Judge Curtis A. Kin, Case Number: 22STCV40309, Date: 2023-08-10 Tentative Ruling

Judge: Curtis A. Kin, Case: 22STCV40309, Date: 2023-08-10 Tentative Ruling

Case Number: 22STCV40309 Hearing Date: February 15, 2024 Dept: 82

APPLICATIONS (2) FOR

RIGHT TO ATTACH ORDERS

Date: 2/15/24 (1:30 PM)

Case: Eastwood International Logistics, (Shanghai) Co., Ltd Lianyungang Branch et al. v. DB Shipping (USA), Inc. (22STCV40309)

TENTATIVE RULING:

Plaintiff Eastwood International Logistics, (Shanghai) Co., Ltd Lianyungang Branch’s Application for Right to Attach Order is GRANTED.

Plaintiff Shanghai Yuda Logistics Co. Ltd.’s Application for Right to Attach Order is GRANTED.

As a preliminary matter, defendant DB Shipping (USA), Inc.’s oppositions were served and filed on February 5, 2024. Defendant had until February 7, 2024 – five court days before the hearing – to file the opposition. (CCP § 484.060(a).) Accordingly, the oppositions were not untimely filed, as defendant mistakenly asserts in the opposition. The Court considers the oppositions.

Plaintiffs’ evidentiary objections are OVERRULED.

Plaintiffs Eastwood International Logistics, (Shanghai) Co., Ltd Lianyungang Branch (“Eastwood”) and Shanghai Yuda Logistics Co. Ltd. (“Shanghai Yuda”) move for amended right to attach orders.

On August 10, 2023, the Court granted plaintiffs’ applications for right to attach orders. As pertinent to the instant applications, the Court found that plaintiffs’ claims for payment against defendant DB Shipping (USA), Inc. were based upon a contract and were for a fixed or readily ascertainable amount. (Rao Decls. ¶ 2 & Ex. A at 3-4. 6-7.) The Court found that defendant, through Liu Hong aka Gerry Hong, entered into settlement agreements with plaintiffs, whereby defendant agreed to pay $551,348.27 to Eastwood and $205,878.99 to Shanghai Yuda. (Ibid.)

In the right to attach orders, the Court ordered defendant DB Shipping (USA), Inc. to transfer to the levying officer “all funds in bank accounts under the name DB SHIPPING USA, INC. in EAST WEST BANK (80206329).” (Rao Decls. ¶ 2 & Ex. A.) On September 14, 2023, the Court issued writs of attachment pursuant to the right to attach orders. (Rao Decls. ¶ 3 & Ex. B.) On October 10, 2023, a levying officer from the Los Angeles County Sheriff’s Department served the writs on East West Bank. (Rao Decls. ¶ 6.) On October 16, 2023, East West Bank indicated to the levying officer that the account specified in the writs of attachment was closed. (Rao Decls. ¶ 6 & Ex. E.)

On January 9, 2023, prior to the hearing on the applications for right to attach orders, East West Bank filed a Complaint in Interpleader in East West Bank v. DB Shipping (USA) Inc., LASC Case No. 23AHCV00054 (“Interpleader Action”), where DB Shipping (USA) Inc. and Hong were named as defendants. (Rao Decls. ¶ 11 & Ex. I.) On June 14, 2023, East West Bank closed the account that was the subject of the right to attach orders and the writs of attachment. (Rao Decls. ¶ 8 & Ex. 2 to Ex. G [6/14/23 billing entry].) On December 12, 2023, as part of the Interpleader Action, East West Bank deposited $569,433.81 with the Court. (Rao Decls. ¶ 10.)

Plaintiffs now seek amended right to attach orders based on the Interpleader Action. In the proposed right to attach orders, plaintiffs seek to have defendant transfer to the levying officer possession of the following:

(a) All assets belonging to DB Shipping (USA), Inc., including but not limited to: all banking, checking, savings, investment, brokerage, or other types of accounts held at any financial institution, including but not limited to East West Bank;

(b) all inventory, accounts receivable, chattel paper, equipment, furniture, vehicles, or any other items owned or belonging to DB Shipping (USA), Inc. located at any physical address;

(c) DB Shipping (USA), Inc.’s cause of action that is the subject of a separate action: East West Bank v. DB Shipping (USA), Inc. et al., case no. 23AHCV00054, before Department 20 of the Superior Court of California for the County of Los Angeles, located at 111 North Hill Street, Los Angeles, CA 90012; and

(d) DB Shipping (USA), Inc.’s rights to money or property under a judgment procured in a separate action: East West Bank v. DB Shipping (USA), Inc. et al., case no. 23AHCV00054, before Department 20 of the Superior Court of California for the County of Los Angeles, located at 111 North Hill Street, Los Angeles, CA 90012.

(1/17/24 Proposed Right to Attach Orders, Attachment 1.)

With respect to (a) and (b), CCP § 487.010(a) states that, where the defendant is a corporation, all corporate property for which a method of levy is provided in CCP § 488.300 et seq. is subject to attachment. Plaintiffs may attach any property of defendant, a corporation.

With respect to (c), when the defendant is a party to a pending action, CCP § 491.410(a)(1) allows plaintiffs to attach “[a]ny cause of action of the defendant for money or property that is the subject of the other action or proceeding, if the money or property would be subject to attachment if the defendant prevails in the action or proceedings.” (CCP § 491.410(a)(1).) Here, plaintiffs have not provided any evidence that defendant DB Shipping (USA), Inc. has asserted any claim to the interpleaded funds in case no. 23AHCV00054. However, in the Complaint in Interpleader from that action, which plaintiffs have submitted, DB Shipping (USA), Inc. is named among the defendants who are alleged to have “adverse and conflicting claims regarding the funds” at issue. (Rao Decls. ¶ 11 & Ex. 1 at ¶ 26.) Insofar as defendant DB Shipping (USA), Inc. asserta a claim to the interplead funds in the action, attachment may be had pursuant to CCP § 491.410(a)(1).

With respect to (d), when the defendant is a party to a pending action, CCP § 491.410(a)(2) allows plaintiffs to attach the “rights of the defendant to money or property under any judgment subsequently procured in the other action or proceeding, if the money or property would be subject to attachment.” (CCP § 491.410(a)(2).) Defendant is a party in the Interpleader Action. (Rao Decls. ¶ 11 & Ex. I.) Pursuant to CCP § 491.410(a)(2) and CCP § 487.010(a), plaintiffs may attach any right to money that defendant obtains in the Interpleader Action.

In the oppositions, defendant contends that Hong, its former officer and manager, and Liang, managing director of Eastwood, conspired to fabricate the settlement agreements. (Wang Decls. ¶ 15.) Attorney Bin Li, who represents plaintiffs herein, also purportedly represented Hong and/or DB Shipping, had plaintiffs and Hong waive a potential conflict of interest arising from the joint representation, and had them agree to pay a portion of the proceeds collected from defendant to attorney Li as attorney fees. (Wang Decls. ¶¶ 9-11.)

First, no Exhibit A containing a Waiver of Potential Conflict of Interest nor separate Client Acceptance of Potential Conflict of Interest were attached to the declarations in support of the oppositions. (See Wang Decls. ¶ 9.) Second, even crediting defendant’s assertions, defendant does not explain or provide any legal authority indicating how the purported waiver of conflict of interest between plaintiffs and Hong invalidates the settlement agreements. Arguments without any legal authority are without merit. (Kensington University v. Council for Private Postsecondary etc. Education (1997) 54 Cal.App.4th 27, 42-43.)

Defendant's owner and sole director, Ren Chang Wang, declares that he and Hong entered into a Cooperation Agreement that stated that “Hong was to be the sole cooperation partner and person-in-charge of the DB Shipping branch office and would be responsible for the day-to-day operation and management of the office.” (Wang Decls. ¶ 3.) In so declaring, Wang concedes that he authorized Hong to enter into transactions in the daily operation of DB Shipping's Alhambra office. (See Civ. Code § 2316 [“Actual authority is such as a principal intentionally confers upon the agent, or intentionally, or by want of ordinary care, allows the agent to believe himself to possess”].) Hong’s execution of the Settlement Agreement, as well as any waiver of conflict of interest in the pursuit of debt resolution, appears to be within the scope of daily operation and management of defendant’s branch office as well.

Wang’s claim that Hong purportedly embezzled funds from defendant or had no authority to enter into any settlement agreements may provide a basis for defendant to seek indemnification from Hong. (Wang Decls. ¶¶ 7, 8, 13.) However, such embezzlement or agreement to settle does not negate the validity of DB Shipping's underlying debt to Eastwood.

For the reasons stated in the August 10, 2023 rulings on plaintiffs’ prior applications for right to attached orders, as well as in the ruling herein, the applications are GRANTED.

Plaintiff Eastwood's application for writ of attachment is GRANTED in the amount of $551,348.27. Eastwood shall post an undertaking in the amount of $10,000 before any writ shall issue. Plaintiff Shanghai Yuda's application for writ of attachment is GRANTED in the amount of $205,878.99. Shanghai Yuda shall post an undertaking in the amount of $10,000 before any writ shall issue.