Judge: Curtis A. Kin, Case: 22STCV34350, Date: 2023-10-03 Tentative Ruling

Case Number: 22STCV34350    Hearing Date: October 3, 2023    Dept: 82

Plaintiffs Waters, LLC and Waters & Russ, LLC move for a right to attach order against defendants Yoon Hee Yeh (aka Charles Y. Yeh) and Kyeung Suk Yeh (aka Christine K. Yeh), as personal guarantors of a lease agreement.

I.       Factual Background

            Plaintiffs are successors-in-interest to the lessors under a Lease Agreement, dated May 26, 1999, which provided for the lease of real property located at 100 South Western Avenue in Los Angeles. (Lewis Decl. ¶¶ 2-4 & Ex. A.) On September 20, 2013, plaintiffs consented to the assignment of lease of the subject property to Hyundae Car Wash, Inc. (“Hyundae”) (Lewis Decl. ¶ 5 & Ex. B.) The assignment was subject to the execution of a Personal Guaranty by defendants Yoon Hee Yeh (aka Charles Y. Yeh) and Kyeung Suk Yeh (aka Christine K. Yeh). (Lewis Decl. ¶¶ 6, 7 & Ex. C.) Plaintiffs and Hyundae, by and through defendants, executed an Amendment to Lease, whereby the term of the Lease Agreement and the Personal Guaranty was extended to November 30, 2025. (Lewis Decl. ¶ 8 & Ex. D.)

            Hyundai has failed to make payments due under the Lease, including past due rent, real property taxes, and insurance. As of the date of the October 3, 2023 hearing, plaintiffs contend that $602,221.19 is owed. (Lewis Decl. ¶¶ 9, 11; Supp. Lewis Decl. ¶¶ 6, 8 & Ex. A.)  Plaintiffs seek to enforce the Personal Guaranty against defendants.

II.      Applicable Law

            “Upon the filing of the complaint or at any time thereafter, the plaintiff may apply pursuant to this article for a right to attach order and a writ of attachment by filing an application for the order and writ with the court in which the action is brought.” (CCP § 484.010.)

The application shall be executed under oath and must include: (1) a statement showing that the attachment is sought to secure the recovery on a claim upon which an attachment may be issued; (2) a statement of the amount to be secured by the attachment; (3) a statement that the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based; (4) a statement that the applicant has no information or belief that the claim is discharged or that the prosecution of the action is stayed in a proceeding under the Bankruptcy Act (11 U.S.C. section 101 et seq.); and (5) a description of the property to be attached under the writ of attachment and a statement that the plaintiff is informed and believes that such property is subject to attachment. (CCP § 484.020.)

            The application for a writ of attachment 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.” (CCP § 484.030.)

The Court shall consider the showing made by the parties, as well as the pleadings and other papers in the record. (CCP § 484.090(a), (d).) The Court shall issue a right to attach order if it finds all of the following:

(1) The claim upon which the attachment is based is one upon which an attachment may be issued.

(2) The plaintiff has established the probable validity of the claim upon which the attachment is based.

(3) The attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based.

(4) The amount to be secured by the attachment is greater than zero.

(CCP § 484.090(a)(1-4).)

            At the times prescribed by CCP § 1005(b), the defendant must be served with a copy of the summons and complaint, notice of application and hearing, and a copy of the application and supporting affidavits. (CCP § 484.040.)

“The Attachment Law statutes are subject to strict construction….” (Epstein v. Abrams (1997) 57 Cal.App.4th 1159, 1168.)

III.     Analysis

A.   Notice

The proofs of service attached to the moving papers indicates that service was timely. Defendants filed an opposition.

The Court notes that, subsequent to the filing of the opposition, defense counsel withdrew from the representation of defendants, pursuant to motions to be relieved as counsel granted on August 10, 2023. (8/10/23 Minute Order.) The Notice of Continuance of the hearing on the instant application to October 3, 2023 was served on former defense counsel prior to the granting of counsel’s motions to be relieved. (See Proof of Service attached to Notice of Continuance filed on 8/2/23.) Accordingly, defendants through counsel were provided notice of the hearing date on the instant application.

B.   Basis of Attachment

“[A]n 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 ($500) exclusive of costs, interest, and attorney’s fees.”  (CCP § 483.010(a).)  “An attachment may not be issued on a claim which is secured by any interest in real property arising from agreement ….”  (CCP § 483.010(b).) 

            The amount sought to be attached is based on a written Personal Guaranty, whereby defendants guaranteed the performance of Hyundae under the Lease Agreement. (Lewis Decl. ¶ 6 & Ex. C.) Defendants do not dispute that the monthly rent due under the Lease Agreement is $20,452 and the monthly impound payment for property tax and insurance is $4,495. (See Lewis Decl. ¶ 4 & Ex. A at ¶¶ 3 [rent], 10 [“As additional rent. Lessee agrees to pay to Lessor, or such persons as may be designated by Lessor, promptly as the same become due and payable. all current city, county and other taxes and general and special assessments levied upon or assessed against the Premises….”], 16(a) [“Lessee shall pay any and all premiums or other expenses arising in connection with the furnishing of the insurance by Lessee to Lessor as herein provided”].)

C.   Probable Validity of Plaintiff’s Claims

“A claim has ‘probable validity’ where it is more likely than not that the plaintiff will obtain a judgment against the defendant on that claim.” (CCP § 481.190.) “If the defendant opposes the application, ‘the court must then consider the relative merits of the positions of the respective parties and make a determination of the probable outcome of the litigation.’ [Citations.]” (Pech v. Morgan (2021) 61 Cal.App.5th 841, 855.)

Defendants contend that the documents attached to the declaration of Robert E. Lewis, plaintiffs’ counsel, are ambiguous. However, defendants do not explain how the documents are ambiguous. Based on the Court’s review of the Lease Agreement, as well as the subsequently executed Assignment of Lease and Personal Guaranty, defendants are obligated to pay rent, property taxes, and insurance to plaintiffs. (Lewis Decl. ¶ 4 & Ex. A at ¶¶ 3, 10, 16(a); ¶ 5 & Ex. B at ¶ 1(a) [assignment of lease to Hyundae subject to execution of Personal Guaranty by defendants]; ¶ 6 & Ex. C.)

Defendants also contend that the declaration of Lewis fails to meet the “particularity” requirements under CCP § 484.020. CCP § 484.020 does not use the word “particular” or “particularity.” CCP § 484.020 sets forth the required statements in an application for right to attach order. As stated herein, plaintiffs provide all the statements required under CCP § 484.020.

            Accordingly, plaintiffs demonstrate the probable validity of its claim for breach of contract against defendants.

D.   Purpose and Amount of Attachment

The other required findings under CCP § 484.090 are that the “attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based” and that the “amount to be secured by the attachment is greater than zero.” (CCP § 484.090(a)(3), (a)(4).)

Plaintiffs declare that “[a]ttachment is not sought for a purpose other than the recovery on a claim upon which the attachment is based.” (App. ¶ 4.)

Plaintiffs also demonstrate that the amount to be secured by the attachment is greater than zero. In the initial moving papers, plaintiffs represented at the time that the amount to be secured by the attachment is $558,278.19 (App. ¶ 8), but additionally provided evidence that the ongoing monthly rent due under the Lease Agreement is $20,452 and the monthly impound payment for property tax and insurance is $4,495. (Lewis Decl. ¶ 11.)

In connection with the reply, plaintiffs submitted an updated ledger indicating the $602,221.19 amount owed as of the date of the hearing. (Ex. A to Supp. Lewis Decl.) The updated ledger contains monthly debits for rent, tax, and insurance consistent with the moving papers and supporting evidence submitted with the moving papers. Thus, based on the representation in the moving papers concerning the amount of future rent, tax, and insurance, the $602,221.19 amount to be secured by the attachment was properly noticed.

Defendants contend that plaintiffs have received $222,000 in fire insurance proceeds which should be applied to the outstanding balance. (Chong Decl. ¶¶ 3, 4.) However, the ledger submitted by plaintiffs reflects that payments from Farmers Insurance have already been credited toward the total amount due.  (Ex. A to Supp. Lewis Decl. [e.g., 1/30/23 and 3/15/23 deposits].) Plaintiffs also explain that some of the fire insurance proceeds are being held for completing repairs to the subject property. (Supp. Lewis Decl. ¶¶ 10, 13.) Such withholding appears to be reasonable. Accordingly, based on the evidence before this Court, the application shall be granted in the amount of $602,221.19.

E.   Bankruptcy

CCP § 484.020(d) requires a “statement that the applicant has no information or belief that the claim is discharged in a proceeding under Title 11 of the United States Code (Bankruptcy) or that the prosecution of the action is stayed in a proceeding under Title 11 of the United States Code (Bankruptcy).” Plaintiffs provide this statement. (App. ¶ 4.)

F.   Property Subject to Attachment

CCP § 487.010(c) lists categories of property subject to attachment where the defendant is a natural person. Plaintiffs moves to attach defendant’s “real property, personal property, equipment, motor vehicles, chattel paper, negotiable instruments, securities, deposit accounts, safe deposit boxes, accounts receivable, general intangibles, property subject to pending actions, final money judgments, and personalty in estates of decedents.” (Att. 9(c) to App.)

Plaintiff seeks to attach property not expressly subject to attachment under CCP § 487.010(c), including vehicles, property in safe deposit boxes, and estates of a decedent in which defendants have an interest. Nevertheless, “[w]here the defendant is a natural person, the description of the property shall be reasonably adequate to permit the defendant to identify the specific property sought to be attached.” (CCP § 484.020(e).) “The requirement of specificity [under CCP § 484.020(e) does not] … prohibit a plaintiff from targeting for attachment everything an individual defendant owns [s]o long as the property descriptions are adequate.” (Bank of America v. Salinas Nissan, Inc. (1989) 207 Cal.App.3d 260, 268.) The categories of property listed in Attachment 9(c) to the application are reasonably adequate and limited to property in which defendants have an interest.

G.   Exemptions

Defendants contend that their property is exempt from attachment, such as property necessary to support defendants’ family and earnings. (Opp. at 6:3-7.) Any “claim of exemption shall be accompanied by an affidavit supporting any factual issues raised by the claim and points and authorities supporting any legal issues raised.” (CCP § 484.070(d).) Defendants do not submit any declaration describing what property is exempt from levy and the basis for the claim of exemption. Accordingly, the Court makes no restrictions on the property sought to be attached by plaintiffs.

H.  Undertaking

CCP § 489.210 requires the plaintiff to file an undertaking before issuance of a writ of attachment. CCP § 489.220 provides, with exceptions, for an undertaking in the amount of $10,000. While defendants request a “substantial undertaking bond,” defendants provide no justification for an undertaking in excess of $10,000. Accordingly, the Court orders the posting of a bond in the amount of $10,00, as set forth in CCP § 480.220(a).

IV.     Conclusion

            The application is GRANTED in the amount of $602,221.19. A writ of attachment shall issue upon plaintiffs Waters, LLC and Waters & Russ, LLC posting an undertaking in the amount of $10,000.00.