Churchill Funding I LLC v. 732 Indiana, LLC
Superior Court of California, County of Los Angeles, West District (Santa Monica) · Cal. Super. Ct. (L.A. Cnty.) · California bar guidance
Verified April 26, 2026
- Citation
- Churchill Funding I LLC v. 732 Indiana, LLC, No. 24SMCV03940 (Cal. Super. Ct. L.A. Cnty. Oct. 31, 2024) (Mandel, J.)
- Decided
- October 31, 2024
Summary
In a judicial foreclosure action over $10 million in defaulted loans, defendants 728 Indiana, LLC and 732 Indiana, LLC, through counsel Eliezer Appel, submitted a 10/24/2024 case management conference statement citing "California Federal Bank v. Kwong (1991) 231 Cal.App.3d 1467, 1472" for the proposition that plaintiff could not pursue judicial and non-judicial foreclosure simultaneously. Judge Elaine W. Mandel found the cited authority does not exist, and that a second cited decision, "Security Pacific National Bank v. Wozab," was misreported (the actual reporter is 51 Cal.3d 991). The court announced it would issue an order to show cause regarding the filing of false pleadings.
- AI tool:
- Unspecified generative AI
What sanction did the court impose?
The court granted plaintiff's ex parte application for appointment of a receiver and a preliminary injunction, sustained nearly all of plaintiff's evidentiary objections to the defense declarations, and stated it would set an OSC re: filing false pleadings with the court. No monetary sanction was imposed in this order.
Why does Churchill Funding I LLC v. 732 Indiana, LLC matter for law firms using AI?
Churchill Funding illustrates a quieter but increasingly common pattern: hallucinated authority surfacing in routine state-court motion practice, not just headline federal filings. A managing partner reviewing a junior associate’s CMC statement is unlikely to Shepardize every California Court of Appeal cite, yet a single fabricated case proposition was enough here to draw an OSC re: filing false pleadings on top of losing the receiver fight on the merits.
Sources
Further reading
Source PDF is a Westlaw printout mirrored from the Damien Charlotin hallucination database. We are working to add the underlying court docket (PACER, CourtListener, or court website) as a second source.