Judge: Elaine W. Mandel, Case: 24SMCV05296, Date: 2025-05-13 Tentative Ruling

Case Number: 24SMCV05296    Hearing Date: May 13, 2025    Dept: P

Tentative Ruling

10710 Chalon Road Reo v. Menlo, Case no. 24SMCV05296

Hearing date May 13, 2025

Plaintiff Chalon Road’s Application for Writ of Attachment

Defendant Menlo’s Notice of Exemption

Defendant Menlo’s Motion for Order Compelling Inspection of Property

Plaintiff 10710 Chalon Road Reo sues defendants Menlo, Siboni and Wizman for breach of contract arising from defendants’ alleged failure to repay a property development loan. Following a trustee sale of the property, plaintiff seeks to recover the remaining loan balance, $3,922,824.51 plus interest. Plaintiff alleges defendants removed custom appliances and garage door from the property prior to the trustee sale.

Menlo moved ex parte on 4/29/25 seeking to compel Siboni to produce the garage door for inspection. Plaintiff offered to credit the value of the door against defendants’ liabilities if it was returned in good order. The court denied the ex parte for lack of exigent circumstances and set a noticed hearing. See Min. Order 4/30/25.

Plaintiff applies for a writ of attachment against Menlo and Wizman for $4,469,381.01, representing the unpaid deficiency after the trustee sale, plus interest that accrued between the sale and May 13, 2025. Defendants oppose the applications.

Plaintiff’s Request for Judicial Notice

Plaintiff requests judicial notice of: (1) Construction Deed of Trust recorded 4/20/21, instrument no. 20210620975 (“DOT”); (2) Assignment assigning DOT from AXOS Bank to ARCPE 12, LLC recorded 1/9/23, instrument no. 20230014613 (“DOT Axos to ARCPE Assignment”); (3) Notice of Default recorded 5/5/23, instrument no. 20230294541 (“NOD”); (4) Notice of Trustee’s Sale recorded 7/5/24 in the Official Records Recorder’s Offices, Los Angeles County, California, instrument no. 20240439701 (“NOS”); (5) Assignment of Deed of Trust from ARCPE 12, LLC to Plaintiff (“DOT ACRPE to Chalon Assignment”) recorded 8/8/24; and (6) Trustee’s Deed Upon Sale recorded 8/8/24, instrument no. 20240532253 (“TDUS”).

Judicial notice os proper per Cal. Evid. Code §452(h). See Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1054-55. GRANTED.

Defendant Menlo’s Motion for Order Compelling Inspection of Property

Siboni, target of the motion, filed a Chapter 13 bankruptcy notice 2/27/25, which imposed an automatic stay on all proceedings involving Siboni. The motion is STAYED until Siboni’s bankruptcy proceedings conclude.

Plaintiff Chalon Road’s Applications for Writs of Attachment

A writ of an attachment may issue on a claim for money based on contract where the total amount owed is equal to or greater than $500, and the amount sought is “fixed or readily ascertainable” by reference to the contract. A writ of attachment may not issue against a claim secured by real property, and it may only issue against a natural person when the claim arises out of the conduct of a “trade, business, or profession.” Code Civ. Proc. §483.010. A writ of attachment will only issue if the court finds (1) the claim on which the writ is based is one upon which an attachment may be issued, (2) plaintiff established the probable validity of the underlying claim, (3) the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based, and (4) the amount to be secured by the attachment is greater than zero. Cal. Code Civ. Proc. §484.090.

The parties’ loan agreement is exh. A; the note on the loan is exh. B. Defendants executed a guaranty without exception 4/6/21. Decl. Olsen exh. C. The deficiency of $3,922,824.51, plus $546,556.50 in interest as of 5/13/25, is joint and severable against defendants and Siboni. Decl. Olsen exh. C, at para. 11(f). Plaintiff established the probable validity of the claim and proposes a $10,000 undertaking.

Plaintiff established the proposed writ would issue on claims arising from an express contract, the guaranty. Plaintiff has shown the writ is for a readily ascertainable amount. The claim is not secured by real property; it is for the unsecured guaranty on the remaining loan balance. See United Central Bank v. Superior Court (2009) 179 Cal.App.4th 212 (holding a claim on an unsecured guaranty is not secured by real property even if the underlying loan/promissory note is secured by real property). Plaintiff meets all requirements of Code Civ. Proc. §484.090.

Defendants argue they were not adequately represented by counsel, asserting “Menlo did not know he was potentially waiving most if not all California defenses to guarantors.” Opp. 2:11-12. This is unavailing; a party who signs a contract is presumed to have read it and understood its contents. Stewart v. Preston Pipeline Inc. (2005) 134 Cal.App.4th 1565, 1588–1589. Menlo admits signing the guarantee on defendants’ behalf. Decl. Menlo para. 3. Defendants are presumed to have read and understood their obligations under the guarantee.

Defendants argue Elite Investment Management Group, LLC, the entity in which all defendants were members, was an instrumentality indistinguishable from Menlo himself, so Menlo is entitled to the unwaivable anti-deficiency statute of Code Civ. Proc. §580d. However, defendants fail to offer evidence in support of this contention.

Further, Menlo declares Elite was formed 9 years prior to the underlying transaction and engaged in multiple other transactions. Decl. Menlo paras. 4-5. By Menlo’s own admission, Elite could not be a mere instrumentality to circumvent the anti-deficiency protections included in the loan, as its purpose was to engage in multiple real estate transactions as an operational entity representing all three defendants, and it was formed 9 years prior to the undertaking at issue here.

Defendants argue the hearing should be put over 60 days to wait for subpoena responses from Axos Bank. Defendants argue the bank possesses knowledge as to “[w]hat the bank knew when it consummated the loan.” Opp. 2:7. This is unavailing; defendants signed a guaranty without exception. Decl. Olsen exh. B. Defendants’ assertions that “the more and the better the bank should have known, the less plaintiff’s chance to prevail” is speculative and not a basis for a continuance. Opp. 2:15.

A writ of attachment shall issue against defendants in the amount of $4,469,381.01. Plaintiff is to post a $10,000 undertaking within 30 days.

Defendant Menlo’s Notice of Exemption

Defendant Menlo filed a claim of exemption from plaintiff’s proposed writ of attachment. A claim of exemption must describe the property which is exempt and specify the statute upon which the exemption is based. Code Civ. Proc. §484.070(c)(1), (2). Further, “[i]f the plaintiff files and serves a notice of opposition to the claim as provided in this section, the defendant has the burden of proving that the property is exempt from attachment.” Code Civ. Proc. §484.070(g). Plaintiff filed and served notice of opposition. Menlo has the burden of justifying each claimed exemption.

Menlo fails to identify with sufficient specificity any of claimed exemption. Menlo asserts an exemption for “$7,500.00 in equity in a motor vehicle under… §704.010” (Decl. Menlo para. 7), yet fails to identify the vehicle make, model, color, VIN or other information. Menlo asserts an exemption for “certain household furnishings, appliances, provisions, wearing apparel, and other personal effects” (Decl. Menlo para. 8), again without specificity. Each of Menlo’s claimed exemptions is boilerplate, insufficient to invoke protection. Menlo fails to proffer evidence to carry his burden in the face of plaintiff’s opposition.

Menlo’s claimed exemptions are DENIED.