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Hamana v. Kholi

August 19, 2010

ARKAN HAMANA, PLAINTIFF,
v.
SAM KHOLI, ET AL., DEFENDANT.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER

Plaintiff Arkan Hamana has filed a motion for a temporary restraining order ("TRO") [Doc. 3] seeking to enjoin Defendants from continuing foreclosure proceedings on his property. For the following reasons, the Court DENIES the motion.

I. BACKGROUND

Plaintiff has sued Defendants for usury and a civil violation of the Racketeering Influenced and Corrupt Organizations Act ("RICO"), among several other claims.*fn1 At the center of the allegations are a series of loans Defendants Sam Kholi and Kholi Enterprises, Inc. allegedly made to Plaintiff. In total, Plaintiff claims Kholi loaned him $1 million in three separate loans. One of the loans was secured by two pieces of Plaintiff's property, his home at 2953 Via Roblar Court, El Cajon, CA 921019 and his commercial property at 3276 Monroe Avenue, San Diego, CA 92116. On May 20, 2010, Action Foreclosure Services, on behalf of Kholi Enterprises, recorded on both properties a notice of default and election to sell. Plaintiff wants to enjoin the foreclosure process.

In October 2007, Plaintiff alleges he borrowed $400,000*fn2 from Kholi through Kholi Enterprises. On the face of the note, the loan had a one-year term and Plaintiff was to pay 10 percent interest each year. But according to Plaintiff, they orally agreed to a higher rate of 16.8 percent. Kholi also allegedly charged Plaintiff origination fees totaling $50,000. This note was secured by Plaintiff's two properties, his home and his business. Plaintiff alleges he was induced into entering this loan by Kholi's false representation that, contrary to the one-year term on the face of the note, the loan would not mature as long as Plaintiff continued to make monthly interest payments.

Plaintiff allegedly borrowed more money from Kholi in January 2009. He claims he borrowed another $400,000. This time, though, Plaintiff claims the loan was not evidenced by a promissory note, and the rate they agreed to was 16.8 percent per year. Plaintiff allegedly paid an origination fee of $80,000 for the second loan.

The very next month, February 2009, Plaintiff says he borrowed from Kholi yet again. This time he allegedly borrowed $200,000. Like with the second loan, they did not execute a written note. And again, Plaintiff claims the interest rate was 16.8 percent per year.

Plaintiff claims that he made payments on these three loans from their execution until May of 2010. But after an argument between Kholi and Plaintiff, Plaintiff claims Kholi then called the loans due. And on May 20, 2010, Kholi Enterprises caused notices of default and election to sell to be recorded against both properties.

II. LEGAL STANDARD

To prevail on a motion for a temporary restraining order, the moving party must establish that (1) he is likely to succeed on the merits; (2) he is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in his favor; and (4) an injunction is in the public interest. Winter v. Natural Res. Defense Council, Inc., __ U.S. __, 129 S.Ct. 365, 374 (2008).

III. DISCUSSION

At the outset, the Court notes that Plaintiff cites to the wrong standard for a temporary restraining order. Plaintiff cites to cases saying that "the greater the relative hardship to the moving party, the less probability of success must be shown." Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1119 (9th Cir. 1999)). Although this used to be Ninth Circuit precedent, the Supreme Court rejected this test in favor of the one set forth in the preceding section. No matter how much harm Plaintiff might suffer, he must still show that he is likely to succeed on the merits. See Winter, 129 S.Ct. at 374.

Plaintiff does little to meet his burden. He does not recite the elements of any of his sixteen claims and show how his evidence proves those elements. He says that he "has submitted sufficient evidence that there is a strong likelihood that he will succeed at trial," and then mentions that he submitted his own declaration and the declaration of five other people "to whom KHOLI through KHOLI ENTERPRISES made similar usurious loans to." (Pl.'s Br. at 12.) But he does not cite to any specific paragraphs of the declarations or explain why they support his claims. The Court could deny his motion on this ground alone.

Still, the Court has reviewed the evidence supporting the two claims Plaintiff mentions as having a likelihood of success on the merits: the RICO claim and the usury ...


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