Judge James C. Chalfant, Case 22STCV29153 2022-12-13 Tentative Ruling

Plaintiff DKP Designs, Inc. (“DKP”) applies for a right to attach order against Defendant Follow Beauty, LLC (“Follow Beauty”) in the amount of $93,110.76.

The court has read and considered the moving papers (no opposition was filed), and renders the following tentative decision.

A. Statement of the Case

1. Complaint

DKP filed the Complaint on September 6, 2022, alleging breach of contract. The Complaint alleges in pertinent part as follows.

On March 31 and July 19, 2021, DKP received from Follow Beauty purchase orders for $39,500, $16,200, and $50,750 (“Purchase Orders”). Follow Beauty failed to pay the invoices issued by DKP pursuant to the Purchase Orders, sent on (1) November 23 and December 8, 2021; (2) March 5 and 18, 2022; and (3) April 22, 2022 (“Invoices”).

DKP seeks (1) $73,656.83 in damages; and (2) interest at 10% per year, or $20.18 per diem, both pre-judgment and post-judgment.

2. Course of Proceedings

On October 16, 2021, DKP personally served Follow Beauty with the Complaint and summons.

On November 4, 2022, DKP served this application for right to attach order and notice thereof by electronic mail and U.S. mail.

On November 30, 2022, Follow Beauty filed an Answer to the Complaint.

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.

On March 31, 2021, Follow Beauty sent DKP Purchase Orders for (1) $39,500 of Coastal Citizen (“Citizen”) cotton rounds, or 10,000 rounds at $3.95 each; and (2) $16,100 of Citizen mask brushes, or 10,000 rounds at $1.61 each. Koppel Decl., ¶¶ 3(a), (b), Ex. 1. The expected receipt date for both orders was August 2, 2021, but handwritten notes changed that date to August 9, 2021. Koppel Decl., ¶¶ 3(a), (b), Ex. 1.

On July 19, 2021, Follow Beauty sent DKP a third Purchase Order for $39,500 of In the Glow (“Glow”) exfoliating mitts, tanning applicator mitts, and tanning face brushes. Koppel Decl., ¶3(c), Ex. 1. Follow Beauty ordered 5,000 each with unit prices of $2.35 per exfoliating mitt, $3.40 per tanning applicator mitt, and $4.40 per tanning face brush. Koppel Decl., ¶3(c), Ex. 1. The expected receipt date for all three was November 19, 2021, but handwritten notes changed that date to December 13, 2021. Koppel Decl., ¶3(c), Ex. 1.

Each Purchase Order provided for a 15% down payment, with the rest due for a product upon its delivery to the Follow Beauty offices. Koppel Decl., ¶3, Ex. 1. It directed DKP to include invoices with the same prices, terms, part numbers, and purchase order numbers as outlined in the Purchase Orders unless DKP received an authorization for change. Koppel Decl., ¶3, Ex. 1. DKP was also to notify Follow Beauty if it was unable to ship as specified. Koppel Decl., ¶3, Ex. 1. If Follow Beauty accepted a shipment of any part of one, it agreed to all specifications as to that shipment’s terms and delivery. Koppel Decl., ¶3, Ex. 1. Follow Beauty also reserved the right to cancel the undelivered part of any order and have any appropriate pro rata payments returned if a natural disaster or governmental action or any cause beyond its control interrupted its business. Koppel Decl., ¶3, Ex. 1.

On November 8, 2021, DKP sent an Invoice for 4,800 Citizen bamboo rounds at $4.05 per unit, or $19,764, plus $392 in shipping. Koppel Decl., ¶4, Ex. 2. After subtracting payments of $11,825.46, the balance owed on this Invoice was $8,330.54. Koppel Decl., ¶4, Ex. 2. Based on a due date of November 23, 2021, interest at a 10% annual rate is $784.32 as of November 1, 2022. Koppel Decl., ¶6, Ex. 3.

On November 23, 2021, DKP sent an Invoice for 10,000 Citizen vegan bristle brushes at $1.71 per unit, or $17,100, plus shipping and “new envelope” costs. Koppel Decl., ¶4, Ex. 2. The bristle brushes have the same item code as the Citizen mask brushes from the March 31 Purchase Orders. Koppel Decl., ¶4, Ex. 2. After subtracting payments of $2,415.00, the balance owed on this Invoice was $21,471.29. Koppel Decl., ¶4, Ex. 2. Based on a due date of December 8, 2021, interest at a 10% annual rate is $1,934.52 as of November 1, 2022. Koppel Decl., ¶6, Ex. 3.

On February 18, 2022, DKP sent an Invoice for 5,000 Glow tanning applicator mitts at $3.40 per unit, or $17,000, plus trucking costs of $170. Koppel Decl., ¶4, Ex. 2. After subtracting payments of $2,550.00, the balance owed on this Invoice was $14,620. Koppel Decl., ¶4, Ex. 2. Based on a due date of March 5, 2022, interest at a 10% annual rate is $970.42 as of November 1, 2022. Koppel Decl., ¶6, Ex. 3.

Also on February 18, 2022, DKP sent an Invoice for 5,000 Glow tanning face brushes at $4.40 per unit, or $22,000, plus trucking costs of $170. Koppel Decl., ¶4, Ex. 2. After subtracting payments of $3,300.00, the balance owed on this Invoice was $18,870. Koppel Decl., ¶4, Ex. 2. Based on a due date of March 18, 2022, interest at a 10% annual rate is $1,183.93 as of November 1, 2022. Koppel Decl., ¶6, Ex. 3.

On April 7, 2022, DKP sent an Invoice for 5,000 Glow tanning face brushes at $2.35 per unit, or $11,750, plus trucking costs of $377.50. Koppel Decl., ¶4, Ex. 2. After subtracting payments of $1,762.50, the balance owed on this Invoice was $10,365. Koppel Decl., ¶4, Ex. 2. Based on a due date of April 22, 2022, interest at a 10% annual rate is $550.96 as of November 1, 2022. Koppel Decl., ¶6, Ex. 3.

The total principal owed on all five Invoices is $73,656.83. Koppel Decl., ¶4, Ex. 2. With interest, the total owed is $79,080.98. Koppel Decl., ¶6, Ex. 3. Despite requests, Follow Beauty has not paid this balance as of November 1, 2022. Koppel Decl., ¶5.

DKP’s counsel charges $595 per hour for partner Michael Berger, Esq. (“Berger”), $495 per hour for partner Sofya Davtyan, Esq. (“Davtyan”), $435 per hour for the associates, $225 for the senior bankruptcy paralegal and law clerk, and $200 per hour for all other paralegals. Berger Decl., ¶3. Counsel has billed DKP $12,863 for 28 hours of work performed, and it has performed 31,66 hours total. Berger Decl., ¶4, Ex. 4. Costs have totaled $1,166.78, for a total bill to DKP of $14,089.28. Berger Decl., ¶4, Ex. 4.

DKP’s claim against Follow Beauty is based on three Purchase Orders and five Invoices. Koppel Decl., ¶¶ 3-4, Exs. 1-2. 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).

DKP asserts ascertainable damages of $93,110.76, based on (1) the principal amount owed under the invoices, totaling $73,656.83 (Koppel Decl., ¶4, Ex. 2); (2) interest based on a 10% annual rate (Koppel Decl., ¶6, Ex. 3); and (3) $14,089.28 in attorney’s fees and costs (Berger Decl., ¶4, Ex. 4).

DKP asserts that, after deposits and other credit, Follow Beauty owes (1) $8,330.54 under the November 8 Invoice; (2) $21,471.29 under the November 23 Invoice; (3) $14,620 under the February 18 Mitt Invoice; (4) $18,870 under the February 18 Brush Invoice; and (5) $10,365 under the April 7 Invoice. Koppel Decl., ¶4, Ex. 2.

Every Invoice includes charges both for the items purchased and for shipping, trucking, and freight. Koppel Decl., ¶4, Ex. 2. The Purchase Orders are the only documents from Follow Beauty, and they did not sign or otherwise acknowledge the Invoices. Koppel Decl., ¶¶ 3, 4, Exs. 1-2. Nor do they always match the Invoices with respect to price. This is a battle of forms between the Purchase Orders and the Invoices.

A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon unless acceptance is expressly made conditional on assent to the additional or different terms. Comm. Code §2207(1). The additional terms are to be construed as proposals for addition to the contract. Comm. Code §2207(2). Between merchants, the new terms become part of the contract unless (a) the offer expressly limits acceptance to the terms of the offer; (b) they materially alter it; or (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received. Comm. Code §2207(2). DKP’s delivery of goods and Follow Beauty’s failure to reject them means that it accepted the terms of Invoices.

The Invoices provide the order number from the Purchase Orders, as the Purchase Orders required, and the unit price of each item. Koppel Decl., ¶¶ 3, 4, Exs. 1, 2. To the extent that the shipping fees and changes in unit price are new terms, these terms are now a part of the contract. Koppel Decl., ¶4, Ex. 2; Comm. Code §2207(2). Each Invoice also reflects deposits made by Follow Beauty, so the final number on each Invoice is the principal owed. Koppel Decl., ¶4, Ex. 2. The Invoices reflect the total principal owed of $8,330.54 + $21,471.29 + $14,620 + $18,870 + $10,365 = $73,656.83. Koppel Decl., ¶4, Ex. 2. These damages are ascertainable.

DKP has calculated daily interest with a 10% annual rate. Koppel Decl., ¶6, Ex. 3. Neither the Purchase Orders nor Invoices provide for interest. Koppel Decl., ¶¶ 3-4, Exs. 1-2. Pre-judgment interest is not interest sought pursuant to contract. Prejudgment interest is available on attachment and is owed from the time that the obligation to pay money begins. See Santa Clara Waste Water Company v. Allied World National Assurance Company, (2017) 18 Cal.App.5th 881, 890. If a contract entered into after January 1, 1986, does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10% per annum after a breach. Civil. Code §3289(b).

The Purchase Orders say that 15% of the cost is due at the creation of the Purchase Orders, with the rest due upon delivery of the product. Koppel Decl., ¶3, Ex. 1. DKP uses the shipping date on each Invoice as the due date. Koppel Decl., ¶¶ 4, 6, Exs. 2-3. The difference between the shipping dates and due dates is not always inconsistent. For example, DKP claims that one of the February 18 Invoices became due on March 5, 2022 whereas the other became due on March 18, 2022. Koppel Decl., ¶6, Ex. 3. This fact does not materially affect the interest owed.

DKP has calculated the daily interest based on the principal of each invoice and a 10% prejudgment interest rate. Koppel Decl., ¶6, Ex. 3. It then multiplied that by the days elapsed after the due date to calculate interest of $784.32, $1,934.52, $970.42, $1,183.93, and $550.96 on the Invoices. Koppel Decl., ¶6, Ex. 3. Total interest of $784.32 + $1,934.52 + $970.42 + $1,183.93 + $550.96 = $5,424.15 is ascertainable.

An attorney declaration is required for attorney’s fees or costs. DKP provides a declaration from counsel that it has billed $12,863 for 28 hours of work, plus $1,166.78 in costs, for a total bill of $14,029.78. Berger Decl., ¶4, Ex. 4. Counsel also provides the hourly rates for each member of counsel who worked on this case and the final page of the latest bill as evidence. Berger Decl., ¶4, Ex. 4. The $14,029.78 in fees and costs are ascertainable.

Total readily ascertainable damages are $73,656.83 + $5,424.15 + $14,029.78 = $93,110.76.

DKP provides evidence that in March and April 2021, Follow Beauty sent DKP multiple Purchase Orders for different items. Koppel Decl., ¶3, Ex. 1. Between November 2021 and April 2022, DKP shipped items pursuant to the Purchase Order to Follow Beauty with Invoices for the cost thereof. Koppel Decl., ¶4, Ex. 2. DKP asserts that aside from the payments on those Invoices, Follow Beauty has not paid the balance of these Invoices despite DKP’s requests. Koppel Decl., ¶5. As discussed above, this is a battle of forms issue for which the Invoices prevail. DKP has demonstrated a probability of success on its claim.

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). DKP seeks attachment for a proper purpose.

The application for a right to attach order in the amount of $93,110.76 is granted. No right to attach order will issue until DKP posts a $10,000 undertaking.