Judge James C. Chalfant, Case 21STCV25811 2022-12-06 Tentative Ruling

Plaintiff and Cross-Defendant 10K Advertising, LLC (“10K LLC”) applies for a right to attach order against Defendant and Cross-Complainant Alkaline 88, LLC (“A88”) in the amount of $574,000.

The court has read and considered the moving papers, opposition,[1] and reply, and renders the following tentative decision.

A. Statement of the Case

1. First Amended Complaint

Plaintiffs 10K LLC and 10K Advertising, Inc. (“10K Inc.”) filed the Complaint on July 13, 2021. The operative pleadings are the First Amended Complaint (“FAC”) filed on August 25, 2022 against Defendants A88, Richard A. Wright (“Wright”), Ryan Chessman (“Ryan”), and Frank Chessman (“Frank”). The FAC alleges claims for (1) fraud; (2) interference with contractual relations; (3) intentional interference with prospective economic advantage; (4) negligent interference with prospective economic advantage; (5) statutory unfair business practices in violation of California's UCL (Business and Professions Code (“Bus. & Prof. Code”) §17200); (6) statutory improper disposition of property (Penal Code §496(c)); (7) breach of contract; (8) breach of implied or oral contract; (9) breach of implied covenant of good faith and fair dealing; and (10) quantum meruit. The FAC alleges in pertinent part as follows.

Stephen Haugse (“Haugse”) was a freelancer who assisted A88 with advertising campaigns. A88 retained 10K Inc. as a vendor to book graphics, printing, and billboard space. In July 2020, Haugse formed 10K LLC.

Defendant Wright is A88’s CEO, Defendant Ryan its National Director of Sales, and Defendant Frank its Executive Director of National Sales.

a. The Outdoor Advertising Campaign Invoices

In September 2020, 10K LLC became A88’s agency to coordinate the strategy, creative design, printing, and installation of two A88 advertising campaigns co-branded with retailers CBD Plus USA (“Plus”) and CBD Emporium, Inc (“Emporium”). A88, Wright, and Richard gave 10K LLC express written approval to incur costs and expenses for the production and placement of billboards for the Plus and Emporium campaigns. 10K LLC and 10K Inc. are liable to several national vendors with which they negotiated as part of the campaigns.

Ryan and Frank directed 10K LLC to provide invoices to A88 for its work for Plus and Emporium (“Invoices”) and promised to pay them. 10K LLC and 10K Inc. (collectively, “10K”) demanded that A88 pay the past due Invoices on numerous occasions between September 2020 and March 2021. A88 promised that it would do so, and it never disclaimed liability for the Invoices.

A88 never paid the Invoices. This compelled 10K to take out large business loans at prevailing interest rates to cover the debt owed to vendors. Plaintiffs have also lost new opportunities because it did not have this money.

b. The SOW

In July 2020, A88 asked 10K LLC to develop a larger strategy for marketing and sales initiative for its CBD products. On July 17, 2020, 10K LLC transmitted a Statement of Work (“SOW”) and advised A88 that it had been working behind the scenes to get A88’s CBD into major distributors and key co-branded retail partners.

The SOW provided for a 12-month agreement with a monthly management fee for 10K LLLC of $20,000 plus 6% commission on gross purchase orders from independent retailers and 3% from distributors. 10K LLC was also to receive A88 shares if it achieved certain sales goals, such as 110,000 shares when sales reach $6 million.

A88 told 10K LLC to project that the parties’ partnership would continue for at least two years. On September 10, 2020, Wright demanded that 10K LLC compile detailed sales projections based upon its work through 2022. Wright then took those projections and misrepresented to the A88 leadership that it was his own work.

On October 1, 2020, Wright sent final changes to the SOW. On October 13, 2020, Wright confirmed to 10K LLC in writing that the parties were “in agreement” on all material terms. On October 19, 2020, 10K LLC transmitted to A88 an execution copy of Agreement, including a list of all recent revisions. A88 promised to sign the Agreement at an-in person meeting. In the meantime, Wright assured 10K LLC that it was as good as signed and told it to get started.

Between July 2020 and January 2021, Defendants and others at A88 worked with 10K LLC to develop co-branded marketing and retail distribution strategies to improve A88’s brand strength and increase sales of A88’s CBD. In reliance on the SOW and A88’s promises to pay the Invoices, 10K LLC provided A88 with services and incurred expenses.

10K LLC kept A88 informed of its progress. At no time was A88 under the mistaken impression that 10K LLC was providing its services and work product for free. At no point did A88 contest the invoices.

A88 touted its growth from 10K LLC’s introductions to new distribution partners without mentioning 10K LLC’s role. In September 2020, 10K LLC introduced A88 to one of its long-standing business partners, Betterment Retail Solutions (“BettermentRS”) which led to a successful partnership between A88 and BettermentRS.

A88 never paid 10K LLC any commissions or stock owed under the SOW and it has not provided the sales data needed to determine the amount owed.

c. Fraudulent Scheme to Steal 10K LLC’s Work

Between October 13, 2020, and January 2021, 10K attended A88 meetings and agreed to additional work based on A88’s promises that the Invoices would be paid and that the SOW was as good as signed. At a lunch meeting on November 6, 2020, A88 claimed that its move to new headquarters was why it had not yet paid the Invoices, but it would pay them. It continued to press 10K LLC for more information on retail and distribution connections.

When 10K LLC asked on November 9, 2020, A88 told 10K LLC to work with David Guarino (“Guarino”) to resolve the issue. On the few occasions that 10K LLC reached Guarino, he did not dispute the amounts owed and continued to promise to pay.

On November 23, 2020, 10K LLC sent an email to Wright demanding payment for “extremely past due” Invoices. Wright responded two days later that he was on vacation but would follow-up on Monday so A88 would take care of it. A88 then dodged multiple meetings through the end of 2020.

On January 14, 2021, A88 decided that the parties’ relationship was over. It now claims that it owes nothing on the Invoices, it had no agreement with 10K LLC, 10K LLC never performed any services for A88, and it owes 10K LLC no management fees.

On March 11, 2021, Wright assured Haugse that A88 would pay 10K LLC for its work if it would just be patient. A year later, he claimed under oath to have never met Haugse and that 10K LLC never worked for A88.

d. Interference with Contractual Relationships

After A88 ended its relationship with 10K LLC, it pressured distributors whom 10K LLC had introduced to A88 to stop all future work with 10K LLC. These distributors have decreased the business they do with 10K LLC, which has led to financial harm.

e. Prayer for Relief

10K LLC and 10K Inc. seek a finding that (1) each Defendant is liable for fraud; (2) they tortiously interfered with 10K LLC’s contractual relations and prospective economic advantage; (3) A88 breached its contract with 10K LLC and owes amounts due on the Plus and Emporium Invoices and SOW, plus contractual and pre-judgment interest; (4) A88 breached the implied covenant of good faith and fair dealing; and (5) A88 violated Bus. & Prof. Code Section 17200. Plaintiffs seek (1) compensatory, exemplary and punitive damages; (2) treble damages and attorney’s fees based on the market rate under Penal Code section 496(c); (3) costs of suit; (4) restitution and disgorgement of unjust gains; and (5) quantum meruit.

2. First Amended Cross-Complaint

A88 and its parent company Alkaline Water Company, Inc. (“Alkaline Water,” collectively “Alkaline”) filed a Cross-Complaint against Cross-Defendants 10K; Haugesund Group, LLC (“Haugesund”); Haugse; Castello Sales, LLC (“Castello Sales”); Castello Profile, LLC (“Castello Profile”), and David White (“White”) on September 29, 2022. The operative pleading is the First Amended Cross-Complaint (“FACC”) filed on October 26, 2022 and alleging (1) equitable indemnity; (2) express indemnity; (3) intentional interference with contractual relations; (4) negligent interference with contractual relations; (5) fraud; and (6) conspiracy. The FACC alleges in pertinent part as follows.

On January 15, 2020, Alkaline Water and Castello Sales entered into a brand management service agreement for A88’s benefit (“Castello Contract”). White is Castello Sales’ sole owner. Castello Sales, Castello Profile, and White hired Haugse to perform services on the Castello Contract. Castello Sales and White directed Alkaline Water to work directly with Haugse as a Castello sales employee. Castello Profile hired Haugse and Haugesund, and White used their services to perform work for Castello Sales under the Castello Contract.

Alkaline did not know that Haugse created 10K LLC to perform the Castello Contract work. During and after the Castello Contract, A88 believed that Castello Sales purchased the advertising it promised. Alkaline later learned that Costello Sales instead used Haugse through 10K LLC. 10K LLC marked up direct costs, Haugse and Haugesund marked them up further, and Castello Sales marked them up yet again.

Castello Sales sued Alkaline Water for breach of contract (“Castello-Alkaline Action”). On June 14, 2021, they entered into a settlement agreement (“Castello-Alkaline Settlement”) that required Castello to defend and indemnify Alkaline for all losses and damages related to the billboards in exchange for $430,002 (“Castello-Alkaline Settlement Money”). The Settlement money was in part intended for Castello Sales and White to pay relevant parties for the purchase of billboards from billboard companies. Castello Sales and White never paid those companies.

Although 10K LLC and Haugesund allege that they purchased the billboards, they did so at the direction of Haugse as an employee of Castello Sales or Castello Profile. 10K LLC was created just to add a layer of business to justify markup of billboard advertising costs. Whereas Castello Sales was supposed to use the Settlement money to pay 10K LLC, it has sued 10K LLC, 10K Inc, Hauge, and Haugesund for breach of contract, interference with contract, and fraud. Castello Sales and White have not fulfilled their duty to indemnify and obtain a release for Alkaline. They instead have left A88 to fend for itself in the FAC action.

Castello Sales, Castello Profile, Haugse, 10K LLC, and White are part of a conspiracy to defraud and damage Alkaline. A88 and Alkaline Water seek (1) unspecified general damages; (2) recission of the Castello-Alkaline Settlement and return of the Settlement Money; (3) special damages; (4) punitive damages; and (5) attorney’s fees and costs.

3. Course of Proceedings

On August 20, 2021, A88 filed an Answer to the Complaint.

On August 25, 2021, A88 filed notice of a related case for Castello Sales, LLC v. 10K LLC et al (“Castello v. 10K LLC”) (2020), 20STCV43914. 10K LLC objected on August 30, 2021. Department 69 (Hon. William Faley) found the cases not related on September 22, 2021.

On November 29, 2021, the parties stipulated for John Reddall, Esq. (“Reddall”) to be admitted as A88’s counsel pro hac vice.

Cross-Complainants Alkaline filed the Answer to the FAC and the Cross-Complaint on September 29, 2022.

On October 10, 2022, 10K LLC demurred to the Cross-Complaint.

Alkaline filed the FACC on October 26, 2022.

10K LLC demurred to the FACC on November 28, 2022. Department 71 (Hon. Monica Bachner) will hear the demurrer on December 20, 2022.

B. Applicable Law

Attachment is a prejudgment remedy providing for the seizure of one or more of the defendant’s assets to aid in the collection of a money demand pending the outcome of the trial of the action. See Whitehouse v. Six Corporation, (1995) 40 Cal.App.4th 527, 533. In 1972, and in a 1977 comprehensive revision, the Legislature enacted attachment legislation (CCP §481.010 et seq.) that meets the due process requirements set forth in Randone v. Appellate Department, (1971) 5 Cal.3d 536. See Western Steel & Ship Repair v. RMI, (12986) 176 Cal.App.3d 1108, 1115. As the attachment statutes are purely the creation of the Legislature, they are strictly construed. Vershbow v. Reiner, (1991) 231 Cal.App.3d 879, 882.

A writ of 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). CCP §483.010(a). A claim is “readily ascertainable” where the amount due may be clearly ascertained from the contract and calculated by evidence; the fact that damages are unliquidated is not determinative. CIT Group/Equipment Financing, Inc. v. Super DVD, Inc., (2004) 115 Cal.App.4th 537, 540-41 (attachment appropriate for claim based on rent calculation for lease of commercial equipment).

All property within California of a corporation, association, or partnership is subject to attachment if there is a method of levy for the property. CCP §487.010(a), (b). While a trustee is a natural person, a trust is not. Therefore, a trust’s property is subject to attachment on the same basis as a corporation or partnership. Kadison, Pfaelzer, Woodard, Quinn & Rossi v. Wilson, supra, 197 Cal.App.3d at 4.

The plaintiff may apply for a right to attach order by noticing a hearing for the order and serving the defendant with summons and complaint, notice of the application, and supporting papers any time after filing the complaint. CCP §484.010. Notice of the application must be given pursuant to CCP section 1005, sixteen court days before the hearing. See ibid.

The notice of the application and the application may be made on Judicial Council forms (Optional Forms AT-105, 115). The application must 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. CCP §484.030.

Where the defendant is a corporation, a general reference to “all corporate property which is subject to attachment pursuant to subdivision (a) of Code of Civil Procedure Section 487.010” is sufficient. CCP §484.020(e). Where the defendant is a partnership or other unincorporated association, a reference to “all property of the partnership or other unincorporated association which is subject to attachment pursuant to subdivision (b) of Code of Civil Procedure Section 487.010” is sufficient. CCP §484.020(e). A specific description of property is not required for corporations and partnerships as they generally have no exempt property. Bank of America v. Salinas Nissan, Inc., (“Bank of America”) (1989) 207 Cal.App.3d 260, 268.

A defendant who opposes issuance of the order must file and serve a notice of opposition and supporting affidavit as required by CCP section 484.060 not later than five court days prior to the date set for hearing. CCP §484.050(e). The notice of opposition may be made on a Judicial Council form (Optional Form AT-155).

The plaintiff may file and serve a reply two court days prior to the date set for the hearing. CCP §484.060(c).

At the hearing, the court determines whether the plaintiff should receive a right to attach order and whether any property which the plaintiff seeks to attach is exempt from attachment. The defendant may appear the hearing. CCP §484.050(h). The court generally will evaluate the attachment application based solely on the pleadings and supporting affidavits without taking additional evidence. Bank of America, supra, 207 Cal.App.3d at 273. A verified complaint may be used in lieu of or in addition to an affidavit if it states evidentiary facts. CCP §482.040. The plaintiff has the burden of proof, and the court is not required to accept as true any affidavit even if it is undisputed. See Bank of America, supra, at 271, 273.

The court may issue a right to attach order (Optional Form AT-120) if the plaintiff shows all of the following: (1) the claim on which the attachment is based is one on which an attachment may be issued (CCP §484.090(a)(1)); (2) the plaintiff has established the probable validity of the claim (CCP §484.090(a)(2)); (3) attachment is sought for no purpose other than the recovery on the subject claim (CCP §484.090(a)(3); and (4) the amount to be secured by the attachment is greater than zero (CCP §484.090(a)(4)).

A claim has “probable validity” where it is more likely than not that the plaintiff will recover on that claim. CCP §481.190. In determining this issue, the court must consider the relative merits of the positions of the respective parties. Kemp Bros. Construction, Inc. v. Titan Electric Corp., (2007) 146 Cal.App.4th 1474, 1484. The court does not determine whether the claim is actually valid; that determination will be made at trial and is not affected by the decision on the application for the order. CCP §484.050(b).

Except in unlawful detainer actions, the amount to be secured by the attachment is the sum of (1) the amount of the defendant’s indebtedness claimed by the plaintiff, and (2) any additional amount included by the court for estimate of costs and any allowable attorneys’ fees under CCP section 482.110. CCP §483.015(a); Goldstein v. Barak Construction, (2008) 164 Cal.App.4th 845, 852. This amount must be reduced by the sum of (1) the amount of indebtedness that the defendant has in a money judgment against plaintiff, (2) the amount claimed in a cross-complaint or affirmative defense and shown would be subject to attachment against the plaintiff, and (3) the value of any security interest held by the plaintiff in the defendant’s property, together with the amount by which the acts of the plaintiff (or a prior holder of the security interest) have decreased that security interest’s value. CCP §483.015(b); see also CCP §483.010(b) (“an attachment may not be issued on a claim which is secured by any interest in real property arising from agreement, statute, or other rule of law…However, an attachment may be issued where the claim was originally so secured but, without any act of the plaintiff or the person to whom the security was given, the security has become valueless or has decreased in value to less than the amount then owing on the claim). A defendant claiming that the amount to be secured should be reduced because of a cross-claim or affirmative defense must make a prima facie showing that the claim would result in an attachment against the plaintiff.

Before the issuance of a writ of attachment, the plaintiff is required to file an undertaking to pay the defendant any amount the defendant may recover for any wrongful attachment by the plaintiff in the action. CCP §489.210. The undertaking ordinarily is $10,000. CCP §489.220. If the defendant objects, the court may increase the amount of undertaking to the amount determined as the probable recovery for wrongful attachment. CCP §489.220. The court also has inherent authority to increase the amount of the undertaking sua sponte. North Hollywood Marble Co. v. Superior Court, (1984) 157 Cal.App.3d 683, 691.

10K Inc.’s sole owner, Francis Fazzina (“Fazzina”), founded the company over a decade ago as a global media buying agency. Fazzina Decl., ¶2.[3] In July 2020, he formed 10K LLC with three partners, and Fazzina and 10K Inc. are the majority members. Fazzina Decl., ¶2.

In mid-2020, Haugse told Fazzina that A88 wanted to partner with 10K LLC to enhance marketing, advertising, and retail sales growth. Fazzina Decl., ¶3. From mid-2020, at A88’s request and with authorization, 10K LLC designed and orchestrated a marketing, advertising, and business-to-business development campaign for A88’s CBD. Fazzina Decl., ¶4. This required 10K LLC, through 10K Inc., to contract with third-party vendors on A88’s behalf to print and place outdoor advertising. Fazzina Decl., ¶4.

On September 2, 2020, Haugse sent A88, with Costello Sales cc’ed, creative designs for the advertising campaign with Emporium. Fazzina Decl., ¶7, Ex. F. A88 approved the plans that day, and Costello Sales started to incorporate them into boards. Fazzina Decl., ¶7, Ex. F. On September 30, 2020, 10K LLC sent A88 Invoice A8802 for $88,000 for work on the co-branded campaign with Emporium (“Invoice A8802”). Fazzina Decl., ¶7, Ex. C. 10K LLC’s email account sent this to Ryan, Haugse, and 10k@10kadvertising.com. Fazzina Decl., ¶7, Ex. C.

Also on September 30, 2020, 10K LLC sent Invoice A8801 to A88 for $508,000 for work on the co-branded campaign with Plus (“Invoice A8801”). Fazzina Decl., ¶7.

In October 2020, Costello Sales sent A88 replacement designs for the advertising campaign with Plus after legal departments rejected the original design. Fazzina Decl., ¶7, Ex. E. Costello Sales’ signature used the website “10Kadvertising.com.” Fazzina Decl., ¶7, Ex. E. Rosie Cousino (“Cousino”) of A88 recommended some changes and approved the final product after Costello incorporated them. Fazzina Decl., ¶7, Ex. E.

On November 11, 2020, 10K LLC sent A88 a revised version of Invoice A8801 in the amount of $360,000 (“Revised Invoice A8801”). Fazzina Decl., ¶7, Ex. B. 10K LLC’s email account sent this to Guarino, Haugse, and 10k@10kadvertising.com. Fazzina Decl., ¶7, Ex. B.[4]

On August 31, 2020, 10K LLC’s Adam Francis (“Francis”) sent a draft SOW to A88 for review. Fazzina Decl., ¶7, Ex. D. A88 and Francis exchanged emails with revisions multiple times. Fazzina Decl., ¶7, Ex. D.

On October 1, 2020, Ryan emailed other A88 officers a draft email for 10K LLC with proposed questions on the SOW. Fazzina Decl., ¶12, Ex. J. After Wright proposed a few changes, Lynda Zeman replied that she had nothing further to add. Fazzina Decl., ¶12, Ex. J.

The parties exchanged further emails on October 9. Fazzina Decl., ¶7, Ex. D. Ryan sent follow-up items on the SOW as late as October 13, 2020. Fazzina Decl., ¶13, Ex. D. While most of these emails said that the parties had agreed on most terms, A88 disagreed with others. Fazzina Decl., ¶13, Ex. D. For example, A88 proposed increases to the monthly “B2B Sales Management” fee based on gross sales. Fazzina Decl., ¶13, Ex. D. It also disputed whether it should pay a fee of 10% of gross media spending on campaigns when a separate agency executes a co-branded deal. Fazzina Decl., ¶13, Ex. D. It asserted that the flat fee A88 pays should cover these expenses. Fazzina Decl., ¶13, Ex. D.

On October 19, 2020, Francis sent A88 a final draft of the SOW, with an effective date of October 15. Fazzina Decl., ¶7, Ex. D. The final draft SOW provided that 10K LLC would provide planned services for 12 months. Fazzina Decl., ¶7, Ex. D. This included “B2B Sales Management” for a monthly fee of $20,000, invoiced on the 15th day of each month. Fazzina Decl., ¶7, Ex. D. This fee would increase to $25,000 per month if gross sales were between $2 million and $6 million, and $30,000 per month if gross sales were over $6 million. Fazzina Decl., ¶7, Ex. D.

10K LLC would also provide marketing services on a commission basis. Fazzina Decl., ¶7, Ex. D. The commission was 6% on gross purchase orders from independent retailers and 3% on gross purchase orders from distributors. Fazzina Decl., ¶7, Ex. D. 10K LLC would deprioritize a project if A88 left the invoice for that project unpaid. Fazzina Decl., ¶7, Ex. D.

Under the SOW, 10K LLC would receive A88 shares as bonuses based on the success of each campaign term. Fazzina Decl., ¶7, Ex. D. It would receive 35,000 shares when total sales reached $2 million, 70,000 shares when total sales reached $4 million, and 110,000 shares when sales reach $6 million. Fazzina Decl., ¶7, Ex. D.

If A88 terminated the SOW, it must provide notice and pay the $20,000 monthly fee for two more months. Fazzina Decl., ¶7, Ex. D. It must also pay any commissions and performance bonuses owed for 12 months after termination. Fazzina Decl., ¶7, Ex. D.

The parties did not discuss changes to the SOW after the final draft of October 19, 2020. Fazzina Decl., ¶13. Ryan claimed that the SOS was as good as signed, and A88 promised to sign it at an in-person meeting with its top executives. Fazzina Decl., ¶13. Efforts to do this always failed. Fazzina Decl., ¶15. On November 15, 2020, Ryan cancelled a meeting set for the next day to review and finalize the SOW. Fazzina Decl., ¶15, Ex. M. A88 never signed the SOW. Fazzina Decl., ¶15.

Nonetheless, A88 instructed 10K LLC to fulfill its duties under the SOW and 10K LLC dedicated most of its resources to its work for A88. Fazzina Decl., ¶13. 10K LLC sent weekly reports to Ryan and A88 staff. Fazzina Decl., ¶14, Ex. K. From October 25, 2020, A88 also received photographs of campaign work from Haugse’s 10kadvertising.com email as proof of performance. Fazzina Decl., ¶8, Ex. G. On December 29, 2020, A88 asked Haugse to resend the photographs for the first two months, which he did. Fazzina Decl., ¶8, Ex. G.

Rob Costello wished A88 staff a happy Thanksgiving from his 10kadvertising.com email on November 25, 2020. Fazzina Decl., ¶9, Ex. I. Cousino replied that A88 appreciated the partnership that year. Fazzina Decl., ¶9, Ex. I.

Through its work under the SOW, 10K LLC introduced A88 to dozens of potential distributors. Fazzina Decl., ¶14. On June 2, 2021, one distributor, BettermentRS, asked A88 whether it should share remittance reports with “[o]ther suppliers introduced to us through 10K”. Fazzina Decl., ¶14, Ex. L.

On November 23, 2020, A88’s Francis Ten forwarded Haugse’s email to Ryan to get past due invoices resolved so that 10K LLC could repay the vendors. Fazzina Decl., ¶9, Ex. H. Ryan replied that he and Guarino were out on vacation, but that Ryan would work with Guarino the following Monday to ensure that this was “taken care of.” Fazzina Decl., ¶9, Ex. H. A88 continued to insist through March 2021 that it would pay the invoices. Fazzina Decl., ¶10.

A88 never paid 10K LLC any of what it owed. Fazzina Decl., ¶5. Between August 2020 and January 2021, 10K LLC performed millions of dollars’ worth of work, services, creative content, and other intellectual property to A88. Fazzina Decl., ¶3, Exs. B-D. To mitigate damages and preserve 10K LLC’s ability to work for other clients, it borrowed money at commercial lending rates to pay the debt incurred for A88 to various vendors. Fazzina Decl., ¶5.

A88 induced Castello Sales to sue 10K LLC and 10K Inc. Fazzina Decl., ¶10. It then negotiated to pay Castello Sales a limited amount to indemnify A88 against 10K’s claims. Fazzina Decl., ¶10. 10K LLC and 10K Inc. have no relationship with Castello Sales and have never done work on its behalf for a client. Fazzina Decl., ¶11. Haugse, Fazzina, and Castello Sales’ owner White told A88 this multiple times between September and November 2020. Fazzina Decl., ¶11. A88 sought hours of work from 10K for months afterwards. Fazzina Decl., ¶11. 10K LLC is not bound by any settlement agreement between A88 and Castello Sales. Fazzina Decl., ¶17.

A88’s failure to pay any of what it owed prompted 10K to file the Complaint. Fazzina Decl., ¶5.[5]

Without interest, A88 owes $448,000 under Revised Invoice A8801 and Invoice A8802. Fazzina Decl., ¶16.

If the SOW remained valid for twelve months, A88 owes $240,000 in monthly management fees. Fazzina Decl., ¶16. A88 also owes at least $6,000 in commissions under the SOW. Fazzina Decl., ¶16. Because A88 withheld sales data, 10K LLC cannot calculate additional commissions. Fazzina Decl., ¶16.

If A88’s failure to communicate after January 2021 serves as notice of termination, the SOW requires that it pay the monthly fee to that point plus two months. Fazzina Decl., ¶16. This equates to six months, or $120,000. Fazzina Decl., ¶16.

The total damages under the SOW and Invoices range from $574,000 to $694,000. Fazzina Decl., ¶16.

Fazzina estimates that (1) fees for filing, court reservations, and investigation for service of documents; (2) costs of deposition court reporting, videography, and transcripts; and (3) the fee to post a bond for right to attach order total $33,342.88. Fazzina Decl., ¶19.

On January 15, 2020, Alkaline and Castello Sales entered into the Castello Contract for marketing services for A88. Reagan Decl., ¶2; Guarino Decl., ¶2, Ex. A. (For convenience, the court will refer to A88 as the contracting party.) Pursuant to the Castello Contract, A88 would be responsible for all costs and expenses incurred by Castello Sales incurred, and Castello Sales would invoice A88 for them monthly along with the $20,000 monthly fee. Guarino Decl., ¶12, Ex. A. The Castello Contract would continue until one party terminates it for convenience with 90 days’ written notice. Guarino Decl., ¶2, Ex. A. The termination date would be the end of the month in which the 90-day period ended. Guarino Decl., ¶2, Ex. A.

On April 13, 2020, Castello Sales owner White informed Ryan that he (White) had hired Haugse to work on A88’s campaign. Ryan Decl., ¶3, Ex. A. The email asserted that Haugse had run his own businesses and had experience with CBD dispensary and distribution insights. Ryan Decl., ¶4, Ex. A. In the meeting that followed, White asked that A88 coordinate directly with Haugse in its marketing for A88. Ryan Decl., ¶5.

Over time, White interacted with A88 less and less. Ryan Decl., ¶6. Haugse asserted that he did all the work for A88 instead of White. Ryan Decl., ¶6. Haugse eventually talked to Ryan about cutting ties with Castello Sales so that A88 could work exclusively with Haugse. Ryan Decl., ¶6.

On June 22, 2020, White informed Ryan that an attempt to hire or contract with Haugse would be a breach of the Castello Contract. Ryan Decl., ¶7, Ex. B. His email asserted that Haugse’s duties were part of what A88 hired Castello Sales to do. Ryan Decl., ¶7, Ex. B. He accused Haugse of slowing down work in hopes of doing a direct deal with A88. Ryan Decl., ¶7, Ex. B.

On August 6, 2020, on behalf of Castello Sales, White sent Ryan a budget for two billboard campaigns, the Phoenix Billboard Campaign and the Six-State Billboard Campaign, so that A88 and CFO Guarino could approve them. Ryan Decl., ¶12, Ex. D; Guarino Decl., ¶24, Ex. M. White included Haugse at steve@castelloknowsretail.com in the email. Guarino Decl., ¶24, Ex. M. A88 approved these campaigns. Guarino Decl., ¶3, Exs. B-C.

On August 11, 2020, Castello Sales sent three invoices for $250,000, $250,000, and $60,000 for the Six-State Billboard Campaign. Guarino Decl., ¶14, Exs. G-I. On August 14, 2020, A88 received a $98,000 invoice from Castello Sales for the Phoenix Billboard Campaign. Guarino Decl., ¶10, Ex. E.

A88 terminated the Castello Contract on August 31, 2020. Ryan Decl., ¶10; Guarino Decl., ¶5, Ex. D. Because the Castello Contract set the end date as the end of the month 90 days after termination, the end date was November 30, 2020. Ryan Decl., ¶10; Guarino Decl., ¶4. Alkaline could not hire a new marketing company until December 1, 2020, and it continued to pay Castello Sales until then. Guarino Decl., ¶7.

From July through November 2020, A88 was working to find a replacement for Castello Sales. Guarino Decl., ¶6. In July 2020, Haugse’s new company, 10K LLC, [6]sent a first draft SOW proposal to Ryan. Ryan Decl., ¶8, Ex. C. Ryan told Haugse that A88 could not agree to marketing services from 10K LLC until the Castello Contract ended at the end of November. Ryan Decl., ¶¶ 9-10. Alkaline’s legal department would also have to review and approve any contract and its board would have to approve any contract for issuance of stock. Ryan Decl., ¶9; Reagan Decl., ¶3.

A88 and 10K LLC traded at least seven drafts of the SOW between July and November 2020. Ryan Decl., ¶11. A88 is listed on the Canadian and U.S. Stock Exchanges. Reagan Decl., ¶4. A88’s board of directors must approve any contract that would grant stock, like the October 19, 2020 SOW. Reagan Decl., ¶3. Both in-house counsel Michael Reagan, Esq. (“Reagan”) and outside counsel must review a contract in its final form before the board reviews and approves it. Reagan Decl., ¶5. Reagan and outside counsel never received an SOW from 10K LLC for such review. Reagan Decl., ¶5.

On September 8, 2020, Haugse sent Ryan the same budgets as Castello Sale had sent on August 6, 2022 for the same campaigns. Ryan Decl., ¶13, Ex. E; Guarino Decl., ¶24, Ex. N. Haugse used his 10K LLC email address, steveh@10kadvertising.com. Guarino Decl., ¶24, Ex. N. He also sent 10K LLC Invoice A8802 in the amount of $88,000, for the same Phoenix Billboard campaign work as Castello Sales’ August 14, 2020 invoice. Guarino Decl., ¶11, Ex. F.

Guarino understood from the Castello Sales Contract that A88 was required to pay Castello Sales’ costs passed through without a markup. Guarino Decl., ¶12. The $10,000 difference between the Castello Sales and 10K LLC invoices alerted Guarino to a problem. Guarino Decl., ¶13.

The same problem happened with the invoices for the Six-State Billboard Campaign. Guarino Decl., ¶13. On September 30, 2020, Haugse sent A88 Invoice A8801 for $508,000 for the same work as Castello Sales’ August 11, 2020 invoices. Guarino Decl., ¶15, Ex. J. 10K LLC then sent Revised Invoice A8801 for $360,000 on November 11, 2020. Guarino Decl., ¶18, Ex. L.

When Haugse asked about the unpaid Invoices in October and November 2020, Ryan told him to work with Guarino. Ryan Decl., ¶14. At no point did Ryan say that A88 would pay 10K LLC. Ryan Decl., ¶14. He believed that Guarino would determine the amount owed, pay Castello Sales that amount, and then Castello Sales would pay 10K LLC. Ryan Decl., ¶14.

In October and November 2020, Guarino asked Castello Sales and 10K LLC to explain the duplicate invoices. Guarino Decl., ¶16. 10K LLC provided proof of performance, but both Castello Sales and 10K LLC otherwise did not answer questions and just demanded payment. Guarino Decl., ¶¶ 16-19, Ex. L.

Guarino became frustrated that 10K LLC would not explain why it sent invoices for work that was under the Castello Contract or why the amounts differed from Castello Sales’ invoices. Guarino Decl., ¶20. This prompted A88 to terminate negotiations with 10K LLC for the SOW in December 2020. Guarino Decl., ¶20.

Castello Sales filed the Castello-Alkaline Action in January 2021. Reagan Decl., ¶6. At the time it was filed, Alkaline still had the invoices from both Castello Sales and 10K LLC. Reagan Decl., ¶6. Reagan asked 10K LLC’s counsel Nathan Rogers, Esq. (“Rogers”) what work Haugse and 10K had performed. Reagan Decl., ¶6. On January 25, 2021, Rogers replied that Haugse and 10K only worked on the billboards. Reagan Decl., ¶7; Guarino Decl., ¶26. While 10K LLC worked with A88 from October to December 2020, this work was only on strategy and planning, with some costs budgeted but no hard costs incurred. Reagan Decl., ¶7. 10K LLC shelved the plans when Castello Sales filed the Castello-Alkaline Action. Reagan Decl., ¶7. Rogers confirmed the same with Castello Sales’ counsel. Reagan Decl., ¶8.

On June 14, 2021, Alkaline and Castello Sales reached the Castello-Alkaline Settlement wherein Alkaline agreed to pay Castello Sales $430,002 for all billboard costs. Guarino Decl., ¶21. Castello Sales agreed to indemnify and defend Alkaline from claims by A88 for the billboard campaigns. Guarino Decl., ¶22. Alkaline has paid the Castello-Alkaline Settlement amount. Guarino Decl., ¶21.

The Castello-Alkaline Settlement covered the billboards costs because Alkaline only had a contract with Castello Sales, not 10K LLC or Haugse. Reagan Decl., ¶9. Castello Sales should have paid 10K LLC out of the Castello-Alkaline Settlement money. Reagan Decl., ¶9.

Castello Sales sued 10K LLC, 10K Inc., and Haugse in Castello v. 10K for interference with the Castello Contract. Guarino Decl., ¶23; Levine Decl., ¶¶ 2, 10, Exs. A, I. On November 2, 2021, the parties settled Castello v. 10K. Levine Decl., ¶¶ 3, 10, Exs. B, J. The settlement required 10K Inc and 10K LLC to pay Castello Sales $42,500 and waive all claims for payment for its work on the billboards. Levine Decl., ¶¶ 3, 10, Exs. B, J; Guarino Decl., ¶23.

The billboard and marketing campaigns in which 10K LLC was involved were unsuccessful. Ryan Decl., ¶15; Guarino Decl., ¶27. The CBD products that they advertised were so unsuccessful that A88 decided to focus solely on water products. Ryan Decl., ¶15; Guarino Decl., ¶27.

In response to A88’s Requests for Admission (“RFA”), Haugse admitted that Haugesund sent invoices to Castello Sales for work on advertising campaigns for A88. Levine Decl., ¶¶ 4-5, Exs. C-E. Two of these invoices are each for $240,000 and reflect work on the State Billboard Campaign that Castello Sales billed Alkaline for directly. Levine Decl., ¶6, Ex. C.

During a deposition, Guarino reiterated that he became frustrated with 10K LLC and Castello Sales when it refused to answer questions needed to understand how much A88 needed to pay and to whom. Levine Decl., ¶9, Ex. H.

10K LLC objected to the related case notice for tis case and Castello v. 10K. Levine Decl., ¶11, Ex. K. Whereas this action concerns a breach of contract claim between 10K LLC and A88, Castello v. 10K alleged that four parties conspired to steal clients from Castello Sales. Levine Decl., ¶11, Ex. K.[7]

10K LLC’s claim against A88 is based on money owed under the two Invoices and an SOW. Assuming that 10K LLC has a contract with A88 (see post), this is a claim on which attachment may be based.

A claim is “readily ascertainable” where the damages may be readily ascertained by reference to the contract and the basis of the calculation appears to be reasonable and definite. CIT Group/Equipment Financing, Inc. v. Super DVD, Inc., (2004) 115 Cal.App.4th 537, 540-41. The fact that the damages are unliquidated is not determinative. Id. But the contract must furnish a standard by which the amount may be ascertained and there must be a basis by which the damages can be determined by proof. Id. (citations omitted).

10K LLC asserts that the damages under the SOW and Invoices range from $574,000 to $694,000. Fazzina Decl., ¶16. It also estimates incurred costs of $33,342.88. Fazzina Decl., ¶19. 10K LLC only seeks attachment of $574,000.

10K LLC claims that A88 owed $88,000 under Invoice A8802 and $360,000 under Revised Invoice A8801, a total of $448,000. Mem. at 9; Fazzina Decl., ¶¶ 7, 16, Exs. B-C. Although 10K LLC claims the Invoices describe the work performed, start date, cost date, and campaign name (Mem. at 4-5), the Invoices are not attached as exhibits and authenticated. Only emails referring to the Invoices are attacjed (Exs. B-C), and neither lists the work performed, start date, or cost date. See Fazzina Decl., ¶7, Exs. B-C. At most, Exhibits B and C are emails that serve as a statement of debt owed under another contract; they are not contracts themselves.

10K LLC does not claim that the SOW somehow is the written contract governing these two Invoices. The Invoices were issued before 10K LLC contends the Sow became a contract, and they are not mentioned in the SOW. The SOW was intended to allow 10K LLC to replace Castello Sales as marketer for A88 and had nothing directly to do with the two billboard campaigns.

Nor is there any evidence of a partly oral, partly written contract memorialized by the Invoices. 10K LLC points to no oral or written negotiation and agreement on terms between it and A88 for the billboard campaign that the Invoices would memorialize.

In sum, there is insufficient evidence of a contract under which the Invoice amounts are fixed and readily ascertainable damages. Therefore, the Invoice total of $448,000 is disallowed.

The final October 19, 2020 proposed SOW requires that A88 pay a monthly fee of $20,000 for 12 months. Fazzina Decl., ¶7, Ex. D. 10K LLC would also receive a 6% commission on gross purchase orders from independent retailers and 3% commission on gross purchase orders from distributors. Fazzina Decl., ¶7, Ex. D. If A88 terminated the SOW, it must provide notice and pay the $20,000 monthly fee for two more months. Fazzina Decl., ¶7, Ex. D. It must also pay any commissions and performance bonuses owed for 12 months after termination. Fazzina Decl., ¶7, Ex. D.

10K LLC asserts that it has earned at least $6,000 in commissions under the SOW. Fazzina Decl., ¶16. Yet, it does not provide any evidence of sales that would entitle it to commissions. The $6,000 commission is disallowed.

10K LLC asserts that A88 owes $240,000 in monthly management fees under the SOW. Fazzina Decl., ¶16. Alternatively, if silence from January 2021 is notice of termination, the SOW requires that it pay the monthly fee to the point plus two months. Fazzina Decl., ¶16. This equates to six months, or $120,000. Fazzina Decl., ¶16.

A88 concedes it did not pay 10K LLC anything under the SOW and argues that it did not have to do so because there was no executed contract. Guarino Decl., ¶20. Nor did A88 ever agree to pay 10K LLC any for marketing services. Guarino Decl., ¶25.

If the SOW is a valid express or implied contract (see post), silence does not constitute termination and A88 owes 10K LLC the $20,000 monthly fee for the full 12 months. The ascertainable damages are $240,000.

Fazzina estimates that between (1) fees for filing, court reservations, and investigation for service of documents; (2) costs of deposition court reporting, videography, and transcripts; and (3) the fee to post a bond if this right to attach order is granted, attorney’s fees in this action total $33,342.88. Fazzina Decl., ¶19. An attorney declaration is required for attorney’s fees or costs. Fazzina is not an attorney; he is the primary owner of 10K LLC. Fazzina Decl., ¶2. The costs of $33,342.88 are disallowed.

Assuming arguendo that damages under the Invoices are ascertainable, 10K LLC asserts that A88 engaged it to design billboard advertising campaigns for A88’s collaborations with Emporium and Plus. Fazzina Decl., ¶7, Exs. E-F. 10K LLC finished the billboard campaigns and sent A88 Invoice A8802 and Revised Invoice A8801. Fazzina Decl., ¶7, Exs. B-C. On November 23, 2020, Ryan told 10K LLC that he would work with Guarino to take care of the invoices. Fazzina Decl., ¶9, Ex. H. A88 continued to insist through March 2021 that it would pay. Fazzina Decl., ¶10. Despite this, A88 never paid 10K LLC any of what A88 owed. Fazzina Decl., ¶5.

Strict compliance is required with statutory requirements for affidavits for attachment (Anaheim National Bank v. Kraemer, (1932) 120 Cal.App. 63, 65), and facts stated in affidavit must be set forth with particularity. CCP §482.040; (Witchell v. Korne, (1986) 179 Cal.App.3d 965, 975. The court must apply the same evidentiary standard to the declarations in an attachment hearing as to a case tried on oral testimony. VFS Financing, Inc. v. CHF Express, LLC, (2009) (C.D. Cal.) 620 F.Supp.2d 1092, 1096-97. The declarant must show personal knowledge of the relevant facts, and such evidence must be admissible and not objectionable. Id. All documentary evidence, including contracts and canceled checks, must be presented in admissible form, and admissibility as non-hearsay evidence or exception to the hearsay rule, such as the business records exception. Lydig Construction, Inc. v. Martinez Steel Corp., (2015) 234 Cal.App.4^th 937, 944; Pos-A-Traction, Inc., v. Kepplly-Springfield Tire Co., (C.D. Cal. 2000) 112 F.Supp.2d, 1178, 1182.

10K LLC’s evidence falls short of this standard.[8] Much of the Fazzina declaration consists of conclusions and reference to what various entities (10K LLC, A88 and others) did without foundational statements as to how Fazzina has firsthand knowledge of what they did. He also attaches emails to which he was neither sender nor recipient, sometimes improperly relying on a conclusion that the exhibit was authenticated in a witness deposition. See, e.g., Fazzina Decl., ¶14, Ex. K.

10K LLC argues that the Fazzina’s declaration is made under penalty of perjury, he authored Exhibit H, and the other exhibits are business records for which as manager of 10K LLC he claims firsthand knowledge that they are true. Reply at 3-4. To state this argument is to show its inadequacy. A witness can not simply claim “I know these documents or facts to be true”; there must be a foundation supporting that conclusion. While there is some admissible evidence, the declaration as a whole is insufficient to support a probability of success on 10K LLC’s contract claims for the Invoices or the SOW. For this reason alone, the application must be denied.[9]

In addition, A88 also presents evidence contradicting 10K LLC’s position. A88’s evidence indicates that A88 incurred its costs as reflected in the Invoices as an employee/agent of Castello Sales as part of the Castello Contract, not through a separate contract with 10K LLC. On January 15, 2020, Alkaline and Castello Sales entered into the Castello Contract for Castello Sales to perform marketing services for A88. Reagan Decl., ¶2; Guarino Decl., ¶2, Ex. A. Castello Sales introduced Haugse, future founder of 10K LLC, as the person it hired to perform work under the Castello Contract. Ryan Decl., ¶3, Ex. A.

The Castello Contract provides that A88 would be responsible for all costs and expenses incurred by Castello Sales, and that Castello Sales would invoice A88 for them along with its monthly fee. Guarino Decl., ¶12, Ex. A. This provision means that Castello Sales would pay its employees and third parties for the work performed and would pass these costs through to A88. There is no provision for direct payment by A88 to employees or agents of Castello Sales. Therefore, A88 owes 10K LLC no payment under this contract.

10K LLC presents evidence that A88 gave the green light for the billboards to be installed around the country. Fazzini Decl., Exs. E-F. Follow-up discussions between 10K LLC and A88 also reflected A88’s approval for the billboard printing and installation. Fazzini Delc., Ex. G. Reply at 2. This argument is a red herring. All parties agree that the billboard campaign went forward and that Haugse did a considerable portion of the work. The issue is who did Haugse and 10K LLC do the work for? The answer is Castello Sales, not A88.

In July 2020, 10K LLC was formed. Fazzina Decl., ¶2. After performing billboard services on behalf of Castello Sales, Haugse suggested that A88 cut ties with Castello Sales and work with him directly. Ryan Decl., ¶6. A88 declined until such time as the Castello Contract ended.

In August 2020, Castello Sales sent all the invoices for the billboard campaign. Guarino Decl., ¶¶ 10 14, Exs. E, G-I. Beginning September 2, 10K LLC billed A88 for the same billboard services for which Castello Sales had billed, but in different amounts. Guarino Decl., ¶¶ 10-11, 14-15, 18, Exs. E-J, L. When Ryan informed Haugse that Guarino would take care of the Invoices, he meant that Guarino would resolve the discrepancy and figure out who to pay and how much. Ryan Decl., ¶14. Guarino was unable to do so because neither 10K LLC nor Castello Sales made any explanation and simply demanded payment. Guarino Decl., ¶20.

10K LLC claims that several of its officers told A88 that it had no relationship with Castello Sales. Fazzina Decl., ¶11. An April 13, 2000 email in which Castello Sales’s owner, White, introduces Haugse to A88 as Castello Sales’ worker demonstrates otherwise. Ryan Decl., ¶3, Ex. A.[10]

A88 has demonstrated that, although 10K LLC performed work on the billboard campaigns, 10K LLC was not entitled to any direct payment from A88. 10K has not demonstrated a probability of success on a breach of contract claim for the Invoices.

The parties agree that they exchanged emails with various drafts and revisions of the SOW throughout the second half of 2020. Ryan Decl., ¶11; Fazzina Decl., ¶¶ 7, 12, Ex. D, J. A88 asserts that it never approved a final SOW. Because the final proposed October 19, 2020 SOW involved a stock issuance, the board of directors had to approve it after review by both in-house and outside counsel. Reagan Decl., ¶¶ 3, 5. This never occurred. Reagan Decl., ¶5. A88 terminated negotiations over the SOW with 10K LLC in December 2020 due to frustrations with 10K LLC’s claim for payment of the Invoices. Guarino Decl., ¶20.

10K LLC asserts that the October 19, 2020 SOW was the final draft. Fazzina Decl., ¶7, Ex. D. The parties did not discuss changes to the SOW afterwards. Fazzina Decl., ¶13. Ryan promised that A88 would sign it soon and asked that 10K LLC begin performance thereunder, which it did. Fazzina Decl., ¶¶ 13-14, Ex. K.

10K LLC’s evidence on the SOW again falls short of the standard required for the reasons stated ante. Instead of an evidentiary foundation, much of the Fazzina declaration consists of conclusions and reference to what 10K LLC, A88, and other entities did without foundation. Fazzina also attaches exhibits to which he was neither sender nor recipient, sometimes relying on a conclusion that the exhibit was authenticated in a witness deposition. See, e.g., Fazzina Decl., ¶14, Ex. K. The declaration is insufficient to support a probability of success on 10K LLC’s contract claim for the SOW.

Additionally, A88 correctly relies on case law that if parties intend that the terms of the contract are to be reduced to writing for them to sign before such a contract shall exist between them, a binding contract does not arise until a writing evidencing the terms of the agreement has been executed. Frankenheimer v. Frankenheimer, (1964) 231 Cal. App. 2d 101, 109. The parties did not view an executed written agreement as a mere formality and the numerous changes in the draft SOW warrant the conclusion that they never agreed on all material terms. See Opp. at 4-5.

10K LLC claims that A88 agreed that the October 19, 2020 SOW was final and would be signed, but its supporting evidence is weak. Fazzina Decl., ¶13. An October 1, 2020 internal email among A88 officers in which an officer said that she had nothing further to add is insignificant because she was saying that she had no additional comments about the SOW draft beyond those of another officer. Fazzina Decl., ¶12, Ex. J. The email also predates further modifications to the SOW on October 9 and 13. Fazzina Decl., ¶7, Ex. D.

On November 15, 2020, Ryan cancelled a meeting set for the next day to review and finalize the SOW. Fazzina Decl., ¶15, Ex. M. 10K LLC asserts that this demonstrates there was an agreement the October 19, 2020 SOW. Mem. at 6; Fazzina Decl., ¶15, Ex. M. The words “review and finalize” do not indicate that Ryan intended to sign the SOW without further change.

10K LLC also claims that Ryan confirmed that the parties were in agreement on all material terms in an email prior to the October 19 draft SOW. Mem. at 6; Fazzina Decl., ¶13, Ex. D. In that email, A88 agreed with most but not all terms in the SOW. Fazzina Decl., ¶13, Ex. D. For example, A88 proposed increases to the monthly “B2B Sales Management” fee based on gross sales. Fazzina Decl., ¶13, Ex. D. It also disputed that it should pay a fee of 10% of gross media spending on campaigns when a separate agency executes a co-branded deal. Fazzina Decl., ¶13, Ex. D. It further asserted that the flat fee A88 pays should cover these expenses. Fazzina Decl., ¶13, Ex. D. Hence, 10K LLC’s evidence shows that the draft SOW was close to being finalized but was not complete.

A88 also presents evidence that it could not have agreed to a SOW in October because it was required to terminate the Castello Contract with 90 days’ written notice, which was not effective until November 30, 2020. Ryan Decl., ¶10; Guarino Decl., ¶5, Ex. D. A88 would not enter another contract and pay for the same services by two parties at the same time (Guarino Decl., ¶7), and 10K LLC was expressly informed of this fact. Ryan Decl., ¶9.[11]

A88 further notes that there is no evidence that 10K LLC performed under the SOW contract. Opp. at 5. The SOW required 10K LLC to provide invoices every month. Opp. at 5-6; Fazzina Decl., ¶7, Ex. D. 10K LLC never provided any invoices other than the two Invoices for billboard work that were not part of the SOW. A88 further notes that 10K LLC fails to show that the services set forth in the SOW were ever performed by 10K LLC. Opp. at 6.

At the time the Castello-Alkaline Action was filed in January 2021, Alkaline still had the invoices from both Castello Sales and 10K LLC. Reagan Decl., ¶6. Reagan asked 10K LLC’s counsel Rogers what work Haugse and 10K performed. Reagan Decl., ¶6. On January 25, 2021, Rogers replied that Haugse and 10K only worked on the billboards. Reagan Decl., ¶7; Guarino Decl., ¶26. While 10K LLC worked with A88 from October to December, this work was only on strategy and planning, with some costs budgeted but no hard costs incurred. Reagan Decl., ¶7. Thus, there is minimal evidence of 10K LLC’s performance under the SOW.

Of course, 10K LLC could always have a claim for implied contract based on a direction to perform the unsigned SOW or quantum meruit for services rendered and accepted. 10K LLC’s attempt to show an implied contract is defective for the same reasons that it has not shown an express contract, including lack of foundation for exhibits and only vague assertions that work was performed. See Fazzini Decl., ¶¶ 14-15, Exs. L-M. 10K LLC does not try to show the value of its services under quantum meruit.

10K LLC fails to show a probability of success on the merits of the SOW claim, and the $240,000 in damages under the SOW is disallowed.

Attachment must not be sought for a purpose other than the recovery on the claim upon which attachment is based.¿ CCP §484.090(a)(3).

10K LLC asserts that a right to attach order is necessary because the Alkaline 10-K’s claim of insolvency suggests that A88 will be unable to pay damages without one. Fazzina Decl., ¶18, Ex. N. A88 asserts that 10K LLC seeks to harass A88 through this application and this action as a whole. 10K LLC had the opportunity to go to trial in October 2022 but relinquished it to file the FAC. If 10K LLC was that concerned about the ability to recover from A88, it would not have delayed the trial. Opp. at 11.

The evidence is not sufficient to second-guess why 10K LLC would amend its Complaint. 10K LLC seeks attachment for a proper purpose.

[1] A88 failed to lodge a courtesy copy of its opposition in violation of the Presiding Judge’s First Amended General Order Re: Mandatory Electronic Filing. Its counsel is admonished to provide courtesy copies in all future filings.

[2] A88 requests judicial notice of (1) the complaint in Castello v. 10K LLC (Levine Decl., Ex. I; RJN Ex. A); (2) 10K LLC’s opposition to the notice of related case in this action (Levine Decl., Ex. K; RJN Ex. B); and (3) a declaration of Nathan Rogers (“Rogers”) in support of Alkaline’s motion to compel further responses in Castello v. 10K LLC, (Levine Decl., Ex. G; RJN Ex. C). The court need not judicially notice RJN Ex. B; it is free to review filings in the current actions when it so chooses. The complaint from Castello v. 10K is judicially noticed. Evid. Code §452(d). The court could not find any Rogers declaration in the Request for Judicial notice or the declarations and the request is denied.

[3] A88 has filed written objections to the Declaration of Francis Fazzina, but the objections fail to identify the paragraphs or page and line number to which the objections are made. See CRC 3.1354. As a result, the court declines to rule on the objections.

[4] 10K LLC claims that both Invoices (Fazzina Decl., ¶7, Exs. B-C) specify that late payments will accrue interest at a 1.5% monthly rate. Mem. at 5. This fact is not on the emails attached as Exhibits B and C.

[5] 10K LLC presents evidence of A88’s lack of funds. Fazzina Decl., ¶¶ 17-18. This evidence is relevant only to whether 10K LLC seeks attachment for a proper purpose.

[6] Although the FAC contends that Haugse formed 10K LLC in July 2020, Fazzini states that he formed 10K LLC with three partners, and that he and 10K Inc. are the majority members. Fazzina Decl., ¶2. While not clear, apparently Haugse is one of Fazzini’s partners.

[7] The reply Declaration of Tara Church consists solely of argument about the non-exclusivity of the Castello Contract and the purpose of A88’s settlement with Castello Sales, and is not set out herein.

[8] The FAC was verified by Fazzina 10K LLC’s corporate officer. While this is permissible, the verified FAC cannot be used as evidence of the allegations therein. See CCP §446(a).

[9] 10K LLC also states that Fazzina will be at the hearing and prepared to testify. Reply at 4. He will not be permitted to do so.

[10] In the Castello-Alkaline Action, the parties reached a settlement on June 14, 2021 wherein Alkaline agreed to pay Castello Sales $430,002 for all billboard costs. Guarino Decl., ¶21. Castello Sales agreed to indemnify and defend Alkaline from claims by A88 for the billboard campaigns. Guarino Decl., ¶22. 10K LLC contends that this lawsuit settlement is irrelevant to this case. Reply at 5. The settlement is not irrelevant. The payment shows that Castello Sales was paid for the work performed on the billboard campaigns.

10K LLC argues that A88 should be judicially estopped from claiming that Castello Sales performed the billboard work under the Castello Contract, and that 10K LLC did not perform, because its answer and counterclaim in a federal lawsuit alleged that Castello Sales did not do the billboard work. Reply at 5. 10K LLC has not addressed the elements of judicial estoppel and therefore has not sufficiently presented this argument. In any event, it is undisputed that Haugse and 10K LLC did most of the billboard work; the issue is whether they did so on Castello Sales’ behalf.

Finally, A88 argues (without supporting evidence) that Castello Sales terminated Haugse on October 4, 2020, likely because he was interfering in the Castello Contract. Opp. at 7. Castello Sales then sued Haugse in Castello v. 10K, and the case settled with Haugse, 10K LLC, 10K Inc., and another company paying Castello Sales and releasing any claims against Castello Sales. A88 contends that, if 10K LLC had a right to be paid for the billboard work, it would have been paid by Castello Sales as part of this lawsuit. The information presented is insufficient for the court to draw this conclusion. The court will not conclude that 10K LLC lost its right to payment in Castello v. 10K.

[11] 10K LLC notes that the Castello Contract was not exclusive (Reply at 4), but that does not mean that A88 wanted to contract with two marketers at the same time.