MITCHELL vs SUMMIT FUNDING, INC, et al.

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

Tentative Ruling

NOTICE:

PLEASE TAKE NOTICE that any oral arguments regarding this tentative ruling will be heard at 1:30 p.m. in Department 8C in the Tani G. Cantil-Sakauye Courthouse at 500 G Street, Sacramento, CA, the Hon. Richard C. Miadich presiding.

Any party who wishes to contest the tentative ruling below must:

(1) request a hearing by calling the Law and Motion Oral Argument Request Line for Department 8C at (916) 874-8380, by 4:00 p.m. the Court day before the noticed hearing date, and leave a voicemail message (a) identifying themselves as the party requesting oral argument; (b) indicating the specific matter/motion for which they are requesting oral argument; and (c) confirming that they have notified the opposing party of their intention to appear; and

(2) advise the opposing party of the location and time of hearing pursuant to Local Rule 1.06.

If a hearing is not requested by 4:00 p.m. on the Court day before the noticed hearing date, the tentative ruling will become the final order of the Court.

If a hearing is requested, the Court prefers in-person attendance by the parties. However, parties may appear by Zoom unless the Court specifically orders in-person attendance. Parties choosing to appear by Zoom are reminded, however, that a Zoom appearance is still a formal appearance before the Court. Parties appearing via Zoom should do so from a quiet location, free from undue distractions, and wear attire suitable for an in-person court appearance.

The parties may join the Zoom session for hearing on the tentative ruling by audio and/or video through the following link:

https://saccourt-ca-gov.zoomgov.com/j/16039062174

SIP Address:

16039062174@sip.zoomgov.com

(833) 568-8864

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

ID: 16039062174

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://www.saccourt.ca.gov/court-reporters/docs/crtrp- 13.Pdf

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING

***NOTICE: EFFECTIVE APRIL 13, 2026, THIS DEPARTMENT HAS MOVED TO THE TANI G. CANTIL-SAKAUYE COURTHOUSE LOCATED AT 500 G STREET SACRAMENTO, CA. ALL MOTIONS NOTICED FOR DEPARTMENT 28 WILL BE HEARD IN DEPARTMENT 8C OF THE NEW COURTHOUSE. ALL PAPERS FOR THIS DEPARTMENT MUST BE FILED AT THIS NEW LOCATION AND WILL NOT BE ACCEPTED AT THE HALL OF JUSTICE. ALL HEARINGS WILL TAKE PLACE AT THIS NEW LOCATION***

On June 23, 2026, the Court granted Plaintiff Brian Mitchell’s (“Plaintiff”) ex parte application for a temporary restraining order (“TRO”) against Defendants Summit Funding, Inc. (“Summit”) and Todd Scrima (“Scrima”) (collectively, “Defendants”), and then-nonparty CrossCountry Mortgage, LLC (“CCM”) and issued an order to show cause (“OSC”) why a preliminary injunction should not issue. The Court now rules on the OSC as follows.

Background

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

Plaintiff filed this employment action on February 7, 2024. Plaintiff alleges that he was hired as Summit’s Chief Growth Officer in December of 2022 and began his employment in March of 2023. Plaintiff further alleges that he was terminated in November of 2023 after whistleblowing several illegal acts committed by Summit and Scrima, Summit’s CEO. Plaintiff’s complaint includes a total of 11 causes of action, including retaliation claims, hostile work environment, wrongful termination, and others.

On April 1, 2026, Plaintiff filed two amendments to the Complaint substituting CrossCountry as Doe 1 and Doe 26. However, the orders granting the amendments were not signed, and thus on April 23, 2026, Plaintiff filed a notice motion for leave to file First Amended Complaint (“FAC”) to substitute CCM as Doe 1 and Doe 26. That motion was denied without prejudice on July 15, 2026 for failure to comply with California Rules of Court rule 3.1324. On July 17, 2026, Plaintiff filed a renewed motion for leave to file FAC.

On August 3, 2026, the Court advanced the hearing on the renewed motion for leave to amend to today’s date so it could be heard in conjunction with the present OSC. The Court has granted the motion for leave to file FAC, which added CCM as a defendant and brought several new causes of action against CCM, Summit, and Scrima related to CCM’s alleged acquisition of Summit, including a claim for violation of the Uniform Voidable Transactions Act (“UVTA”).

The TRO currently in effect enjoins Defendants from:

(a) Transferring, disbursing, encumbering, pledging, assigning, hypothecating, dissipating, secreting, or otherwise disposing of any proceeds, consideration, or payments arising from or related to the acquisition of Summit Funding, Inc. by CrossCountry Mortgage, LLC, including without limitation:

(i) Any and all earn-out payments or contingent consideration payable to Todd Scrima or any entity in which Scrima holds an interest, under the asset purchase agreement or any related agreement;

(ii) Any and all deferred purchase price installments payable to Summit, Scrima, or any affiliate thereof;

(iii) Any and all proceeds from the sale, transfer, or licensing of any assets, customer accounts, branch operations, or goodwill of Summit Funding, Inc.; and

(iv) Any other amounts paid, payable, or to become payable in connection with the Summit-CCM transaction.

(b) Receiving, distributing, or expending any of the foregoing amounts except as

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

expressly ordered by this Court; and

(c) Taking any action with intent to hinder, delay, or frustrate Plaintiff’s ability to enforce any judgment obtained in this action, or to dissipate or transfer assets subject to execution on any such judgment.

(TRO, pp. 2:13-3:4.)

The TRO also directs Defendants to deposit all “earn-out payments, contingent consideration, deferred purchase price installments, and any other payments due or to become due under the asset purchase agreement between Summit and CCM” with the Court or into a neutral, interestbearing escrow account within three court days after each payment’s due date. (TRO, p. 2:6-13.) The TRO also directs Defendants to provide an accounting to Plaintiff’s counsel and to the Court of “[a]ll amounts received, paid, or due and payable under or in connection with the asset purchase agreement between Summit and CCM, including the total purchase price, the earn-out or contingent consideration structure, and the schedule of payments” and “[a]ll amounts already paid to Summit, Scrima, or any affiliate as of the date of [the TRO].” (TRO, p. 2:15-22.)

Legal Standard

“As its name suggests, a preliminary injunction is an order that is sought by a plaintiff prior to a full adjudication of the merits of its claim[s]. [Citation.]” (White v. Davis (2003) 30 Cal.4th 528, 554.) “The purpose of such an order ‘is to preserve the status quo . . . .’ It ‘does not constitute a final adjudication of the controversy.’ [Citation.]” (Costa Mesa City Employees Assn v. City of Costa Mesa (2012) 209 Cal.App.4th 298, 305.)

“To obtain a preliminary injunction, a plaintiff ordinarily is required to present evidence of the irreparable injury or interim harm that it will suffer if an injunction is not issued pending an adjudication of the merits.” (White, supra, 30 Cal.4th at p. 554.) “‘[T]he extraordinary remedy of injunction’ cannot be invoked without showing the likelihood of irreparable harm.” (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1352.)

“If the threshold requirement of irreparable injury is established, then [the court] must examine two interrelated factors to determine whether . . . a preliminary injunction should be [issued]: ‘(1) the likelihood that the moving party will ultimately prevail on the merits and (2) the relative interim harm to the parties from issuance or non-issuance of the injunction.’ [Citation.]” (Costa Mesa City Employees Assn., supra, 209 Cal.App.4th at p. 306.) The greater the showing on one factor, the lesser the showing need be on the other. (Butt v. State of California (1992) 4 Cal.4th 668, 678.) However, a preliminary injunction may not be granted, regardless of the balance of interim harm, unless it is reasonably probable that the moving party will prevail on the merits.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

(San Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal.App.3d 438, 442.) “[T]he party seeking the injunction must present sufficient evidentiary facts to establish a likelihood that it will prevail.” (Tahoe Keys Property Owners’ Assn. v. State Water Resources Control Board (1994) 23 Cal.App.4th 1459, 1478.)

The party seeking injunctive relief bears the burden of showing all elements necessary to support issuance of a preliminary injunction. (O’Connell v. Superior Court (2006) 141 Cal. App. 4th 1452, 1481.)

Plaintiff seeks injunctive relief under the UVTA, which authorizes a creditor to obtain “[a]n injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or other property of the transferee.” (Civ. Code § 3439.07(a)(3)(A).) A creditor’s ability to obtain an injunction under the UVTA is expressly “[s]ubject to applicable principles of equity and in accordance with the applicable rules of civil procedure,” which indicates the rules applicable to injunctions generally apply to injunctions under the UVTA.

Discussion

Irreparable Injury

“An injunction against disposing of property is proper if disposal would render the final judgment ineffectual.” (Heckmann v. Ahmanson (1985) 168 Cal.App.3d 119, 136.) Moreover, an injunction is statutorily authorized “[w]hen 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.” (Code Civ. Proc. § 526(a)(3).)

Defendants cite IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69-70 to support the assertion that courts “uniformly reject attempts to recharacterize collection risk as irreparable harm.” (Opp. MPA, p. 6:24.) IT Corp. does not support this assertion. No portion of the opinion addresses whether “collection risk” or the disposal of assets during litigation constitutes irreparable harm, and the pages cited by Defendants simply state the basic test for injunctions in general. Defendants also contend that Plaintiff cannot use an injunction “to secure assets for the satisfaction of a future judgment,” but must “instead proceed, if at all, through statutory attachment procedures, which provide safeguards and evidentiary thresholds.” (Opp.

MPA, p. 6:1-3.) This argument is belied by the fact that the UVTA, which renders voidable certain transfers made by a debtor to hinder, delay, or defraud a creditor (Civ. Code § 3439.04(a)(1)), expressly authorizes a preliminary injunction as a remedy. (Civ. Code § 3439.07(a)(3)(A); see also Oiye v. Fox (2012) 211 Cal.App.4th 1036, 1057.) Defendants also do not identify the purported “safeguards and evidentiary thresholds” that are available in attachment proceedings

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

but not available in preliminary injunction proceedings. Defendants cite Doyka v. Superior Court (1991) 233 Cal.App.3d 1134, 1136, but that case is distinguishable. Doyka arose from a dispute over a loan of $125,000. The injunction restrained the defendant borrower from using or disposing of $125,000, held in any financial institution on the defendant’s behalf, for any purpose whatsoever. Although the plaintiff had made a strong showing that he was likely to succeed on the merits of his underlying claims, the court stated, “We are not convinced, however, that an injunction against use for any purpose of money on deposit in any bank is a proper legal remedy,” because the injunction was not directed towards a specific identifiable asset for a specific purpose. (Ibid.)

The court concluded, “By the time the injunction issued, Lord was no longer trying to prevent dissipation of assets; he was trying to force Doyka to replace them with money from any and all of his bank accounts.” (Id. at pp. 1136-1137.) The court also noted that the injunction was essentially an improper attachment. In the present case, the injunction Plaintiff seeks is directed towards specific assets—payments made or owed to Defendants resulting from the merger agreement—and the injunction remedy is expressly authorized by the UVTA.

Accordingly, the Court finds the irreparable harm element has been satisfied.

Likelihood of Success on the Merits

Since Plaintiff seeks an injunction under the UVTA to ostensibly protect a potential judgment he obtains on his employment claims, the assessment of the likelihood-of-success factor seemingly requires analysis of the merits of Plaintiff’s underlying claims and his UVTA claim. (Cf. Oiye v. Fox, supra, 211 Cal.App.4th at pp. 1049-1060 [focusing primarily on the merits of the plaintiff’s underlying sexual assault claims, but in balancing the harms, stating “The timing of defendant’s conveyance of his personal residence to a trust after he was arrested on charges of molestation may be indicative of an intent to protect his assets against creditors.”].) Indeed, Plaintiff and Defendants addressed both in their respective papers. Thus, the Court will address both issues.

Plaintiff’s Employment Claims

While Plaintiff brings 11 employment-related causes of action, the crux of Plaintiff’s claims is the alleged retaliatory acts committed by Defendants. Plaintiff alleges that in March of 2023, around the time Plaintiff’s employment commenced, Summit began recruiting Deran Pennington, who was then employed by Movement Mortgage, LLC, and had him sign a confidentiality agreement. Plaintiff further alleges that Pennington remained employed by Movement Mortgage for several months after signing the confidentiality agreement, during which time he continued to receive and accumulate Movement Mortgage’s confidential and proprietary information. Plaintiff then alleges that Pennington began soliciting other Movement Mortgage employees on Summit’s behalf, and that when Pennington ultimately joined Summit

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

as an employee, he brought with him several employees and Movement Mortgage’s trade secrets. Plaintiff alleges that, at Defendants’ request, Pennington compiled the misappropriated information into a spreadsheet for Summit’s use and exploitation. Upon receiving the spreadsheet, Scrima, on Summit’s behalf, allegedly sent the information to Plaintiff and other employees with the instruction to “dissect” the information contained therein. Plaintiff alleges that he objected to the instruction and informed Defendants that their actions were illegal. Plaintiff alleges that his concerns were repeatedly dismissed, and after he expressed doubt over whether he could continue working for Summit, he was abruptly terminated on November 20, 2023.

In his TRO papers, Plaintiff submits the following evidence: (1) the June 7, 2023 email from Scrima to Plaintiff and other employees attaching the spreadsheet created by Pennington and instructing, “Please dissect this!” (Mitchell Decl., Exh. A); (2) emails Plaintiff sent to Summit’s in-house counsel on June 2, November 8, and November 17, 2023 expressing his concerns about Summit’s possession and use of Movement Mortgage’s proprietary information (Mitchell Decl., Exhs. B & C); (3) an email dated November 11, 2023 from Plaintiff to Scrima and other employees wherein Plaintiff proposed terms for a mutual termination of his employment and a severance package (Mitchell Decl., Exh.

D); and (4) an email dated November 17, 2023 from Robyn LaVassaur, Summit’s EVP of Sales, to Plaintiff that Plaintiff describes as a demotion from “Chief Growth Officer” to “Growth Officer” and the elimination of Plaintiff’s direct supervisory authority over any other employees (Mitchel Decl., Exh. E).

The elements of a retaliation claim under FEHA are “(1) the employee’s engagement in a protected activity, i.e., ‘oppos[ing] any practices forbidden under [FEHA]’; (2) retaliatory animus on the part of the employer; (3) an adverse action by the employer; (4) a causal link between the retaliatory animus and the adverse action; (5) damages; and (6) causation.” (Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 713.) “[I]n order to establish a prima facie case of retaliation under the FEHA, a plaintiff must show (1) he or she engaged in a ‘protected activity,’ (2) the employer subjected the employee to an adverse employment action, and (3) a causal link existed between the protected activity and the employer’s action.” (Yanowitz v.

L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1042.) If the employee establishes a prima facie case, the burden shifts to the employer to show a legitimate, nonretaliatory reason for the adverse employment action. (Ibid.) If the employer meets its burden, the burden shifts back to the employee to show that the reason offered by the employer is pretextual. (Guz v. Bechtel National, Inc. (2000) 34 Cal.4th 317, 356.)

The Supreme Court has described the analytical approach for retaliation claims under Labor Code section 1102.5 as follows:

[Labor Code] [s]ection 1102.6 provides the governing framework for the presentation and

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

evaluation of whistleblower retaliation claims brought under section 1102.5. First, it places the burden on the plaintiff to establish, by a preponderance of the evidence, that retaliation for an employee’s protected activities was a contributing factor in a contested employment action. The plaintiff need not satisfy McDonnell Douglas in order to discharge this burden. Once the plaintiff has made the required showing, the burden shifts to the employer to demonstrate, by clear and convincing evidence, that it would have taken the action in question for legitimate, independent reasons even had the plaintiff not engaged in protected activity.

(Lawson v. PPB Architectural Finishes, Inc. (2022) 12 Cal.5th 703, 718.)

Under the “same decision” defense, if the employer shows by clear and convincing evidence that it would have taken the same action regardless of the protected activity, the employee’s claim fails even if retaliation was a contributing factor. (Ververka v. Department of Veterans Affairs (2024) 102 Cal.App.5th 162, 174.)

Plaintiff contends that he is likely to prevail on his retaliation claims because he was terminated just days after his last email to Summit’s in-house counsel regarding Scrima’s directive to “dissect” the spreadsheet containing Movement Mortgage’s proprietary information.

In opposition, Defendants contend that they can show legitimate, nonretaliatory reasons for terminating Plaintiff and that the same-decision defense applies. To support their position, Defendants submit “a series of profane, insulting, abusive, and unprofessional text messages” Plaintiff sent in a text message group consisting of Scrima and several other high-ranking employees at Summit, including Plaintiff’s direct manager, Robyn Lavassaur. The text messages were sent on the evening of Friday, November 17, 2023.

The screenshots of the text messages submitted with Defendants’ opposition show that Plaintiff sent two audio recordings and stated, “If you get a chance to listen to this. Here is the problem.” (Scrima Decl., Exh. 2, p. 2.) Ms. Lavassaur responded, “Brian it’s 10pm on a Friday night for some it’s 1am. Scott has asked you to send any and every concern to him, please respect that request. We have already listened and heard the above.” (Scrima Decl., Exh. 2, p. 2.) In response, Plaintiff sent over two dozen brief text messages saying things like, “You are a fucking [joke],” “Fraud doesn’t have a time zone,” “Scott is an idiot,” and “Todd [S]crima is a fraud, enough said.

He is a fraud.” (Scrima Decl., Exh. 2, pp. 2-3.) Defendants contend, “No reasonable manager would read that text chain and not at least consider termination.” (Opp. MPA, p. 4:8-9.)

The Court finds that Plaintiff has established a likelihood of prevailing on the merits of his retaliation claim under Labor Code section 1102.5. Plaintiff’s evidence shows that he reported to Summit’s executives and in-house counsel that the information contained in the spreadsheet was proprietary and thus Scrima’s directive to “dissect” the spreadsheet was illegal. This constitutes

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

protected activity under Labor Code section 1102.5(b). Plaintiff has also shown that he was terminated shortly after making these reports. The causal element of a whistleblower retaliation claim may be established by “the temporal proximity between a protected disclosure of information and adverse treatment.” (Taswell v. Regents of University of California (2018) 23 Cal.App.5th 343, 365; see also Zirpel v. Alki David Productions, Inc. (2023) 93 Cal.App.5th 563, 578.) Thus, Plaintiff’s evidence satisfies his prima facie burden, and the burden shifts to Defendants to establish, by clear and convincing evidence, they would have made the same decision to terminate Plaintiff for reasons other than retaliation.

Defendants have not met this burden. The text messages alone are insufficient when considering that they were sent in the context of the protected whistleblower activity and the temporal proximity between Plaintiff’s last report and his termination. Defendants have not submitted any testimony from any decisionmakers to support the assertion that Defendants would have terminated Plaintiff for nonretaliatory reasons. Defendants do not cite to any analogous case authority applying Labor Code section 1102.5 and the same decision defense.

Indeed, the only authority cited by Defendants at all in relation to the merits of Plaintiff’s employment claims is Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 232. Defendant cites to Harris to support the following proposition: “Even were Mr. Mitchell to present such evidence [to support a probability of prevailing on his employment claims], the text messages he sent will always give rise to a ‘same decision’ defense.” (Opp. MPA, p. 4, fn. 1, emphasis in original.) Harris involved only FEHA claims, not a claim under Labor Code section 1102.5.

Since the Court finds that there is a probability of Plaintiff prevailing on his Labor Code section 1102.5 retaliation claim, the Court need not address Plaintiff’s other employment claims.

UVTA

Civil Code section 3439.04(a) states:

(a) A transfer made or obligation incurred by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation as follows:

(1) With actual intent to hinder, delay, or defraud any creditor of the debtor.

(2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor either:

(A) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

(B) Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.

(Civ. Code § 3439.04(a).)

Subdivisions (a)(1) and (a)(2) are disjunctive, meaning a plaintiff may establish a claim under the UVTA by showing either that the transfer was made with fraudulent intent or without receiving reasonably equivalent value. (Aghaian v. Minassian (2020) 59 Cal.App.5th 447, 456- 457.) The UVTA provides a nonexhaustive list of factors to consider when determining actual intent under subdivision (a)(1):

(1) Whether the transfer or obligation was to an insider.

(2) Whether the debtor retained possession or control of the property transferred after the transfer.

(3) Whether the transfer or obligation was disclosed or concealed.

(4) Whether before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit.

(5) Whether the transfer was of substantially all the debtor’s assets.

(6) Whether the debtor absconded.

(7) Whether the debtor removed or concealed assets.

(8) Whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred.

(9) Whether the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred.

(10) Whether the transfer occurred shortly before or shortly after a substantial debt was incurred.

(11) Whether the debtor transferred the essential assets of the business to a lienor that transferred the assets to an insider of the debtor.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

(Civ. Code § 3439.04(b).)

“There is no minimum number of factors that must be present before the scales tip in favor of finding of actual intent to defraud. This list of factors is meant to provide guidance to the trial court, not compel a finding one way or the other.” (Filip v. Bucurenciu (2005) 129 Cal.App.4th 825, 834.)

Here, sufficient “badges of fraud” are present to warrant injunctive relief. The transfer was made during pending litigation and it is for substantially all of Summit’s assets. While there is no indication that the consideration received is not reasonably equivalent to the value of the asset, the timing and nature of the transaction overrides this factor. (See Oiye v. Fox, supra, 211 Cal.App.4th at pp. 1059-1060 [concluding that the timing of the defendant’s transfer of his residence shortly after his arrest was indicative of fraudulent intent and thus sufficient to warrant a preliminary injunction].)

Through the transaction, Defendants are essentially converting the tangible, fixed assets of Summit into liquid cash to Scrima. Although there is no direct evidence that Scrima is likely to dispose of the cash before judgment, the transaction better facilitates that possibility and thus increases the risk of Plaintiff being left unable to collect on a judgment. Accordingly, the Court finds that Plaintiff has established a probability of prevailing on the merits of his UVTA claim. [1]

Balance of Hardships

“The ultimate goal of any test to be used in deciding whether a preliminary injunction should issue is to minimize the harm which an erroneous interim decision may cause.” (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 73.)

Here, the Court is persuaded that the potential harm to Defendants if an injunction is granted is minimal, and the potential harm to Plaintiff if an injunction is not granted is significant. The injunction does not halt the transaction itself. It only requires that the proceeds from the sale paid to Summit be deposited in a blocked account pending trial. While Defendants assert that the injunction places the transaction at risk, this assertion is speculative and unsupported. Notably, nobody from CCM provided a declaration, either with Defendants’ papers or through CCM’s own filing, to corroborate Scrima’s bare contention that an injunction will jeopardize the deal.

Nor is there any evidence that an injunction that places the sale proceeds in a blocked account will affect Summit’s operations, and Defendants’ evidence indicates that Summit has ample cash on hand plus consistent cash flow to fund operations during the pendency of this case. The only apparent harm to Defendants is the blocked access to the cash proceeds from the sale pending trial. This harm is outweighed by the risk of Plaintiff being unable to collect on a judgment.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV002348: MITCHELL vs SUMMIT FUNDING, INC, et al. 08/26/2026 Order to Show Cause Re: Preliminary Injunction in Department 8C

Disposition

Based on the above, Plaintiff’s request for a preliminary injunction is GRANTED.

Plaintiff posted a $20,000.00 bond in connection with the TRO. Plaintiff maintains that the amount of the bond for the preliminary injunction should reflect the cost of holding the funds, not the value of the transaction, and thus should “remain minimal.” (Reply MPA, p. 11:8.) Plaintiff’s proposed order calls for the TRO bond to serve as the only bond. Defendants contend that the bond should be set at a minimum of $5 million, since part of the sale consists of retention payments to sales employees in the amount of $9 million. The Court is not persuaded that this harm is likely to occur for the same reasons discussed above. Since Defendant has not made a significant showing of potential damages incurred in the event the injunction should not have been issued, the Court sets the bond at an additional $20,000.00 above the TRO bond.

Plaintiff shall submit a revised proposed order reflecting that a $20,000.00 bond is required to be paid within 5 days for the preliminary injunction.

[1] Defendants contend that significant assets will remain with Summit after the deal closes, but the remaining assets

Defendants highlight in their opposition present the same issue as the transaction itself. Defendants point to (1) periodic payments of profits from the sale of assets; (2) retained loans and servicing rights remaining on Summit’s balance sheet; and (3) a direct payment of $5 million. Thus, the remaining assets consist of cash and the right to obtain cash from third-party debtors. With cash, there is a greater risk of depletion; with the retained loans and servicing rights, there is the risk of nonpayment by the third-party debtors. Further, the value of the assets, other than the $5 million up front payment, is estimated at $5 million, far less than the apparent value of Summit.