Judge: H. Jay Ford, III, Case: 24SMCV00614, Date: 2025-02-07 Tentative Ruling

Case Number: 24SMCV00614    Hearing Date: February 7, 2025    Dept: O

  Case Name:  REEP-OFC Corporate Pointe CA, LLC v. Optimity Advisors, LLC, et al.

SUBJECT:                 APPLICATION FOR WRIT OF ATTACHMENT   

MOVING PARTY:   Plaintiff REEP-OFC Corporate Pointe CA, LLC

RESP. PARTY:         Defendant Optimity Advisors, LLC

TENTATIVE RULING

            Plaintiff REEP-OFC Corporate Pointe, CA, LLC’s Application for Writ of Attachment is GRANTED in the reduced amount of $325,336.67 for unpaid Base Rent, plus $10,000 in fees and costs.  Plaintiff to post a bond of $100,000. 

I.  Applicable Law

            An attachment may only issue on a money claim must be for a “fixed or readily ascertainable amount” of not less than $500 (excluding costs, interest, and attorney fees). CCP § 483.010(a). “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.” CCP §483.010(c). CCP §483.010(c)). “A purpose of the attachment statutes is to confine attachments to commercial situations and to prohibit them in consumer transactions.”  (Kadison, Pfaelzer, Woodard, Quinn & Rossi v. Wilson (1987) 197 Cal.App.3d 1, 4.)

The damages need not be liquidated. But they must be measurable by reference to the contract itself and the basis for computing damages must be reasonable and certain. (CIT Group/Equipment Financing, Inc. v. Super DVD, Inc. (2004) 115 Cal.App.4th 537, 541 (master lease and corresponding lease schedules provided clear formula for computation of damages: monthly rent multiplied by unexpired term).)

II.  Application to Facts

1.  The Claim: The money claim must be for a “fixed or readily ascertainable amount” of not less than $500 (excluding costs, interest, and attorney fees).  CCP § 483.010(a).  “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.”  CCP §483.010(c).  CCP §483.010(c)).  “A purpose of the attachment statutes is to confine attachments to commercial situations and to prohibit them in consumer transactions.”  Kadison, Pfaelzer, Woodard, Quinn & Rossi v. Wilson (1987) 197 Cal.App.3d 1, 4. 

The damages need not be liquidated. But they must be measurable by reference to the contract itself and the basis for computing damages must be reasonable and certain.  CIT Group/Equipment Financing, Inc. v. Super DVD, Inc. (2004) 115 Cal.App.4th 537, 541 (master lease and corresponding lease schedules provided clear formula for computation of damages: monthly rent multiplied by unexpired term). 

Plaintiff is suing on a commercial lease with Defendant for commercial office space.  (Miret Dec., ¶¶3-5.)  Plaintiff seeks an attachment order in the amount of unpaid rent, which Plaintiff argues is capable of being made certain based on the rental agreement and totals $515,155.52.  (Id. at ¶¶2-23.) 

Defendant argues the damages are not fixed or readily ascertainable, because certain components of the rental damages are variable.  Defendant argues elements of the rent due such as Common Area Maintenance and taxes are variable and Plaintiff’s attachment amount is based on estimates.  Defendant argues there is a discrepancy between the ledger amounts upon which the attachment is based and the schedule and methods of calculation in the Lease.

Plaintiff fails to establish that the claim at issue is one that is subject to attachment.  While the Base Rent is readily ascertainable by reference to the Lease Agreement, Base Rent is only one component of Plaintiff’s damages ($365,100.45.)  (Miret Dec., ¶¶6-7.)  The remainder of Plaintiff’s damages are based on estimated components, including estimations of Additional Rent due, i.e. CAM charges and taxes, and Late Charges, which are a percentage of the total amount of unpaid rent due (Base Rent plus Additional Rent). (Miret Dec., ¶¶8-17.)  Plaintiff also includes estimated brokerage commissions of “approximately $50,000.”  (Id. at ¶21.) 

2.  Probable Validity of the Claim: Is the claim supported and/or does the defendant have a viable argument in opposition to the claim?  If the application is unopposed, that appears to be a basis for finding that plaintiff has met his/her burden.  "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.). 

The court has the power to determine disputed facts on the basis of a preponderance of the evidence as disclosed in the affidavits and declarations (unlike summary judgment motions, for example, in which the court has no power to weigh the evidence).  (Hobbs v. Weiss (1999) 73 Cal. App.4th 76, 80 (court must “consider the relative merits of the positions of the respective parties and make a determination of the probable outcome of the litigation”).)  The trial court is not required to accept as true the sworn testimony of any witness or undisputed affidavit testimony. It may make contrary findings based on inferences drawn from other evidence.  (Bank of America v. Salinas Nissan (1989) 207 Cal.App.3d 260, 273.)

Plaintiff establishes Defendant’s default on its payment obligations under the lease agreement for the period from January 1, 2023 through February 29, 2024 and June 1, 2024 to July 31, 2024.  (Miret Dec., ¶¶14-17.)  Plaintiff sued Defendant for unpaid rent in prior actions covering other periods and does not seek recovery of those amounts in this action.  (Miret Dec., ¶13.) 

Defendant does not dispute that it defaulted on rental obligations.  Defendant instead argues that its rental obligations ceased upon serving the notices to quit and filing the prior UD actions.  (McNabb Dec., ¶9, Ex. 5.)  Defendant argues a landlord’s right to collect rent terminates in the event the landlord terminates the tenant’s right to possession.  Defendant argues Plaintiff will not be able to prevail on its claim to seek damages “spanning the entirety of the Lease.”  (Opposition, 8:19-20.) 

Plaintiff is not seeking damages for the entire term of the lease in this action.  The lease term was from May 1, 2026 through February 28, 2027.  Plaintiff limits the damages to the period from January 1, 2023 through February 29, 2024 and June 1, 2024 to July 31, 2024.  (Complaint, ¶17.)  Moreover, Defendant allegedly had possession of the premises until October 18, 2023.  (Id.; McNabb Dec., ¶¶9-10.)  Even based on Defendant’s evidence, Plaintiff is entitled to rent for the period from January 1, 2023 through February 29, 2024.

As to the period from June 1, 2024 through July 31, 2024, Defendant argues Plaintiff fails to provide evidence of attempts to mitigate damages by re-leasing the property.  “Except as otherwise provided in Section 1951.4, if a lessee of real property breaches the lease and abandons the property before the end of the term or if his right to possession is terminated by the lessor because of a breach of the lease, the lease terminates. Upon such termination, the lessor may recover from the lessee:…(3) Subject to subdivision (c), the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the lessee proves could be reasonably avoided.”  (Civil Code §1951.2(a)(3).) 

“The lessor may recover damages under paragraph (3) of subdivision (a) only if:

(1) The lease provides that the damages he may recover include the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award, or for any shorter period of time specified in the lease, exceeds the amount of such rental loss for the same period that the lessee proves could be reasonably avoided; or

(2) The lessor relet the property prior to the time of award and proves that in reletting the property he acted reasonably and in a good-faith effort to mitigate the damages, but the recovery of damages under this paragraph is subject to any limitations specified in the lease.”  (Civil Code §1951.2(c).) 

Plaintiff fails to establish the probability of prevailing on the claim for damages from June 1, 2024 through July 31, 2024, post-abandonment and post-termination of the lease.  Plaintiff submits no evidence of any efforts to mitigate such damages. 

Plaintiff also attests to $10,000 in fees and costs already incurred due to Defendant’s breaches.  (Miret Dec., ¶¶18-19.)  Plaintiff is entitled to fees and costs pursuant to the Lease Agreement.  (Id.)

Plaintiff thus establishes the probability of prevailing on its breach of contract claim.  However, Plaintiff fails to establish the probability of prevailing on the full amount of damages requested. 

3.  Suit for Damages.  Yes. 

4.  Property to be Attached:  Where the defendant is an individual, the application must specify the particular property sought to be attached.  (See CCP §487.010.)  Defendant must be able to identify the property that plaintiff seeks to attach, so that the defendant can determine whether he desires to make a claim of exemption as to that property.  However, the requirement of a specific description does not prohibit the plaintiff from targeting for attachment all of the property of an individual defendant.  See Bank of America v. Salinas Nissan (1989) 207 Cal.App.3d 260, 268. 

However, all property within California held by a corporation, partnership or unincorporated association is subject to attachment if there is a statutory method of levy for the property (CCP §487.010(a),(b)).  By logical extension, the above requirement also should apply to limited liability companies.  See CCP §481.170 (defining “person” for attachment purposes to include corporations, partnerships, unincorporated associations and limited liability companies.)

When a plaintiff notices a hearing on an attachment application, the defendant must assert any exemption claims for targeted personal property five days before the hearing or such claims are deemed waived, absent a change of circumstances.  (CCP §§484.070(a), (e); 482.100.)

Defendant is a corporate entity. Plaintiff seeks to attach “any property of a defendant who is not a natural person,” which is permissible.

5.  Undertaking:  An undertaking is required pursuant to CCP §489.210 which provides that, "Before issuance of a writ of attachment . . ., the plaintiff shall file an undertaking to pay the defendant any amount the defendant may recover for any wrongful attachment by the plaintiff in the action."  A flat amount of undertaking is provided for by statute: $10,000 (CCP §489.220(a)).  The Court may set a higher amount pursuant to CCP §489.220(b) if there is an objection to the undertaking.

No undertaking provided yet.  Defendant asks that the Court impose a $200,000 bond. 

6.  Claim of Exemption.  None.