Real Estate Litigation: Preliminary Injunctions
Real estate attorneys often have to deal with preliminary injunctions early on in a lawsuit. Often a party will file a complaint and make an ex parte application for a temporary restraining order and preliminary injunction shortly thereafter. The court will essentially engage in a mini-trial at the beginning of the case in order to assess the need for an injunction. Because the granting of an injunction can prevent a party from managing or disposing of a property as he sees fit, an injunction can be a powerful tool for leverage in real estate litigation.
What Is A Preliminary Injunction?
A preliminary injunction is a provisional (i.e., before trial) injunction that is meant to keep the status quo prior to a trial and judgment. A preliminary injunction is intended to prevent ‘irreparable injury’ from occurring prior to a final court ruling. In real estate litigation, preliminary injunctions are often brought to prevent a foreclosure, a sale or destruction of property.
There are two types of injunctions: a prohibitive injunction or a mandatory injunction. The prohibitive injunction prevents a party from doing something (i.e., selling the property). A mandatory injunction compels a party to affirmatively do something.
Preliminary injunctions are just that: preliminary. The do not represent a final ruling on the dispute by the court. Even if an injunction is granted, the case will continue as any other lawsuit. At the time of trial, it is conceivable that the court could find in favor of the party who lost the application for injunction. In Los Angeles Superior Court, for example, a lawyer’s application for preliminary injunction is often heard by one judge while the case itself will be heard by another judge. Moreover, after the injunction but before the trial, the parties will have time to develop their evidence and conduct discovery prior to trial. At the end of trial, an injunction may be made permanent (if applicable) or may be cancelled. Oftentimes, at the conclusion of trial, the issue that led to the application is rendered moot.
When Will A Court Grant A Preliminary Injunction?
One of the key ingredients in a claim for preliminary injunction is a showing that the moving party has a reasonable probability of prevailing. In other words does it look like they will win the case?
This must be done through a showing based on admissible evidence and a viable legal complaint. A preliminary injunction may not be based on a complaint that does not adequately allege legal causes of action.
Another key ingredient in an application for a preliminary injunction is ‘irreparable injury’. In other words, will the preliminary injunction prevent a party from an injury or damage that cannot be addressed later in the lawsuit. The best example of this is when monetary damages are the remedy. There would be no need for a preliminary injunction in a case where a party will suffer monetary damage because the court can award those money damages later on. A party seeking an injunction must establish that money damages would not be adequate or that it would be extremely difficult to establish the amount of damages.
In addition a mandatory injunction is more difficult to win than a preliminary injunction (because the court is more hesitant to force a party to affirmatively do something as opposed to simply maintaining the status quo). Case law states that a mandatory injunction is not permitted except in extreme cases and is only rarely granted.
Because a preliminary injunction will preserve the status quo and may act as powerful leverage in real estate litigation, always consider whether an application for a preliminary injunction is appropriate.