to appear remotely (encouraged) or in person for oral argument. You should assume that others may appear at the hearing to argue. · If the parties neither submit nor appear at hearing, the court may take the matter off calendar or adopt the tentative ruling as the order of the court. After the court has issued a tentative ruling, the court may prohibit the withdrawal of the matter without leave.

Non-attorney Stephenson and corporation ENE were not represented during the briefings and initial hearing on Respondent's demurrer. Stephenson's filed papers only purport to oppose on her own behalf.

County of Los Angeles Department 834 ¿ BALERNO CASTLE, LLC, et al. Plaintiff(s), vs. JUVENTINO ROSALES, et al., Defendant (s). | Case No.: |

| | Hearing Date: | August 25, 2026 | | | | | | |

| [TENTATIVE] ORDER RE: MOTION FOR PRELIMINARY INJUNCTION | | Plaintiff Balerno Castle, LLC ("Balerno") and its principal, plaintiff Hector Rosales Contreras ("Contreras"), (collectively, "Plaintiff") seek a preliminary injunction restraining defendant Culver Real Estate Investment Group, LLC ("Culver") from foreclosing on the real property located at 3912 Eagle St, Los Angeles, California, 90063, APN 5238-006-041 ("Eagle Property") and compelling Culver to file and record a Notice of Rescission of any Notices of Default and Election to Sell. The preliminary injunction is granted in part. I. Background 1.

Factual Background

Contreras is the principal and managing member of Balerno. (Contreras Decl., P. 2.) Miller Uwanawich ("Uwanawich") is the manager of Culver. (Uwanawich Decl., P. 1.) Ronald Perlstein ("Perlstein") is the president of defendant Danco, Inc. ("Danco"). On February 28, 2017, Balerno purchased the Eagle Property from defendant Juventino Rosales ("Rosales") for $205,000. (Contreras Decl., P. 3.) On March 13, 2019, Balerno conveyed the Eagle Property to Contreras. (Contreras Decl., P. 2.) Balerno, Contreras, and Contreras's ex-wife Maria Elena Rosales executed a promissory note ("2019 Note") agreeing to pay Danco $390,000 over two years. (Contreras Decl., P. 4, Ex. 1.)

The Note was secured by a Short Form Deed of Trust and Assignment of Rents ("2019 DOT") assigning Danco an interest in the Eagle Property, property located at 10535 Clancey Ave, Downey, CA 90241 ("Clancy Property"), and property located at 253 S. Carondelet St, Los Angeles, CA 90057. (Contreras Decl., P. 5, Ex. 2.) On July 19, 2021, Plaintiff issued a check to Danco for $19,764.60. (Contreras Decl., P. 7, Ex. 6.) Thereafter, Danco provided an account statement showing the new total amount of Plaintiff's obligation as $424,768.40. (Contreras Decl., P. 7, Ex. 7.)

On July 20, 2021, Danco sent a payoff demand to escrow for a related refinancing with Riverbend Funding, LLC ("Refinancer") reflecting an unpaid balance of $424,768.40 plus fees and charges of $225, less a $424,768.40 credit. (Contreras Decl., P. 7, Ex. 8.) On July 21, 2021, Plaintiff executed a promissory note agreeing to pay Danco $424,768.40 ("2021 Note") and a deed of trust for the Carondelet Property ("2021 DOT"). (Contreras Decl., P. 8, Exs. 3-4.) When the refinance closed on July 27, 2021, Danco received $225. (Contreras Decl., P. 9, Ex. 9.)

On November 22, 2022, Danco assigned the 2021 DOT to Culver. (Contreras Decl., P. 11, Exs. 10-11.) On December 8, 2023, Danco assigned the 2019 DOT to Culver. (Contreras Decl., P. 12, Ex. 12.) On or about April 29, 2026, Culver recorded a Notice of

Default to institute non-judicial foreclosure proceedings on the 2019 DOT. (Contreras Decl., P. 15, Ex. 5.) Plaintiff contends it and Danco agreed to replace the Note and 2019 DOT with a new note secured by a deed of trust on the Carondelet Property only, with Danco to be paid through the refinance. (Contreras Decl., P. 7.) According to Plaintiff, the 2021 Note and 2021 DOT (collectively, "2021 Loan") are the culmination of that negotiation and replaced and superseded the 2019 Note and 2019 DOT ("collectively, 2019 Loan"), so Danco was obligated to reconvey the 2019 DOT to Plaintiff. (Contreras Decl., P. 10.)

Related to this, Plaintiff states it never received any disbursement relating to the 2021 Loan, and neither Danco nor Culver has issued any written communication relating to the 2019 Note and 2019 DOT (collectively, "2019 Loan") since execution of the 2021 Loan. (Contreras Decl., P.P. 10, 16.) Danco and Culver ("Lenders") contend the 2019 Loan matured by its terms on September 6, 2021, at which time the entire balance became due and payable, and Plaintiff never satisfied its balance, nor did Lenders release Plaintiff. (Perlstein Decl., P. 4.)

Lenders contend the 2019 Loan was "carried into" the 2021 Loan, but was not intended to extinguish Lenders' interest in the Eagle Property or the Clancy Property. (Perlstein Decl., P.P. 6-8.) Relatedly, Lenders note the 2021 DOT states that it is subject to the 2019 DOT, and nothing in the 2021 Loan documents purports to satisfy, replace, or extinguish the 2019 Loan. (Opp. at 10; see Perlstein Decl., Ex. E; Contreras Decl., Ex. 3.)

2.

Procedural History

Plaintiff filed its verified complaint on June 8, 2026 against Rosales, Rosa Maria Fernandez Covarrubias ("Covarrubias"), Culver, and Danco (collectively, "Defendants"). On July 17, 2026, the independent calendar court trailed the hearing Plaintiff's ex parte application for a temporary restraining order ("TRO") and order to show cause ("OSC") re: preliminary injunction from July 17, 2026 in the independent calendar court to July 20, 2026 in the writs and receivers court. On July 20, 2026, the Court heard Plaintiff's ex parte application for a TRO and OSC.

The Court denied the application for inadequate notice, but also noted Plaintiff did not show any great or irreparable injury would occur before the matter could be heard on regular notice, as there was no Notice of Trustee's Sale issued and no foreclosure sale scheduled. Proofs of service filed June 30, 2026 show Plaintiff served the summons and complaint on Rosales, Covarrubias, and Danco by substituted service on June 26, 2026, and on Culver by substituted service on June 24, 2026. On July 22, 2026, Plaintiff filed the instant motion for a preliminary injunction.

On August 13, 2026, the Court heard and granted Plaintiff's ex parte application for an order shortening time to hear the instant motion on the basis that Culver had since issued a Notice of Trustee's Sale scheduling sale of the Property before the instant motion's original hearing date. On August 19, 2026, Lenders Culver and Danco filed their opposition to the instant motion. On August 21, 2026, Plaintiff filed its reply. [1]

II. Evidentiary Objections Plaintiff objects to portions of the Perlstein Declaration. The objections to portions of paragraphs 3, 6, 9, and 11 are sustained as legal conclusion and as inadmissible testimony as to the contents of a writing. The remaining objections are overruled. Plaintiff also objects to portions of the Uwanawich Declaration. The objections to portions of paragraphs 18 and 20 are sustained as legal conclusion and also, for paragraph 18, inadmissible testimony as to the contents of a writing. The remaining objections are overruled. The Court will disregard any legal conclusions contained in the admitted portions of the declarations. The evidence is admitted, and the Court will afford it the proper weight. III.

Discussion

Plaintiff seeks a preliminary injunction restraining Culver from foreclosing on Eagle Property and compelling Culver to record a Notice of Rescission of any Notices of Default and Election to Sell. In determining whether to issue a preliminary injunction, the trial court considers two factors: (1) the reasonable probability that the plaintiff will prevail on the merits at trial (Code Civ. Proc. ["CCP"] Sec.526(a)(1)), and (2) a balancing of the "irreparable 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. (CCP Sec.526(a)(2); 14859 Moorpark Homeowner's Assn. v.

VRT Corp. (1998) 63 Cal.App.4th 1396, 1402; Pillsbury, Madison & Sutro v. Schectman (1997) 55 Cal.App.4th 1279, 1283; Davenport v. Blue Cross of California (1997) 52 Cal.App.4th 435, 446; Abrams v. St. John's Hospital (1994) 25 Cal.App.4th 628, 636.) Thus, a preliminary injunction may not issue without some showing of potential entitlement to such relief. (Doe v. Wilson (1997) 57 Cal.App.4th 296, 304.) The purpose of a preliminary injunction is to preserve the status quo pending final resolution upon a trial. (See Scaringe v.

J.C.C. Enterprises, Inc. (1988) 205 Cal.App.3d 1536; Grothe v. Cortlandt Corp. (1992) 11 Cal.App.4th 1313, 1316; Major v. Miraverde Homeowners Assn. (1992) 7 Cal.App.4th 618, 623.) The status quo has been defined to mean the last actual peaceable, uncontested status which preceded the pending controversy. (Voorhies v. Greene (1983) 139 Cal.App.3d 989, 995, quoting United Railroads v. Superior Court (1916) 172 Cal. 80, 87; 14859 Moorpark Homeowner's Assn. v. VRT Corp. (1998) 63 Cal.App.4th 1396, 1402.)

1. Probability of Success "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. State of California (1992) 4 Cal.4th 668, 678.) However, "[a] trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim." (Ibid.)

Plaintiff's applicable causes of action [2] are its third for cancellation of instrument, fourth for quiet title, fifth for failure to reconvey, sixth for slander of title, and seventh for unfair business practices. The third, fourth, and fifth rely on a single factual nucleus: the 2021 Loan represents a renegotiation of Plaintiff's obligations under the 2019 Loan, and serves to replace and extinguish any interest Lenders have in the Eagle Property. (Compl. at 8-10.) The sixth and seventh stem from the same basis with the additional allegations that Lenders acted with malice and/or fraud. (Compl. at 10-12.)

Therefore, Plaintiff seeks, inter alia, to cancel the 2019 DOT as to the Eagle Property, a judgment that the 2019 DOT is void as to the Eagle Property, and to compel Lenders to reconvey the 2019 DOT to Plaintiff as to the Eagle Property. (Compl. at 13.) The following facts are undisputed: Plaintiff and Danco executed the 2019 Loan, including the 2019 DOT providing Danco a security interest in the Eagle Property, the Clancy Property, [3] and the Carondelet Property. (Contreras Decl., P.P. 4-5; Perlstein Decl., P.P. 2-3.)

Plaintiff and Danco executed the 2021 Loan, whose principal balance is the amount of Plaintiff's obligation under the 2019 Loan at the time of the 2021 Loan's execution. (Contreras Decl., P.P. 7-10; Perlstein Decl., P.P. 6-7.) The 2021 Loan provides Danco a security interest only in the Carondelet Property. (Contreras Decl., P.P. 7-10; Perlstein Decl., P.P. 6-7.) Danco assigned the 2019 DOT and the 2021 DOT to Culver. (Contreras Decl., P. 11; Perlstein Decl., P. 13.) Thus, the question before the Court--whether Plaintiff has established a reasonable probability of success on its claims-- turns on whether Plaintiff has demonstrated a reasonable probability that the 2019 Loan was fully satisfied, thereby extinguishing Lenders' interest in the Eagle Property.

Plaintiff presents evidence to show the 2019 Loan was satisfied by the 2021 Loan. As part of the escrow for Plaintiff's refinance with Refinancer, Danco issued a payoff demand for the 2019 Loan ("Demand"). (Contreras Decl., Ex. 8.) The Demand included a "Recon fee." (Contreras Decl., Ex. 8.) The Demand also included a credit for the full amount of the unpaid balance, $424,768.40. (Contreras Decl., Ex. 8.) Therefore, the full amount of the payoff demand was the "Processing fee," "Recon fee," "Fax fee," "Demand Fee," and "Notary fee" combined for $225. (Contreras Decl., Ex. 8.)

The amended final escrow accounting ("Escrow Accounting") includes a section for "LOAN PAYOFF: Danco, Inc.," which lists the "processing fee," "Reconveyance Fee," "fax fee," "demand fee," "notary fee" and states a "Total Loan Payoff" of $225. (Contreras Decl., Ex. 9.) The 2021 Note shows a principal amount of $424,768.40, the same amount as remained on the 2019 Loan. (Contreras Decl., Exs. 3, 8.) Plaintiff has therefore made a prima facie case that the 2021 Loan satisfied the 2019 Loan. Lenders oppose, asserting that the 2019 Loan was never satisfied because the balance remains unpaid, and the 2021 Loan did not constitute a satisfaction.

Lenders observe that the 2021 Loan does not purport to extinguish or satisfy the 2019 Loan or surrender Lenders' interest in the Eagle Property. Lenders cite authority showing that the existence of a new agreement on the same debt does not extinguish prior agreements or security interests absent an agreement to that effect. (Opp. at 9.) This is true, but the

Demand itself appears to reflect that the 2021 Loan would satisfy the 2019 Loan. On July 20, 2021, Danco issued the Demand. (Contreras Decl., Ex. 8.) While the Demand does not characterize itself as a total payoff demand (the Demand itself is untitled and does not contain any detailed description of its nature or purpose) (Contreras Decl., Ex. 8), it can be understood to be a payoff demand by its contents. It includes a calculation of an amount due, and, rather than simply listing applicable fees, it accounts for the full unpaid balance, as well as a credit in the same amount. (Contreras Decl., Ex. 8.)

The Demand describes itself as a demand by stating, "[t]his demand expires 8/5/21." (Contreras Decl., Ex. 8.) Finally, as Plaintiff notes, the Demand indicates, "[w]hen we are in receipt of the pay off check/funds, you can have the title company arrange pickup of full satisfaction and demand at the address above." The Demand, which Lenders acknowledge (Opp. at 4-5), apparently contemplates that payment of the amount stated (when calculated, $225) would constitute "full satisfaction" of the 2019 Loan.

The Escrow Accounting also understood the amount to be a total payoff and did issue Danco the $225 before the August 5, 2021 expiration of the Demand. (Contreras Decl., Ex. 9.) Critically, among the fees in the Demand was a "Recon fee" (Contreras Decl., Ex. 8), which the Escrow Accounting states is a "Reconveyance Fee" (Contreras Decl., Ex. 9). Lenders provide no explanation for why the payoff demand includes a reconveyance fee if the payoff was not intended to satisfy the 2019 Loan such that the 2019 DOT should be reconveyed to Plaintiff.

Nor do Lenders explain an alternative meaning for "Recon fee." Lenders offer no evidence explaining the reconveyance fee in the context of a demand they characterize as something other than a full payoff. Also notable, while the 2021 Loan does not purport to extinguish or satisfy the 2019 Loan, neither does it purport to renew or continue the 2019 Loan. Purely on its terms, the 2021 Loan is an entirely independent obligation. (See Contreras Decl., Exs. 8-9.) To the extent that Lenders and Perlstein may imply that the 2021 DOT acknowledged the 2019 DOT as "the 1st Trust Deed of Record" without extinguishing it (see Opp. at 3; Perlstein Decl., P. 6 ["That instrument expressly states on its face: 'This is a 2nd Trust Deed and is subject to the 1st Trust Deed of Record.'¿"]) their own evidence shows that the first position deed of trust on the Carondelet Property was not the 2019 DOT, but rather Refinancer's new deed of trust. (Opp. at 4; Perlstein Decl., P.P. 8-9.)

The 2021 DOT does not acknowledge the 2019 DOT; absent a full or partial reconveyance of the 2019 DOT, the 2021 DOT would be the third position deed of trust. So while the 2021 Loan does not expressly reference the 2019 Loan, it assumes the 2019 DOT had been at least partially reconveyed. Consequently, while the 2021 Loan does not provide that it satisfied the 2019 Loan, the documentation provided shows Danco intended the 2021 Loan to include funds to satisfy the 2019 Loan and applied those funds to its satisfaction, and the 2021 Loan assumes the 2019 DOT had been at least partially reconveyed by the time the 2021 Loan was executed. "The grant or denial of a preliminary injunction is not an adjudication of the ultimate rights in controversy; it is merely a determination by the court, balancing the respective equities of the parties, that the defendant should or

should not be restrained from exercising a claimed right. (Robbins v. Superior Court (1985) 38 Cal.3d 199, 206, 211 Cal.Rptr. 398, 695 P.2d 695; Continental Baking, supra, 68 Cal.2d at p. 528, 67 Cal.Rptr. 761, 439 P.2d 889.)" (Association for Los Angeles Deputy Sheriffs v. County of Los Angeles (2024) 106 Cal.App.5th 982.) The Court must decide the matter on the limited evidence presented in the affidavits and exhibits before it. Based on admitted evidence, the Court concludes the 2019 Loan was satisfied by the 2021 Loan and the escrow payout as contemplated by the Demand. Accordingly, the Court finds Plaintiff has shown a probability of success on at least the third, fourth and fifth causes of action against Lenders.

2. Balance of Harms The court must balance the irreparable harm that Plaintiff is likely to sustain if the injunction is denied as compared to the harm that Defendants are likely to suffer if the court grants a preliminary injunction. (CCP Sec.526(a)(2); 14859 Moorpark Homeowner's Assn. v. VRT Corp., supra, 63 Cal.App.4th at 1402; Pillsbury, Madison & Sutro v. Schectman, supra, 55 Cal.App.4th at 1283.) Lenders' opposition identifies that the Court must weigh the relative interim harms from granting or denying injunctive relief (Opp. at 7) but does not otherwise address the issue of harms.

Lenders therefore concede the question. Even so, Plaintiff, as the party seeking injunctive relief, bears the burden to make all necessary showings. (O'Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.) If the Court does not enjoin Culver from foreclosing on the Eagle Property, Plaintiff's interest will be extinguished. Without objection from Lenders, this is sufficient to show the balance of harms favors Plaintiff over Lenders. [4] However, Plaintiff does not identify any harm it will suffer if this Court does not issue an injunction mandating that Culver rescind its notices of default before final adjudication on the merits. (See Mot. at 11.)

In fact, Plaintiff's memorandum only discusses "the issuance of an injunction to preserve the status quo." Plaintiff is seeking provisional relief and must show the necessity of that relief. Based on the foregoing, the balance of harms favors Plaintiff as to an injunction restraining Culver from foreclosing on the Eagle Property, but not as to an injunction mandating Culver rescind its notices of default.

3. Bond In setting the bond, the court must assume that the preliminary injunction was wrongly issued. (Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 15.) The attorney fees necessary to successfully procure a final decision dissolving the injunction also are damages that should be included in setting the bond. (Id. at 15-16.) While Abba reasoned that the plaintiff's likelihood of prevailing is irrelevant to setting the bond, a more recent case disagreed, stating that the greater the likelihood of the plaintiff prevailing, the less likely the preliminary injunction will have been wrongly issued, and that is a relevant factor for setting the bond. (Oiye

v. Fox (2012) 211 Cal.App.4th 1036, 1062.) Plaintiff requests a nominal undertaking of $10,000. Lenders request only that the Court set the undertaking "sufficient to compensate Culver for interest, trustee fees, foreclosure expenses, and other damages resulting from the injunction", but do not object to Plaintiff's requested $10,000, do not suggest any alternative, and do not provide any evidence or explanation of the likely amount of those expenses. Accordingly, the Court will set Plaintiff's undertaking at $10,000. IV.

Conclusion

Plaintiff has shown a probability of success on the merits, and the balance of harms favors Plaintiff. The preliminary injunction is therefore GRANTED in part. The Court sets Plaintiff's undertaking at $10,000. Pending final resolution of this matter, Culver, along with its agents, members, successors, officers, executives, employees, representatives, and any person or entity acting on its behalf, is enjoined from proceeding with the nonjudicial foreclosure process as to the Eagle Property (3912 Eagle Street, APN 5238-006-041) legally described as follows: Lot 9 in Block 5 of Sylvan Tract, in the County of Los Angeles, State of California, as per Map recorded in Book 23, Pages 78 and 79 of Maps, in the Office of the County Recorder of said County.

Except therefrom all mineral and oil rights provided in document recorded March 26, 1957 as Instrument No. 711, of Official Records. Date: August 25, 2026 | | | HON. TIANA J. MURILLO | PLEASE TAKE NOTICE: · Parties are encouraged to meet and confer after reading this tentative ruling to see if they can reach an agreement. · If a party intends to submit on this tentative ruling, the party may send an email to the court at [email protected] with the Subject line "SUBMIT" followed by the case number.

The body of the email must include the hearing date and time, counsel's contact information, and the identity of the party submitting. · Unless all parties submit by email to this tentative ruling, the parties should arrange to appear remotely (encouraged) or in person for oral argument. You should assume that others may appear at the hearing to argue.

· If the parties neither submit nor appear at hearing, the court may take the matter off calendar or adopt the tentative ruling as the order of the court. After the court has issued a tentative ruling, the court may prohibit the withdrawal of the matter without leave.

The Court ordered Plaintiffs' reply filed and served no later than August 20, 2026. Plaintiffs filed their reply on August 21, 2026, only two court days before the hearing. Given that the Court shortened time to hear the motion on Plaintiff's ex parte request, this failure is significant. Nonetheless, the Court exercises its discretion to consider the reply in the interest of resolving the matter on the merits.

Plaintiff also pleads an eighth cause of action for injunctive relief. However, injunctive relief is a remedy, not a cause of action. (Art Movers, Inc. v. Ni West, Inc. (1992) 3 Cal.App.4th 640, 647.)

The Clancy Property has already been foreclosed upon and is therefore not at issue in these proceedings. (Mot. at 4-5.)

Defendants Rosales and Covarrubias, who do not oppose, would also have their interest in the Eagle Property extinguished if the Court does not enjoin Culver. Case Number: 26STLC03263 Hearing Date: August 25, 2026 Dept: 834 Superior Court of California County of Los Angeles Department 834 ¿ EVERGREEN BANK GROUP, Plaintiff(s), vs. YANJU MA, Defendant(s). | Case No.: | 26STLC03263 | | Hearing Date: | August 25, 2026 | |