Judge: Gary I. Micon, Case: 21CHCV00856, Date: 2024-01-18 Tentative Ruling

Case Number: 21CHCV00856    Hearing Date: January 18, 2024    Dept: F49

Dept. F-49

Date: 1-18-24

Case #21CHCV00856

Trial Date: 3-11-24

WRIT OF ATTACHMENT

MOVING PARTY: Plaintiff Mukhdir, LLC

RESPONDING PARTIES: Defendants Brittany Walsh, Matthew Walsh, and Carbon Fit Lab, LLC

RELIEF REQUESTED

Writ of Attachment

SUMMARY OF ACTION

On September 15, 2019, Plaintiff Mukhdir, LLC (Plaintiff) entered into a commercial lease with Defendant Carbon Fit Lab, LLC (Carbon Fit). Individual Defendants Matthew Walsh and Brittany Walsh (collectively Defendants) served as guarantors of Carbon Fit’s obligations under the lease.

Subject to the lease and corresponding guaranty, Defendants agreed to pay base rent subject to annual increases, plus common area operating expenses, for a term of five years. Shortly after the term of the lease began, Defendants stopped paying rent, common area operating expenses, or any other rental obligations, and left the Premises in an unleasable condition. Plaintiff was forced to make extensive repairs and employ a broker to re-let the Premises.

Defendants agreed to a starting rent of $1,597.05 subject to annual increases. On March 1, 2021, the rent was to increase to $1,715.35; $1,833.65 on March 1, 2022; $1,951.95 on March 1, 2023; and $2,070.25 on March 1, 2014. The Common Area Maintenance (CAM) fees were $414.05 per month. Late payments included a one-time late charge equal to 10% of each overdue amount of $100, or whichever is greater.

Defendants were supposed begin operating out of the Premises on March 1, 2020. Defendants failed to pay their monthly rental obligation or CAM fees beginning May 2020. Defendants also failed to get their Minor Use Permit (MUP) in a timely manner, as required by the lease.

The total amount of damages that Plaintiff alleges that Defendants owe for unpaid rent, CAM fees, late charges, and interest is $155,989.05. (Pasha Decl., ¶ 16.) At the time of filing of the writ of attachment, Plaintiff had incurred $47,325.91 in attorney fees, and Plaintiff expects to incur an additional $66,295.00 in future litigation expenses. (Pasha Decl., ¶ 18.) In total, Plaintiff seek an attachment of $269,610.04, inclusive of damages, interest, and incurred and future litigation expenses.

On November 4, 2021, Plaintiff filed a complaint for breach of lease and breach of guaranty. Defendant Carbon Fit filed a cross-complaint on February 17, 2022, alleging breach of lease, breach of implied covenant of good faith and fair dealings, intentional interference with prospective economic relations, and fraud.

RULING: Denied for all Defendants

Plaintiff moves for a writ of attachment for $269,610.64, due to Defendants’ failure to pay rent and other expenses.

Defendants oppose Plaintiff’s writ. Defendants filed their opposition on January 11, 2024. CCP § 484.060 requires that the opposition to a writ of attachment be filed 5 court days before the hearing. Because Monday, January 15 is a court holiday, 5 court days before the hearing would have been January 10. However, Defendants may not have been aware of this when they filed their opposition, so the Court will consider their opposition.

Defendants argue in their opposition that Plaintiff has not established probable validity of its claim because none of the declarations in support of Plaintiff’s writ address whether the legal requirements for the writ have been met. Defendants also argue that Plaintiff’s claim is not readily ascertainable because of the cross-claims that Defendant Carbon Fit has filed and the damages that Defendant seeks from Plaintiff based on Plaintiff’s alleged breaches of the lease. Defendant Carbon Fit has alleged in its cross-complaint that Plaintiff failed to deliver the Premises to Carbon Fit in the condition required under the lease. Defendant also argues that the lease gave it the ability to terminate the lease early. Finally, Defendants argue that writs cannot be issued against natural persons, such as Defendants Matthew and Brittany Walsh, if the claim is based on the lease of property.

DEFENDANTS’ EVIDENTIARY OBJECTIONS

Sustained: 1, 4, 5, 6, 11, 12, 13

            Overruled: 2, 3, 7, 8, 9, 10

ANALYSIS

CCP § 483.010 subdivision (a) states: “Except as otherwise provided by statute, an 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.” The court may issue a right to attach order if it finds all of the following:

(1)   The claim the attachment is based on is a claim in which an attachment may be issued.

(2)   Plaintiff has established the probable validity of its claim.

(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).)

“The general requirements for prejudgment attachments include the following: The action must seek money, be based on a contract, where the total claim is fixed or readily ascertainable and not less than $500 [citation]; that the claim be unsecured [citation]; and that the plaintiffs make a showing that they ‘on the facts presented would be entitled to a judgment on the claim upon which the attachment is based.’ [Citation.]”  (Hobbs v. Weiss (1999) 73 Cal.App.4th 76, 80.) “‘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.’ [Citation.]” (Goldstein v. Barak Construction (2008) 164 Cal.App.4th 845, 852.) The contract must also be commercial in nature. (Ibid.) “Although damages need not be liquidated, they must be measurable by reference to the contract sued upon, and their basis must be reasonable and certain.” (Kemp Bros. Construction, Inc. v. Titan Electric Corp. (2007) 146 Cal.App.4th 1474, 1481, fn. 5.; citing CIT Group/Equipment Financing, Inc. v. Super DVD, Inc. (2004) 115 Cal.App.4th 537, 540.)

CCP § 483.015(a) states that the total sum of the attachment includes: “(1) The amount of the defendant’s indebtedness claimed by the plaintiff. (2) Any additional amount included by the court under Section 482.110.” “The plaintiff’s application for a right to attach order and a writ of attachment pursuant to this title may include an estimate of the costs and allowable attorney's fees.” (CCP § 482.110(a).)

If the defendant is a corporation, “all corporate property” is subject to attachment under CCP § 487.010(a) and a description referencing “all corporate property which is subject to attachment” pursuant to § 487.010 is sufficient to satisfy § 484.020.  “Corporations and partnerships generally have no exempt property.” (Bank of America v. Salinas Nissan, Inc. (1989) 207 Cal.App.3d 260, 268.) There is no argument that Defendant operates as anything other than a corporate entity.

Plaintiff moves for attachment based on the parties’ lease agreement. The claimed unpaid sums exceed $500, and the agreement for payment is not secured by any personal property. Plaintiff establishes that Defendants failed to make any rent payments or other payments required under the lease in May 2020, or any payment thereafter. However, none of the declarations supporting Plaintiff’s application for writ address whether the application meets the legal requirements of a writ of attachment.

Additionally, because of Defendant Carbon Fit’s cross-complaint alleging that Plaintiff also breached the lease by failing to deliver the Premises in the required condition, the amount that Plaintiff may recover is not readily ascertainable, as there may be mitigating circumstances. Additionally, the probable validity of Plaintiff’s claim is also called into question by Defendant’s cross-claims because it is not “more likely than not” that Plaintiff will obtain a judgment against Defendants on its claims.

Further, “[i]f 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 claim is based on the sale or lease of property…” (CCP § 483.010(c).) Based on that code section, no writ of attachment may be issued for Defendants Matthew Walsh and Brittany Walsh.

Because Plaintiff has not established the probable validity of its claim against Defendant Carbon Fit and because no writ may be issued against the individual Defendants, Plaintiff’s writ of attachment is denied for all Defendants.

Moving party to provide notice.