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.