Judge Gary Y. Tanaka, Case 21TRCV00416 2022-12-21 Tentative Ruling

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka Wednesday, December 21, 2022

Department B Calendar No. 5

Daniel R. Jamele, et al.’s Application for Writ of Possession is granted pursuant to Code of Civil Procedure § 512.040(b).

Plaintiffs filed the Complaint on June 14, 2022. Plaintiffs allege the following facts. Defendants entered into stock purchase agreements with Plaintiffs. Pursuant to the terms of the Agreement, Plaintiffs were to be given a Retained Earnings Promissory Note in an amount to be agreed upon by the parties. Eventually, four additional Promissory Notes were agreed upon. Now, Defendants are in default on the Notes. Thus, Plaintiffs are secured creditors who are owed approximately $4.8 million by Defendant MediaMation, Inc. ("MMI"). Plaintiffs allege the following causes of action: 1. Breach of Contract 2. Judicial Foreclosure of Personal Property Collateral 3. Breach of Personal Guaranty.

Defendant’s objection to the supplemental declaration of Daniel R. Jamele is overruled because the Court continued the application and allowed Defendant an adequate opportunity to respond to the supplemental declaration.

CCP § 512.010 sets forth the requirements in an application for writ of possession. CCP § 512.010(b) states: “The application shall be executed under oath and shall include all of the following:

(1) A showing of the basis of the plaintiff's claim and that the plaintiff is entitled to possession of the property claimed. If the basis of the plaintiff's claim is a written instrument, a copy of the instrument shall be attached.

(2) A showing that the property is wrongfully detained by the defendant, of the manner in which the defendant came into possession of the property, and, according to the best knowledge, information, and belief of the plaintiff, of the reason for the detention.

(4) A statement, according to the best knowledge, information, and belief of the plaintiff, of the location of the property and, if the property, or some part of it, is within a private place which may have to be entered to take possession, a showing that there is probable cause to believe that such property is located there.

(5) A statement that the property has not been taken for a tax, assessment, or fine, pursuant to a statute; or seized under an execution against the property of the plaintiff; or, if so seized, that it is by statute exempt from such seizure.

Pursuant to CCP § 512.040(b): “The writ will be issued if the court finds that the plaintiff's claim is probably valid and the other requirements for issuing the writ are established. The hearing is not for the purpose of determining whether the claim is actually valid. The determination of the actual validity of the claim will be made in subsequent proceedings in the action and will not be affected by the decision at the hearing on the application for the writ.” Pursuant to CCP § 511.090, a “claim has probable validity where it is more likely than not that plaintiff will obtain judgment against defendant on that claim.”

Further, “[a]t the hearing, the court shall make its determinations upon the basis of the pleadings and other papers in the record; but, upon good cause shown, the court may receive and consider additional evidence and authority produced at the hearing or may continue the hearing for the production of such additional evidence, oral or documentary, or the filing of other affidavits or points and authorities.” CCP § 512.050.

The property sought to be recovered must exist in some concrete or tangible form, capable of identification and seizure. A writ of possession does not apply to intangible property such as bank accounts, accounts receivables, etc… Lamus v. Engwicht (1919) 39 Cal.App. 523, 529. In addition, as noted above, as to this tangible property, the description must be particularized and include a statement of its value. CCP § 512.010(b)(3).

“[T]o possess all right, title and interest of Defendant MediaMation in and to all accounts receivable, proceeds thereof; money, deposit accounts, accounts, chattel paper, documents, notes, drafts, instruments, goods, inventory equipment, general intangibles, insurance proceeds and tother (sic) tangible or intangible property receivable or received in connection with the foregoing, or when the foregoing (or proceeds) are sold, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary (the "Original Collateral").” (Application, ¶ 4.)

As noted above, and as described in the initial declaration of Daniel R. Jamele, most of the property sought to be attached are intangible assets in the form of accounts receivable and other rights to payment. As to the alleged tangible property, in the initial declaration, Plaintiffs did not describe the property with particularity or reasonable certainty. Instead, the property was described as follows to: “include, without limitation, furniture and equipment, vehicles, and leasehold improvements” or are “office equipment and related hard assets.” (Decl., Jamele, ¶¶ 42, 45.) These descriptions are generalized statements and categories, and not capable of specific identification, in order to allow the sheriff to identify the specific property sought to be recovered.

However, with the supplemental declaration of Daniel R. Jamele and attached exhibits, filed on November 8, 2022, Plaintiffs provided a sufficient description of the tangible property sought to be attached and a statement of its value. (Suppl. Decl., Jamele, ¶ 16, Ex. 2.) Plaintiffs set forth a list of the tangible property and stated its value at $134,272.94. Defendant argues that the stated value is insufficient as each item set forth in the list was not valued separately. However, CCP §512.010(b)(3) does not appear to require a separate valuation for each asset. CCP §512.010(b)(3) merely states that the applicant is required to provide “a particular description of the property and a statement of its value.” In addition, the fact that the description and value were provided with the supplemental declaration and not with the original application is not dispositive since CCP § 512.050 allows the Court to hear new evidence even at the hearing date.

Defendant also argues that the applicant fails to establish a probable validity of the claim based on Defendant’s contention that Plaintiffs breached fiduciary duties and have unclean hands. However, Defendant submitted no competent evidence to show that Plaintiffs breached fiduciary duties or have sufficient unclean hands to deny the application. The mere references in the declaration of Howard Kiedaish and to the minutes of the board meeting of December 14, 2017, essentially complaining of Plaintiffs’ alleged role and actions as directors of MediaMation, Inc., do not provide sufficient competent evidence of breaches of fiduciary duty or unclean hands.

Plaintiffs are not required to post an undertaking as Defendant has failed to establish a positive interest in the tangible property identified. Again, here, the only argument presented to request an undertaking involved Plaintiffs’ alleged breaches of fiduciary duties and unclean hands.

Pursuant to Code of Civil Procedure § 515.020(a), the amount of Defendant’s undertaking is set at $134,272.94.