Judge: Andre De La Cruz, Case: 2022-01260587, Date: 2023-08-14 Tentative Ruling
Application for Right to Attach Order/Writ of Attachment filed by First Bio Lab, LLC on 4/6/23
Plaintiff First Bio Lab LLC seeks a right to attach order and writ of attachment against Defendant Flow Health Laboratories LLC, a Delaware limited liability company for $1,000,000.00 pursuant to Code of Civil Procedure Section 483.010.
Application is DENIED.
Attachment law statutes are subject to strict construction, and where a court is required to exercise its jurisdiction in a particular manner or subject to certain limitations, an act beyond those limits is in excess of its jurisdiction and void. Pacific Design Sciences Corp. v. Superior Court, 121 Cal. App. 4th 1100, 1106 (2004).
Under Code of Civil Procedure § 483.010, attachment may be issued only if the claim sued upon is:
(1) a claim for money based on a contract (express or implied);
(2) the claim is for a fixed or readily ascertainable amount not less than $500, exclusive of costs, interest and attorney’s fees;
(3) the claim is not secured by real property (or was originally so secured, but due to no fault of plaintiff has become valueless, or inadequate to secure the amount owed on the claim, so as to allow attachment for the unsecured portion); and
(4) if the defendant is a natural person, that the claim arises out of the conduct by that defendant of a trade, business, or profession (i.e., not consumer transactions).
The burden is on the applicant to establish each element necessary for an attachment order by a preponderance of the evidence. Loeb & Loeb v. Beverly Glen Music, Inc., 166 Cal. App. 3d 1110, 1116 (1985).
In addition, under Code of Civil Procedure Section 484.090, an attachment order may be issued only if the court also finds all of the following:
(1) The claim is one upon which an attachment may be issued;
(2) The moving party has established the probable validity of the claim upon which the attachment is based (i.e., it is more likely than not that plaintiff will prevail on the claim);
(3) The attachment is not sought for a purpose other than the recovery on the claim; and
(4) The amount to be secured by the attachment is greater than zero.
Additionally, the facts stated in each affidavit in support of an application for writ of attachment shall be set forth with particularity. Cal. Code Civ. Proc. § 482.040.
The
elements of a breach of contract cause are: “(1) existence of the contract;
(2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s
breach; and (4) damages to plaintiff as a result of the breach.”
AToN Center, Inc. v. United Healthcare Insurance Company, 2023 WL 4782433, at *8, (Cal. Ct. App., July 27, 2023, Case No. D080122).
Here, in support of its application, Plaintiff submits the Declarations of Melinda Tu (Laboratory Supervisor of First Bio Lab, LLC) (ROA 49); Debby Quartucy (employee of Plaintiff) (ROA 46); Ashlie Torres (manager of Plaintiff) (ROA 48); and Adhitya Sumardie (Clinical Laboratory Scientist of Plaintiff).
It is apparently undisputed that the contract exists, but the rest of the elements are somewhat disputed. That is, what appears to be in dispute is whether Plaintiff also breached the agreement, and the total damages. Ex. A to the FAC is the Laboratory Services Agreement. In Section 1.1 of that Agreement, the parties agreed as follows:
Laboratory shall provide the laboratory testing services as set forth in Exhibit A (the “Laboratory Tests”) to Company on a non-exclusive basis in accordance with industry standards and applicable law as requested by Company’s standing order and requisition and Laboratory’s receipt of the attendant satisfactory specimen.
Ex. A attached to the Agreement provides. “Laboratory shall perform the Laboratory Test and receive compensation from the company in the manner set forth in the table below . . . .” “Polymerase Chain Reaction (PCR) test” “$50”.
(emphasis added).
Although Plaintiff tested 20,000 specimens, Defendant has not paid for the results. See Decl. of Tu, ¶ 5-8; Decl. of Quartucy, ¶ 5.
However, Defendant seems to contend that Plaintiff admits that the specimens were not “satisfactory”; and was therefore in breach of the agreement by testing them. Notably, “satisfactory” is not defined in the agreement itself.
Plaintiff’s Declarant, Debby Quartucy does declare, however:
“3. When First Bio received the Flow Health specimens for covid-testing on January 14, 2022, I noticed that many of the dates on the specimen containers reflected collection dates from the week prior, including as early as January 6, 2022. This was a concern because Covid-specimen DNA usually must be tested within three to seven (3 to 7) days of collection and must be properly stored. Otherwise, the delay can cause the specimens to be stale and yield an incorrect result.
4. Nevertheless, because First Bio was contractually bound to test the specimens for Flow Health, I oversaw the testing along with the First Bio staff, including additional persons we hired specifically to get this project done immediately, and we were able to complete the testing within approximately a day after receipt of each of the [two sets] of specimen.”
Decl., of Quartucy, ¶¶ 3,4.
In its Cross-Complaint, Cross-Complainants allege that Plaintiff breached the Contract because:
“16. Of the 20,000 specimens Flow Health provided, First Bio detected just one positive result for COVID-19. The results were particularly unusual given that, at the time, covid19.ca.gov reported COVID-19 test positivity rates of approximately 20% in California.
17. Based on the above test results, Flow Health is informed and believes and thereon alleges, that First Bio failed to perform any testing of the Specimens, or conducted the testing in such a manner that the results are so inaccurate as to be entirely unusable, unreliable and, essentially useless.”
Cross-Complaint, ¶¶ 16, 17.
In support of Defendant/Cross-Complainant’s argument that it was Plaintiff who breached, it submits the declarations of Helmie Teketay (Vice President of Molecular Diagnostics) (ROA 59); and Alex Meshkin (CEO and President of Defendant) (ROA 57).
Alex Meshkin declares that, “[o]n or around January 13 and 14, 2022, Flow Health provided First Bio Labs, LLC (“First Bio”) with the samples for testing. The samples Flow Health provided to First Bio for testing were viable for testing and were not stale. Flow Health’s pre-analytics testing confirmed that the samples were properly stored and were viable for testing at the time they were delivered to First Bio.”
Decl. of Meshkin, ¶ 4.
But he also declares, that if the specimens were stale, Plaintiff had a duty to notify Defendant, which it did not do. Id., ¶¶ 7, 8.
However, the real problem were Plaintiff’s results in that, “First Bio produced the results of the Tests piecemeal, starting on January 16, 2022, through January 17, 2022. Of the 20,000 specimens First Bio tested, it only produced two positive results, for a test positivity rate of .005%. Such results were highly improbable because California, specifically Los Angeles County, was going through a high test positivity period of approximately 20%, brought on by the Omicron variant of the COVID-19 virus. At that time, Flow Health’s test positivity rate for Los Angeles County was approximately 11%.” Id., ¶ 5.
Therefore, “[o]n or about January 27, 2022, Flow Health tested at least 94 of the samples after retrieving them from First Bio and resulted a 20% positivity rate which further confirms that there was either a significant problem(s) with First Bio’s testing procedures or First Bio did not perform the tests.” Id., ¶ 11.
These facts are reiterated in Teketay’s declaration.
Given that either: a) the specimens were stale and Plaintiff may have had a duty not to test (and charge for testing) stale specimens; and/or b) something was seriously flawed in Plaintiff’s test results, it does not appear Plaintiff can establish a probability of prevailing on the claim for breach of contract.
Furthermore, a challenge to the amount sought by Plaintiff has been made because Defendant filed a cross-complaint based on an attachable claim against plaintiff. Cal. Code Civ. Proc. § 483.015(b).
RJN is DENIED as the Court notes that the document was derived from “The Wayback Machine” and not an actual historical record of COVID positive results provided by the State of California on the date referenced therein.
Objections filed Aug. 7, 2023, ROA 66 and 67, are OVERRULED, save for ¶ 8 of the Meshkin Declaration, which is sustained.
Objection filed Aug. 7, 2023, ROA 68, is sustained as to lack of foundation.
Defendant to give notice.