Judge James C. Chalfant, Case 22STCP02192 2022-07-28 Tentative Ruling

Plaintiff Hyang Sook Choi (“Choi”), acting derivatively on behalf of Le-Blen Beauty, Inc. (“Le-Blen”), applies for a right to attach order against Defendant Le-Blen in the amount of $340,000.

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

A. Statement of the Case

1. Complaint

Plaintiff Choi filed the Complaint against Defendants Le-Blen, Eun Jung Lee (“Lee”), and Young Su Hyoun (“Hyoun”) on June 8, 2022, alleging (1) breach of fiduciary duty, (2) abuse of control, (3) waste of corporate assets, (4) gross mismanagement, (5) unjust enrichment, (6) misappropriation of corporate assets, (7) breach of written investment agreement, (8) breach of written share transfer agreement, (9) breach of implied covenant of good faith and fair dealing, (10) common counts (money had and received), (11) fraud: misrepresentation, (12) negligent misrepresentation, (13) fraud: false promise, (14) unjust enrichment, (15) civil RICO (18 U.S.C. §1961 et seq.), and (16) California RICO. The Complaint alleges in pertinent part as follows.

Lee is the controlling shareholder, director, and/or officer of Le-Blen, and Hyoun is her husband. Lee and Hyoun established Le-Blen in 2015.

In 2016, Choi entered into an Investment Agreement with Lee in which Choi would invest $20,000 in Le-Blen, receive10% ownership and the right to participate in all financial matters and inspect the books. Lee also promised in the Investment Agreement to pay Choi 10% of sales revenue per month and to provide sales records.

Separately, the parties entered into a Loan Agreement where Choi loaned Le-Blen $60,000 to be repaid with interest (“Loan Agreement”).

Defendants have only made ten payments pursuant to the Investment Agreement – citing slow business and promising to pay all outstanding payments soon – and did not repay any interest or principal on the Loan Agreement.

This year, Choi discovered that Defendants made false sales reports, hiding and falsifying the amount of the sales. In doing so, they have made false representation about the monthly sales records and amounts by falsifying sales records and embezzling the sales made by Lee and Hyoung. Lee also misrepresented Le-Blen’s business and made false promises about Le-Blen’s ability to make all outstanding payments soon.

The parties agreed to resolve Choi’s claims against Defendants in a Share Transfer Agreement: (1) Defendants would pay Choi $130,000 for her investment in one payment this year of $30,000 and three subsequent annual payments of $25,000, and additionally monthly payments of 15% of the monthly sales revenue during the 1st year and 10% of the same during the 2nd through 4th year; (2) Choi would transfer her 10% ownership to Defendants upon completion; but (3) this would be voided upon further misrepresentations and Le-Blen would be shut down with Lee liable for all past embezzlement. Separately, (4) Lee would repay the $60,000 loan with $20,000 interest over six years.

Lee made the initial $20,000 loan payment on May 6, 2022 and brought Choi the remaining $60,000 in cash on May 13, 2022. Lee asked Choi to sign an “Agreement and Release in Full” representing that the document was just about the Loan Agreement. Choi, who has a limited grasp of English, did not realize that the document would extinguish her rights under all agreements until she sent a photograph of it to her relative for review. Lee left the house, only to falsely claim that Choi and her son took $110,000 from her, even making a false police report to that effect.

Choi seeks damages and interest for all breaches of Lee’s fiduciary duty to Le-Blen (including $130,000 plus profits of $200,000 for the next four years), orders directing Le-Blen to reform and improve its corporate governance to protect shareholders, restitution and disgorgement of all profits and benefits, fees and costs, and appointment of a receiver.

2. Course of Proceedings

No proof of service for the Complaint and Summons is on file.

On June 10, 2022, the case was reassigned from Dept. 86 (Hon. Mitchell Beckloff) to Dept. 1 for reassignment. It was reassigned to Dept. 38 (Hon. Maureen Duffy-Lewis) on June 14, 2022.

On July 21, 2022, Defendants filed a demurrer to the Complaint. Dept. 38 will hear the demurrer on November 2, 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.

If the action is against a defendant who is a natural person, an attachment may be issued only on a commercial claim which arises out of the defendant’s conduct of a trade, business, or profession. CCP §483.010(c). Consumer transactions cannot form a basis for attachment. CCP §483.010(c); Kadison, Pfaelzer, Woodard, Quinn & Rossi v. Wilson, (1987) 197 Cal.App.3d 1, 4 (action involving trust property was a commercial, not a consumer, transaction).

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.

Where the defendant is a natural person, the description of the property must be reasonably adequate to permit the defendant to identify the specific property sought to be attached. CCP §484.020(e). Although the property must be specifically described, the plaintiff may target for attachment everything the individual defendant owns. Bank of America v. Salinas Nissan, Inc., (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). 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.

Prior to founding Le-Blen, Lee and Hyoun had a history of borrowing from Choi and in 2015 asked again to borrow from her to establish the company. Choi Decl., ¶¶ 5-6. In August 2016, the parties negotiated the Investment Agreement whereby Choi would invest $20,000 in the business and receive a 10% ownership, would receive 10% of the sales revenue each month, and would have the right to participate in all financial matters and inspect the books. Choi Decl., ¶6, Ex. A.

Needing more money, Lee and Hyoun constantly asked Choi for loans. Choi Decl., ¶7. The parties then orally entered into the Loan Agreement in which Choi agreed to loan Le-Blen $60,000 loan, which she paid $20,000 via check and $40,000 in cash. Choi Decl., ¶7, Ex. B. As proof of receipt of the $40,000 cash, Defendants issued undated checks to Choi in Le-Blen’s name. Choi Decl., ¶7, Ex. B.

In the five years between 2016 and 2021, Defendants only paid Choi the 10% of monthly sales revenue ten times. Choi Decl., ¶8, Ex. C. Defendants claimed that they were short of money for the other months and would pay her when possible. Given their close relationship, Choi believed them and granted extra time to pay. Choi Decl., ¶8.

In 2021, Choi received reports that Lee and Hyoun were selling Le-Blen merchandise at heavily discounted prices; these sales did not appear in the sales reports. Choi Decl., ¶9. Choi found that Lee and Hyoun were selling the products online to other wholesalers and overseas without recording the sales on the sales reports she received from Le-Blen. Choi Decl., ¶9, Ex. D. When questioned, Lee and Hyoun admitted to doing so and offered to buy out Choi’s 10% share. Choi Decl., ¶10. The parties agreed that Choi would transfer her 10% ownership interest in the company under certain terms, and she also demanded repayment of her $60,000 loan. Choi Decl., ¶10.

On May 6, 2022 at around 2:00 p.m., Lee came to Choi’s residence with a $20,000 check as part repayment of the $60,000 loan. Choi Decl., ¶11, Ex. E. The two then discussed terms of a Share Transfer Agreement, which Choi created after Lee left. Choi Decl., ¶¶ 11-12, 18b, Ex. F.

Under the Share Transfer Agreement, Defendants would pay Choi (1) $130,000, one payment in 2022 of $30,000 and four subsequent annual payments of $25,000, and (2) 15% of LeBlen’s monthly sales revenue during the first year and 10% during the next three years. Choi Decl., ¶12, Ex. F. Upon completion of these payments, Choi would transfer her 10% ownership in Le-Blen to Lee and Hyoun. She would retain rights as shareholder until then, including access to corporate records at will. Choi Decl., ¶12, Ex. F. The Share Transfer Agreement would be voided if Lee continued to misrepresent sales as she had before or otherwise breached the agreement, and Le-Blen would be dissolved. Choi Decl., ¶12, Ex. F.

At 5:44 p.m., Choi sent the Share Transfer Agreement to Lee via social media platform KakaoTalk’s messenger service to confirm acceptance. Lee responded two minutes later: “Yes. Agreed!” Choi Decl., ¶12, Ex. F.

On May 13, 2022, Lee appeared at Choi’s residence with $60,000 to pay the balance of the $60,000 loan, which totaled $80,000 including interest. Choi Decl., ¶¶ 13, 18c-d.[2] Lee presented a set of documents for Choi to sign, claiming that they were a translated version of the May 6, 2022 Share Transfer Agreement. Choi Decl., ¶14, Ex. G. Choi sent images of these pages to a relative married to an attorney for confirmation. Choi Decl., ¶14, Ex. G. The relative frantically informed her that the document was actually a settlement agreement. Choi Decl., ¶¶ 14-15, 18f, Ex. G.

The proposed settlement agreement provided that Lee would pay Choi $130,000, $20,000 of which had been paid on May 6, 2022. Choi Decl., Ex. G. Upon signing the “Cash Payment Receipt” section of the Settlement Agreement, Choi would be acknowledging receipt of this $110,000, that Lee owed nothing else, and that Choi was releasing all rights to her shares. Choi Decl., ¶¶ 14-15, Ex. G. The settlement agreement did not mention Choi’s revenue rights over the next four years. Ex. G.

Choi’s relative advised her that if she could keep Lee there, she would bring a correct English copy of the May 6 Share Transfer Agreement for them to sign. Lee instead chose to leave. Choi Decl., ¶¶ 15-16. Hyoun then texted Choi’s husband alleging that Lee brought $110,000 to the residence, Choi and her son forcibly took the cash and then refused to sign the documents Lee brought. Choi Decl., ¶16. Hyoun said that they filed a police report for robbery. Choi Decl., ¶16.

The next day, Choi confirmed with the Los Angeles Police Department (“LAPD”) that no case had been opened against Choi or her son. Choi Decl., ¶17. Choi’s attorney requested that Defendants provide some proof that they had paid $110,000, but they did not. Choi Decl., ¶19.

On May 24, 2022, Choi’s attorney wrote to Le-Blen demanding corporate records and a special shareholder meeting to discuss its financial records, agreements, and payments received from customers. Bom Lee Decl., ¶5, Ex. H. After learning that Defendants had hired counsel, on May 26, 2022 Choi’s attorney wrote to opposing counsel demanding corporate record access plus assurance that Defendants would honor the Share Transfer Agreement. Bom Lee Decl., ¶6, Ex. I. Le-Blen’s counsel responded that the company would provide the records on July 25, 2022, but never provided written assurance that it would honor the Share Transfer Agreement. Bom Lee Decl., ¶¶ 7-8.

This writ of attachment is sought to recover the base $130,000 owed under the Share Transfer Agreement. Choi plans to apply separately for attachment of her share of monthly sales revenue after receiving more evidence. Choi Decl., ¶20; Bom Lee Decl., ¶10. Counsel expects costs to be $10,000, while fees will be $200,000 because the Complaint alleges breaches of fiduciary duty. Bom Lee Decl., ¶¶ 11-13.

On February 18, 2016, Le-Blen borrowed $20,000 from Choi with the understanding that it was a loan and not an investment. Lee Decl., ¶4, Ex. 2. The company then borrowed an additional $40,000 in August 2016, issuing three undated checks as receipts totaling $40,000. Lee Decl., ¶5, Ex. 3. Le-Blen therefore borrowed a total of $60,000. Lee Decl., ¶6.

Wanting more than blank checks as proof of the loan, Choi drafted a security agreement entitling her to 10% shares if Defendants did not repay the loan. Lee Decl., ¶7.

On October 22, 2018, Lee sent a text purportedly to Choi – the contact is listed as “Jae Young Oh” – outlining her belief that she had repaid $40,000 of the loan. Lee Decl., ¶7, Ex. 4. She claimed to have made regular payments of $5,000 since 2016, $4,000 of which was applied to the principal for the $40,000 loan, and the loan was paid off by May 2017. Ex. 4. The following month, Lee began paying $500 towards the interest on the remaining $20,000; she also began paying $3,000 per month from September 2017 towards the “money pool.” Lee Decl., ¶7, Ex. 4. Choi, or “Jae Young Oh,” replied that she did not understand this and needed to consult the note. Lee Decl., ¶7, Ex. 4.

In early May 2022, Choi began accusing Defendants of not paying monthly commissions, asserting that she owned 10% of the company. Lee disagreed. Lee Decl., ¶8. Wanting to preserve their relationship, the parties met on May 6, 2022 to discuss a resolution and agreed that Choi would relinquish her 10% claim in exchange for (1) $130,000, via one payment this year of $30,000 and four annual payments of $25,000 thereafter; and (2) commissions on sales over the next four years. Lee Decl., ¶9. The same day, Lee made a $20,000 payment by check to partially satisfy the first $30,000 due. Lee Decl., ¶10.

In subsequent phone conversations, Choi offered to relinquish her claim to both the 10% ownership and commission payments if Lee accelerated payment of the remaining $110,000. Lee Decl., ¶11. Lee hesitantly agreed, borrowing $100,000 to accomplish this. Lee Decl., ¶¶ 12-13.

Feeling uncertain about the proposal, Lee asked Julie Kim, Esq. (“Kim”), a lawyer and mutual friend of Lee and Choi, how to ensure that Choi did not later lay claim to Le-Blen. Lee Decl., ¶14; Kim Decl., ¶¶ 4-5. Kim advised Lee to have a lawyer draft a settlement agreement, bring that and only half of the $110,000 to Choi, and get the other half from the car only after Choi signed the settlement agreement. Lee Decl., ¶15; Kim Decl., ¶5.

When Lee visited Choi on May 13, 2022, she followed the first half of Kim’s plan and gave Choi half of the cash payment. Lee Decl., ¶16. Choi told that she would have a relative look over the settlement agreement and that Choi should go to her car to get the other half of the payment. Lee Decl., ¶17. Lee complied and brought the remaining $50,000, only for Choi to claim she needed more time to review and she needed to catch a plane to San Jose. Lee Decl., ¶18. When Lee asked Choi to return the money pending execution of a revised settlement agreement, Choi refused, claiming that she needed to catch the plane. Lee Decl., ¶18. When Lee threatened to call the police, Choi gave the money to her son who then left the building with the money. Lee Decl., ¶18.

Lee left the building and called her husband and LAPD. Lee Decl., ¶19. While she was waiting, Kim, who knew that was the day she was paying Choi, called to find out how everything went. Lee Decl., ¶¶ 19-20; Kim Decl., ¶6. Lee told Kim that Choi had taken the $100,000 and she (Lee) had called the police. Kim Decl., ¶6. Kim advised her to wait for the police at a nearby restaurant. Lee did so, and LAPD summarized her report as “(1) Business Dispute; (2) Advised PR regarding the Civil Court; (3) no evidence of robbery.” Lee Decl., ¶19, Ex. 5.

The next day, Choi called Kim stating that Lee had reported her to LAPD. Kim Decl., ¶7. Kim replied that Lee should not have involved her son. Kim Decl., ¶7. Kim visited Choi, who corroborated Lee’s version of events – half the cash, going to the car for the rest while Choi reviewed the agreement, and Choi handing the money to her son. Kim Decl., ¶9. Choi showed Kim a black plastic bag with the $110,000. Kim Decl., ¶9. Choi made a snide comment about how Lee came up with the money and, when asked, confirmed that Lee paid the entire $110,000 sum. Kim Decl., ¶9.

Choi asked Kim to call Lee to discuss the matter, but she refused to involve herself. Kim Decl., ¶10. After Kim further refused to go to Lee’s house to resolve the matter, Choi offered $5,000 for her help in getting Lee to surrender to Choi’s demands. Kim Decl., ¶11. Kim was offended and refused. Kim Decl., ¶11.

In the weeks that followed, Choi called Kim to tell her that (1) Lee must have lied about calling LAPD because there was no case number; (2) Choi could easily say that the $110,000 was repayment of loans and that a few checks she had for monthly commission payments were all that she received because most of the monthly commissions had been in cash; and (3) she wanted to punish Lee for calling the police. Kim Decl., ¶12.

As early as 2011, Choi has made personal loans to Defendants – some still unpaid – and used checks to document them. Choi Reply Decl., ¶7, Ex. M. Choi would always issue a receipt upon receiving payment of such a loan. Choi Reply Decl., ¶7.

Lee’s handwriting verifies that she prepared the Investment Agreement that she now claims is just a security agreement that Choi wrote. Choi Reply Decl., ¶6.

Choi never exchanged the Exhibit 4 text with Lee, which she believes has been fabricated by a cut and paste from other texts. Choi Reply Decl., ¶7. After reviewing various pieces of translated evidence in this application, court certified interpreter Paul Yi (“Yi”) has found many issues with Exhibit 4, the text message that purportedly shows that Le-Blen had repaid Choi’s loan by October 22, 2018 (Lee Decl., ¶7, Ex. 4). Yi Decl., ¶3. The text messages may therefore be fabricated. Yi Decl., ¶3; Bom Lee Reply Decl., ¶¶ 12-13. Choi denied ever receiving it and notes that the supposed text uses the incorrect form of “you” as Lee is 15 years younger than Choi. Choi Reply Decl., ¶7.

On December 20, 2021, when preparing tax return forms, Hyoun wrote to Choi that “10% ownership shareholder was agreed and notarized between us, and it is not the matter CPA should concern about.” Choi Reply Decl., ¶8, Ex. N. Defendants reaffirmed this on March 21, 2022 at 1:14 p.m. Choi Reply Decl., ¶8, Ex. O. When the parties were arguing via text over performance of the Share Transfer Agreement on May 10, 2022, and Choi accused Lee of misappropriating her 10% interest, Lee did not object that this interest was invalid. Choi Reply Decl., ¶9, Ex. P.

Apartment CCTV footage from May 13, 2022, at 3:44-3:47 p.m. – before Choi and Lee’s meeting – shows a figure that is purportedly Choi’s son leaving her apartment building. Choi Reply Decl., ¶11, Ex. R.

Based on the footage from Choi’s residence on May 13, 2022, at 3:48 p.m., Choi began by explaining to Lee that she had trusted her when Le-Blem first began and therefore did not ask for any documentation when she gave Lee $80,000. Choi Reply Decl., ¶4, Ex. L. Lee replied with “Now I have repaid you.” Choi Reply Decl., ¶4, Ex. L.

Lee did not go downstairs to get a second bag of cash, but to bring 25 sets of skincare products Choi requested. Choi Reply Decl., ¶11, Ex. Q.

Casey Park (“Park”), Choi’s relative, confirms that Choi sent her photographs of the proposed settlement agreement on May 13, 2022, and he realized the drastic differences between that document and the Share Transfer Agreement. Park Decl., ¶¶ 3-5. When Park asked over the speakerphone why the documents state receipt of $110,000 when Choi only received $60,000, Lee only mumbled “just because” multiple times. Park Decl., ¶7; Choi Reply Decl., ¶11, Ex. S. Park also asked in the interest of fairness if Choi could hire an attorney to review the documents as Lee had hired one to write them. Park Decl., ¶8. Lee repeatedly responded that these documents were not important. Park Decl., ¶8. Park told Choi that she could bring corrected English versions of the documents by 6:30 p.m. that day. Park Decl., ¶6. At no point during this conversation, with Choi yelling at Lee, did Lee claim that she brought more than $60,000. Park Decl., ¶9.

Park got to the house at 5:00 p.m., only to find that Lee had left but she was not waiting outside; she was with Hyoun in the car parking lot next to Choi’s residence. Park Decl., ¶12.

Choi never discussed the Share Transfer Agreement with Kim until after the meeting between Choi and Lee on May 13, 2022. Choi Reply Decl., ¶13.

In Mid-May 2022, Choi visited Café owner Jin Hong (“Hong”) and relayed her version of what happened on May 13, 2022, consistent with Choi’s opening declaration. Hong Decl., ¶¶ 3-4. She then showed a bag of $20,000 in $20 bills so Hong could exchange them for $100 bills. Hong Decl., ¶5.

On another day, Kim and Choi argued in Hong’s restaurant about what transpired, with Choi upset that Kim was taking Lee’s side and Kim warning Choi that both sides would lose a lot of money through litigation. Hong Decl., ¶6; Choi Reply Decl., ¶16. Choi never asked Kim to contact Lee. Choi Reply Decl., ¶15.

July 15, 2022 was the first time that Defendants, via counsel, ever claimed to Choi that the document giving Choi 10% interest in Le-Blen was a security agreement for the $40,000 loan, not a separate transfer for a $20,000 investment. Bom Lee Reply Decl., ¶9, Ex. Y.

Plaintiff Choi applies for a right to attach order against Defendant Le-Blen in the amount of $340,000, including $10,000 in estimated costs and $200,000 in attorney’s fees.

Choi applies for a right to attach order on the proper form, but her notice is not given to Defendant Le-Blen but rather to defense counsel’s law firm. This is improper but the defect is not raised by Defendant.

In opposition, Defendants assert that there is no contract on which to base a claim because Choi never signed the settlement agreement, which was supposed to reflect the parties’ agreement that they had begun negotiating on May 6, 2022. Opp. at 10; Lee Decl., ¶¶ 9-12. Choi correctly responds that she does not seek attachment based on the unsigned settlement agreement to which she never agreed, but rather based on the Share Transfer Agreement in which Le-Blen agreed to pay her at least $130,000. Choi Decl., ¶12, Ex. F. Reply at 4. The Share Transfer Agreement is a contract on which to base attachment.

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).

The parties agree that as of May 6, 2022, Choi agreed to relinquish her 10% ownership of Le-Blen – if she had any – in exchange for a payment of $130,000 over time, plus commissions on sales. Choi Decl., ¶12, Ex. F; Lee Decl., ¶9. Choi asserts that the Share Transfer Agreement embodies this duty by LeBlen as she rejected Lee’s underhanded efforts to alter it via the settlement agreement. Choi Decl., ¶¶ 14-16, 18e, Ex. G. Defendants assert that the proposed changes of accelerating payment of the $130,000 and waiving the commissions were Choi’s idea and the settlement agreement merely reflected them. Lee Decl., ¶¶ 12-13, 15.

Defendants’ claim that (a) Choi’s 2016 $60,000 payment was a loan not an investment, (b) the Share Transfer Agreement was merely a security agreement, (c) they repaid the $60,000 loan by October 2018, (d) Choi had been paid many monthly commissions in cash, (e) the proposed settlement agreement memorialized an oral settlement in which Choi would relinquish her 10% claim of company ownership in exchange for (1) $130,000, via one payment in 2022 of $30,000 and four annual payments of $25,000 thereafter; and (2) commissions on sales over the next four years, and that on May 6, 2022 Lee made a $20,000 payment by check to partially satisfy the first $30,000 due, and (f) Lee paid Choi the entire $110,000 balance on May 13, 2022.

The court need not address the viability of these claims because there are two problems with attachment based on the Share Transfer Agreement.

First and foremost, Choi claims that her loan was repaid and none of the $130,000 payments have been made. App. at 8-9. But none of the payments are due. The May 6, 2022 Share Transfer Agreement expressly provides that Lee will pay Choi $130,000, of which $30,000 will be a down payment and $25,000 will be paid in four payments over four years. Choi Decl., Ex. F. None of the $25,000 payments are yet due, and the Share Transfer Agreement does not indicate when the $30,000 down payment will be made. Id. A court can find that the down payment is due within a reasonable period from the May 6, 2022 Share Transfer Agreement date, but Choi fails to show what that reasonable period is. Choi cannot obtain attachment based on an anticipated breach of payments not yet due.

Second, the Share Transfer Agreement provides that Le-Blen will pay Choi $130,000 plus commissions for her 10% share, but it also provides for a remedy. It states that if there is a breach “on the foregoing promises and terms, this Agreement shall become null and void..[and Le-Blent] shall be closed” and Lee will be responsible for damages. This provision can be construed to mean that Le-Blen’s failure to pay results in voiding the Share Transfer Agreement and dissolution of Le-Blen, that Choi may collect her debt from Le-Blen’s assets, and that Lee will be responsible for any remaining loss. Choi Decl., ¶12, Ex. F. It is not clear, therefore, that Choi can proceed directly to collect the $130,000 from Le-Blen without this dissolution.

The $130,000 in damages is not readily ascertainable from the Share Transfer Agreement. The court need not reach the question of Choi’s estimated fees and costs. Bom Lee Decl., ¶¶ 11-13.

Assuming arguendo that a breach would entitle Choi to damages, Choi asserts that Le-Blen has not paid any of what is owed under the Share Transfer Agreement. The May 2022 payments were for a $60,000 loan Choi made to Le-Blen in August 2016. Choi Decl., ¶¶ 11, 13, 18c-d, Ex. E. Choi had a valid claim to 10% of the company pursuant to an Investment Agreement for her separate $20,000 investment made at the same time. Choi Decl., ¶6, Ex. A. It was to resolve her contentions about her rights to sales revenue that the parties entered into the May 6, 2022 Share Transfer Agreement.

As stated, Defendants assert that Choi did not own 10% of the company, her loan was repaid, and all payments in May 2022 contributed to the $130,000 Defendants agreed to pay for Choi to relinquish any claim to Le-Blen shares. Lee Decl., ¶¶ 9-13, 16.

This is a credibility case and there are reasons to distrust the position of both sides. The Investment Agreement drafted by Lee does not say that Choi is a lender; it expressly provides that Choi owns 10% of the company. Even Defendants agree that Choi was entitled to 10% of the sales revenue, which supports her interpretation. Choi Decl., ¶6, Ex. A. Additionally, if Choi had no interest in the company, Le-Blen would have no reason to send her invoices calculating a 10% share of revenue throughout 2020 and 2021 – after Lee claims to have repaid the loan. Lee Decl., ¶7, Ex. 4. See also Choi Reply Decl., ¶¶ 8-9, Ex. N-P.

While Lee claims that the October 2018 text messages prove she repaid the loan, the text (1) was sent to “Jae Young Oh” and (2) the recipient did not understand what Lee was saying. Lee Decl., ¶7, Ex. 4. If the text is genuine, it does not explain how and how much interest was paid on the loan. Moreover, Choi, Yi, and others challenge the authenticity of the text. Yi Decl., ¶3; Bom Lee Reply Decl., ¶¶ 12-13; Choi Reply Decl., ¶7. Choi also notes (Choi Reply Decl., ¶7) that she always provided receipts acknowledging repayment of loans; she even a receipt for the $20,000 payment on May 6, 2022. Choi Decl., ¶11, Ex. E. Defendants do not offer a receipt for repayment of the loan.

The events of May 13, 2022 are seriously in dispute. Lee’s position is that she followed Kim’s advice and gave Choi $60,000 in cash, went out to car, and brought the remaining $50,000 in cash which Choi took from her without signing the settlement agreement. Lee Decl., ¶16. Lee is corroborated by her immediate telephone call to LAPD. Lee Decl., ¶19, Ex. 5.

Lee is strongly corroborated by Kim, a mutual friend of both, who provides evidence that the next day Choi admitted Lee’s version of events, showed Kim a black plastic bag with the $110,000, and when asked, confirmed that Lee paid the entire $110,000 sum. Kim Decl., ¶9. Choi subsequently asked Kim to call Lee and offered $5,000 for Kim’s help in getting Lee to surrender to Choi’s demands. Kim Decl., ¶11. In the weeks that followed, Choi told Kim that she (Choi) could easily say that the $110,000 was repayment of loans and that a few checks she had for monthly commission payments were all that she received because most of the monthly commissions had been in cash and that she wanted to punish Lee for calling the police. Kim Decl., ¶12.

Choi provides evidence of her own, including that Apartment CCTV footage from May 13, 2022before the meeting shows Choi’s son leaving her apartment building (Choi Reply Decl., ¶11, Ex. R), the footage shows Choi explaining to Lee that she had trusted her by not asking for documentation of the $80,000 and Lee replied “Now I have repaid you.” (Choi Reply Decl., ¶4, Ex. L), Lee did not go downstairs to get a second bag of cash, but to bring 25 sets of skincare products Choi requested (Choi Reply Decl., ¶11, Ex. Q), when Choi’s relative (Park) asked over the speakerphone why the settlement agreement states receipt of $110,000 when Choi only received $60,000, Lee only mumbled “just because” multiple times (Park Decl., ¶7; Choi Reply Decl., ¶11, Ex. S), Lee waited outside with her husband in the car parking lot next to Choi’s residence (Park Decl., ¶12), and Choi never discussed the Share Transfer Agreement with Kim until after the meeting between Choi and Lee on May 13, 2022. Choi Reply Decl., ¶13.

Some of this evidence is helpful to Choi. However, Choi never satisfactorily explains why Kim would say that she saw the $110,000 and that she (Choi) admitted to Kim that Lee had paid $110,000. See Choi Reply Decl., ¶¶ 13-15.

Choi also fails to explain why, if the parties agreed that Choi would transfer her 10% ownership interest in the company under certain terms and the company would repay her $60,000 loan (Choi Decl., ¶10), the Share Transfer Agreement not mention the loan? After all, the parties were seeking to remove Choi from her ownership interest in the company and presumably she would have no further dispute with them. Why not refer to the loan?

Finally, why would Lee come to Choi’s business a week after entering into the Share Transfer Agreement with $60,000? She had no obligation to do so under the Share Transfer Agreement. Her only obligation was Choi’s demand for repayment of the balance of the loan. But if Lee came solely to repay the loan, why did she have a proposed settlement agreement? Was it simply to defraud Choi or was it because she believed that the payment (in whatever amount) would end their differences?

The court need not resolve these issues. Someone, or multiple persons, are not telling the whole truth. Credibility issues are best suited for trial and the court cannot fully evaluate them here. Choi has not demonstrated a probability of success under the Share Transfer Agreement.

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).

Defendants assert that Choi brings this action in retaliation for Lee calling the police to report Choi and her son for stealing the money from her on May 23, 2022. Kim Decl., ¶12. This contention is unproven. Defendants have failed to demonstrate that Choi seeks attachment for an improper purpose.

[1] Defendants failed to lodge a courtesy copy of their opposition and supporting papers, and Choi her reply and supporting papers, in violation of the Presiding Judge’s First Amended General Order Re: Mandatory Electronic Filing. Counsel is admonished to provide courtesy copies in all future filings.

[2] Choi claims that these events are on video but does not provide video footage evidence. Choi Decl., ¶13.

[3] All of Choi’s written objections to Defendants’ evidence are overruled.