Judge: Edward B. Moreton, Jr., Case: 22SMCV00883, Date: 2022-10-14 Tentative Ruling

Case Number: 22SMCV00883    Hearing Date: October 14, 2022    Dept: 200

Superior Court of California

County of Los Angeles

Beverly Hills Courthouse | Department 200

Background

This is a breach of contract action between Erron Silverstein (Plaintiff) and Golden Phoenix Holdings LLC (Defendant).  Plaintiff alleges in the first amended complaint (FAC) that he loaned Defendant money under the terms of a promissory note and that Defendant defaulted on the loan.  The only stated cause of action is breach of contract, and the requested remedies are compensatory damages with interest, court costs, and attorney’s fees.

Plaintiff initially filed an Application for Right to Attach Order and Writ of Attachment (Application) but without proof of service.  The hearing on this issue was continued, and the Plaintiff has since filed the necessary proof of service for the summons, complaint, Application, supporting documents, notice of hearing, and minute order.

Attachment Legal Standard

“Upon the filing of the complaint or at any time thereafter, the plaintiff may apply pursuant to [Code of Civ. Proc. section 484.010] 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] shall 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 issue a right to attach order if the Court 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 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.)  In determining the probable validity of a claim where the defendant makes an appearance, the court must consider the relative merits of the positions of the respective parties and make a determination of the probable outcome of the litigation.”  (See Loeb & Loeb v. Beverly Glen Music, Inc. (1985) 166 Cal.App.3d 1110, 1120.)

At the times prescribed by Code of Civ. Proc. section 1005(b), the defendant must be served with summons and complaint, notice of application and hearing, and the application and supporting evidence.  (CCP, § 484.040.) 

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

Analysis

Service

A writ of attachment may not issue unless Defendant has been properly served with the summons and complaint, and a notice of the application and hearing.  (CCP, § 484.040.)

On September 19, 2022, Plaintiff filed with the Court proof of service of the summons, complaint, civil case cover sheet, civil case cover sheet addendum, statement of location, Application, and supporting documents.  Therefore, Defendant was properly served.

Probable Validity of Plaintiff’s Claim

The Application is based on a claim for breach of contract.  To state a cause of action for breach of contract, Plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.”  (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)  If a breach of contract claim “is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.”  (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.)  In some circumstances, a plaintiff may also “plead the legal effect of the contract rather than its precise language.”  (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.)

Here, Plaintiff provided a copy of the Unsecured Promissory Note (UPN) between Plaintiff and agent of Defendant.  (FAC, Exh. 1.)  Plaintiff alleges that he loaned Defendant money pursuant to their agreement.  (FAC, ¶¶ 11, 15, 19.)  The UPN obligated Defendant to pay Plaintiff in full no later than January 25, 2022, which Plaintiff alleges Defendant never did.  (FAC, Exh. 1, ¶ 2(a).)  As a result of Defendant’s alleged breach, Plaintiff claims he is entitled to compensatory damages.  Therefore, Plaintiff’s claim is probably valid.

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).)

Plaintiff makes a claim for money against Defendant.  (FAC, Prayer for Relief, ¶ 1.)  The claim is based on Defendant’s alleged breach of an express contract.  (FAC, ¶¶ 39-43.)  The initial $80,000 of the loan were contained in an express contract, and the rest of the loan amount was part of an implied contract that followed the terms of the initial express contract.  (FAC, ¶¶ 13-15.)  The amount of the claim is readily ascertainable, as Plaintiff represents the loan amount and interest rate.  (FAC, ¶ 19.)  The amount, exclusive of costs, interest, and attorney’s fees is $144,500, which is greater than $500.  (FAC, Prayer for Relief, ¶ 1.)  Therefore, there is a valid basis for attachment.

Purpose and Amount of Attachment

Code of Civ. Proc. section 484.090 states that the court shall issue a right to attach order if “the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based . . . [and] the amount to be secured by the attachment is greater than zero.”

There is no indication Plaintiff seeks attachment for any purpose other than recovery on the breach of contract claim.  Plaintiff’s Application requests attachment in the amount of $237,452.40, which is greater than zero.  (Application, ¶ 8.)  Therefore, the purpose and amount of attachment are proper.

Subject Property and Exemptions

Code of Civ. Proc. section 487.010(a) provides that “[w]here the defendant is a corporation, all corporate property for which a method of levy is provided” is subject to attachment.  “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 Application represents Plaintiff believes that the money sought to be attached is [a]ny property of a defendant who is not a natural person[,]” which is permitted by Code of Civ. Proc. section 487.010(a).  (Application, ¶ 9.)  Defendant does not claim an exemption.  Therefore, the money is subject to attachment and no exemptions apply.

Reduction of Amount to Be Secured

Code of Civ. Proc. section 483.015(b) provides that the amount to be secured by the attachment shall be reduced by, inter alia: (2) The amount of any indebtedness of the plaintiff that the defendant has claimed in a cross-complaint filed in the action if the defendant’s claim is one upon which an attachment could be issued. (3) The amount of any claim of the defendant asserted as a defense in the answer pursuant to section 431.70 if the defendant’s claim is one upon which an attachment could be issued had an action been brought on the claim when it was not barred by the statute of limitations.

Neither of the grounds for reduction of the amount to be secured apply because Defendant neither filed a cross-complaint nor asserted such claim in an answer.  Therefore, there is no reduction in the amount to be secured.

Undertaking

Code of Civ. Proc. section 489.210 requires the plaintiff to file an undertaking before issuance of a writ of attachment.  Code of Civ. Proc. section 489.220 provides, with exceptions, for an undertaking in the amount of $10,000.

Plaintiff filed an undertaking on June 27, 2022 in the amount of $10,000.  (Undertaking, p. 1.)  Therefore, the filed undertaking is adequate under Code of Civ. Proc. section 489.210.

Conclusion

For the foregoing reasons, the Court will GRANT the application for right to attach order and writ of attachment.

Dated: October 14, 2022

__________________________________________

Edward B. Moreton, Jr.

Judge of the Superior Court