Judge James C. Chalfant, Case 22STCV17813 2023-05-23 Tentative Ruling

Plaintiff Chapman Court LLC (Landlord”) applies for a right to attach order against Defendant Brian Clark (“Clark” or “Tenant”) in the amount of $1,368,046.91.

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 Landlord filed the Complaint against Tenant on May 31, 2022, alleging a single cause of action for breach of contract. The Complaint alleges in pertinent part as follows.

On October 21, 2019, Tenant and Landlord entered a written lease agreement (“Lease”) for premises at 3511 W. 6th Street, Los Angeles, CA 90020 (“Premises”) from December 2019 through October 2029. Pursuant to the Lease, Tenant was required to pay Base Rent starting at $3.95 per rentable square foot per month, or $64,400.80 per month, with a 4% increase on every anniversary of the Lease’s Commencement Date. Tenant also was to pay the cost of utilities and any attorney’s fees Landlord incurs due to any breach.

Tenant also agreed to provide an irrevocable standby letter of credit for $200,000 within five business days of the Commencement Date. Tenant further agreed to provide a security deposit of $200,000.

In January 2020, Tenant breached the Lease for failure to provide the irrevocable standby letter of credit. In September 2020, he breached for failure to provide $100,000 of the $200,000 security deposit. Tenant also failed to pay the full monthly Base Rent from July 2020 thereafter, plus $186.08 in utility bills in February 2022.

In April 2022, Tenant returned the keys to the Premises without Landlord’s consent or waiver of its right to full enforcement of all remedies under the Lease. Article 19.2.1 allows Landlord to terminate the Lease and claim all amounts which would have been earned thereunder, adjusted for present-day value after mitigation. Landlord has mitigated its damages by releasing a portion of the Premises beginning April 2022 for $4,000 per month with an annual 3% increase. Efforts to lease the rest of the Premises have failed.

Landlord has calculated the Base Rent owed each year of the Lease after mitigation, although not the total. Landlord seeks compensatory damages for these amounts, interest at the rate listed in the Lease, and attorney’s fees and costs.

2. Course of Proceedings

On June 10, 2022, Landlord served Tenant with the Complaint and Summons.

On July 20, 2022, Tenant filed an Answer.

On August 31, 2022, Tenant filed notice of substitution of attorney from Avraham Sinai, Esq. to Paul Deese, Esq.

On March 29, 2023, Landlord served Tenant with the moving papers by email and U.S. mail.

On April 25, 2023, the court continued the hearing on the instant application under CCP section 484.080 to provide Tenant sufficient time to file an opposition, but also granted a temporary protective order.

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.

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.

On October 21, 2019, Tenant and Landlord entered a Lease for commercial Premises from December 2019 through October 2029. Neman Decl., ¶¶ 3, 5-6, Ex. 1. Pursuant to the Lease, Tenant was required to pay Base Rent starting at $64,400.80 per month, with a 4% increase on every anniversary of the Lease’s December 1, 2019 Commencement Date. Neman Decl., ¶¶ 7-8, Ex. 1. Tenant also was required to pay Landlord the cost of supplying all utilities. Neman Decl., ¶5, Ex. 1.

Article 3.3 of the Lease required Tenant to provide a letter of credit for $200,000 within five business days of the Commencement Date. Neman Decl., ¶11, Ex. 1. Landlord would have the right to draw upon it in the event of default. Neman Decl., ¶11, Ex. 1.

Article 21 of the Lease required Tenant to provide a $200,000 security deposit upon the Lease’s execution. Neman Decl., ¶10, Ex. 1.

Under Article 8.5, if Tenant made any alterations or improvements to the Premises, they would become the Landlord’s property. Neman Decl., Ex. 1. Tenant would hold Landlord harmless from any liability, cost, obligation, expense or claim of lien in any manner relating to such improvements. Neman Decl., Ex. 1.

Under Article 14.1, Tenant could not sublease or assign any interest under the Lease without Landlord consent, but the Landlord should not unreasonably withhold it. Neman Decl., Ex. 1. The Tenant was to provide a written Transfer Notice with the proposed effective date of such transfer, which must be between 30 and 180 days of the notice. Neman Decl., Ex. 1. The Transfer Notice shall also provide financial statements of the proposed transferee, credit history, and any other information the Landlord would need to determine the financial responsibility, character, and reputation of the proposed transferee and their proposed use of the subject space. Neman Decl., Ex. 1.

Article 19.1 defines default to include (1) failure to pay Rent when it becomes due and (2) abandonment or vacation of all or a substantial portion of the Premises. Neman Decl., Ex. 1. Upon default, the Landlord could terminate the Lease and recover (1) any unpaid rent accrued as of termination; (2) any rent that would have accrued thereafter, either before or after the time of an award of such damages, until the time of award exceeds the amount of such rental loss that Tenant

proves could have been reasonably avoided; and (3) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform. Neman Decl., Ex. 1.

Article 29.21 provides that, in any action to enforce the Lease, the prevailing party is entitled to costs and attorney’s fees incurred. Neman Decl., ¶9, Ex. 1.

Article 29.14 identifies the Lease as the entire agreement between the parties as to the leasing of the Premises, with no oral agreement between the parties. Neman Decl., Ex. 1.

Article 12 asserts that no provision of the Lease is waived by either party absent express waiver in writing signed by that party. Neman Decl., Ex. 1.

Tenant’s signature on the Lease is “Brian Clark, an individual.” Neman Decl., ¶5, Ex. 1.

On December 1, 2019, Tenant breached the Lease for failure to pay the $200,000 deposit. Neman Decl., ¶9. Although Tenant paid $100,000 in September 2020, he never paid the rest. Neman Decl., ¶14.

On December 9, 2019, Tenant breached the Lease for failure to provide the $200,000 letter of credit. Neman Decl., ¶13.

From July 2020 thereafter, Tenant failed to make full monthly payment of the Base Rent. Neman Decl., ¶15. Tenant had made two excess payments in February 2020 totaling $10,270.39. Neman Decl., ¶16. Landlord credited the $10,270.39 against the $64,400.80 Base Rent for July 2020, which reduced the balance to $54,130.41. Neman Decl., ¶16. Rent then continued to accrue. Neman Decl., ¶16. Tenant’s only payments after July 1, 2020 were $2,500.00 in August 2021, $2,500.00 in December 2021, and $688.16 in February 2022. Neman Decl., ¶16.

In April 2022, Tenant returned the keys to the Premises without Landlord’s consent or waiver of its right to full enforcement of all remedies under the Lease. Neman Decl., ¶17.

A ledger of the amounts owed under the Lease (“Ledger”) shows that Tenant accrued $1,358,921 in debt through April 2022. Neman Decl., ¶19, Ex. 2. This includes Base Rent and utilities through April 2022 after the $100,000 security deposit and the partial payments made from February 2020. Neman Decl., ¶19, Ex. 2. Without utilities, Landlord has calculated the damages for this period as follows.

The Base Rent for July and August 2020 was $128,801.60. Neman Decl., ¶18(1). Landlord subtracts the $100,000 security deposit, $10,270.39 of credit from February 2020, $2,500.00 paid in August 2021, $2,500.00 paid in December 2021, and $688.16 paid in February 2022. Neman Decl., ¶18(1). The outstanding Base Rent for those two months is $12,843.05. Neman Decl., ¶18(1).

The unpaid Base Rent totals $193,202.40 between September and November 2020, $803,721.96 based on an increased Base Rent from December 2020 to November 2021, $278,623.60 based on an increased Base Rent from December 2021 to March 2022, and $69,655.90 for Base Rent at the same rate in April 2022. Neman Decl., ¶¶ 18(2)-18(5). When added to the outstanding Base Rent from July and August 2020, damages from Base Rent total $1,358,046.91. Neman Decl., ¶18.

Counsel for Landlord charges an hourly rate of $595. Tabibi Decl., ¶4. Although counsel estimates that Landlord’s attorney’s fees and costs each will exceed $5,000, this application limits them to $5,000 each. Tabibi Decl., ¶4. The $10,000 in estimated fees and costs increases the total subject to attachment as $1,368,046.91. Neman Decl., ¶19.

When counsel for Landlord made demands on Tenant for amounts owed under the Lease, Tenant said he could not pay. Tabibi Decl., ¶3. On July 18, 2022, before mediation on this action, Tenant sold two parcels of land he owns to Orellana Family Land Holdings, LLC for $4,000,000 and $2,900,000, or a total of $6,900,000. Tabibi Decl., ¶3, Ex. 1.[2]

On October 21, 2019, Tenant entered a Lease for the Premises. Clark Decl., ¶2. Tenant sought to use the Premises as a coworking space by subleasing smaller furnished offices to sublessees, subject to Landlord’s approval. Clark Decl., ¶3. Landlord agreed to the plan, and Tenant never used the Premises as his own workspace. Clark Decl., ¶3. Landlord therefore did not enforce significant provisions of the Lease from the very beginning. Clark Decl., ¶3.

Landlord did not cooperate in approving subleases and dictated the sublease conditions and prices. Clark Decl., ¶4. As a result, Tenant was unable to sublease the Premises. Clark Decl., ¶4.

On March 2, 2022, Tenant informed Landlord that he was vacating the Premises by the end of the month. Clark Decl., ¶4. He returned the Premises in or around April 2022. Clark Decl., ¶4.

Landlord has not demonstrated efforts to advertise and relet the Premises. Clark Decl., ¶5. A writ of attachment will make it difficult for Tenant to get the loan needed to repay Landlord and cause him damages far in excess of $10,000. Clark Decl., ¶6.

Tenant’s spouse lives in a rental home and relies on him for support. Clark Decl., ¶7. Their total monthly expenses are $9,300, including $2,500 for attorney’s fees to defend himself in this action. Clark Decl., ¶7; Clark Financial Statement. The total annual necessary-for-support exemption is $111,600. Clark Decl., ¶7.

Tenant owns and personally uses a 2011 BMW M3 (“Vehicle”) worth $30,000, for which he also claims an exemption. Clark Decl., ¶8; Clark Financial Statement.

Tenant regularly receives gross monthly wages of $7,000. Clark Decl., ¶9; Clark Financial Statement.

Tenant has a watch worth $8,725 and seeks to exempt it in full. Clark Decl., ¶11.[3]

Tenant also seeks to claim a full exemption for household and personal effects that are ordinarily and reasonably necessary to, and personally used by, him and his spouse at his family home. Clark Decl., ¶10.

The financing statement also lists two bank accounts with balances of $35,000 and $2,000, $3.200,000 in real estate equity, and $175,000 in miscellaneous personal property. Clark Financial Statement. It also reports that Tenant’s spouse has a monthly income of $1,000. Clark Financial Statement.

Landlord’s claim for $1,358,046.91 is based on a breach of the Lease. Neman Decl., ¶¶ 5-6, Ex. 1. Landlord has a claim 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).

Under the Lease, Base Rent started at $64,400.80 per month and increased by 4% on every anniversary of the Lease’s December 1, 2019 Commencement Date. Neman Decl., ¶¶ 7-8, Ex. 1. Tenant was also required to pay Landlord the cost of supplying all utilities. Neman Decl., ¶5, Ex. 1. Landlord presents a Ledger showing that Tenant’s rental balance is $1,358,921 through April 2022, after deducting the $100,000 security deposit and the various Tenant checks from February 2020 to February 2022. Neman Decl., ¶19, Ex. 2. Because this total includes utilities, Landlord used the credits and charges from the Ledger to calculate the outstanding debt based on Base Rent alone as $1,358,046.91. Neman Decl., ¶18.

In any action to enforce the Lease, the non-prevailing party must reimburse the prevailing party any costs and expenses incurred. Neman Decl., ¶9, Ex. 1. Counsel for Landlord estimates that its attorney’s fees and costs will exceed the $10,000 that Landlord seeks for attachment. Tabibi Decl., ¶4. This increases the total amount to attach to $1,368,046.91. Neman Decl., ¶19.

Tenant asserts that Landlord has not credited him for either the letter of credit or improvements to the Premises. Opp. at 3-4. Although the Lease required Tenant to deliver a $200,000 letter of credit, Landlord’s undisputed evidence is that Tenant failed to provide a letter of credit. Neman Decl., ¶¶11, 13, Ex. 1. Tenant does not explain how the Lease enables him to credit improvements to the Premises against rent owed. Under Article 8.5, all Tenant alterations or improvements become Landlord Property. Neman Decl., Ex. 1. As for the $100,000 security deposit, Landlord credited Tenant with that amount. Reply at 4; Neman Decl., ¶19, Ex. 2.

Landlord provides evidence that Tenant and Landlord entered a Lease for commercial Premises from December 2019 through October 2029. Neman Decl., ¶¶ 3, 5-6, Ex. 1. The Ledger also shows that between July 2020 and April 2022, Tenant accrued rent on the Lease but only made a few partial payments. Neman Decl., ¶¶ 16, 19, Ex. 2. Tenant returned the keys to the Premises in April 2022, the last month on the Ledger. Neman Decl., ¶¶ 17, 19, Ex. 2. The failure to pay rent prior to April 2022 is a breach of contract and supports the damages Landlord sought.

Tenant’s declaration states that he leased the Premises to sublet them as a coworking space subject to Landlord’s approval. Clark Decl., ¶3. Landlord did not cooperate in approving subleases. Clark Decl., ¶4.

Tenant’s opposition does not contend that Landlord breached the Lease by unreasonably refusing to allow Tenant to sublet. In any event, such an argument would fail on the current state of evidence. Under Article 14.1, Tenant could not sublease or assign any interest under the Lease without Landlord consent, but the Landlord should not unreasonably withhold it. Neman Decl., Ex. 1. The Tenant was required to provide a written Transfer Notice with enough information for the Landlord to determine the financial responsibility, character, and reputation of the proposed transferee and their proposed use of the subject space. Neman Decl., Ex. 1. Tenant does not provide evidence that he provided this information and fails to show that any rejection of potential subletters was unreasonable.

Tenant argues that he is entitled to offset all sums that he can prove that Landlord obtained or could have obtained by acting reasonably in reletting the Premises. See Lu v. Grewal, (2005) 130 Cal.App.4^th 841, 850; Civil Code §1951.2(a)(2), (3). Landlord admitted that Tenant returned possession of the Premises in April 2022 and Landlord has not provided any evidence of its efforts to relet the Premises. The amount of rent that Landlord could have avoided under Civil Code section 1951.2 remains unknown until discover and cannot be determined until trial. Opp. at 5.

This argument misstates Civil Code section 1951.2, which Article 19.1 of the Lease mimics. Landlord only seeks damages through April 2022, when Tenant vacated the Lease. Neman Decl., ¶19, Ex. 2. Neither the Lease nor Civil Code section 1951.2(a)(1) apply a duty to mitigate by reletting the Premises before termination. Civil Code §1951.2(a)(1); Neman Decl., Ex. 1.[4] Additionally, Civil Code sections 1951.2(a)(2) and (3) and Article 19.1 of the Lease reduce damages by the amount of such rental loss that the Tenant proves could have been reasonably avoided. Civil Code §§ 1951.2(a)(2)-(3); Neman Decl., Ex. 1. Tenant fails to provide any evidence that Landlord could have mitigated damages and his attempt to shift the burden of proof on this issue is improper. See Reply at 4-5.

The conduct of a trade, business, or profession is generally activity “which occupies the time, attention and effort. . . for the purpose of livelihood or profit on a continuing basis.” Nakasone v. Randall, (1982) 129 Cal.App.3d 757, 764 (quoting Advance Transformer Co. v. Superior Court, (1974) 44 Cal.App.3d 127, 134). “The term ‘business,’ therefore, embraces any activity engaged in for profit or for gain. The phrase ‘engaged in business,’ however, generally is held to imply business activity of a frequent or continuous nature.” Id. There is a distinction between one who spends his time and effort in carrying on an activity for livelihood or profit on a continuing basis and one who merely conserves his personal investments. Id.

Landlord asserts that the Premises are commercial in nature. Neman Decl., ¶3. This says nothing about whether Tenant leased the Premises for commercial purposes. However, the Lease provides that Tenant shall use the Premises solely for the Permitted Use set forth in Section 7 of the Summary. Neman Decl., Ex. 1, §5.1. In turn, the Lease Summary provides that Tenant’s Permitted Use is as a “General office use consistent with a first-class office building in Los Angeles.” Ex 1. Tenant admits that he planned to sublease the Premises to others as part of a business model similar to WeWork. Clark Decl., ¶3.

This is sufficient to demonstrate that the Lease is a commercial transaction and that Landlord’s claim is commercial in nature arising out of Tenant’s conduct of a business.

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). This application for a right to attach order does not seek attachment for any purpose other than to recover upon Landlord’s claim in this action. Mem. at 8. Landlord seeks attachment for a proper purpose.

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. The requirement of specificity avoids unnecessary hearings where an individual defendant is willing to concede that the described property is subject to attachment. Ibid. A general list of categories - e.g., “real property, personal property, equipment, motor vehicles, chattel paper, negotiable and other instruments, securities, deposit accounts, safe-deposit boxes, accounts receivable, general intangibles, property subject to pending actions, final money judgments, and personal property in decedents’ estates” – is sufficient. Ibid.

Landlord seeks to attach Tenant’s interests in real property other than leasehold estates with unexpired terms of less than 1 year, accounts receivable, chattel paper, general intangibles of at least $150, equipment, farm products, inventory, final money judgments related to a trade or business, money after the first $1,000 on premises where a trade or business is conducted, money located elsewhere, deposit accounts, negotiable documents of title, instruments, securities, and minerals or the like to be extracted, and any community property of said types which would otherwise be subject to enforcement of a judgment entered in this action. This description is sufficiently specific.

The property exempt from attachment consists of (a) all property exempt from enforcement of a money judgment,[5] (b) property which is necessary for the support of a defendant who is a natural person or the family of such defendant supported in whole or in part by the defendant, (c) “earnings” as defined by CCP section 706.011, and (d) all property not subject to attachment pursuant to CCP section 487.010. CCP §487.020.

If the defendant claims that any personal property described in the application is exempt from attachment, the defendant may include that claim in the notice of opposition to the right to attach order (CCP §484.060(a)), or may file and serve a separate claim of exemption for the property (CCP §484.070(b)). If the defendant does not do either, the claim of exemption will be barred in the absence of a showing of a change in circumstances occurring after the expiration of the time for claiming exemptions. CCP §484.070(a); Bank of America, supra, 207 Cal.App.3d at 268 (plaintiff’s failure to oppose exemption claim concedes its propriety). This waiver applies only to personal property. Thus, a homestead exemption for a dwelling is not waived by failing to make a claim for exemption. Martom v. Aboyan, (1983) 148 Cal.App.3d 826, 831.

The defendant also may obtain a determination at the hearing whether real or personal property not described in the application or real property described in the application is exempt from attachment by including an exemption claim for such property in the notice of opposition/separate claim of exemption. The defendant’s failure to claim such property as exempt does not preclude the defendant from raising the issue at a later time. CCP §484.070(b). The claim of exemption shall (1) describe the property claimed to be exempt, and (2) specify the statute section supporting the claim. CCP §484.070(c). The claim of exemption shall be accompanied by an affidavit supporting any factual issues raised by the claim and points and authorities supporting any legal issues raised. CCP §484.070(d). The defendant must file and serve the claim of exemption and supporting papers not less than five court days before the date set for the hearing. CCP §484.070(e).

Where a right to attach order has been issued by the court, a plaintiff may discover, through any means provided for by, and subject to the protections included in, CCP section 2016.010 et seq, the identity, location, and value of property in which the defendant has an interest. CCP §485.230. In reply, Landlord asks the court to deny all claims for exemptions or alternatively hold a separate hearing on exemptions so Landlord can conduct discovery as to Tenant’s assets. Reply at 9.

Landlord asks the court to disregard Tenant’s exemptions because he failed to mark the appropriate box on form AT-155. Reply at 7. Tenant did check box 4.c for a claim of exemptions on the Form AT-155 filed with the court. In any case, the Judicial Council form is optional and Tenant could seek exemptions without checking the appropriate box.

A plaintiff who has been guilty of improper conduct connected with the controversy at hand will be denied by equity any recognition or relief with regard to the controversy. Moriarty v. Carlson, (1960) 184 Cal.App.2d 51. The actions of the party alleged to have soiled hands must relate “directly to the transaction concerning which the complaint was made....” Pond v. Insurance Co. of North America, (1984) 151 Cal.App.3d 280, 290. While equity does not demand that a plaintiff lead a blameless life as to other matters, it does require that he have acted fairly and without fraud or deceit as to the controversy in issue. A plaintiff’s failure to do so is a complete defense to the complaint. Dickson, Carlson & Campillo v. Pole, (“Dickson”) (2000) 83 Cal.App.4th 436, 446. The defense of unclean hands applies to both equitable and legal claims. Pond v. Insurance Co. of North America, 151 Cal.App.3d at 290.

The defense of unclean hands does not apply in every instance where the plaintiff has committed some misconduct in the matter in controversy, but only where it would be inequitable to grant any relief. Dickson, supra, 83 Cal.App.4th at 447. The court must consider the material facts affecting the equities between the parties, including the nature of the plaintiff’s misconduct, the degree of harm caused, and the extent of the plaintiff’s damages. Id. The decision whether to apply the defense in a particular case is committed to the trial court’s discretion. Id.

Landlord asserts that Tenant cannot claim exemptions due to unclean hands. He has made several misrepresentations as to his assets and cannot be trusted. Landlord asserts that Tenant has failed to disclose that he told Landlord before entering into the Lease that he has (1) $1.2 million in annual income from collecting rent on other properties, (2) ownership interest in real estate in both Los Angeles and Miami, (3) multiple businesses, whether LLCs or corporations, (4) owns $10,000,000 in real property, and (5) a portfolio of stocks and securities. Reply at 8-9. Landlord presents no evidence that Tenant has these assets or told Landlord that he did.

Landlord presents evidence that Tenant sold two properties for a total of $6,900,000. Tabibi Decl., ¶3, Ex. 1. Landlord concedes that up to 70% of the sale price may be encumbered through mortgages but this would still leave $1,750,000 in sales proceeds. Landlord asks why Tenant has not disclosed them? Reply at 7.

Landlord’s argument and evidence make Tenant’s financial statement troublesome but do not show unclean hands. Tenant’s financial statement indicates $3.2 million in real estate equity. The sales in question occurred in July 2022, almost a year before this hearing, and there is no evidence about what happened to the proceeds. See Tabibi Decl., ¶3, Ex. 1. Evidence of the sale alone is not sufficient to show that Tenant concealed assets in his financial statement.

Landlord also argues that Tenant must be hiding assets because he does not explain why his $9,300 expenses exceed his $7,000 income. Reply at 8; Clark Financing Statement. The court need not speculate about how Tenant makes up the difference when he has sufficient equity in real estate and apparently buys and sells real estate as part of his business.

Landlord has failed to demonstrate that Tenant has unclean hands as to his claims for exemptions. The request to hold a separate hearing on his assets is denied.

The property exempt from attachment includes property which is necessary for the support of a defendant who is a natural person or the family of such defendant supported in whole or in part by the defendant.¿ CCP §487.020(b).

Property which is necessary for the support of a defendant who is a natural person or the family of such defendant supported in whole or in part by the defendant may be exempt. Code CCP §487.020(b). All property of the defendant is considered when determining the needs of the defendant, his spouse, and his dependents. CCP §703.115. Where property is claimed exempt pursuant to a provision exempting property necessary of the support of the claimant and the claimant’s family, “the claim of exemption shall include a financial statement” which “shall be executed under oath by the [claimant]…” CCP §703.530. The financial statement must detail the names, ages, relationships, earnings, income, assets, and outstanding obligations of all members of the family. CCP §703.530.

Tenant has provided a financial statement showing monthly expenses of $9,300 per month, or $111,600 per year, to support himself and his spouse. Clark Decl., ¶7; Clark Financial Statement. Of this amount, $2,500 per month ($30,000 per year) is for legal fees to defend this lawsuit. Clark Decl., ¶7; Clark Financial Statement. Such legal fees must be considered as necessary for support in order for attachment law to pass constitutional muster. Randone v. Appellate Department, (1971) 5 Cal.3d 536, 562. $111,600 per year in cash or other liquid assets is exempt as necessary for family support.

Compensation payable by an employer to an employee for personal services performed by such employee, whether denominated as wages, salary, commission, bonus, or otherwise, is exempt from attachment. CCP §487.020(c); CCP §706.011(b).

Tenant’s financing statement lists gross monthly wages of $7,000. Clark Decl., ¶9; Clark Financial Statement. Tenant seeks an exemption for this amount, which is granted.

As of January 1, 2023, the aggregate equity in motor vehicles is exempt up to $7,500. CCP §704.010(a).

Tenant’s Financing Statement shows that he owns and personally uses a 2011 BMW M3 (“Vehicle”) worth $30,000, for which he also claims an exemption. Clark Decl., ¶8; Clark Financial Statement. This is four times greater than the $7,500 maximum exemption for a vehicle. The exemption is granted in the amount of $7,500.

Jewelry, heirlooms, and works of art are exempt to the extent that the aggregate equity does not exceed $8,725. CCP §704.040.

Tenant asserts that he has a watch worth $8,725 which he seeks to exempt. Clark Decl., ¶11. Although he asserts that his Financing Statement reflects this interest, it is not expressly identified. Clark Decl., ¶11. It may be part of category 3.e, which lists $175,000 in other personal property, but the court cannot speculate. Tenant fails to provide any evidence identifying the watch and the exemption is denied.

A defendant may elect to exempt interest, not to exceed $725 in value in any particular item, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor. CCP §703.140(b)(3).

Tenant claims an exemption in household items for personal and family use. Opp. at 7-8; Clark Decl., ¶10. Although his financing statement does not include the furniture and household items for which he claims an exemption, the nature of these items is such that they need not be identified. The exemption is granted.

The application for a right to attach order in the amount of $1,368,046.91 is granted. Tenant’s exemption for property necessary for the support of his family is granted in the amount of $111,600 per year in cash or other liquid assets. A $7,000 monthly wages exemption, a $7,500 vehicle exemption, and a household items exemption are also granted. An exemption for a watch is denied. No writ shall issue until Landlord posts a $10,000 bond.

[1] The court has exercised its discretion not to read or consider the footnotes in Landlord’s reply which violate the 12-point font size requirement of CRC 2.104.

[2] Landlord reattaches this exhibit to its reply, split into two, to request judicial notice. Reply at 6. It did not file a separate request for judicial notice as required by CRC 3.1113(l). The request is denied.

[3] Tenant asserts this watch is on his Financing Statement. Clark Decl., ¶11. No watch is specifically identified. It may be part of category 3.e, which lists $175,000 in other personal property.

[4] According to the Complaint, Landlord has mitigated its post-April 2022 damages by releasing a portion of the Premises for $4,000 per month with an annual 3% increase. Efforts to lease the rest of the Premises have failed.

[5] The property exempt from enforcement of a money judgment is listed in CCP section 704.010 et seq.