Judge: Curtis A. Kin, Case: 23STCV20240, Date: 2024-04-04 Tentative Ruling

Case Number: 23STCV20240    Hearing Date: April 4, 2024    Dept: 82

Plaintiff Shawn Matian moves for a right to attach order against defendant Daryoush Somekhian in the amount of $90,960.26.

I.       Factual Background

             Pursuant to a Convertible Promissory Note (“Note”) dated June 29, 2021, defendant Daryoush Somekhian promised to pay plaintiff Shawn Matian the principal sum of $100,000 and interest on an amortized five-year basis. (Matian Decl. ¶ 2 & Ex. A.) On or about July 15, 2022, the Note was amended (“Amended Note”), whereby defendant promised to pay plaintiff the remaining principal of $95,000 at 7% interest over five years. (Matian Decl. ¶ 3 & Ex. B.) The terms of the Note were otherwise unchanged. (Matian Decl. ¶ 3 & Ex. B.)

            Plaintiff alleges that defendant stopped making payments after July 2023. (Matian Decl. ¶ 4.) Through counsel, plaintiff sent a notice of default to defendant, wherein plaintiff declared $86,831.06 immediately due and payable under paragraphs 3 and 4 of the Note. (Matian Decl. ¶ 4 & Ex. C.) No payment was made. (Matian Decl. ¶ 4 & Ex. C.)

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

The amount sought to be attached is based on amounts due under a written Note and Amended Note executed by defendant. (Matian Decl. ¶¶ 2, 3 & Exs. A, B.)

            Defendant contends that the money loaned under the Note was for personal, family, or household purposes. “If the action is against a defendant who is a natural person, an attachment may be issued only on a claim which arises out of the conduct by the defendant of a trade, business, or profession. An attachment may not be issued on a claim against a defendant who is a natural person if…the money loaned was used by the defendant primarily for personal, family, or household purposes.” (CCP § 483.010(c).)

            Contrary to plaintiff’s assertion, the Note does not indicate that the loan was for the purpose of defendant’s dental business. (See Points and Authorities at 4:19-20.) The maker of the note was defendant Daryoush Somekhian, as an individual. (Matian Decl. ¶ 2 & Ex. A at 1.) The Note states: “Maker [defendant] is entering into this agreement as an individual, and not as an agent of Pair Dental, Inc. or any of its shareholders or affiliated entities.” (Matian Decl. Ex. A at ¶ 11.) Pair Dental, Inc. (“Pair”) is not a party to the Note. The Note provides that defendant may convert the Note into common stock of Pair Dental, Inc. as an alternative to paying any unpaid balance. (Matian Decl. Ex. A at ¶ 11.) However, the form of payment has no bearing on the purpose of funds loaned pursuant to the Note.

            Defendant maintains that the loan was used to purchase a home. In support of this contention, defendant provides text messages and emails between plaintiff and himself. The subject line of the emails is “NOTICE Default and Default of personal loan to purchase home by Somekhian’s.” (Somekhian Decl. ¶ 13 & Ex. 5.) In notifying defendant that he is in default, plaintiff admits that loan was for personal purposes.

In an email dated July 27, 2023, plaintiff wrote: “You lied to me to secure money in Pair, which is now also going BK [bankruptcy].” (Somekhian Decl. ¶ 13 & Ex. 5.) However, this is explained by the Amended Note, which states: “On or about January 9, 2020, Matian tendered $25,000 to Pair as part of a ‘Simple Agreement for Future Equity’ between Matian and Es Aitch Em, Inc.” (Matian Decl. ¶ 3 & Ex. B at 1.) Under the Amended Note, in exchange for not receiving ownership or equity in Pair, Pair agreed to pay $495.03 per month for 60 months. (Matian Decl. ¶ 3 & Ex. B at 1.)

The Amended Note also states: “Separately, on or about June 29, 2021, Matian made a loan to Daryoush Somekhian (‘Darius’) in the amount of $100,000 at an interest rate of 0.001% per annum pursuant to a promissory note (‘Note’).” (Matian Decl. ¶ 3 & Ex. B at 1.) With respect to that separate loan, the Amended Note modified the interest rate to 7 percent, and defendant agreed to pay $1,881.11 per month for 60 months. (Matian Decl. ¶ 3 & Ex. B at 1, 5.)

The Amended Note confirms that the funds loaned to defendant were under a separate agreement from the funds loaned to Pair. Accordingly, the purpose of the funds loaned to defendant was different than the purpose of the funds loaned to Pair.

Indeed, in the email dated July 27, 2023, plaintiff wrote: “You live under the roof that I helped provide for you….”  (Somekhian Decl. ¶ 13 & Ex. 5.) Similarly, on July 25, 2023, plaintiff told defendant through text message: “Ur such a jerk, you live under the roof that I helped you get.” (Somekhian Decl. ¶ 12 & Ex. 4.) Such communications by plaintiff clearly indicate that the money loaned to defendant was primarily for personal, family, or household purposes.

            Under CCP § 483.010(c), an attachment may not be issued. Accordingly, the Court does not address whether certain real properties may be attached or whether the subject loan is a consumer loan on which plaintiff cannot collect.

IV.     Conclusion

            The application is DENIED.