Henson v. McKinley Trailer Village ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 TOM HENSON, No. 2:21-cv-02189 WBS AC 13 Plaintiff, 14 v. ORDER RE: PRELIMINARY INJUNCTION 15 MCKINLEY TRAILER VILLAGE, an Unknown Entity Type; THE KAUR 16 GROUP, LLC, a California Limited Liability Corporation; NITA 17 DENHOY, an individual; BALWANT S. DENHOY, an individual,1 18 Defendants. 19 20 ----oo0oo---- 21 Before the court is plaintiff’s Motion for a 22 Preliminary Injunction to enjoin defendants from proceeding with 23 an unlawful detainer action against plaintiff. (Docket No. 8.) 24 25 1 Defendants state in their opposition that “McKinley Trailer Village” is erroneously sued and should actually be “2525 26 South El Dorado LLC.” (Def.’s Opp’n at 1.) Defendants also note 27 that Balwant DenHoy is deceased. (Decl. of Nita DenHoy ¶ 2.) However, no formal motions have been brought regarding these 28 issues so the court does not address them here. 1 The court held a hearing on the motion on January 10, 2022. 2 I. Factual and Procedural Background 3 Plaintiff has lived in his mobile home at the McKinley 4 Trailer Village mobile home park since 1987 and began working as 5 the onsite property manager in 2002. (Decl. of Tom Henson 6 (“Henson Decl.”) ¶ 4 (Docket No. 8-3).) In February 2020, 7 defendants purchased McKinley Trailer Village. (Decl. of Nita 8 DenHoy (“DenHoy Decl.”) ¶ 3 (Docket No. 11).) Plaintiff and 9 defendants agreed that plaintiff would continue his role as the 10 onsite property manager at an hourly rate and receive free rental 11 space for his mobile home. (Henson Decl. ¶ 7; DenHoy Decl. ¶ 3.) 12 Plaintiff claims he worked 899 hours from March 2, 2020 to 13 October 31, 2020, for which he did not receive pay, and did not 14 receive his first paycheck until November 2020. (Henson Decl. ¶ 15 9-10.) 16 In May 2021, plaintiff and defendants engaged in 17 negotiations over plaintiff’s mobile home and any alleged unpaid 18 wages for the March to October 2020 period. (Henson Decl. ¶ 12; 19 DenHoy Decl. ¶ 7.) Plaintiff, via email, offered to sell his 20 mobile home for $45,000, “which includes back-pay for unpaid 21 wages.” (DenHoy Decl., Ex. 1 (Docket No. 11-1).) Defendants 22 prepared a purchase agreement for the mobile home for $40,000 and 23 a severance agreement for $5,000 and sent it to plaintiff on July 24 2, 2021. (DenHoy Decl., Exs. 2-5 (Docket No. 11-1); Henson Decl. 25 ¶ 16.) On July 6, 2021, plaintiff notified defendants that he no 26 longer wished to sell his mobile home and would instead apply for 27 tenancy within the McKinley Trailer Village, which he did. 28 (Henson Decl. ¶ 17.) 1 Shortly thereafter, plaintiff was orally informed that 2 his tenancy application was approved. (Id. ¶ 18.) Defendants 3 claim that plaintiff was orally informed in July 2021 that the 4 space rent would be $1,800 and that plaintiff had himself 5 expected it to be $2,000. (Decl. of Nicole Udall (“Udall Decl.”) 6 ¶ 8 (Docket No. 13).) From August 2021 to December 2021, 7 plaintiff has submitted checks for rent to defendants for $500 8 each month as that is the maximum amount any tenant pays in 9 McKinley Trailer Village for space rent. (Henson Decl. ¶ 20; 10 DenHoy Decl., Ex. 10 (Docket No. 11-1).) 11 On September 3, 2021, plaintiff’s counsel sent, via 12 email, a letter to defendant Nita DenHoy notifying DenHoy of 13 plaintiff’s wage and hour claims. (Decl. of Natalia Asbill- 14 Bearor (“Asbill-Bearor Decl.”) ¶ 2 (Docket No. 8-2).) Plaintiff 15 claims that shortly after this letter was sent, he was given a 16 rent bill indicating his rent was $1,800 a month. (Henson Decl. 17 ¶ 25.) Defendants claim this rent bill was given to plaintiff on 18 August 27, 2021, prior to his counsel’s email to DenHoy. (DenHoy 19 Decl. ¶ 16; Udall Decl. ¶ 9.) 20 Defendants served plaintiff with two 15-day notices to 21 pay or quit, in October and November 2021, demanding he pay the 22 entirety of his rent balance at the $1,800 rate. (Henson Decl. ¶ 23 27-28; DenHoy Decl. ¶ 18.) Plaintiff has not paid that rent 24 balance, and defendants claim they have not yet commenced an 25 unlawful detainer action but plan to do so. (DenHoy Decl. ¶ 18.) 26 Plaintiff brought this lawsuit alleging state and 27 federal claims against defendants based on the alleged failure to 28 pay wages and retaliation against him in the form of an 1 excessively high “space rent” for his mobile home for seeking 2 those wages. (Docket No. 1.) The court previously denied 3 plaintiff’s Motion for a Temporary Restraining Order. (Docket 4 No. 7.) After commencement of this suit, defendants paid to 5 plaintiff the amount of wages he asserted were due for the 899 6 hours of work he performed, plus waiting time penalties pursuant 7 to California Labor Code, but plaintiff contends he is still owed 8 interest, attorney’s fees and costs, and liquidated damages. 9 (DenHoy Decl. ¶ 22; Pl.’s Reply at 7 (Docket No. 17).) Plaintiff 10 now seeks to enjoin defendants from proceeding forward with an 11 unlawful detainer action against him. 12 II. Discussion 13 Injunctive relief is “an extraordinary and drastic 14 remedy, one that should not be granted unless the movant, by a 15 clear showing, carries the burden of persuasion.” Mazurek v. 16 Armstrong, 520 U.S. 968, 972 (1997) (citation omitted). To 17 obtain a preliminary injunction, the moving party must establish 18 (1) it is likely to succeed on the merits, (2) it is likely to 19 suffer irreparable harm in the absence of preliminary relief, (3) 20 the balance of equities tips in its favor, and (4) an injunction 21 is in the public interest. Winter v. Nat. Res. Def. Council, 22 Inc., 555 U.S. 7, 20 (2008). “A plaintiff must make a showing 23 on all four prongs to obtain a preliminary injunction.” A 24 Woman's Friend Pregnancy Res. Clinic v. Becerra, 901 F.3d 1166, 25 1167 (9th Cir. 2018) (internal quotation marks and citations 26 omitted). 27 A. Irreparable Harm 28 The Ninth Circuit has held that that the risk of 1 eviction creates a likelihood of irreparable harm. See Park 2 Vill. Apartments Tenants Ass’n v. Mortimer Howard Tr., 636 F.3d 3 1150, 1159 (9th Cir. 2011). Like the situation in Park Village 4 Apartments, the record here demonstrates that defendants plan to 5 commence eviction proceedings. See id.; (DenHoy Decl. ¶ 18.) 6 Plaintiff claims his trailer is unmarketable at the $1,800 space 7 rent rate, and he will incur costs of $10,000 to $20,000 to move 8 the trailer, if the trailer is even movable given its old age. 9 (Pl.’s Mot. at 11.) Plaintiff acknowledges that these moving 10 costs “may be compensated by damages.” (See id.) However, while 11 costs associated with eviction may have a remedy at law, the 12 eviction itself does not. Given the “likelihood of eviction,” 13 the court determines that defendants’ plan to evict plaintiff 14 creates a likelihood of irreparable harm. See Park Village 15 Apartments, 636 F.3d at 1159. 16 B. Likelihood of Success on the Merits 17 Plaintiff brings, along with his failure to pay wages 18 and emotional distress claims, a retaliation action under the 19 Fair Labor Standards Act (“FLSA”) of 1983. (Docket No. 1.) 20 Plaintiff argues that defendants have retaliated against him by 21 charging him $1,800 space rent for raising the issue of unpaid 22 wages. (Pl.’s Points and Authorities ISO Mot. (“Pl.’s Mot.”) at 23 6 (Docket No. 8-1).)2 Plaintiff’s refusal to pay the alleged 24 retaliatory rent will likely lead to his eviction, as discussed 25 26 2 Both parties request that the court judicially notice various documents related to employment benefits and taxation. 27 (Docket Nos. 18 and 19.) The court need not rely on the materials referenced within the requests at this stage. Accordingly, both 28 parties’ requests for judicial notice are denied. 1 above. Accordingly, the court considers the likelihood of 2 success on the retaliation claim at this stage. 3 Under 29 U.S.C. § 215(a)(3), it is unlawful to 4 discharge or discriminate against an employee because the 5 employee has complained about violations of the FLSA to his 6 employer. Williamson v. Gen. Dynamics Corp., 208 F.3d 1144, 1151 7 (9th Cir. 2000). To prove retaliation under 29 U.S.C. § 8 215(a)(3) a plaintiff must show that (1) plaintiff engaged in 9 statutorily protected conduct under § 215(a)(3) of the FLSA, or 10 the employer must have erroneously believed that plaintiff 11 engaged in such conduct; (2) plaintiff suffered an adverse 12 employment action; and (3) a causal link exists between the 13 plaintiff’s conduct and the employment action. See Mayes v. 14 Kaiser Found. Hosps., 917 F. Supp. 2d 1074, 1080 (E.D. Cal. 2013) 15 (Mueller, J.); Singh v. Jutla & C.D. & R’s Oil, Inc., 214 F. 16 Supp. 2d 1056, 1059 (N.D. Cal. 2002); Batts v. City of Los 17 Angeles, No. CV 06-00843 GAF (AJWx), 2010 WL 11595885, at *2 18 (C.D. Cal. Aug. 12, 2010) (citing Raad v. Fairbanks N. Star 19 Borough Sch. Dist., 323 F. 3d 1185, 1196-97 (9th Cir. 2003) 20 (discussing Title VII retaliation claims)). 21 Both sides make credible arguments on the questions of 22 whether the $1,800 charge of rent can be considered an “adverse 23 employment action,” whether $1,800 is the fair market value for 24 space rent,3 and whether there is a casual link between the 25 3 Both parties make objections to statements in the other parties’ declarations discussing the rental rate at other 26 neighboring trailer parks. Because the Federal Rules of Evidence 27 do not apply strictly at the preliminary injunction phase, the court considers the parties objections only as they go to the 28 weight to be accorded to the objectionable statements. See Flynt 1 plaintiff’s complaint and the rent charge based on the timing of 2 the rent charge. At this stage of the proceeding, based on the 3 evidence produced thus far, the court is inclined to be more 4 persuaded by plaintiff’s evidence that no one in the park 5 currently pays more than $500 a month in rent, and the temporal 6 relationship between plaintiff’s protected conduct and the 7 increase in rent, which suggests an adverse employment action 8 based on retaliatory motive has occurred. In balance, it is not 9 unlikely that plaintiff could prevail on the merits of his 10 claims. 11 C. Balance of Equities and Public Interest 12 Plaintiff faces an imminent risk of eviction. In 13 contrast, the requested injunctive relief does not appear to be 14 unduly burdensome upon defendants, as they will continue to 15 receive space rent of $500 a month from plaintiff. See Park 16 Village Apartments, 636 F.3d at 1159-60 (holding that 17 “plaintiff’s risk of eviction, the fact that Defendants would not 18 be unduly burdened . . . because they would continue to receive” 19 rent “militated in favor of preliminary relief”). Though there 20 is a dispute about the fair market value of the space rent, other 21 tenants at the park pay at maximum $500, and defendants will 22 continue to receive a rent amount in accordance with the other 23 24 Distrib. Co., Inc. v. Harvey, 734 F.2d 1389, 1394 (9th Cir. 1984) (“The trial court may give even inadmissible evidence some 25 weight, when to do so serves the purpose of preventing irreparable harm before trial”); Stardock Sys., Inc. v. Reiche, 26 No. C 17-07025, 2018 WL 7348858, at *6 (N.D. Cal. Dec. 27, 2018) 27 (“[T]he Federal Rules of Evidence do not strictly apply to preliminary injunction proceedings.”) 28 1 tenants while the parties litigate whether plaintiff is obligated 2 to pay more. 3 Further, an order enjoining defendants will prevent 4 eviction and encourage compliance with anti-retaliation laws, 5 which is in the public interest. Id. at 1160 (quoting N.D. v. 6 Haw. Dep’t of Educ., 600 F.3d 1104, 1113 (9th Cir. 2010) (“[I]t’s 7 obvious that compliance with the law is in the public interest.”) 8 For these reasons, the court finds that the balance of equities 9 and public interest factors also favor plaintiff. 10 In sum, plaintiff has made a sufficient showing on all 11 four prongs to obtain a preliminary injunction. 12 III. Bond 13 Rule 65(c) of the Federal Rules of Civil 14 Procedure expressly requires the movant to give security for the 15 issuance of a preliminary injunction. The presumption 16 under Rule 65(c) is that a bond will issue when a court grants 17 a preliminary injunction, and exceptions are rare. At oral 18 argument, plaintiff’s counsel represented that plaintiff was able 19 and willing to pay a bond set by the court. 20 Plaintiff continues, since September 2021, to pay $500 21 a month in rent to defendants. From September to November 2021 22 defendants charged $1,800 a month for rent, which leaves a $1,300 23 a month difference. Starting in December 2021, defendants raised 24 the rent to $1,830 a month, which leaves a $1,330 a month 25 difference. Assuming it takes at least two years from now before 26 the merits of this case are decided at trial, the court 27 determines that the bond amount shall total the difference in 28 rent since September 2021 to January 2024. Bond will therefore 1 be set in the amount of $37,150 plus interest at the rate of 2 0.41%.4 If circumstances change, the parties may file a motion 3 to modify the bond amount. 4 IV. Settlement Conference 5 The parties are hereby notified that a Settlement 6 Conference is set before the Honorable Deborah Barnes, Magistrate 7 Judge, on March 9, 2022 at 10:00 a.m. in Courtroom 27, 8th Floor 8 (to be held virtually via Zoom, unless otherwise ordered). Each 9 party is ordered to have a principal with full settlement 10 authority present at the settlement conference or to be fully 11 authorized to settle the matter on any terms. 12 No later than 12:00 p.m. on March 2, 2022, counsel for 13 each party shall submit a Confidential Settlement Conference 14 Statement via email to DBorders@caed.uscourts.gov. The parties 15 may agree, or not, to serve each other with the Confidential 16 Settlement Conference Statements. The Confidential Settlement 17 Conference Statements shall not be filed with the clerk and shall 18 not otherwise be disclosed to the trial judge. However, each 19 4 The court utilizes the current post-judgement interest 20 rate as an approximation of the post-interest judgment rate, which is also appropriate to determine the pre-judgment interest 21 rate. See Blankenship v. Liberty Life Assurance Co. of Boston, 22 486 F.3d 620, 628 (9th Cir. 2007) (quoting Grosz–Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154, 1164 (9th Cir. 2001)) 23 (“[T]he interest rate prescribed for post-judgment interest under 28 U.S.C. § 1961 is appropriate for fixing the rate of pre- 24 judgment interest unless the trial judge finds, on substantial evidence, that the equities of that particular case require a 25 different rate.”); THE FED. RSRV. SYS., SELECTED INTEREST RATES (DAILY) – H.15, https://www.federalreserve.gov/releases/h15/ (last visited 26 Jan. 12, 2022) (the rate of interest used in calculating the 27 amount of post-judgment interest is the weekly average 1-year constant maturity (nominal) Treasury yield, as published by the 28 Federal Reserve System each Monday for the preceding week). nee nen ene nn nnn nnn en ne nnn EE OE IIE ED eee 1 | party shall e-file a one-page document entitled “Notice of 2 Submission of Confidential Settlement Conference Statement.” 3 IT IS THEREFORE ORDERED that plaintiff’s motion for a 4 preliminary injunction (Docket No. 8) be, and the same hereby is 5 GRANTED. Conditioned upon plaintiff posting bond in the sum of 6 $37,150, within 10 days from the date of this Order, defendants 7 are hereby ENJOINED from proceeding with an unlawful detainer 8 action against plaintiff pending final Judgment in this action. 9 10 | Dated: January 12, 2022 hittin th. Ld. bEeE—~ 11 WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10