Judge: Curtis A. Kin, Case: 23STCV20098, Date: 2023-12-19 Tentative Ruling
Case Number: 23STCV20098 Hearing Date: December 19, 2023 Dept: 82
APPLICATION FOR RIGHT TO ATTACH ORDER
Date: 12/19/23
(9:30 AM)
Case: Peter S. Nam v. Jamie
Kim et al. (23STCV20098)
Plaintiff Peter Nam’s application for right to attach order
with respect to defendant Jamie Kim is GRANTED IN PART.
The Court finds: (1)
the claim is one upon which attachment may be issued; (2) plaintiff has
established the probable validity of the claim; (3) attachment is not sought
for any purpose other than recovery on the claim; and (4) the amount to be attached
is greater than zero.
Plaintiff Peter S. Nam moves for right to attach order
against defendant Jamie Kim in the amount of $521,250. Plaintiff’s claim
against defendant Kim is for amounts that defendant owes under two written
promissory notes – (1) a promissory note executed on October 5, 2016 for
$900,000 (“2016 Note”) and (2) a promissory note executed on August 23, 2019
for $300,000 (“2019 Note”)—as well as an oral agreement for a $50,000 loan.
(Nam Decl. ¶¶ 2-4 & Exs. A, B.)
Defendant failed to pay amounts due under the agreements,
purportedly totaling $521,250. (Nam Decl. ¶¶ 7 [$125,000 for 2016 Note], 10
[$346,250 for 2019 Note], 13 [$50,000 for oral agreement].)
The 2016 Note and 2019 Note define default to include a
failure to make any principal or interest when due. (Nam Decl. ¶¶ 2, 3 &
Exs. A [page 2], B [§ 6.A].) The 2016 Note has a maturity date of May 31, 2021.
(Nam Decl. ¶ 2 & Ex. B at § 1.E.) The 2019 Note has a maturity date of
August 23, 2022, three years from the execution of the note. (Nam Decl. ¶ 3
& Ex. A at 2.) The 2019 Note also has monthly interest of $1,250. (Nam
Decl. ¶ 3 & Ex. A at 1.) The oral loan was due on demand. (Nam Decl. ¶ 4.)
2016 Note
With respect to the 2016 Note, a principal balance of
$100,000 still remains as of October 2023.
(Nam Decl. ¶ 7.) Plaintiff also claims
accrued interest through October 2023 in the amount of $25,000. (Nam Decl. ¶
7.) Based on a principal balance of $100,000 and a default interest rate of
10%, the post-default daily interest is $27.40 ($100,000 x 0.10 ÷ 365 days =
$27.40). (Nam Decl. ¶ 7 & Ex. B [§ 1.D].) Based on the period from June 1,
2021 (the day after the maturity date on the 2016 Note) to October 31, 2023
(the last day of October 2023), a total of 883 days, the correctly calculated amount
of accrued interest is $24,194.20 ($27.40 x 883 days). In connection with the 2016
Note, plaintiff may attach $124,194.20 ($100,000.00 principal + $24,194.20
interest).
Defendant contends that the amount of plaintiff’s claim is
not readily ascertainable. (CCP § 483.010(a).) With respect to the 2016
Note, defendant asserts the need for an accounting because she states that she paid
off “most if not all of this loan.” (Kim Decl. ¶ 2.) However, defendant
provided no specific information concerning the amount of payments she made to
satisfy the loan. By contrast, plaintiff specifically avers that a principal
balance of $100,000 remains. (Nam Decl. ¶ 7.) On this record, the Court finds
that plaintiff has sufficiently shown a right to attachment that incorporates
the claimed $100,000 principal balance owed on the 2016 Note.
2019 Note
With respect to the 2019 Note, plaintiff claims the entire
principal balance of $300,000 remains unpaid.
(Nam Decl. ¶ 8.) In addition,
plaintiff claims accrued interest through October 2023 in the amount of
$46,250.00, consisting of nine months of monthly interest during the term of
the note ($11,250) and post-default accrued interest ($35,000) (Nam Decl. ¶¶ 8,
9). Defendant did not pay 9 months of $1,250 monthly interest, totaling
$11,250.00. (Nam Decl. ¶ 8.) Plaintiff also claims $35,000 in interest after
default from August 2022 to October 2023. (Nam Decl. ¶ 9.) Based on a remaining
principal balance of $300,000 and a default interest rate of 10%, the post-default,
daily interest is $82.19 ($300,000 x 0.10 ÷ 365 days = $82.19). (Nam Decl. ¶ 10
& Ex. A at 1, 4 [default interest rate is 5% Note Rate + 5%].) Based on the
period from August 24, 2022 (the day after the maturity date on the 2019 Note)
to October 31, 2023 (the last day of October 2023), a total of 434 days, the
total post-default accrued interest is $35,670.46. Because the amount of
default interest to which plaintiff is entitled exceeds the amount of requested
default interest, the Court will allow attachment in the full amount of $346,250
requested by plaintiff ($300,000 principal + $11,250 monthly interest + $35,000
post-default interest).
With respect to the 2019 Note, defendant asserts that she
made a “substantial number of payments on this loan” and asserts the need for
an accounting. (Kim Decl. ¶ 3.) Just as is the case with the 2016 Note,
defendant’s assertion that she made a substantial number of payments toward the
2019 Notie is too vague and insufficient for this Court to conclude the amount
owed on the 2019 Note is not readily ascertainable. Given defendant’s failure
to produce any evidence of any payments she made on the 2019 Note, the Court
credits plaintiff’s assertion that a principal balance of $300,000 remains.
(Nam Decl. ¶ 10.)
Oral Agreement
With respect to the oral agreement, plaintiff claims the
principal sum of $50,000. (Nam Decl. ¶ 13.)
Defendant contends that she never borrowed $50,000 from
plaintiff. (Kim Decl. ¶ 4.) Instead, according to defendant, plaintiff
purportedly gave defendant $50,000 to pay off the remaining balance on a line
of credit from Wells Fargo. (Ibid.) In the reply, plaintiff provides a
copy of a check, dated July 16, 2019, for $50,000, with a note in the memo
stating “Loan to Intraco.” (Nam Reply Decl. ¶ 11 & Ex. B.) Notably,
however, that check is made payable to “INTRACO, INC.,” which contradicts plaintiff’s
contention that the purported loan was to defendant Jamie Kim. “Ordinarily a
corporation is considered a separate legal entity, distinct from its
stockholders, officers and directors, with separate and distinct liabilities
and obligations.” (Curci Investments, LLC v. Baldwin (2017) 14
Cal.App.5th 214, 220.) Accordingly, the Court does not find that plaintiff is
entitled to include in its request for attachment as to defendant Jamie Kim the
$50,000 from the alleged oral agreement to pay.
Payment of Loans Through Sale of Inventory
Defendant argues that plaintiff accepted goods as payment
for the loans. (Kim Decl. ¶ 5.) The book value of the goods was purportedly
$1,803,276.74, and the retail value of the goods was purportedly $4,431,232.52.
(Ibid.) Plaintiff explains in reply that he provided the $900,000 loan
in 2016 and the $300,000 loan in 2019 in connection with defendant’s purchase
of Intraco, Inc. (“Intraco”) from plaintiff. (Nam Reply Decl. ¶ 2; see also Kim
Decl. ¶ 2.) Intraco guaranteed the loans using its personal property, including
inventory, as collateral. (Ibid.) Intraco also leased a warehouse from
plaintiff to operate its business. (Ibid.)
By August 2022, defendant defaulted on the loans from
plaintiff. (Nam Reply Decl. ¶ 3; see also Kim Decl. ¶ 5 [admitting
default on loans in October 2022].) On October 31, 2022, Intraco vacated the
warehouse and abandoned its inventory of hats at the premises. (Id. ¶ 6;
see also Kim Decl. ¶ 5.)
Pursuant to Commercial Code § 9615, plaintiff, as a secured
party, may apply the cash proceeds from disposition of collateral first to the
“reasonable expenses of retaking, holding, preparing for disposition,
processing, and disposing, and, to the extent provided for by agreement and not
prohibited by law, reasonable attorney’s fees and legal expenses incurred by
the secured party.” (Comm. Code § 9615(a)(1).) Then the proceeds can be applied
to the “satisfaction of obligations secured by the security interest…under
which the disposition is made.” (Id. § 9615(a)(2).)
Plaintiff sold the inventory for $127,048.34. (Nam Reply
Decl. ¶ 9.) Plaintiff contends that the proceeds were applied first to
$36,096.12 in expenses incurred to sell the inventory and $90,000 in storage
costs, based on 3 months of storage from November 2022 to January 2023 at
$30,000 for each month. (Id. ¶¶ 9, 10.) Plaintiff contends that the
balance of the sale proceeds in the amount of $952.22 was applied to unpaid
rent for the warehouse. (Id. ¶ 10.)
Plaintiff does not provide any evidentiary support for the
purported $36,096.12 in expenses, including any documentation or a description
of the expenses. Further, plaintiff does not provide any documentation for the
$90,000 in purported storage costs. Indeed, on its face, $30,000 in monthly
storage costs seems excessive. Lastly, with respect to the balance of sale
proceeds in the amount of $952.22, plaintiff states such proceeds were applied
to an unpaid rent obligation of $85,000, even though the proceeds were
generated from property supposedly pledged to secure the obligations on the
Notes. (Nam Reply Decl. ¶¶ 2,
10.) Plaintiff does not explain how or
why the balance of the sales proceeds could or should have been applied to the
unpaid rent.
Because plaintiff does not adequately justify how he is
permitted to apply the sales proceeds in the way that he did, the Court reduces
the amount of attachment by the total amount of sales proceeds, namely, $127,048.34.
Property Subject to Attachment
Defendant contends plaintiff does not adequately identify
the property subject to attachment. Defendant is a natural person. “Where 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—any real property, accounts receivable, chattel paper,
general intangibles, equipment, farm products, inventory, final money
judgments, money, negotiable documents of title, instruments, securities, and
minerals or the like to be extracted—are reasonably adequate and limited to
property in which defendant has an interest.
Claim of Exemption
With regard to the right to attach order, defendant seeks an
exemption of her primary residence and earnings. (Kim Decl. ¶ 8.) Under CCP §
487.020, cited by defendant, “earnings” as defined in CCP § 706.011 are exempt
from attachment. (See CCP § 487.020(c), § 706.011(b) [“earnings”
defined as “compensation payable by an employer to an employee for personal
services performed by such employee, whether denominated as wages, salary,
commission, bonus, or otherwise”].) Plaintiff does not raise any meaningful argument
concerning whether defendant’s earnings are exempt from attachment. The right
to attach order will reflect that defendant’s earnings, as defined in CCP §
706.011 are exempt from attachment.
With respect to the
primary residence, defendant did not specify the statute that exempts a primary
residence from attachment, as required by CCP § 484.070(c)(2). Plaintiff
opposed defendant’s claim of exemption as to her primary residence. (Reply at
4:1-8.) Defendant thus has the burden of proving that the property is exempt
from attachment. (CCP § 484.070(g).)
CCP § 487.025
provides for attachment of a homestead “in the amount of any surplus over the
total of the following: [¶] (1) All liens and encumbrances on the homestead at
the time the attachment lien is created. [¶] (2) The homestead exemption set
forth in Section 704.730.” (CCP § 487.025(b).) However, not only does defendant
fail to cite this code provision, but defendant also fails to provide any
information concerning the liens and encumbrances on her residence, as well as
evidence of the amount of the homestead exemption pursuant to CCP § 704.730. (See CCP § 704.730(a) [“The amount of the homestead exemption is the greater
of the following: [¶] (1) The countywide median sale price for a single-family
home in the calendar year prior to the calendar year in which the judgment
debtor claims the exemption, not to exceed six hundred thousand dollars
($600,000). [¶] (2) Three hundred thousand dollars ($300,000)”].) Accordingly,
the Court cannot calculate the extent to which defendant’s primary residence is
exempt from attachment. Defendant fails to meet her burden to establish that
her primary residence is exempt from attachment.
Conclusion
The application is GRANTED IN PART in the amount of $343,395.86.
($124,194.20 for 2016 Note + $346,250.00 for 2019 Note - $127,048.34 sale of
inventory).
Writ will issue upon the posting of bond in the amount of $10,000.
(CCP §489.220.)