Judge: Helen Zukin, Case: 22SMCV01237, Date: 2022-10-19 Tentative Ruling

Case Number: 22SMCV01237    Hearing Date: October 19, 2022    Dept: 207

Background

Plaintiff Justin Kohanoff (“Plaintiff”) brings this action to collect on two loans to Defendant Hacopian Design & Development Group, LLC (collectively with Defendant Ando Hacopian “Defendants”) which Plaintiff alleges were never repaid. Plaintiff filed his Complaint on July 28, 2022, alleging causes of action against Defendants for breach of contract, fraud and deceit, unjust enrichment, and common count. Plaintiff now brings an application for writ of attachment on his cause of action for breach of contract in the amount of $176,200.

Legal Standard

“Upon the filing of the complaint or at any time thereafter, the plaintiff may apply pursuant to this article 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.” (C.C.P. § 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. (C.C.P. § 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.” (C.C.P. § 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.

(C.C.P. § 484.090.)

To obtain a writ of attachment, the defendant must be served with summons and complaint, notice of application and hearing, and the application and supporting evidence by the times prescribed by Code Civ. Proc. § 1005(b). (C.C.P. § 484.040.)

Analysis

“The Attachment Law statutes are subject to strict construction.”¿(Epstein v. Abrams¿(1997) 57 Cal.App.4th 1159, 1168.) The Legislature enacted the current attachment statutes in response to the Court’s landmark holding in Randone v. Appellate Department (1971) 5 Cal. 3d 536, which “involved the attachment, without notice or hearing, of a bank account of the owners of a trucking company to satisfy an outstanding bill for legal services.” (Hobbs v. Weiss (1999) 73 Cal.App.4th 76, 79.) As a result, the attachment statutes set forth “a variety of safeguards, including the requirement of a noticed hearing to prevent the evil of depriving debtors of ‘much-needed assets for protracted periods of time during possibly meritless litigation.’” (Id. [quoting Western Steel & Ship Repair, Inc. v. RMI, Inc. (1986) 176 Cal. App. 3d 1108, 1115].)

Plaintiff’s application was originally set for hearing on September 14. In advance of the hearing the Court posted a tentative ruling denying Plaintiff’s application because Plaintiff’s moving papers did not demonstrate Defendants had been properly served with the application and related documents as required by Code Civ. Proc. § 484.040. The Court’s tentative ruling denied Plaintiff’s application without prejudice to be refiled upon a showing of proper service. The application came on for hearing on September 14. When no party appeared, the Court issued a minute order noting the non-appearance and placing the matter off calendar. On September 15, 2022, Plaintiff filed two proofs of service, apparently in response to the Court’s tentative ruling, and re-calendared the hearing on his application for September 30.

In advance of the September 30 hearing date, the Court published a tentative ruling denying Plaintiff’s application without prejudice on the basis that the September 15 proofs of service filed by Plaintiff did not establish proper notice as required by Code Civ. Proc. § 484.040 as the Court could not discern whether Defendants could be properly served at the address listed on the proofs. Following the hearing, the Court issued a minute order permitting Plaintiff to file and serve a declaration regarding service by October 7, 2022.

Plaintiff timely filed a declaration regarding service on October 5. In his declaration, Plaintiff states Defendants “were served process by substitute service on a family member of Defendant, Ando Hacopian (“Hacopian”) in La Crescenta, California” on August 26, 2022. (Kohanoff Decl. at ¶ 3.) Plaintiff also asserts “Defendant, Ando Hacopian received actual notice of the pending lawsuit and the application for right| to attach order and writ of attachment,” because after Plaintiff served Hacopian’s family member, Hacopian sent him a text message stating “You had someone serve my mom?” (Id. at ¶ 3, Ex. 5.)

The Court finds this August 26, 2022, service on Defendants to be deficient. As set forth above, Code Civ. Proc. § 484.040 requires service be made in compliance with the time requirements set forth in Code Civ. Proc. § 1005(b). Under section 1005(b), Plaintiff’s moving papers had to be “served and filed at least 16 court days before the hearing” set for September 14, or no later than August 22, 2022. Plaintiff’s August 26 service was thus untimely under section 484.040. The law requires strict compliance with these statutory provisions regarding notice, and accordingly the Court DENIES Plaintiff’s application as untimely.

The same result would follow even if the Court were to ignore the untimeliness of Plaintiff’s service. Pursuant to Code Civ. Proc. § 482.070(d), where a defendant has not appeared in the action, service under section 484.040 must be made “in the same manner as a summons is served under Chapter 4 (commencing with Section 413.10) of Title 5.” In other words, Defendants must be served with notice of the hearing in the same manner as they would ordinarily be served with a summons and complaint. This statutory scheme regarding service of the summons and complaint does not allow for substitute service at the residence of a defendant’s family member. Code Civ. Proc. § 415.20(a) allows for substitute service at a defendant’s “usual mailing address.” Section 415.20(b) allows for substitute service at a defendant’s “dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box.” Section 415.20(c) allows for substitute service at “a private mailbox obtained through a commercial mail receiving agency.” Plaintiff here does not claim the Los Olivos Lane address served on August 26 was Defendants’ usual mailing address, dwelling house, usual place of abode, or usual place of business. Rather, Plaintiff concedes service was attempted at Hacopian’s mother’s house. No code section authorizes substitute service at the address of a family member’s residence in this manner.

Plaintiff argues Defendants received actual notice of this lawsuit as evidenced by Hacopian’s text message to Plaintiff. However, courts have rejected the argument that actual notice is sufficient to excuse compliance with the statutory requirements for service. “Actual notice of the action alone, however, is not a substitute for proper service and is not sufficient to confer jurisdiction.” (American Express Centurion Bank v. Zara (2011) 199 Cal.App.4th 383, 392.) “[N]o California appellate court has gone so far as to uphold a service of process solely on the ground the defendant received actual notice when there has been a complete failure to comply with the statutory requirements for service.” (Summers v. McClanahan (2006) 140 Cal.App.4th 403, 414.) Accordingly, the Court finds Defendants were not properly served at the Los Olivos Lane address. This separately compels the denial of Plaintiff’s application.

The attachment statutes must be strictly construed, and Plaintiff must satisfy the safeguards in place to ensure Defendants receive full and fair notice of Plaintiff’s application and hearing date. The Court finds Plaintiff’s application does not satisfy the service requirements imposed by the Code of Civil Procedure as set forth above. The Court thus DENIES Plaintiff’s application without prejudice to refile the application with proper notice to Defendants in advance of the hearing.

Conclusion

Plaintiff’s application for a writ of attachment as to Defendants Hacopian Design & Development Group, LLC and Ando Hacopian is DENIED without prejudice.