Judge James C. Chalfant, Case Number: 23STCV01994, Date: 2023-10-31 Tentative Ruling

Plaintiff 1149 South LA Street Fashion District, LLC (“1149 South LA” or “Landlord”) applies for right to attach orders against Defendants Unrivaled Brands, Inc. (“Unrivaled”) and Bernard Steimann (“Steimann”) in the amount of $495,595.

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

A. Statement of the Case

1. Complaint

On January 30, 2023, Plaintiffs 1149 South LA and 1135 South LA Street Fashion District, LLC (“1135 South LA”) filed the Complaint against Defendants Unrivaled, Steimann, People’s Properties LLC (“PP”), and Oxford Properties, LLC (“Oxford”) alleging (1) breach of written contract, (2) breach of written guaranty, (3) breach of implied covenant of good faith and fair dealing, (4) waste, and (5) declaratory relief. The Complaint alleges in pertinent part as follows.

On November 22, 2019, Plaintiffs 1149 South LA and 1135 South LA (collectively, “Landlords”) and Defendant PP entered into a commercial lease (“Lease”) for premises at 1149 South Los Angeles Street and 1135 South Los Angeles Street in Los Angeles, California (“Premises”) with a term of seven years. Steimann signed a Guaranty for all amounts owed under this Lease (“Guaranty”).

On September 1, 2021, PP, Unrivaled, Steimann, and Landlords signed an assignment of both leases (“Assignment”) that assigned PP’s rights as tenant to Unrivaled. Steimann remained the guarantor.

From August 2022 through January 2023, PP, Unrivaled, and Steimann have accrued $579,399.21 in Base Rent under the Lease. Unrivaled also has vacated the Premises without Landlords’ consent in violation of the Lease. The Lease remains in effect until Landlords terminate Defendants’ right to possess the Premises, which they have not. As a result, Landlords may continue to enforce their right to recover rent.

Landlords seek compensatory, consequential, exemplary, and punitive damages, as well as attorney’s fees and costs.

2. Course of Proceedings

On February 6, 2023, Landlords served PP with the Complaint and Summons by substitute service, effective February 16, 2023.

On February 13, 2023, Landlords served Unrivaled with the Complaint and Summons by substitute service, effective February 26, 2023.

On March 14, 2023, Landlords served Steimann with the Complaint and Summons.

On April 10, 2023, Unrivaled filed its Answer.

On April 14, 2023, PP and Steimann filed their Answer.

On October 26, 2023, Landlord applied ex parte to specially set the right to attach hearing. Landlord timely had served the applications but e-filed them on October 10, 2023, one day after the required 16-day period in CCP section 1005(a). The court noted that merits oppositions were on file, no prejudice would result, and granted the application.

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 November 22, 2019, Landlords and Oxford signed the seven-year Lease for the 1149 Premises. Yi Unrivaled Decl., ¶8, Ex. 1. Steimann signed the Lease on Oxford’s behalf as a manager. Yi Unrivaled Decl., ¶8, Ex. 1.

Section 5 of the Lease requires the tenant to deposit a security deposit. Yi Unrivaled Decl., ¶8, Ex. 1. In the event of default, Landlords could use, apply, or retain any portion of this deposit for rents already due or to become due. Yi Unrivaled Decl., ¶8, Ex. 1. If Landlords did so, the tenant was required to replenish it within ten days of a written request. Yi Unrivaled Decl., ¶8, Ex. 1.

Section 12.1(a) prohibits any assignment of the tenant’s interests in the Lease without Landlords’ prior written consent. Yi Unrivaled Decl., ¶14, Ex. 1. Under section 12.2(e), any request for assignment or subletting must include information relevant to Landlords’ determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and required modification of the Premises. Yi Unrivaled Decl., ¶14, Ex. 1.

Section 13.2(a) of the Lease provides that, if the tenant breached the Lease, the Landlords may terminate the Lease and collect (1) unpaid rent earned at the time of termination plus (2) the amount by which unpaid rent which would have been earned after termination until the time of an award thereof exceeds the amount of such rental loss the tenant proves could have been reasonably avoided. Yi Unrivaled Decl., ¶14, Ex. 1. Alternatively, section 13.2(b) allows Landlords to continue the Lease and tenant’s right to possession of the Premises thereunder and recover rent as it becomes due. Yi Unrivaled Decl., ¶14, Ex. 1. The tenant may then sublet or assign the Lease, subject only to reasonable limitations. Yi Unrivaled Decl., ¶14, Ex. 1. For purposes of this remedy, efforts to relet the Premises would not constitute termination of the tenant’s right to possession. Yi Unrivaled Decl., ¶14, Ex. 1.

Steimann signed a Guaranty for all amounts owed thereunder. Yi Unrivaled Decl., ¶8, Ex. 2. The Guaranty gives Landlords the right to proceed against Steimann as guarantor without first proceeding against the Premises tenant. Yi Guaranty Decl., ¶9, Ex. 2. Steimann also waived all notice of acceptance of the Guaranty and demand of payment, presentation, and protest. Yi Guaranty Decl., ¶9, Ex. 2.

On March 6, 2020, Oxford filed an Amendment to its Articles of Incorporation changing its name to PP. Yi Unrivaled Decl., ¶8, Ex. 6; Yi Guaranty Decl., ¶8, Ex. 5. Steimann signed the amendment. Yi Unrivaled Decl., ¶8, Ex. 6; Yi Guaranty Decl., ¶8, Ex. 5.

In August 2021, PP sought Landlords’ consent for Unrivaled to assume the Lease for and possession of the Premises from PP. Yi Unrivaled Decl., ¶9. Unrivaled’s 10-Q for the first quarter of 2023 states that it is a cannabis company with operations in retail, production, distribution, and cultivation throughout California. Yi Unrivaled Decl., ¶19, Ex. 5. With the 2021 acquisition of People’s First Choice, Unrivaled now operates a premier cannabis dispensary in Orange County, California. Yi Unrivaled Decl., ¶¶ 10, 21-22, Ex. 5. It also owns dispensaries in California which operate as The Spot in Santa Ana, Blüm in Oakland, and Blüm in San Leandro. Yi Unrivaled Decl., ¶10, Ex. 5. Unrivaled has eight subsidiaries and 153 employees. Yi Unrivaled Decl., ¶¶ 19-20, Ex. 5.

Landlords agreed to the transfer of possession. Yi Unrivaled Decl., ¶11. On September 1, 2021, PP, Unrivaled, Steimann, and Landlords entered the Assignment. Yi Unrivaled Decl., ¶11, Ex. 3. PP assigned Unrivaled all of its rights and obligations under the Lease. Yi Unrivaled Decl., ¶11, Ex. 3. Landlords acknowledged that they held a $110,000 security deposit from PP and would continue to hold this sum for the benefit of Unrivaled’s account. Yi Unrivaled Decl., ¶11, Ex. 3.

Unrivaled breached the Assignment for failure to pay rent when it became due in August 2022. Yi Unrivaled Decl., ¶12.

The Base Rent under the Lease and Assignment started at $47,250 in November 2019 and increased by 3% every year beginning November 1, 2022. Yi Unrivaled Decl., ¶13, Exs. 1, 3-4.

The Base Rent therefore increased to $48,667.50 on November 2022. Yi Unrivaled Decl., ¶13, Ex. 4. The Base Rent that became due from August 2022 through August 2023 is ($47,250 x 3) + ($48,667.50 x 10) = $628,425. Yi Unrivaled Decl., ¶13, Ex. 4. During that time, Unrivaled made one $100,000 payment on April 10, 2023, and one $32,830 payment on April 21, 2023. Yi Unrivaled Decl., ¶13, Ex. 4. This reduced the amount owed to $628,425.00 - $100,000 - $32,830 = $495,595. Yi Unrivaled Decl., ¶13, Ex. 4.

Steimann has refused to honor his duty under the Guaranty to pay PP and Unrivaled’s outstanding obligations under the Lease and Assignment. Yi Guaranty Decl., ¶15.

Unrivaled and Steimann’s debts are unsecured. Yi Unrivaled Decl., ¶14; Yi Guaranty Decl., ¶16. Landlords only seek attachment to ensure recovery of amounts owed. Yi Unrivaled Decl., ¶14. They have not terminated Unrivaled’s right to possession of the Premises. Yi Unrivaled Decl., ¶16.

Unrivaled entered the Assignment with the intent to open a cannabis dispensary at the Premises. Carillo Decl., ¶4. Its efforts to do so failed. Carillo Decl., ¶4. By August 2022, Unrivaled had abandoned the Premises and stopped paying rent. Carillo Decl., ¶5.

After Unrivaled abandoned the Lease, Landlords never made a demand on Steimann to personally pay anything related to the Lease. Steimann Decl., ¶2. Landlords still has the $110,000 security deposit and the Lease allows Landlords to apply it against the amount owed. Steimann Decl., ¶3.

On March 1, 2023, Landlords told Unrivaled they were trying to show the Premises to local brokers and prospective tenants. Scott Decl., ¶2, Ex. 2. They asked Unrivaled how it wanted Landlords to request access and deactivate the lockbox and security alarm. Scott Decl., ¶2, Ex. 2. This request surprised Unrivaled, which had abandoned the Premises for months. Carillo Decl., ¶6. Unrivaled replied that to the extent that it still had possession, it was formally abandoning the Premises and did not need access. Scott Decl., ¶2, Ex. 2.

Landlords stated that, based on this notice of abandonment, they intended to conduct a walkthrough and initial inspection of the Premises on March 3. Colby Decl., ¶3, Ex. A. Landlords later uploaded video and photo files from the inspection. Colby Decl., ¶4, Ex. B. Counsel for Steimann interpreted Landlords’ conduct as affirmative steps to regain possession and to list and market the Premises for sale or lease. Colby Decl., ¶3.

On March 7, 2023, Landlords gave notice that they were showing the building to a prospective tenant the next day. Colby Decl., ¶4, Ex. B.

On March 13, 2023, Landlords stated that, pursuant to Civil Code section 1951.4(b) and section 13.2(b) of the Lease, Landlords were not terminating the Lease, the Assignment, or Unrivaled’s right thereunder to possession of the Premises. Scott Decl., ¶3, Ex. 3. Base Rent would continue to accrue at $48,667.50 per month, plus 10% interest on the balance owed. Scott Decl., ¶3, Ex. 3.

Following Landlords’ March 13, 2023 assertion that Unrivaled retained possession of the Premises, Unrivaled attempted to mitigate Landlords’ damages by listing the property with the broker Marcus & Millichap (“M&M”). Carillo Decl., ¶7. Unrivaled discovered that Landlords had already begun marketing the Premises through their own broker, CBRE. Carillo Decl., ¶7. Because commercial real estate brokers insist on exclusivity in listing property, CBRE’s listing prevented listing by M&M. Carillo Decl., ¶7.

In May 2023, Landlords introduced Unrivaled to a potential Lease assignee, Yinchun Chen (“Chen”). Carillo Decl., ¶9. Chen represented the owner of several successful night clubs and wanted to open a night club on the Premises. Carillo Decl., ¶9. After discussions with Unrivaled, Chen agreed to assume the Lease. Carillo Decl., ¶10. Unrivaled informed Landlords. Carillo Decl., ¶11.

On May 12, 2023, Chen said that Landlords’ representative said they decided not to work with Chen. Carillo Decl., ¶12, Ex. 1. Landlords wanted to keep Unrivaled on the Lease to make things “easier for them.” Carillo Decl., ¶12, Ex. 1. Unrivaled was surprised at Landlords’ rejection of a legitimate tenant. Carillo Decl., ¶13.

On June 23, 2023, M&M was able to list the Premises. Carillo Decl., ¶14. The same day, Landlords sent notice that this impeded their own ongoing efforts to actively market the Premises. Colby Decl., ¶5, Ex. C.

In an email on August 16, 2023, Landlords asserted that not much marketing for the Premises had occurred since M&M assumed the listing. Scott Decl., ¶5, Ex. 5. They asked Unrivaled if it would allow CBRE to take over, with all parties reserving all rights. Scott Decl., ¶5, Ex. 5. Landlords were told that no broker would touch the listing without the exclusive right to do so. Scott Decl., ¶5, Ex. 5. Unrivaled complied and informed Landlords on September 5 that it had released the listing. Carillo Decl., ¶15; Scott Decl., ¶6, Ex. 6. Unrivaled believed it was then relieved of any obligation to market the Premises. Carillo Decl., ¶16.

On October 11, 2023, Landlords said they were “ready to proceed” with a CBRE listing for the Premises. Scott Decl., ¶7, Ex. 7; Colby Decl., ¶6, Ex. D. The next day, Landlords asserted via email that their desire to list the Premises was to help Unrivaled with its duty to mitigate Landlords’ damages. Scott Decl., ¶8, Ex. 8. Landlords did not waive their right to continue to recover rent that meanwhile became due, and they were not assuming any affirmative duty to mitigate damages. Scott Decl., ¶8, Ex. 8. Until Defendants agreed, Landlords would not undertake marketing activities. Scott Decl., ¶8, Ex. 8.

On October 16, 2023, Landlords announced they would not move forward with engaging CBRE or another broker to market, sub-lease, or take other activities related to the Premises due to homeless activities nearby. Scott Decl., ¶9, Ex. 9; Colby Decl., ¶7, Ex. E. Landlords urged Unrivaled to secure the property in a reasonable manner. Ex. 9.

Steimann has two children and an ex-wife, none of whom contribute to the household’s income. Steimann Decl., ¶5, Ex. A. His estimated monthly expenditures total $38,180.19, including $2,500 for legal fees for this lawsuit. Steimann Decl., ¶6, Ex. A. Steimann requests an annual exemption of $458,162.28 for amounts necessary to support his family. Steimann Decl., ¶6, Ex. A.

His gross monthly pay is $12,500, and his monthly take-home pay is $8,872.85 after $3,627.15 in payroll deductions. Steimann Decl., ¶7, Ex. A. Based on his gross pay, he requests an annual exemption of $150,000 for employer compensation. Steimann Decl., ¶7.

Steimann owns multiple vehicles. Steimann Decl., ¶8, Ex. A. His 1973 Chevy Blazer is worth $50,000. Steimann Decl., ¶8, Ex. A. Steimann requests a motor vehicle exemption of $7,500. Steimann Decl., ¶8, Ex. A.

To secure the Lease, Steimann advised Landlords that he was the majority shareholder and CEO of PP. Yi Guaranty Reply Decl., ¶9. He executed the Guaranty to further PP’s business as the Lease’s original tenant. Yi Guaranty Reply Decl., ¶9.

In 2021, Steimann advised Landlords that he had sold PP’s assets to Unrivaled, which would be taking over the store on the Premises. Yi Guaranty Reply Decl., ¶9. Steimann entered the current Guaranty only to transfer the PP Lease to Unrivaled. Yi Guaranty Reply Decl., ¶9.

Steimann is fully aware of Unrivaled’s default on the Lease. Yi Guaranty Reply Decl., ¶3. The Guaranty permits Landlords to proceed against him without any prior demand or payment. Yi Guaranty Reply Decl., ¶4. This Complaint doubles as another such demand. Yi Guaranty Reply Decl., ¶4.

Landlords never accepted Unrivaled’s offer to abandon the Premises. Yi Unrivaled Reply Decl., ¶2. They never terminated the Lease or expressed intent to do so. Yi Unrivaled Reply Decl., ¶2.

Although Unrivaled hired M&M to exclusively list the premises for subletting, M&M made no meaningful progress. Yi Unrivaled Reply Decl., ¶3. Before Landlords committed to helping by having its own listing agent find a sublessee, they asked Unrivaled and Steimann to clarify that this was not a waiver of Landlords’ rights. Yi Unrivaled Reply Decl., ¶¶ 3-4. When they refused, Landlords chose not to help. Yi Unrivaled Reply Decl., ¶4. Landlords never told Unrivaled it was relieved of obligations to market the property. Yi Unrivaled Reply Decl., ¶9.

Unrivaled and Steimann never asked Landlords to apply the security deposit to the amount owed. Yi Unrivaled Reply Decl., ¶5. The Lease does not require Landlords to do so. Yi Unrivaled Reply Decl., ¶5.

When Chen asked if her client could sublease the Premises, she said it would only do so in exchange for a concession of six to nine months of free rent. Yi Unrivaled Reply Decl., ¶6. Landlords were unwilling to agree, and Chen never asked Unrivaled if it would pay those months of rent. Yi Unrivaled Reply Decl., ¶6. Unrivaled also never provided proof that the proposed sub-lessee had the means to pay rent or the necessary business license for the proposed nightclub. Yi Unrivaled Reply Decl., ¶7. When Landlords discovered that obtaining a night club license is not as simple as Chen made it sound, they knew Chen’s client was not a suitable tenant. Yi Unrivaled Reply Decl., ¶7. It was inexperienced, unable to commit to paying full rent, and unsuitable. Yi Unrivaled Reply Decl., ¶8. Landlords had reasonable basis to reject the company as a sub-tenant. Yi Unrivaled Reply Decl., ¶8.

Landlord’s claims for $495,595 are based on the Lease, Assignment, and Guaranty. Yi Unrivaled Decl., Exs. 1-3. Landlord has claims 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).

Pursuant to the Lease, Base Rent started at $47,250 in November 2019 and increased by 3% on November 1, 2022. Yi Unrivaled Decl., ¶13, Exs. 1, 3-4.

The Base Rent that became due from August 2022 through August 2023 is therefore ($47,250 x 3) + ($48,667.50 x 10) = $628,425. Yi Unrivaled Decl., ¶13, Ex. 4. During that time, Unrivaled made one $100,000 payment on April 10, 2023, and one $32,830 payment on April 21, 2023. Yi Unrivaled Decl., ¶13, Ex. 4. This reduced the amount owed to $628,425.00 - $100,000 - $32,830 = $495,595. Yi Unrivaled Decl., ¶13, Ex. 4.

Steimann cites the Assignment’s acknowledgement that PP had paid a $110,000 security deposit that now applied to Unrivaled. Steimann Decl., ¶3. Although the deposit is to be used as security for amounts owed under the Lease, Landlords have not demonstrated they applied the deposit to the $495,595. Guaranty Opp. at 8-9.

The Lease allows Landlords to apply the deposit to damages owed because of default but does not require Landlords to do so. Guaranty Reply at 8; Yi Unrivaled Reply Decl., ¶5; Yi Unrivaled Decl., ¶8, Ex. 1. Unrivaled and Steimann never asked Landlord to apply the security deposit to the amount owed. Yi Unrivaled Reply Decl., ¶5. Additionally, the tenant is required to replenish the security deposit within ten days of a written request to that effect. Yi Unrivaled Decl., ¶8, Ex. 1. Assuming the Lease remains in effect, the security deposit does not affect the total amount Landlord can demand from Unrivaled and Steimann.

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, (“Kadison”) (1987) 197 Cal.App.3d 1, 4 (action involving trust property was a commercial, not a consumer, transaction).

These terms “trade,” “business,” and “profession” encompass almost any activity engaged in for profit with “frequency and continuity.” Advance Transformer Co. v. Superior Court, (1974) 44 Cal.App.3d 127, 139. The purpose of the attachment statutes is to confine attachment to commercial situations and prohibit their use in consumer transactions. Kadison, supra, 197 Cal.App.3d at 4.

Steimann asserts that Landlord has failed to tie the breach of guaranty claim to his trade, business, or profession. Guaranty Opp. at 6. Landlord responds that Steimann represented he was PP’s CEO when he signed the Guaranty. Guaranty Reply at 8; Yi Guaranty Reply Decl., ¶4. He executed the Guaranty to further PP’s business as the Lease’s original tenant. Yi Guaranty Reply Decl., ¶9.

Landlord’s evidence also demonstrates the commercial nature of Steimann debt. Steimann signed the Lease in his capacity as a manager for the original tenant, Oxford. Yi Unrivaled Decl., ¶8, Ex. 1. Steimann advised Landlords that he was the majority shareholder and CEO of PP. Yi Guaranty Reply Decl., ¶9. Steimann also signed the amendment to Oxford’s Articles of Incorporation that changed its name to PP. Yi Unrivaled Decl., ¶8, Ex. 6; Yi Guaranty Decl., ¶8, Ex. 5.

In 2021 Steimann advised Landlords that he had sold PP’s assets to Unrivaled, which would be taking over the store on the Premises. Yi Guaranty Reply Decl., ¶9. Steimann entered the Guaranty only to transfer the PP lease to Unrivaled. Yi Guaranty Reply Decl., ¶9. He executed the Guaranty to further PP’s business as the Lease’s original tenant. Yi Guaranty Reply Decl., ¶9.

These facts indicate that Steimann signed the Guaranty to induce Landlords to execute the Lease and further his commercial interests. Yi Unrivaled Decl., Ex. 2. The action against Steimann arises out of his conduct of a business or profession.

Steimann asserts that Landlords never made a demand for him to pay amounts owed under the Assignment or Lease. Steimann Decl., ¶3. Steimann therefore never breached his Guaranty. Steimann Decl., ¶3. Guaranty Opp. at 5.

The Guaranty did not require such a demand. As guarantor, Steimann waived all notice of acceptance of the Guaranty and demand of payment, presentation, and protest. Guaranty Reply at 7; Yi Guaranty Reply Decl., ¶4, Yi Guaranty Decl., ¶9, Ex. 2. The Guaranty also gave Landlords the right to proceed against Steimann as guarantor without first proceeding against the Premises tenant or providing Guarantor notice. Guaranty App. at 1; Yi Guaranty Decl., ¶9, Ex. 2. Additionally, the Complaint itself may be considered a payment demand.

Most leases for real property terminate whenever a lessee breaches the lease and abandons the property before the end of the term or if his right to possession is terminated by the lessor because of a breach of the lease. Civil Code §1951.2(a). The lessor may then recover the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the lessee proves could have been reasonably avoided. Civil Code §1951.2(a)(2).

A lease may provide that it survives the lessee’s breach and abandonment of the real property for so long as the lessor does not terminate the lessee’s right to possession. Civil Code §1951.4(b). The lessor may enforce all rights and remedies under the lease, including to recover rent as it becomes due, if it permits the lessee to sublet the property, assign the lessee’s interest in the lease, or both. Civil Code §1951.4(b)(1). If subject to standards and conditions, they must be reasonable at the time the lease is executed and at the time the lessor seeks to enforce them. Civil Code §1951.4(b)(2). The burden of proof lies with a lessee seeking to show a condition was unreasonable. Id. If the right to sublet or assign requires lessor consent, consent may not be unreasonably withheld. Civil Code §1951.4(b)(3).

For purposes of Civil Code section 1951.4(b), a landlord’s acts of maintenance or preservation or efforts to re-let the property do not constitute termination of lessee possession. Civil Code §1951.4(c)(1). Withholding consent to or terminating a subletting or assignment does not terminate the lessee’s right to possession if the withholding or termination does not violate the rights of the lessee in Civil Code section 1951.4(b). Civil Code §1951.4(c)(3).

In the event of tenant or assignee default, the Lease allows Landlords to continue the Lease and tenant’s right to possession of the Premises thereunder and recover rent as it becomes due. Yi Unrivaled Decl., ¶14, Ex. 1. The tenant may then sublet or assign the Lease, subject only to reasonable limitations. Yi Unrivaled Decl., ¶14, Ex. 1. For purposes of this remedy, Landlords’ efforts to relet the Premises would not constitute termination of the tenant’s right to possession. Yi Unrivaled Decl., ¶14, Ex. 1. Landlords assert they exercised this right and have not terminated Unrivaled’s right to possession of the Premises. Yi Unrivaled Decl., ¶16.

Both Unrivaled and Stemann allege Landlords’ interference with Unrivaled’s contractual duty to mitigate. Guaranty Opp. at 6-8; Unrivaled Opp. at 6-8.

Steimann argues that Unrivaled abandoned the property and that Landlords had the right to keep the Lease in effect and continue to collect rent only if it acted reasonably and consistent with the Lease remaining in effect. Wills v. Soda Shoppes of California, Inc., (1982) 134 Cal.App.3d 899, 903. Guaranty Opp. at 6-8.

Unrivaled argues that it abandoned the Premises in August 2022. Following abandonment, on March 1, 2023, Landlords contacted Unrivaled about showing the property and inquiring how Unrivaled wanted it to request access. On March 13, 2023, Landlords asserted that it was exercising its rights under Civil Code section 1951.4 not to terminate the Lease and to continue to seek rent as it became due. After that point, Landlords obstructed Unrivaled’s effort to market the property and prevented Unrivaled from assigning the Lease. Unrivaled Opp. at 2-4. In August 2023, Landlords demanded that Unrivaled de-list with its broker. When Unrivaled released its exclusive broker listing on September 5, 2023, Landlords never actually re-listed the Premises and informed Unrivaled on October 16, 2023 that it would not engage a broker. Unrivaled Opp. at 4-5.

Landlords can only impose reasonable restrictions on Unrivaled’s ability to assign or sublet the Premises following abandonment. Lease §13.2(b). Landlords’ refusal to consent to assignment of the Lease to a new tenant was unreasonable because consent was denied because it would be easier for Landlords to force Unrivaled to maintain possession. Carillo Decl., ¶12, Ex. 1. If Landlords had acted in good faith, Unrivaled would have mitigated rents for June through August 2023, reducing the attachment by $146.002.50 to $349,592.50. Unrivaled Opp. at 6-8.

Beginning on March 1, 2023, Landlords notified Unrivaled and Steimann that they were marketing the Premises and showing them to local brokers and prospective tenants. Scott Decl., ¶2, Ex. 2; Colby Decl., ¶5, Exs. B-D. On March 1, Unrivaled asserted that, to the extent that it still had possession, it was formally abandoning the Premises and did not need access. Scott Decl., ¶2, Ex. 2. Landlords then scheduled and conducted a walkthrough and initial inspection on March 3. Colby Decl., ¶¶ 3-4, Exs. A-B.

Landlord cites to Civil Code section 1951.35(c)-(e), which outlines the procedure for establishing abandonment of leased commercial real property. Guaranty Reply at 4. A lessor may give notice of belief of abandonment after rent has remained unpaid for the number of days required for a lessor to declare default if the lessor believes that the lessee has abandoned the property. The lessee then has at least fifteen days after the lessor personally serves notice of belief of abandonment to assert that it does not intend to abandon the commercial real property. Civil Code §§ 1951.35(b), (c), (e). Landlord never gave such notice. Guaranty Reply at 3-4.

Assuming arguendo that Unrivaled did abandon the Premises, on March 13, 2023 Landlords refused to terminate the Lease, the Assignment, or Unrivaled’s right to possession of the Premises. Guaranty Reply at 4; Scott Decl., ¶3, Ex. 3; Yi Unrivaled Reply Decl., ¶2. Steimann admits that when a tenant abandons the premises and offers to surrender a leasehold to the landlord, the landlord may reject it. 7 Miller & Starr, Cal. Real Estate (3d ed.2001) § 19:190, p. 586; see also Rest.2d Property, Landlord and Tenant, § 12.1(3). Guaranty Opp. at 7; Guaranty Reply at 4.

Steimann argues that Landlords accepted Unrivaled’s tender of possession, revoked the Lease, and excused Unrivaled from paying future rent. Guaranty Opp. at 7. Civil Code section 1951.4(c)(1) excludes efforts to relet the property from the types of conduct that may demonstrate termination of lessee possession. Guaranty Reply at 4, 6. Landlords’ effort to market the Premises does not by itself constitute repossession.

Prevention of performance by a promisee is equivalent to performance by the promisor. Unruh v. Smith, (“Unruh”) (1954) 123 Cal.App.2d 431, 437; Carlson v. Sheehan, (1910) 157 Cal. 692, 696. Where a party to a contract prevents the fulfillment of a condition or its performance by the adverse party, he cannot rely on such condition to defeat his liability. Unruh, supra, 123 Cal.App.2d at 437.

When Unrivaled first tried to list the Premises with M&M, it discovered the Landlords were already listing the Premises with CBRE. Carillo Decl., ¶¶ 7-8. Because commercial real estate brokers insist on exclusivity in listing property, CBRE’s listing prevented listing by M&M. Carillo Decl., ¶7. Landlords later admitted that this was true for all real estate brokers. Scott Decl., ¶5, Ex. 5. M&M obtained the right to list the Premises on June 23, 2023. Carillo Decl., ¶14. Unrivaled asserts that until that date, Landlords had interfered with Unrivaled’s ability to fulfill its duty to mitigate damages. Unrivaled Opp. at 7.

This argument fails. The Lease provides that the tenant has the right to sublet and assign its rights after default subject to “reasonable limitations.” Yi Unrivaled Decl., ¶14, Ex. 1. Unrivaled has not shown that Landlord’s listing actions were unreasonable. Landlord presents evidence that, although Unrivaled hired M&M to exclusively list the premises for subletting, M&M made no meaningful progress. Yi Unrivaled Reply Decl., ¶3. Landlords discussed with Unrivaled’s counsel which of the two listing brokers would provide better results and engage in more aggressive marketing. Scott Decl., ¶5, Ex. 5. Before Landlords committed to helping by having its own listing agent find a sublessee, they asked Unrivaled and Steimann to clarify that this was not a waiver of Landlords’ rights. Yi Unrivaled Reply Decl., ¶¶ 3-4. When they refused, Landlords chose not to help. Yi Unrivaled Reply Decl., ¶4. Landlords never told Unrivaled it was relieved of obligations to market the property. Yi Unrivaled Reply Decl., ¶9. Moreover, assuming arguendo that Landlords interfered, Defendants fail to show that listing the Premises with M&M may have resulted in mitigation where listing with CBRE did not.

Unrivaled fails to demonstrate that Landlords’ control over listing the Premises deprived Unrivaled of the ability to mitigate damages.

If a lessee’s right to sublet or assign the lease after default is subject to standards and conditions, they must be reasonable at the time the lease is executed and at the time the lessor seeks to enforce them. Civil Code §1951.4(b)(2). The burden of proof lies with a lessee seeking to show a condition was unreasonable. Id. If the right to sublet or assign requires lessor consent, consent may not be unreasonably withheld. Civil Code §1951.4(b)(3).

In May 2023, Landlords’ representative introduced Unrivaled to a potential Lease assignee, Chen. Carillo Decl., ¶9. Chen and Unrivaled eventually agreed to an assignment. Carillo Decl., ¶¶ 10-11. However, on May 12, 2023, Chen said that Landlords’ representative had told her that Landlords decided not to work with Chen. Carillo Decl., ¶12, Ex. 1. Landlords wanted to keep Unrivaled on the Lease to make things “easier for them.” Carillo Decl., ¶12, Ex. 1.

Unrivaled asserts that Landlords’ refusal to accept the assignment was unreasonable. Unrivaled Opp. at 7. It should therefore receive the benefits it would have if Landlords had accepted the assignment, which are the rent that would not have accrued from June through August 2023, a total of $146,002.50. Id.

Section 12(a) of the Lease requires Landlords’ written consent to assignment of the tenant’s interests in the Lease. Yi Unrivaled Decl., ¶14, Ex. 1. Under section 12.2(e), any request for assignment or subletting must include information relevant to Landlords’ determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and required modification of the Premises. Yi Unrivaled Decl., ¶14, Ex. 1. Defendants have the burden of showing that Landlords’ rejection was unreasonable. See Civil Code §1951.4(b)(2).

While Unrivaled’s position has some support, it is insufficient. The communication to Unrivaled that Landlords want to keep Unrivaled on the Lease because it would be “easier” is ambiguous. Landlord presents evidence that, when Chen asked if her client could sublease the Premises, she said it would only do so in exchange for a concession of six to nine months of free rent. Yi Unrivaled Reply Decl., ¶6. Landlords were unwilling to agree, and Chen never asked Unrivaled if it would pay those months of rent. Yi Unrivaled Reply Decl., ¶6. Unrivaled also never provided proof that the proposed sub-lessee had the means to pay rent or the necessary business license for the proposed nightclub. Yi Unrivaled Reply Decl., ¶7. When Landlords discovered that obtaining a night club license is not as simple as Chen made it sound, they knew Chen’s client was not a suitable tenant. Yi Unrivaled Reply Decl., ¶7. It was inexperienced, unable to commit to paying full rent, and unsuitable. Yi Unrivaled Reply Decl., ¶8. Landlords had reasonable basis to reject the company as a sub-tenant. Yi Unrivaled Reply Decl., ¶8.

In an email on August 16, 2023, Landlords asked for permission to again list the Premises with CBRE, with all parties reserving all rights. Scott Decl., ¶5, Ex. 5. Unrivaled complied and informed Landlords on September 5 that it had released the listing. Carillo Decl., ¶15; Scott Decl., ¶6, Ex. 6. On October 11, 2023, Landlords said they were only “ready to proceed” with a CBRE listing for the Premises. Unrivaled Opp. at 7; Scott Decl., ¶7, Ex. 7; Colby Decl., ¶6, Ex. D. On October 16, 2023, Landlords announced they would not move forward with engaging CBRE or another broker to market, sub-lease, or take other activities related to the Premises due to homeless activities nearby. Scott Decl., ¶9, Ex. 9; Colby Decl., ¶7, Ex. E. Landlords urged Unrivaled to secure the property in a reasonable manner. Ex. 9.

The court need not discuss these events in detail because they are irrelevant. Landlords only seek attachment for Base Rent accruing by August 1, 2023. Yi Unrivaled Decl., ¶13, Ex. 4. If these events interfered with efforts to mitigate damages (Unrivaled Opp. at 7), it did not affect the damages at issue.

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.

Landlords seek to attach Steimann’s interests in real property; accounts receivable; chattel paper; equipment; farm products; inventory; general intangibles and final money judgments arising out of the conduct of a trade, business, or profession; money on the premises where a trade, business, or profession is conducted; negotiable documents of title; instruments; securities; minerals or the like to be extracted; and Steimann’s checking account with Bank of America.

Steimann’s argument that these categories are too broad fails. Guaranty Opp. at 9-10. Landlords assert that the checking account with Bank of America has $367,000. Yi Guaranty Decl., ¶22. Although this evidence lacks foundation and fails to state details of the account (see Guaranty Opp. at 10, n. 4), it is not required. The right to attach order can encompass any bank account Steimann may have without identifying specific accounts. The description of attachable property is adequate.

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).

Landlord’s proposed right to attach order for Unrivaled includes a list of 72 properties to attach. Unrivaled Opp. at 9. Only 12 of these are in Unrivaled’s name, and the other 60 are owned by its subsidiaries. Id; Unrivaled App. at 3; Yi Unrivaled Decl., ¶¶ 10, 19-22, Ex. 5. Unrivaled asserts that Landlords are using the right to attach order to “reverse pierce” the corporate veil Unrivaled’s subsidiaries without establishing the legal basis to do so. Unrivaled Opp. at 9-11.

While Unrivaled appears to be correct, the court need not discuss this issue in any detail. The identification of specific property to be attached is unnecessary for a right to attach order against a corporate entity. CCP §484.020(e). To the extent Landlord seeks to attach property belonging not to Unrivaled but rather to a subsidiary, that subsidiary entity has its own remedies to set aside the attachment and to seek damages for wrongful attachment. That does not change whether attachment of Unrivaled assets in itself is proper. Unrivaled Reply at 5.

The property exempt from attachment consists of (a) all property exempt from enforcement of a money judgment,[3] (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.

Unrivaled asserts that Steimann should not raise his exemption arguments at this hearing because allowing him to preclude attachment based on these exemptions is “putting the cart before the horse.” Opp. at 9. Not so. 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).

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. 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.

Steimann has provided a financial statement showing monthly expenses of $38,180.19 per month, or $458,162.28 per year, to support himself and his four-person household. Steimann Decl., ¶6, Ex. A. Of this amount, $2,500 per month ($30,000 per year) is for legal fees to defend this lawsuit. Steimann Decl., ¶6, Ex. A. Such legal fees must be considered as necessary for support for attachment law to pass constitutional muster. Randone v. Appellate Department, (1971) 5 Cal.3d 536, 562.

Steimann has not shown that $458,162.28 per year in cash or other liquid assets is necessary for his and his family’s support. Guaranty Reply at 10. Steimann’s financial statement is insufficiently detailed to explain his monthly expenses -- most particularly payments of $8300 for rent or house, $20,000 in child support, $1000 for transportation, and $250 for entertainment. He also fails to explain how he can have $38,180.19 in monthly expenses and only $8,872.85 in monthly income. The exemption is disallowed.

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).

Steimann’s financing statement lists gross monthly wages of $12,500. Steimann Decl., ¶7, Ex. A. Steimann does not show who his employer is, what his job title is, or provide any documentary support for his employee compensation. The exemption is denied.

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

Steimann’s financing statement shows he owns three vehicles. He claims that a 1973 Chevy Blazer is worth $50,000. Steimann Decl., ¶8, Ex. A. This seems unlikely, but the value of the vehicles exceeds the $7,500 maximum exemption for a vehicle anyway. The exemption is granted.

The applications for right to attach orders are granted against Defendants Unrivaled and Steimann in the amount of $495,595. Steimann’s exemptions for property necessary for the support of his family and for employee wages are disallowed. A $7,500 vehicle exemption is granted. No writ shall issue for either Defendant until Landlord posts a $10,000 undertaking for that Defendant.

[1] Defendants failed to lodge courtesy copies of their oppositions in violation of the Presiding Judge’s First Amended General Order Re: Mandatory Electronic Filing. Their counsel is admonished to provide courtesy copies in all future filings.

[2] The court has ruled on Steimann’s written evidentiary objections. The clerk is directed to scan and electronically file the rulings.

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