Judge: James C. Chalfant, Case: 22STCV37923, Date: 2023-03-09 Tentative Ruling

Case Number: 22STCV37923    Hearing Date: March 9, 2023    Dept: 85

Rediger Investment Mortgage Fund v. Jade Collective, 22STCV37923

 

Tentative decision on application for right to attach order:  granted


 

           

            Plaintiff Rediger Investment Mortgage Fund (“Rediger”) applies for a right to attach order against Defendant Jade Collective (“Jade”) in the amount of $789,931.50. 

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

           

            A. Statement of the Case

            1. Complaint

            Plaintiff Rediger filed the Complaint on December 5, 2022, alleging breach of written lease.  The Complaint alleges in pertinent part as follows.

            On June 1, 2020, Rediger’s predecessor-in-interest El Segundo Impex LLC (“Impex”) and Jade entered a lease (“Lease”) for real property at three addresses (collectively “Premises”).    When Impex foreclosed, it conveyed its rights to Rediger as landlord for the Lease through the trustee’s deed of sale for the Premises.

            Base rent under the Lease is $60,000 per month.  Jade has failed to pay any base rent since August 1, 2022.  Jade also owes a late fee of 5% per month.  On September 7, 2022, Rediger sent a notice of default that asked for the then past-due amount of $120,000 in base rent plus $6,000 in late fees.  Jade did not comply.

            Under the Lease, Jade must pay the annual property taxes for the Premises.  It has not paid the property taxes for 2021 which total $166,993.49.  On September 14, 2022, Rediger sent a notice of default for these taxes to no avail.  Although Jade purports to have entered a payment arrangement with the County Tax Assessor, any such arrangement is without Rediger’s consent.  Rediger has also paid a $75,219.01 installment for 2022-2023 property taxes, which Jade also must repay.

            Rediger seeks at least $585,000 in compensatory damages plus late fees, interest, pre-judgment interest, attorney’s fees, and costs.

 

            2. Course of Proceedings

            No proof of service is on file for the Complaint or Summons.  On January 23, 2023, Jade filed an Answer.

           

            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.

 

            C. Governing Law

            The City of Los Angeles (“City”) has passed an ordinance that prohibits evictions of tenants of commercial real property for failure to pay rent during a Local Emergency Period due to circumstances related to the COVID-19 pandemic.  LAMC §49.99.3.  This Local Emergency Period began on March 4, 2020 and will end when the mayor so declares.  LAMC §49.99.1(C).

            The ordinance defined “commercial real property” as not including property leased by multi-national companies, publicly traded companies, and companies that employ more than 500 employees.  LAMC §49.99.1(A).  Circumstances related to the pandemic include loss of business income due to a COVID-19 related workplace closure, childcare expenditures due to school closures, health care expenses related to being ill with COVID-19 or caring for a member of the tenant's household or family who is ill with COVID-19, or reasonable expenditures that stem from government-ordered emergency measures.  LAMC §49.99.3.  The tenant shall have three months after the end of the Local Emergency Period to repay any deferred rent.  LAMC §49.99.3. 

            The ordinance applies to non-payment eviction notices, no-fault eviction notices, and unlawful detainer actions based on such notices, served or filed on or after the date on which a local emergency was proclaimed.  LAMC §49.99.5.  The ordinance also prohibited collection of late fees for failure to pay and provides commercial tenants with up to three months following the expiration of the Local Emergency Period to repay past rent due.  LAMC §49.99.3.  The ordinance does not eliminate any obligation to pay lawfully charged rent.  LAMC §§ 49.99.3, 49.99.5. 

            Tenants may use the ordinance as an affirmative defense in an unlawful detainer action.  LAMC §49.99.6. 

 

            D. Statement of Facts

            On June 1, 2020, Rediger’s predecessor-in-interest Impex and Jade entered into the Lease of commercial real property located at 12751, 12767, and 12755 West Foothill Blvd, Sylmar, Ca. (the “Premises”).  Rediger Decl., ¶3, Ex. A.  On March 28, 2022, Jade extended this Lease by five years to March 31, 2022 pursuant to the option in the Lease.   Rediger Decl., ¶3. 

            Base rent, or “Lease Payment,” is $60,000 per month, due on the first day of each month.  Rediger Decl., ¶¶ 3, 5, Ex. A.  The Lease is a triple net lease in which Jade is responsible for repairs and maintenance of the Premises and all heat, power, and other utilities.  Rediger Decl., ¶6.  The Lease also required Jade to pay all real estate taxes against the Premises for the duration of the Lease.  Rediger Decl., ¶¶ 3, 6, Ex. A. 

            With the monthly rent payment on the first of each month, Jade must pay the landlord’s estimated payments for taxes, insurance, maintenance of the landscaping and parking lot, and utilities (“Estimated Payments”).  Rediger Decl., ¶3, Ex. A.  The landlord could change this estimate based on any estimate that compels it to revise the estimate.  Rediger Decl., ¶3, Ex. A.  The landlord must reconcile estimated payments against actual expenses up to once per quarter and either demand payment of excess amount Jade owes or credit any excess already paid against future estimated payments.  Rediger Decl., ¶3, Ex. A. 

            The Lease defines “default” as failure to fulfill any Lease obligation or term.  Rediger Decl., ¶3, Ex. A.  If Jade failed to cure any financial default within five days of written notice by the landlord, the landlord can cure any default and add the cost of such default to Jade’s debt.  Rediger Decl., ¶3, Ex. A.  Jade must pay all costs, damages, and expenses, including reasonable attorney fees and expenses, that landlord suffers as a result.  Rediger Decl., ¶3, Ex. A. 

            The parties to the Lease agreed to settle any disputes arising thereunder first through friendly negotiations, then mediation, then litigation.  Rediger Decl., ¶3, Ex. A.  The Lease is binding on and inures to the benefit of both parties and all successors and assigns thereof.  Rediger Decl., ¶3, Ex. A. 

            On July 21, 2022, Impex recorded a trustee’s deed upon sale that granted Rediger the Premises and all of landlord’s rights under the Lease.  Rediger Decl., ¶4, Ex. B.

            Jade failed to pay its monthly installment of Rent from August 1, 2022 thereafter.  Rediger Decl., ¶8.  On September 7, 2022, Rediger sent a notice of default that asked for the then past-due amount of $120,000 in base rent, plus late fees, by September 16, 2022.  Rediger Decl., ¶8, Ex. C.  Jade did not comply.  Rediger Decl., ¶8.  As of February 2023, Jade owes $420,000 in base rent.  Rediger Decl., ¶¶ 8, 14, Ex. C. 

            Jade also has failed to pay $166,993.49 in property taxes for 2021-2022.  Rediger Decl., ¶9.  On September 14, 2022, Rediger sent a notice of default that asked for that amount, due September 22, 2022.  Rediger Decl., ¶9, Ex. D.  Jade did not comply.  Rediger Decl., ¶9.  To avoid interest and penalties on the taxes, Rediger paid the 2021-2022 taxes via check on September 14, 2022.  Rediger Decl., ¶10, Ex. E.

            In September 2022, Jade asserted that it could have entered a payment arrangement with the Los Angeles County Assessor's office for the 2021-2022 taxes.  Rediger Decl., ¶10, fn. 1.  Jade has provided no proof of an initial payment to that effect, the Lease does not permit such an arrangement, and Rediger never agreed to an amendment that would allow that.  Rediger Decl., ¶10, n. 1.  Any payment plan would still prejudice Rediger with tax liens against the property.  Rediger Decl., ¶10, n. 1. 

            Jade has also failed to pay both installments of 2022-2023 property taxes.  Rediger Decl., ¶11.  $75,219.01 of this was due on November 1, 2022, and another $75,219 was due on February 1, 2023.  Rediger Decl., ¶11, Ex. F.  Rediger has paid both.  Rediger Decl., ¶11, Ex. F.  Damages from the property taxes total $317,431.50.  Rediger Decl., ¶12. 

            Despite Rediger’s attempts to resolve this without litigation, Jade has exhibited no intent to engage in meaningful discussions about repayment of the amount due.  McGarrigle Decl., ¶6. 

            Unpaid rent and taxes total $737,431.50.  Rediger Decl., ¶14.  Counsel for Rediger has considered the time and expense already incurred in this matter to estimate that attorney’s fees will total $45,000 and costs will total $7,500.  McGarrigle Decl., ¶3.  When added together, the sum for attachment is $789,931.50.  Rediger Decl., ¶15.

            On January 23, 2023, Rediger sent Jade an email about its answer in an unlawful detainer action also based on this Lease.  McGarrigle Reply Decl., ¶2, Ex. G.  The email asserted that Jade had demonstrated that it was unwilling to engage in negotiations or mediation.  McGarrigle Reply Decl., ¶2, Ex. G.  When it received the notice to perform, Jade waited until a few days before the deadline and then asserted extensions from the City.  McGarrigle Reply Decl., ¶2, Ex. G.  If Jade wanted to engage in negotiation, it should have tried to do so in November and December 2022.  McGarrigle Reply Decl., ¶2, Ex. G.  Without waiving this argument, Rediger offered for Jade to engage in friendly negotiations or mediation the following week to resolve the different forms of default.  McGarrigle Reply Decl., ¶2, Ex. G.  Jade did not respond or otherwise contact Rediger about mediation.  McGarrigle Reply Decl., ¶3.

           

            E. Analysis

            Plaintiff Rediger applies for a right to attach order against Jade in the amount of $789,931.50, including $7,500 in costs and $45,000 in attorney’s fees.

 

            1. A Claim Based on a Contract and on Which Attachment May Be Based 

            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). 

            Rediger’s claim against Jade is based on the Lease in the amount of $737,431.50, not including attorney’s fees and costs.  Rediger Decl., ¶¶ 3, 14, Ex. A.  This is a claim on which attachment may be based. 

             

            2. An Amount Due That is Fixed and Readily Ascertainable  

            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, the base rent is $60,000 per month, due on the first day of each month.  Rediger Decl., ¶¶ 3, 5, Ex. A.  Jade also is required to pay all property taxes for the Premises during the Lease.  Rediger Decl., ¶¶ 3, 6, Ex. A. 

            Rediger asserts that Jade has not paid base rent beginning August 2022.  Rediger Decl., ¶8.  As of February 2023, the unpaid base rent for seven months totals $420,000.  Redinger also presents evidence that property taxes for the Premises totaled $317,431.50 from 2021 to 2023. Rediger Decl., ¶¶ 10-12, Exs. E-F.

            The Lease entitles Redinger to recovery of reasonable attorney fees and expenses after any default.  Rediger Decl., ¶3, Ex. A.  Rediger’s counsel has estimated attorney’s fees of $45,000 and costs of $7,500.  McGarrigle Decl., ¶3.  The damages total $789,931.50 and are readily ascertainable.

 

            3. Probability of Success 

            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). 

            Redinger provides evidence that on June 1, 2020, Rediger’s predecessor-in-interest Impex and Jade entered the Lease.  Rediger Decl., ¶3, Ex. A.  The Lease listed the various damages owed and defined default as failure to fulfill any Lease obligation or term.  Rediger Decl., ¶3, Ex. A.  If Jade failed to cure any financial default within five days of written notice by the landlord, the landlord can cure any default and add the cost of such default to Jade’s debt.  Rediger Decl., ¶3, Ex. A.

            In June 2022, Impex recorded a trustee’s deed upon sale that granted Rediger the Premises and all of the landlord’s rights under the Lease.  Rediger Decl., ¶4, Ex. B.

            On September 7, 2022, Rediger sent a notice of default that asked for the then past-due amount of $120,000 in base rent, plus late fees, by September 16, 2022.  Rediger Decl., ¶8, Ex. C.  On September 14, 2022, Rediger sent a notice of default that asked for 2021-2022 property taxes by September 22, 2022.  Rediger Decl., ¶9, Ex. D.  Jade did not comply with either notice.  Rediger Decl., ¶¶ 8-9. 

 

            a. The City’s Moratorium

            Jade asserts that it never defaulted because the commercial tenant protections under the City’s ordinance defer payment of all rent for up to three months after the Local Emergency Period.  Opp. at 2; LAMC §49.99.3.  Because the emergency period ended on February 1, 2023, Jade has until May 1, 2023 to pay the rent owed.  Opp. at 2.

            Jade fails to provide the City Moratorium ordinance, only referring to LAMC section 49.99.3.  Jade also fails to provide any evidence that it is a commercial tenant protected by LAMC section 49.99.3. 

Rediger cites case authority that has rejected the use of the COVID-19 pandemic as a defense to default.  SVAP III Powa Crossin s LLC v. Fitness International, LLC (“SVAP”) (2023) 87 Cal. App. 5th 882; 640 Tenth LP v. Newsom (“640 Tenth”) (2022) 78 Cal. App. 5th 840.  Reply at 3.  SVAP concerns a force majeure clause and the impossibility/impracticability and frustration of purpose defense.  87 Cal.App.5th at 882-93.  640 Tenth was a challenge by restaurant and gym owners to the governor’s emergency public health orders as violating the Administrative Procedure Act and a taking under the Fifth Amendment.  78 Cal.App.5th at 849-50.  Neither bears on the applicability of the City’s ordinance.

            The construction of local agency charter provisions, ordinances, and rules is subject to the same standards applied to the judicial review of statutory enactments.  Domar Electric v. City of Los Angeles, (1994) 9 Cal.4th 161, 170-72.  In construing a legislative enactment, a court must ascertain the intent of the enacting legislative body so as to effectuate its purpose.  Brown v. Kelly Broadcasting Co., (1989) 48 Cal.3d 711, 724; Orange County Employees Assn. v. County of Orange, (“Orange County”) (1991) 234 Cal.App.3d 833, 841.  The court first looks to the language of the statute, attempting to give effect to the usual, ordinary import of the language and seeking to avoid making any language mere surplusage.  Brown v. Kelly Broadcasting Co., (1989) 48 Cal 3d 711, 724.  Significance, if possible, is attributed to every word, phrase, sentence and part of an act in pursuance of the legislative purpose.  Orange County, supra, 234 Cal.App.3d at 841. 

            LAMC section 49.99.3, entitled “Prohibition on Commercial Evictions”, prohibits a landlord from evicting a commercial tenant for non-payment of rent during the Local Emergency Period and for three months thereafter “if the tenant is unable to pay rent due to circumstances related to the COVID-19 pandemic.”  LAMC §49.99.3.  The language relied upon by Jade states: “Tenants shall have up to three months following the expiration of the Local Emergency Period to repay any rent deferred during the Local Emergency Period.”  Id.  The provision also states that nothing in this article eliminates any obligation to pay lawfully charged rent.”  Id.

            LAMC section 49.99.3 is ambiguous because, on the one hand, it concerns commercial evictions but, on the other hand, expressly states that a commercial tenant impacted by COVID shall have up to three months following the expiration of the Local Emergency Period to pay deferred rent.  The issue becomes whether the deferred rent obligation applies to all commercial tenants impacted by COVID or only those subject to the eviction process.  The ordinance is unclear on this point.  LAMC section 49.99.3 may mean that an impacted commercial tenant may avoid eviction for up to three months after the Local Emergency Period ends by paying rent during that period or that all commercial tenants shall have up to three months after the Local Emergency Period ends to pay rent.

            LAMC section 49.99.5, entitled “Retroactivity”, provides that “[t]his article applies to nonpayment eviction notices, no-fault eviction notices, and unlawful detainer actions based on such notices....Nothing in this article eliminates any obligation to pay lawfully charged rent.”  LAMC §49.99.5.  LAMC section 49.99.5 sets forth the scope of the ordinance, which concerns only evictions and not rent collection actions.  It is for this reason that the statute consistently refers to the prohibition of “evictions of residential and commercial tenants” for failure to pay.  LAMC §49.99. 

The proper construction of the ordinance does not preclude a rent collection action that does not involve eviction.  Even if the City Moratorium applies to a rent collection action from a commercial tenant, Jade fails to show that it is eligible for protection.        

 

            b. Deadline for Property Taxes

            Jade notes that the Lease does not specify a deadline by which Jade must property taxes; it just says that Jade is obligated to pay all property taxes “during the time of this Lease”.  Rediger Decl., ¶3, Ex. A.  Payment of the property taxes with a penalty, therefore, is not a default so long as the taxes are paid during the lease.  Jade also contends that the County Assessor has informed Jade’s counsel that it will not incur penalties on unpaid property taxes until June 2025.  Because Jade’s further alleges that because it will address the issue and pay the property taxes at some point, it has satisfied its duties under the Lease.  Opp. at 2-3.

            Aside from the fact that it has no supporting evidence, Jade misinterprets the Lease.  Reply at 5.  The Lease is a triple net lease and requires Jade to pay water, gas, heat, light, power, telephone and other utilities, a proportionate share of real property taxes, insurance, and common area maintenance expenses.  Reply at 5; Denise Decl., ¶3, Ex. A.  If not separately metered, Jade shall pay a proportionate share as determined by Rediger.  Id.  With the monthly rent payment on the first of each month, Jade must pay the landlord’s Estimated Payments, which includes property taxes.  Ex. A.  The landlord must reconcile Estimated Payments against actual expenses up to once per quarter and either demand payment of excess amount Jade owes or credit any excess already paid against future estimated payments.  Ex. A. 

            These provisions mean that Jade must pay for all separately metered utilities, and a proportionate share of costs that are not metered, monthly when they are due or as estimated by Regiger and trued up once a quarter.  Rediger may demand payment of any unpaid pro rata share of the actual expense.  Reply at 4-5.  On September 14, 2022, Rediger sent Jade a notice of default for failure to pay property taxes, demanding payment by September 22, 2022.  Rediger Decl., ¶9, Ex. D.  Jade failed to comply.

 

            c. Cannabis Business

            Jade asserts that both state and local laws require Defendant to maintain strict control over the property and operations of a commercial cannabis business.  It argues that attachment of the property by a party without a commercial cannabis license would violate these laws.   Opp. at 3-4. 

As Rediger notes, Jade does not cite to any attachment exemption to support this argument.  Reply at 4.  All corporate property for which a method of levy is provided is subject to attachment.  CCP §487.010(a).  There is no exception for a highly regulated business.  Jade’s inventory is subject to attachment and its preservation/storage by the levying officer is not proscribed by any law cited by Jade.  Nor does this argument have any bearing on Rediger’s application for a right to attach order; it only concerns the property that may be attached pursuant to a writ of attachment. 

 

            d. Mediation

            The parties to the Lease agreed to settle any disputes arising thereunder first through friendly negotiations, then mediation, then litigation.  Denise Decl., ¶3, Ex. A.  Jade asserts that Rediger did not pursue mediation, and therefore it has brought this action before it is ripe.   Opp. at 3.

            Rediger presents evidence that it attempted to resolve this informally, but Jade would not comply.  McGarrigle Decl., ¶6.  In reply, Rediger adds evidence that on January 23, 2023, its counsel offered mediation with no response from Jade.  Reply at 6; McGarrigle Reply Decl., ¶¶ 2-3, Ex. G.  Rediger has sufficiently rebutted Jade’s claim that informal negotiations and mediation were required before suit.

 

            e. Conclusion

            Rediger has demonstrated a probability of success on the merits.

 

            4. Attachment Sought for a Proper Purpose¿ 

            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).  Rediger seeks attachment for a proper purpose. 

 

            5. Description of Property to be Attached

            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.

            Jade alleges that Rediger’s application fails because it does not include a description of property to be attached.  Opp. at 4.  This requirement does not apply when the defendant is a corporate entity, as here.  Reply at 3.  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). 

 

            F. Conclusion

            The application for a right to attach order is granted in the amount of $789,931.50.  No writ of attachment shall issue until Rediger posts a $10,000 undertaking.



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

Jade also failed to file a proof of service and the supporting evidence for its opposition.  Although there is no proof of service, Rediger filed a reply.  As a result, the court can consider the opposition without any supporting evidence.  As there is no opposition evidence for the court to consider, there is no need to rule on Rediger’s written evidentiary objections.