Judge: Ashfaq G. Chowdhury, Case: 23GDCV01247, Date: 2023-12-01 Tentative Ruling
Case Number: 23GDCV01247 Hearing Date: December 1, 2023 Dept: E
Hearing Date: December 1, 2023
Case No: 23GDCV01247 Trial Date: Not yet set
Case Name: Byline Bank v.
Zart Art Printing, Inc., et al.
[TENTATIVE
RULING ON WRIT OF ATTACHMENT]
Moving Party: Plaintiff Byline Bank
Responding Party: None
Proof of service timely filed (CRC 317(b)):¿¿ Not
applicable
Correct Address (CCP §§ 1013, 1013(a)):¿¿¿¿Not applicable
16/+5
day¿lapse (CCP §1005):¿¿Not applicable ¿
RELIEF REQUESTED:
As to Defendant
Zart Art Printing, Inc., Plaintiff seeks an attachment of all corporate
property pursuant to Code of Civil Procedure § 487.010, subdivision (c).
As to the
individual defendant Vaheh Mansourian, Plaintiff seeks attachment of all of his
property that fall within the delineated types of property set forth in Code of
Civil Procedure section 487.010, subdivision (c).
BACKGROUND:
Plaintiff Byline Bank (“Plaintiff”) brings this action to
collect on a loan to Defendant Zart Art
Printing, Inc., guaranteed by Defendant Vaheh Mansourian, which Plaintiff
alleges is owing in the amount of $1,893,777.67.
Plaintiff filed its
Complaint on June 16, 2023, alleging causes of action against Defendant Zart
Art Printing, Inc. and DOES 1 to 14 for breach of contract, against Defendant
Vaheh Mansourian and DOES 15 to 30 for enforcement of guaranty, and against both
defendants and DOES 1 through 50 for account stated and open book account.
Plaintiff previously
applied for a writ of attachment ex parte. The Court granted it in part,
issuing a temporary restraining order. The Court continued the hearing on the
writ of attachment to December 1, 2023.
On November 17,
2023, Plaintiff filed a request for entry of default against the named
defendants.
Plaintiff’s
application is unopposed.
Tentative ruling: The Court is inclined to deny the application for
a writ of attachment.
ANALYSIS:
Legal Standard
Attachment
is a prejudgment remedy providing for the seizure of one or more of the
defendant’s assets to aid in the collection of a money demand pending the
outcome of the trial of the action. (See Whitehouse v. Six Corporation
(1995) 40 Cal.App.4th 527, 533.)
In 1972,
and in a 1977 comprehensive revision, the legislature enacted attachment
legislation (C.C.P. §481.010 et seq.) which meets the due process
requirements set forth in Randone v. Appellate Department (1971) 5
Cal.3d 536. (See Western Steel & Ship Repair v. RMI (1986)
176 Cal.App.3d 1108, 1115.) The attachment statutes are strictly construed. (Vershbow
v. Reiner (1991) 231 Cal.App.3d 879, 882.)
A writ
of attachment may be issued only in an action on a claim or claims for money,
each of which is based upon a contract, express or implied, where the total
amount of the claim or claims is a fixed or readily ascertainable amount not
less than five hundred dollars. (C.C.P. § 483.010(a).)
A claim
is “readily ascertainable” where the amount due may be clearly ascertained from
the contract and calculated by evidence; the fact that damages are unliquidated
is not determinative. (CIT Group/Equipment Financing, Inc. v. Super DVD,
Inc., (2004) 115 Cal.App.4th 537, 540-41 [attachment appropriate for claim
based on rent calculation for lease of commercial equipment].)
All
property within California of a corporation, association, or partnership is
subject to attachment if there is a method of levy for the property. (C.C.P. §§
487.010(a), (b).)
The notice
of the application and the application may be made on Judicial Council forms
(Optional Forms AT-105, 115).
The application
must be supported by an affidavit showing that the plaintiff on the facts
presented would be entitled to a judgment on the claim upon which the
attachment is based. (C.C.P. § 485.210, subd. (c)(1).) A proper
foundation must be established for declarations and affidavits showing the
declarant had personal knowledge of each
fact stated. (Generale Bank Nederland, N.V. v. Eyes of the
Beholder Ltd. (1998) 61 Cal.App.4th 1384, 1390.)
Ex parte applicants may not
rely on a verified complaint. (C.C.P. § 485.210, subd. (c)(1).)
Where
the defendant is a corporation, a general reference to “all corporate property
which is subject to attachment pursuant to subdivision (a) of Code of Civil
Procedure Section 487.010” is sufficient. (C.C.P. § 484.020(e).)
Where
the defendant is a partnership or other unincorporated association, a reference
to “all property of the partnership or other unincorporated association which
is subject to attachment pursuant to subdivision (b) of Code of Civil Procedure
Section 487.010” is sufficient. (C.C.P. § 484.020(e).)
A
specific description of property is not required for corporations and
partnerships as they generally have no exempt property. (Bank of America v.
Salinas Nissan, Inc. (1989) 207 Cal.App.3d 260, 268.)
A
defendant who opposes issuance of the order must file and serve a notice of
opposition and supporting affidavit as required by Code Civ. Proc. § 484.060
not later than five court days prior to the date set for hearing. (C.C.P. §
484.050(e).) The notice of opposition may be made on a Judicial Council form
(Optional Form AT-155). The plaintiff may file and serve a reply two court days
prior to the date set for the hearing. (C.C.P. § 484.060(c).)
The
court may issue a right to attach order (Optional Form AT-120) if the plaintiff
shows all of the following: (1) the claim on which the attachment is based is
one on which an attachment may be issued (C.C.P. § 484.090(a)(1)); (2) the
plaintiff has established the probable validity of the claim (C.C.P. §
484.090(a)(2)); (3) attachment is sought for no purpose other than the recovery
on the subject claim (C.C.P. § 484.090(a)(3); and (4) the amount to be secured
by the attachment is greater than zero (C.C.P. § 484.090(a)(4)).
A claim
has “probable validity” where it is more likely than not that the plaintiff
will recover on that claim. (C.C.P. § 481.190.)
In
determining this issue, the court must consider the relative merits of the
positions of the respective parties. (Kemp Bros. Construction, Inc. v. Titan
Electric Corp. (2007) 146 Cal.App.4th 1474, 1484.)
The
court does not determine whether the claim is actually valid; that
determination will be made at trial and is not affected by the decision on the
application for the order. (C.C.P. § 484.050(b).)
The
amount to be secured by the attachment is the sum of (1) the amount of the
defendant’s indebtedness claimed by the plaintiff, and (2) any additional
amount included by the court for estimate of costs and any allowable attorneys’
fees under Code Civ. Proc. § 482.110. (C.C.P. § 483.015(a); Goldstein v.
Barak Construction (2008) 164 Cal.App.4th 845, 852.)
This
amount must be reduced by the sum of (1) the amount of indebtedness that the
defendant has in a money judgment against plaintiff, (2) the amount claimed in
a cross-complaint or affirmative defense and shown would be subject to
attachment against the plaintiff, and (3) the value of any security interest
held by the plaintiff in the defendant’s property, together with the amount by
which the acts of the plaintiff (or a prior holder of the security interest)
have decreased that security interest’s value. C.C.P. § 483.015(b).
Discussion
Proof of Service
Parties appearing at the ex parte
hearing must serve the ex parte application on all other appearing parties at
the first reasonable opportunity. (Cal. Rules of Court, rule 3.162.) Absent
exceptional circumstances, no hearing may be conducted unless such service has
been made. (Ibid.)
The motion lacks any proof of service of the memorandum of
the application for the writ of attachment. (Cal.
Rules of Court, rules 3.1201, 3.162.)
Undertaking
Before issuing a writ of attachment, the plaintiff must
file an undertaking “to pay the defendant any amount the defendant may recover
for any wrongful attachment by the plaintiff in the action.” (C.C.P. §
489.210.) Under section 489.220, the amount of the undertaking will be
$10,000 absent an objection. The failure to post an undertaking prior to the
issuance of the writ of attachment renders the writ of attachment void ab
initio. (Vershbow v. Reiner (1991) 231 Cal.App.3d 879, 883.)
As
of this ruling, Plaintiff has not filed an undertaking.
Analysis
Plaintiff has submitted evidence
of the following facts, which are undisputed by Defendants as no opposition has
been filed to Plaintiff’s application.
Plaintiff’s claims are for the
recovery of money loaned and not repaid to Zart Art Printing, Inc. (Rasheed
Decl., ¶ 4, Ex. A.) Each claim against Defendants is based upon various loan
documents that constitute express contracts. (Rasheed Decl., ¶ 5, Ex. A.) The
total amount sought by Plaintiff, exclusive of costs, interest, and attorney’s
fees, is $1,893,777.67. (Rasheed Decl., ¶ 6, Ex. A.)
This agreement called for
Plaintiff to loan $2,000,000 to Defendant Zart Art Printing, Inc. to purchase
the assets of Optimal Business Solutions, LLC. (Ex. 1, Ex. A to Rasheed Decl.)
Defendant Zart Art Printing, Inc.
was to pay principal and interest payments of $22,204.10 every month, beginning
one month from the month of the date of the note. (Ibid.)
Defendant Vaheh Mansourian
guaranteed payment of all sums owing to Plaintiff. (Ex. A. to Rasheed Decl.)
If default occurred, Plaintiff
could collect all amounts owing from Defendant Zart Art Printing, Inc. and from
any guarantor. (Ex. 1, Ex. A to Rasheed Decl.)
Plaintiff seeks a right to attach
order in the amount of $1,893,777.67 against Defendants, calculated as:
1.
$1,893,777.67 for the
principal due under the loan agreement.
1. A Claim
Based on a Contract
Plaintiff’s claims against Defendants
are based on contractual obligations stemming from the loan agreement with Defendant
Zart Art Printing, Inc. and guarantee from Vaheh Mansourian. Thus, the Court finds Plaintiff raises claims based on
contracts. As set forth above, such claims are properly subject to attachment.
2. An Amount
Due That is Fixed and Readily Ascertainable
A claim is “readily ascertainable”
where the damages may be readily ascertained by reference to the contract and
the basis of the calculation appears to be reasonable and definite. (CIT
Group/Equipment Financing, Inc. v. Super DVD, Inc. (2004) 115 Cal.App.4th
537, 540-41.) The fact that the damages are unliquidated is not determinative.
(Id.) But the contract must furnish a standard by which the amount may
be ascertained and there must be a basis by which the damages can be determined
by proof. (Id.)
Plaintiff’s claims here concern
amounts purportedly due under contracts between the parties, and thus the Court
finds they satisfy the ascertainability element as they can be determined by
reference to those contracts, which expressly state the amount to be paid to
Plaintiff under their terms.
However, the Court finds
Plaintiff’s calculation of these damages lacking. Plaintiff seeks to attach $1,893,777.67,
but Plaintiff does not assert how it calculated this figure. Defendant Zart Art
Printing, Inc. was to pay principal and interest payments of $22,204.10 every
month, beginning one month from the month of the date of the note. (Ex. 1, Ex.
A to Rasheed Decl.) The date of the note is April 14, 2022. (Ibid.) There
is no basis by which the damages can be determined by proof.
Because the amount due is not
readily ascertainable, the Court will not adjudicate whether the claim on which the attachment
is based is one on which an attachment may be issued or if plaintiff has
established the probable validity of the claim.
Conclusion
The tentative ruling is that the application for writ of
attachment is DENIED against both defendants.