Judge James C. Chalfant, Case Number: 23STCV05901, Date: 2023-08-03 Tentative Ruling

Plaintiff RNWD JV, LLC (“Tenant”), applies for a right to attach order against Defendant Lexham Torrance, LLC (“Landlord”) for $453,044.81, including $10,000 in costs and $200,000 in attorney’s fees.

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

A. Statement of the Case

1. Complaint

Plaintiff Tenant filed the Complaint against Landlord on March 17, 2023, alleging (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, and (3) declaratory relief. The Complaint alleged in pertinent part as follows.

On June 22, 2022, Landlord and Tenant entered into a Lease Agreement (“Lease”) to rent suite #400 at 3655 Lomita Blvd, Torrance, CA 90505 (“Premises”). Tenant prepaid $15,372 in rent and a $226,672.81 security deposit. A $207,615.84 portion of the security deposit was in the form of a letter of credit from U.S. Bank National Association (“Letter of Credit”).

Under the terms of the Lease, Landlord was required to install HVAC and the necessary cooling, demise walls, install drywall, stub the building for electricity to the perimeter, and provide electricity with a dedicated 200-amp panel (collectively, “Landlord Work”) prior to delivery of the Premises on August 1, 2022. Landlord failed to complete its work or delivery of the Premises on that date. An addendum between the parties extended the deadline to September 30, 2022 (“Addendum”), but Landlord also failed to finish the Landlord Work by that date.

The Lease gives Tenant the right to terminate upon Landlord’s failure to substantially complete the Landlord Work and deliver the Premises within 30 days of the deadline, provided that Tenant gives ten days’ written notice before doing so. Landlord must then return any pre-paid rent and security deposit, including the Letter of Credit.

Landlord has admitted that it failed to complete the Landlord Work and deliver the Premises to Tenant by October 30, 2022. Tenant tried for months to work with Landlord, but it became clear that Landlord was not operating in good faith. The Landlord Work remained unfinished as of February 15, 2023. Research has revealed that Landlord had not even obtained the necessary permits for some of the Landlord Work.

Throughout this time, Landlord’s conspired with its contractor to keep Tenant off the Premises so that it could not see how far behind the Landlord Work was. The contractor, whom the Landlord suggested, also charged over three times the market rate for the agreed-upon Landlord Work.

On February 15, 2023, Tenant sent a Notice of Termination terminating the Lease on February 26, 2023. Landlord refused to recognize Tenant’s right to termination and to return the pre-paid rent and security deposit. Tenant’s business has suffered significant losses because it is unable to open the dental office it planned after significant investment.

Tenant seeks damages according to proof, prejudgment interest, and a judicial declaration that the Lease was terminated on February 26, 2023. The declaration should compel Landlord to return all pre-paid rent and security deposits and not draw on the Letter of Credit. Injunctive relief should also issue to prevent Landlord from drawing on the Letter of Credit. Tenant further seeks attorney’s fees and costs.

2. Cross-Complaint

Landlord filed a Cross-Complaint against Tenant on May 1, 2023, alleging (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, and (3) declaratory relief. The Cross-Complaint alleged in pertinent part as follows.

The Lease defined the Commencement Date as the completion of the Landlord Work and delivery of the Premises, originally August 1, 2022. The parties agreed that Tenant would not pay rent for the first nine months after the Commencement Date and the pre-paid rent was for the tenth month of the Lease.

Under the Lease, Landlord was to (1) demise the Premises as shown on an attached Premises Floor Diagram; (2) bring and stub the building’s plumbing, HVAC, and electricity to the perimeter of Premises; and (3) install a dedicated 200-amp panel for Tenant’s electricity. Landlord was not required to perform any other work for the Premises. The parties agreed that the Landlord was to substantially complete the work by August 1, 2022, subject to delays outside of Landlord’s reasonable control, including those caused by Tenant or force majeure.

After the Landlord Work is substantially completed, Tenant agreed to be solely responsible for all required and desired improvements and alterations to prepare the Premises for Tenant’s use and occupancy thereof (“Tenant Work”). The Tenant Work was to be performed under the Landlord’s supervision and pursuant to building permits, approvals, and other licenses as required by governmental agencies. Tenant was required to “diligently prosecute” said work to completion.

Tenant was required to execute and deliver a statement in writing to the Landlord or proposed mortgagee or purchaser (“Estoppel Certificate”) within ten days of such a written request from the Landlord. The Landlord may then rely on such a statement or certificate.

A Tenant default under the Lease includes abandonment of the Premises, failure to pay rent within five days of the due date, and failure to take possession of the Premises and begin Tenant Work and/or commercial use after completion of Landlord Work and delivery of the Premises.

Upon default, Landlord may terminate the Tenant’s right to possession and recover all damages incurred. This includes the cost of recovery, reletting expenses, costs of necessary renovation, reasonable attorney’s fees, and the worth of the amount by which unpaid future rent exceeds what the Tenant proves Landlord could have reasonably avoided. Unpaid rent and other installments would also accrue 10% annual interest.

After Tenant signed the Lease, it decided to alter the floor plan for the Premises and asked Landlord to alter the Landlord Work’s demising of the walls to accommodate it. To accommodate this request, Tenant agreed to the Addendum which changed the deadline for Landlord Work under the Lease to September 30, 2022. Because the parties signed the Addendum on August 30, 2022, which means that Tenant was still modifying the floor plans three months after it signed the Lease.

Landlord hired Shamma Construction, Inc. (“Shamma”)[1] as its general contractor for Landlord Work. Shamma finished demising the walls of the Premises and stubbing the building’s plumbing, HVAC, and electricity to the perimeter in mid-September 2022. Landlord also mounted two 100-amp panels in late September 2022 because Shamma recommended them in lieu of one 200-amp panel for the Premises’ size and Tenant’s needs. The Landlord Work was substantially completed by the Addendum deadline of September 30, 2022.

Tenant asked Landlord to keep the demising walls free of drywall to allow later inspectors to inspect the construction of the walls. This also accommodated Tenant’s delays in finalizing its floor plans and hiring a general contractor to start Tenant Work. Landlord also applied for a common hallway permit and installed a hallway corridor door. None of this changed the fact that Landlord had substantially completed Landlord Work as of September 30, 2022.

When Tenant asked for a referral to a contractor for the Tenant Work, Landlord recommended Shamma due to its familiarity with the building. Shamma commenced the Tenant Work as early as November 2022. Tenant has paid Shamma $30,000 for Tenant Work. None of the work Shamma performed for Tenant Work was included in Landlord Work under the Lease.

On November 15, 2022, Peter Abruzzo (“Abruzzo”), Tenant Manager and Renew LLC’s (“Renew”) president, visited the Premises along with Steve Siemers (“Siemers”). Neither one asked Shamma or Premises property manager Jennifer Moore (“Moore”) questions about the state of the Landlord Work.

On January 16, 2023, Tenant executed a Tenant Estoppel Certificate to Community West Bank, N.A. The estoppel certificate warranted that the Lease was not in default and that Tenant did not know of any event that constituted a default by Landlord. Both Landlord and the Lender proceeded in good faith in reliance on this 2023 Certificate.

In the following months, Tenant vacillated on finalizing its plans for the Premises, delayed its efforts to select a general contractor, and at times appeared to conduct no activities at the Premises. It later complained to Landlord that Shamma’s construction costs exceeded Tenant estimates and asked to terminate the Lease. When Landlord refused, Tenant filed this Complaint.

In reality, Landlord substantially completed Landlord Work in September 2022 and fully completed it on the week of February 13, 2023.

Tenant’s failure to pay rent and Direct Expenses due under the Lease resulted in damages of at least $5 million. Costs incurred to complete Landlord Work totaled $250,000. Landlord seeks these compensatory damages, attorney’s fees and costs, interest accrued, and a declaration that (1) the Lease is valid, (2) Tenant wrongfully terminated it, and (3) Landlord is entitled to draw on the Letter of Credit, the security deposit, and the pre-paid rent.

2. Course of Proceedings

On March 17, 2023, the court denied Tenant’s ex parte application for a temporary restraining order (“TRO”) and order to show cause (“OSC”) why a preliminary injunction should not issue to enjoin Landlord from drawing funds from the Letter of Credit, and to compel Landlord to withdraw any prior requests to draw from the Letter of Credit.

On March 31, 2023, Tenant served Landlord with the Complaint and Summons.

On May 1, 2023, Landlord filed and its Answer and Cross-Complaint.

On June 2, 2023, Tenant filed an Answer to the Cross-Complaint.

Effective August 7, 2023, the case is reassigned from Department 72 (Hon. Curtis A. Kin) to Department 72 (Hon. Joseph Lipner).

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.

Landlord has admitted in court that it is a special purpose vehicle that owns only the building in which the Premises are located. Salim Decl., ¶4.

On June 22, 2022, the parties entered into the Lease for the Premises. Abruzzo Decl., ¶3, Ex. 1. In connection thereto, Tenant prepaid $15,372 in rent, paid a cash security deposit of $20,056.97, and tendered the $207,615.84 Letter of Credit. Abruzzo Decl., ¶6, Ex. 1.

The Term of the Lease is ten years and nine months, and the rent increases over time. Abruzzo Decl., ¶4, Ex. 1. The Lease defines the Commencement Date as the date of completion of Landlord Work and delivery of possession to Tenant. Ex. 1, p. 1. Article 36 defines the Landlord Work to include: (1) demising the Premises based on an attached Premises Floor Diagram; (2) bringing and stubbing the plumbing, HVAC, and electricity to the perimeter of Premises; and (3) installing a dedicated 200-amp panel for Tenant’s electricity. Ex. 1, p. 34. The completion date for the Landlord work was to be no later than August 1, 2022, subject to delays outside of Landlord’s reasonable control, including force majeure and delays caused by Tenant. Id.

Article 36 states that, if the Landlord failed to substantially complete Landlord Work and deliver possession within 30 days of the intended delivery date, Tenant had the right to terminate the Lease after ten days’ prior written notice. Id. Landlord must then return any prepaid rent and security deposit, including the Letter of Credit. Id. If the Landlord substantially completes the Landlord Work and delivers possession of the Premises during the ten-day notice period, the termination notice will be null and void. Id.

Under Article 35, apart from the Landlord Work, Tenant shall be solely responsible for all required and desired improvements at its sole cost and expense (Tenant Work). Ex. 1, p. 33. Tenant shall perform all Tenant Work pursuant to building permits, approvals and other licenses as required by governmental agencies, in compliance with all applicable laws, rules and regulations and in a good and workmanlike manner using reputable licensed contractors which Landlord approved. Id. Article 23.f defines Tenant’s failure to perform such Tenant Work as one form of default. Ex. 1, p. 27.

Article 26 provides that, upon request from Landlord at any point during the Lease, Tenant shall execute, acknowledge, and deliver an Estoppel Certificate to either the Landlord or proposed mortgagee or purchaser. Ex. 1, p. 28. If Tenant did not execute and deliver such an Estoppel Certificate, the Landlord may do so in Tenant’s name and on Tenant’s behalf. Id. Landlord and any prospective purchaser or encumbrancer may then rely on the Estoppel Certificate. Id.

Article 30(xii) entitled the prevailing party in any action to enforce the Lease to recover attorney’s fees and costs. Abruzzo Decl., Ex. 1.

On August 30, 2022, the parties signed the Addendum that modified the deadline for Landlord Work and delivery of the Premises to September 30, 2022. Abruzzo Decl., ¶7, Ex. 2.

On August 22 and 31, 2022 Tenant sent revised plans to Landlord through contractor Sharma. Siemers Decl., ¶2, Ex. 1, pp. 8-9. Landlord received clarification that the revised wall demising plan replaces one of the plans attached to the Lease. Id., p. 7. On September 1, 2022, Landlord asked how to resolve the fact that general contractor Shamma’s door delivery would not be for another 17-20 weeks. Id., p. 6. Landlord explained that because the doors were part of the demising for Landlord Work, it would not be finished by September 30. Id. Landlord did not think it would affect Tenant because Tenant still needed eight to ten weeks for its own plan check and four months for construction. Id.

Landlord did not finish Landlord Work by September 30, 2022 or 30 days later on October 30, 2022. Abruzzo Decl., ¶9. Tenant worked with Landlord to avoid termination of the Lease because it was eager to operate a dental center on the Premises. Abruzzo Decl., ¶10.

On January 10, 2023, a general contractor sent Siemers a bid for review. Siemers Decl., ¶3, Ex. 2, p. 15-16. The contractor explained that the bid was a first draft because of uncertainties as to the HVAC control and fire alarm control panel capacity. Siemers Decl., ¶3, Ex. 2. After some exchanged emails, on January 16, 2023, the contractor said that the electrical panel boxes on the Premises were too small and must be a 42-breaker panel per engineered electrical plans. Id., p. 11.

In January 2023, Landlord presented Tenant with the Estoppel Certificate for execution. Abruzzo Decl., ¶12.[2] Tenant understood that Landlord was refinancing its mortgage and needed the Estoppel Certificate to assist those efforts. Abruzzo Decl., ¶12. Abruzzo signed the Estoppel Certificate with the understanding that under Article 26 Landlord could otherwise execute it on Tenant’s behalf. Abruzzo Decl., ¶12.

On February 2, 2023, Tenant’s electrical contractor Kunle Olofinboba (“Olofinboba”) of the AYK Group, Inc. (“AYK”) informed Siemers that Landlord’s contractor Shamma had told AYK to stop work on the premises until further notice. Siemers Decl., ¶4, Ex. 3. Olofinboba confirmed that Landlord had not yet installed a 200-amp panel as part of Landlord’s work and the City of Torrance (“City”) had not inspected or approved the electrical portion of Landlord’s Work. Siemers Decl., ¶4.

On February 15, 2023, another Tenant contractor, Mark Sirianni (“Sirianni”), sent Tenant pictures of the Premises. Siemers Decl., ¶5, Ex. 4. Sirianni commented that it looked like there was work ongoing on the Premises, all in the common areas. Siemers Decl., ¶5, Ex. 4. This showed Tenant that Landlord had not completed the Landlord Work. Siemers Decl., ¶5, Ex. 4.

Tenant researched whether Landlord obtained the necessary permits for inspection needed to complete Landlord Work. Abruzzo Decl., ¶14. On February 28, 2023, Tenant emailed the City’s Permit Center Supervisor to ask if any permits or inspections been issued or called pertaining to the Premises. Siemers Decl., ¶6, Ex. 5. On March 5, the Permit Center Supervisor responded that Olofinboba had picked up two corrections on February 14, 2023. Siemers Decl., ¶6, Ex. 5.[3]

As of February 2023, Landlord failed to (1) demise the Premises; (2) install drywall; (3) bring and stub the building for electricity to the perimeter of the Premises; (4) provide the cooling necessary for the HVAC for the Premises; and (5) install a dedicated 200 amp-panel for Tenant’s electricity. Abruzzo Decl., ¶13.

When Tenant representatives tried to access the Premises to see the progress on Landlord Work, Landlord’s contractors refused to let them in. Abruzzo Decl., ¶15. Earlier, when Tenant was looking for a contractor to complete Tenant Work, Landlord had recommended its contractor at triple the market rate. Abruzzo Decl., ¶15.

On February 15, 2023, Tenant sent Landlord a ten-day Notice of Termination. Abruzzo Decl., ¶16, Ex. 4. The Notice of Termination asserted that Landlord failed to (1) demise the Premises, which still had no drywall; (2) bring and stub the building for the electricity to the perimeter; (3) provide the tons of cooling necessary for the HVAC; and (4) install a dedicated 200-amp panel for electricity. Abruzzo Decl., ¶16, Ex. 4, p. 57. Landlord also did not have the Landlord Work permitted or inspected. Id. A Landlord representative had admitted in writing the failure to timely perform Landlord’s Work. Id. Tenant demanded return of the $15,372 rent, $20,056.97 cash security deposit, and $207,615.84 Letter of Credit from U.S. Bank by February 28. Id., p. 58.

On February 20, 2023, Landlord replied that it had substantially completed the Landlord Work as set forth in the Lease and agreed upon by the parties. Abruzzo Decl., ¶18, Ex. 5, p. 60. Landlord also delivered possession of the Premises by September 30, 2022. Id. Landlord asserted that Tenant had taken possession of the Premises and had begun Tenant Work. Id. Landlord cited the Estoppel Certificate in which Tenant accepted possession of the Premises and stated that the Lease Term commenced on September 30, 2022. Id. Per the Estoppel Certificate, Tenant also admitted that it was performing the Tenant Work and had started paying rent, that there was no condition that constituted a Landlord default to Tenant’s knowledge, that Landlord had fully satisfied and performed all applicable conditions and obligations, and that Tenant had no defenses or offenses to Landlord’s enforcement of the Lease. Id. Landlord asserted that because Tenant had accepted possession of the Premises, the provision of the Lease that Tenant relied on for the Notice of Termination was no longer in effect. Id.

Pursuant to the Notice of Termination, Tenant terminated the Lease on February 26, 2023. Abruzzo Decl., ¶17.

On March 3, 2023, Tenant responded to Landlord’s February 20, 2023 letter. Abruzzo Decl., ¶19, Ex. 6. Tenant asserted that Landlord admitted on September 1, 2022 that demising work would not be finished by the deadline. Abruzzo Decl., ¶19, Ex. 6, p. 62. In any case, local officials had confirmed that Landlord did not have the necessary permits or inspections for the Landlord Work. Id. Therefore, the Landlord Work was not substantially complete. Id. Substantial completion of this work and delivery of the Premises were separate conditions to fulfill before the Commencement Date listed in the Lease and this has not occurred. Id., p. 63.

Landlord never responded to this letter. Abruzzo Decl., ¶19. Landlord has since drawn on the Letter of Credit and has not refunded the security deposit or prepaid rent. Abruzzo Decl., ¶20.

Tenant’s counsel are a law firm partner who bills $1,250 per hour and an associate who bills $825 per hour. Salim Decl., ¶2. The law firm already has billed $53,512.50 in fees and $1,917.06 in costs, for a total of $55,429.56. Salim Decl., ¶2.

Tenant’s counsel expects to bill an additional $144,497.50 in fees to finalize this application for writ of attachment, file a reply brief, attend the hearing, serve discovery, depose Landlord and its contractor, defend depositions of Tenant and its contractors, draft and oppose any summary motions, and try the case. Salim Decl., ¶3. Counsel also expects to incur an additional $8,082.94 in costs. Salim Decl., ¶3. A conservative total estimate of attorney’s fees and costs is $200,000 and $10,000, respectively. Salim Decl., ¶3.

Morlin Asset Management LP (“Morlin”) performed asset management services for Landlord in connection with the Premises. Moore Decl., ¶1.

In July 2022, Landlord contacted Shamma to discuss work on the Premises. Shamma Decl., ¶3. The scope of work was to prepare the Premises for Tenant to build out tenant improvements for a dental implant center. Shamma Decl., ¶3. On July 3, Shamma received a preliminary plan that matched the Lease’s plan for demised walls as part of Landlord Work. Shamma Decl., ¶3.

On July 11, 2022, Tenant representative Steve Siemers (“Siemers”) emailed Shamma the preliminary plan. Shamma Decl., ¶4. The next day, he emailed Shamma questions and a request to move the exit doors. Shamma Decl., ¶4.

On July 13, 2022, Siemers emailed Landlord and Shamma with additional questions about the preliminary plan. Shamma Decl., ¶5. Shamma hired an architect to prepare revised plans that would accommodate Tenant’s requests. Shamma Decl., ¶5. Siemers and Shamma continued to revise the demising walls plans over the following month. Shamma Decl., ¶6. Siemers did not seem in a hurry during this time and would often delay in his response to emails. Shamma Decl., ¶6.

On August 22, 2022, Shamma emailed revised demising wall plans to Siemers and Landlord representative Thomas Bailey (“Bailey”) for approval. Shamma Decl., ¶7, Ex. A. Siemers approved these plans on August 31, 2022. Shamma Decl., ¶7, Ex. B. Shamma then sent a proposal to Bailey, who approved it on September 7, 2022. Shamma Decl., ¶8; Bailey Decl., ¶3.

Shamma completed the extension of plumbing into the Premises between September 8 and 20, 2022. Shamma Decl., ¶10.

Shamma started the demising walls work on September 13, 2022. Shamma Decl., ¶9; Bailey Decl., ¶4. By September 22, 2022, it had finished the wall framing. Shamma Decl., ¶9. Shamma did not install the drywall on exterior and interior side of the demising walls because, after Tenant finished its interior tenant improvements, the City inspector would ask to inspect electrical work on the interior of the demising walls. Shamma Decl., ¶9; Bailey Decl., ¶5. Siemers agreed that Shamma should leave the demising walls open to allow such inspection. Shamma Decl., ¶9. Thus, by the end of September Shamma had substantially completed demising the walls as part of the Landlord Work. Shamma Decl., ¶9; Moore Decl., ¶4; Bailey Decl., ¶5.

Although the Lease provided for a single 200-amp electrical panel as part of Landlord Work, Siemers and Shamma agreed to instead install two 100-amp panels on either side of the Premises. Shamma Decl., ¶12; Bailey Decl., ¶4. Siemers did not approve the plans for installation of the electrical panels until September 7, 2022, and he understood that the electrical panels had a lead time of four to six weeks. Shamma Decl., ¶12. The panels could have been installed on perimeter walls, but Tenant required that they be installed on interior walls during the Tenant Work. Bailey Decl., ¶4.

By September 26, 2022, Shamma had installed electrical conduits, wires, and cans. Shamma Decl., ¶12. He had also brought and stubbed the electricity to the perimeter of the Premises. Shamma Decl., ¶12; Bailey Decl., ¶4.

On October 13, 2022, Shamma received the two 100-amp panels. Shamma Decl., ¶12. On October 18, 2022, Siemers sent modified electrical plans for Shamma to follow. Shamma Decl., ¶12, Ex. C. Siemers instructed Shamma to install these panels on interior partition walls based on the October 18, 2022 modified electrical plans. Shamma Decl., ¶12, Ex. C.

Because the HVAC was already stubbed to the perimeter of the Premises, it required no changes as a part of Landlord Work before Tenant took possession. Shamma Decl., ¶11. Siemers accepted the HVAC system as it was. Shamma Decl., ¶11.

Based on this work, Landlord had substantially completed the Landlord Work by the Addendum’s deadline of September 30, 2022. Bailey Decl., ¶4.

Landlord has in good faith applied for a common hallway permit and installed a hallway corridor door. Bailey Decl., ¶10. It was under no Lease obligation to do so. Bailey Decl., ¶10.

In mid-August 2022, Tenant asked Landlord to refer a general contractor for interior tenant improvements of the Premises. Bailey Decl., ¶8. Landlord referred Shamma. Bailey Decl., ¶8.

On October 31, 2022, at Siemers’ request, Shamma sent Tenant a proposal for improvements that were not a part of the Landlord Work. Shamma Decl., ¶13, Ex. D. The work included framing and bracing of partition walls. Shamma Decl., ¶13, Ex. D. Shamma would also install backing and bracing for various fixtures, ceiling tiles, power sources and conduits for a dental chair and other equipment, data wires, plumbing, a concrete floor, medical gas piping, fire extinguisher cabinets, and laminate cabinets. Shamma Decl., ¶13, Ex. D. Siemers gave Shamma approval to start the Tenant Work based on this proposal. Shamma Decl., ¶13.

In November 2022, Shamma began work on interior construction of the Premises for Tenant, which the Lease defines as the Tenant Work. Bailey Decl., ¶8. Tenant has paid Shamma $30,000 for interior door framing. Bailey Decl., ¶9. It has not paid Shamma for interior doors it ordered, which Shamma has now stored in a warehouse. Bailey Decl., ¶9.

Siemers and Tenant President Peter Abruzzo (“Abruzzo”) planned to visit the Premises on November 15, 2022. Shamma Decl., ¶14. Siemers instructed Shamma to frame the interior partition walls as part of the Tenant Work before the visit. Shamma Decl., ¶14. Shamma employee Antonio Rodriguez’s timecard shows that he worked on the interior partition walls every weekday between November 3 and 15 ,2022. Shamma Decl., ¶14, Ex. E.

When Siemers and Abruzzo visited the Premises on November 15, 2022, they were very pleased with the layout of the interior partition walls and the floor markings for the electrical outlets and panels. Shamma Decl., ¶15. Siemers told Shamma to install the two electrical panels on those walls at a later time. Shamma Decl., ¶15. Siemers and Abruzzo did not ask any questions about the walls’ demising or other issues with the Premises. Moore Decl., ¶7. Based on Bailey’s experience with Siemers and Abruzzo, they would have raised any problems that they had with the Premises. Bailey Decl., ¶7.

During the visit, Siemers and Abruzzo voiced some concerns about Shamma’s high air conditioning bid. Moore Decl., ¶6. Morlin Senior Portfolio Manager Moore explained that this was because of supply chain issues and parts costs. Moore Decl., ¶6. She also asserted that Tenant was asking for over-standard air conditioning capabilities. Moore Decl., ¶6. When asked, she opined that Shamma was trustworthy. Moore Decl., ¶6. Siemers and Abruzzo also met with Shamma to discuss the air conditioning proposal and Tenant Work. Moore Decl., ¶7.

After multiple conference calls between Siemers, Shamma, and electrical contractor Olofinboba, on December 14, 2022, Siemers sent updated design plans to update the electrical plans for revisions associated with Tenant Work for the washer and dryer. Olofinboba Decl., ¶12, Ex. I.

In January 2023, at Siemers’ request, Shamma replaced the two 100-amp panels on the interior partition walls with two 42-breaker 100-amp panels. Shamma Decl., ¶16. Tenant continued to modify tenant improvement plans over the following months, which caused further delay. Shamma Decl., ¶16. When Shamma spoke to Siemers on February 1, 2023 about payment owed for those improvements, Siemers hung up. Shamma Decl., ¶16.

On February 17, 2023, Shamma installed drywall on the exterior side of demised walls on Landlord’s instructions. Shamma Decl., ¶17; Bailey Decl., ¶13. He also installed sheetrock and soundboard on walls common side of corridor. Bailey Decl., ¶13. On February 24, 2023, Shamma installed drywall on the interior side, again on Landlord’s instructions. Shamma Decl., ¶17; Bailey Decl., ¶14.

At some point, Siemers requested Morin to provide general contractor candidates for the Tenant Work. Moore Decl., ¶8. Moore has reviewed four of the five bids Renew received from general contractors, including Shamma. Moore Decl., ¶9.[4] Two of them are for prices higher than Shamma’s proposal. Moore Decl., ¶9. While CMM’s bid seems lower, it was missing several material items that would have made the price higher than Shamma’s proposal. Moore Decl., ¶9.

The Estoppel Certificate states that the Lease is not in default, is valid, and is in full force and effect. Lewis Decl., ¶4, Ex. 1. The Lease has not been modified and represents the entire agreement between Landlord and Tenant with respect to the Premises. Id. Tenant had accepted possession of the Premises and is performing Tenant Work as defined in the Lease. Id. The Lease began on September 30, 2022. Id.

Tenant agreed that, to the best of its knowledge, no event has occurred and no condition exists which would constitute Landlord’s default under the Lease. Id. Tenant affirmed that it has no defenses or offsets against Landlord’s enforcement of the Lease. Id. Landlord had made all required contributions for tenant improvements except for Landlord Work as described in Article 36 and Tenant Improvement Allowance as described in Article 35. Id. The Estoppel Certificate may be relied upon and shall inure to the benefit of Lender and Landlord knowing it will reply upon the truth and accuracy if it. Id.

The Estoppel Certificate concluded that it shall inure to the benefit of the Landlord and its Lender, Community West Bank, N.A (“Lender”). Id. Both parties know that they will rely on the truth and accuracy of all statements therein. Id.

On July 12, 2022, Shamma contacted Olofinboba to request a proposal for electrical design consulting work at the Premises. Olofinboba Decl., ¶3. Olofinboba, on behalf of his company, AYK, sent a proposal the same day and a revised proposal on July 17, 2022, both addressed to Shamma. Olofinboba Decl., ¶¶ 3-4, Ex. A. On July 18, 2022, Shamma forwarded the revised proposal to Siemers. Olofinboba Decl., ¶4, Ex. B.

At Siemers’ request, on September 1, 2022, Olofinboba resent the electrical design consulting proposal directly to him. Olofinboba Decl., ¶5, Ex. C. On September 20, 2022, Siemers sent Olofinboba the proposal with references to Tenant in place of Shamma. Olofinboba Decl., ¶6, Ex. D. Neither Olofinboba nor anyone else at AYK sent the proposal to Tenant, and his practice was to contract with Shamma. Olofinboba Decl., ¶6.

Olofinboba asked for clarification on who was responsible for paying AYK. Olofinboba Decl., ¶7, Ex. E. After a conference call, Shamma, Siemers, and Olofinboba agreed that Shamma would hold the contract with AYK so it would receive all invoicing and billing. Olofinboba Decl., ¶8. Shamma and AYK executed a contract to that effect. Olofinboba Decl., ¶9, Ex. F.

On February 1, 2023, Siemers asked Olofinboba if he could pay AYK to pick up plan check comments from the City. Olofinboba Decl., ¶13, Ex. J. Siemers asserted that Shamma was no longer involved in the project, and that a mechanical engineer was now handling its plans. Olofinboba Decl., ¶13, Ex. J. Olofinboba replied that AYK could pick up the comments and charge the same hourly rate as it had for Shamma. Olofinboba Decl., ¶14, Ex. K.

Olofinboba became concerned about how Siemers and Renew offered to pay AYK directly when Shamma held the contract. Olofinboba Decl., ¶14. When he asked Shamma, he was told to stop work on the project until further notice. Olofinboba Decl., ¶14. Olofinboba informed Siemers of this fact via email on February 2, 2023. Olofinboba Decl., ¶15, Ex. L. Olofinboba also said that Shamma held AYK’s contract on the project. Olofinboba Decl., ¶15, Ex. L. He meant that AYK could not enter into a separate contract for work in connection with the Premises until Tenant had paid Shamma in full for its contract. Olofinboba Decl., ¶15.

On February 6, 2023, Siemers emailed Olofinboba that Tenant was no longer working with Shamma due to its high-priced bid. Olofinboba Decl., ¶16, Ex. M. On February 9, Siemers asserted that Tenant had paid in full AYK’s invoice under its contract with Shamma. Olofinboba Decl., ¶16, Ex. M. Olofinboba replied that Shamma would not cut AYK loose until all outstanding invoices were paid. Olofinboba Decl., ¶16, Ex. M. He asked Siemers to resolve them with Shamma so AYK could move forward with the project. Olofinboba Decl., ¶16, Ex. M. Siemers reiterated that Renew had paid all invoices before it cut Shamma loose for overpricing the job. Olofinboba Decl., ¶16, Ex. M. Siemers requested that AYK keep construction separate from design services and permitting, for which it never wanted to use a general contractor again. Olofinboba Decl., ¶16, Ex. M.

On February 13, 2023, Olofinboba advised Siemers to resolve the issue with Shamma, who did not treat design and construction as separate services. Olofinboba Decl., ¶16, Ex. M. These conversations made Olofinboba realize that Siemers was attempting to circumvent AYK’s contract with Shamma. Olofinboba Decl., ¶16.

On February 15, 2023, Olofinboba picked up the electrical plan check comments from the City and then emailed these comments to Siemers. Olofinboba Decl., ¶17, Ex. N. On March 23, 2023, Olofinboba resubmitted plan check corrections to the City. He received notice on April 17 that the City approved the corrected plan. Olofinboba Decl., ¶17. He forwarded that notification to Shamma on April 21, 2023. Olofinboba Decl., ¶17, Ex. O.[5]

On February 7, 2023, Siemers called Bailey to discuss the money Tenant owed to Shamma for the Tenant Work. Bailey Decl., ¶11. Later that day, Siemers asked if Landlord would consider buying Tenant out of the Lease; it would not. Bailey Decl., ¶11. Landlord declined. Id.

By the time Landlord received Tenant’s Notice of Termination on February 20, 2023, it had completed the Landlord Work. Lewis Decl., ¶6. That day, Landlord responded with a letter asserting that per Tenant’s warranties in the Estoppel Certificate, the provision of the Lease on which Tenant relied for its Notice of Termination was no longer applicable. Lewis Decl., ¶7, Ex. 2.

On March 3, 2023, Tenant gave notice that it still intended to terminate the Lease, asserting that it never waived its right to terminate the Lease. Lewis Decl., ¶8, Ex. 3.

Tenant had underestimated the costs of Tenant Work by as much as $200,000. Lewis Decl., ¶5; Bailey Decl., ¶11. On March 7, 2023, Abruzzo again asked if Tenant could buy out the Lease at a discounted price. Lewis Decl., ¶5. Landlord rejected the offer. Lewis Decl., ¶5.

Section 81.2.2 of the City Building Code lists the types of construction work that is exempted from a permit. Siemers Supp. Decl., ¶6, Ex. A. This list does not include any of the Landlord Work like demising walls, bringing and stubbing plumbing, HVAC, and electricity, or installing electrical panels. Siemers Supp. Decl., ¶6, Ex. A (City Building Code §81.2.2). The City Building Official may require that a registered design professional evaluate unpermitted work and prepare mitigation plans to mitigate such work. Siemers Supp. Decl., ¶7, Ex. A (City Building Code §81.2.4).

During a phone conversation in November 2022, Shamma told Siemers that he had not pulled a permit for any work performed at the Premises since 2014. Siemers Supp. Decl., ¶10.

Once Tenant discovered that the Landlord Work on the Premises was performed without permits, Tenant could not proceed with Tenant Work. Siemers Supp. Decl., ¶9. This was because, when the City came to permit the Tenant Work, it would discover the lack of permits for the Landlord Work and could evaluate and prepare mitigation plans for it. Siemers Supp. Decl., ¶9.

As of July 31, 2023, a search on the City’s website yielded six permits for the Premises from 2022 thereafter. Siemers Supp. Decl., ¶12, Ex. B. One was filed in May 2023, months after the Notice of Termination. Siemers Supp. Decl., ¶14, Ex. B. The other five are either labeled “TEN IMP” or are to relocate or install air units. Siemers Supp. Decl., ¶13, Ex. B. This shows that all these permits are for the Tenant Work, not the Landlord Work. Siemers Supp. Decl., ¶13.

Sirianni’s February 2023 pictures of the Premises (Siemers Decl., ¶5, Ex. 4) show that the electrical panels were the wrong size and had the wrong number of breakers. Siemers Supp. Decl., ¶17. Another of Tenant’s contractors confirmed this (Siemers Decl., ¶3, Ex. 2). Siemers Supp. Decl., ¶17. Wires were loose and too short to connect to the panels. Siemers Supp. Decl., ¶19. The HVAC ran through the framing. Siemers Supp. Decl., ¶19.

The pictures also show that Landlord did not install drywall on the demising walls. Siemers Supp. Decl., ¶18. Although Landlord asserts that this was to allow for City inspection of the Tenant Work, this explains the lack of drywall on the interior side and not the exterior. Siemers Supp. Decl., ¶21. A permit holder only needs to tell the City that it will place drywall on the exterior side but needs an inspection before it can place drywall on the interior side. Siemers Supp. Decl., ¶21.

After the parties executed the Lease, Landlord asked to alter the Premises’ floor plans to maximize rentable space for other tenants. Siemers Supp. Decl., ¶25.

On August 1, 2022, Shamma informed Siemers that it needed to relocate the tank storage room to create a common corridor. Siemers Supp. Decl., ¶30, Ex. E. Siemers agreed but asked why a corridor was necessary. Siemers Supp. Decl., ¶30, Ex. E. Shamma replied that some of the leftover space was land-locked. Siemers Supp. Decl., ¶31, Ex. E. Landlord added that this felt like a good compromise because it only needs a corridor if another tenant exists. Siemers Supp. Decl., ¶31, Ex. E. On August 2, 2022, Siemers asked if Landlord wanted to plan the Premises with only one corridor and as if it would not continue south to the stairs. Siemers Supp. Decl., ¶31, Ex. E.

Shamma suggested the switch from one 200-amp panel to two 100-amp panels. Siemers Supp. Decl., ¶33. Tenant deferred to Shamma and agreed. Siemers Supp. Decl., ¶33.

Any assertion that the Addendum was due to changes that Tenant made to the Premises plan is false. Siemers Supp. Decl., ¶34. Shamma’s delay in obtaining interior doors is what made the September 30 target date impossible to meet. Siemers Supp. Decl., ¶35.

Tenant never executed a contract with Shamma for the Tenant Work. Siemers Supp. Decl., ¶38. Shamma provided construction plans and began to perform based on the assumption that it would receive the contract. Siemers Supp. Decl., ¶38. Although Tenant paid $30,000, this was as a sign of good faith and not performance under any contract. Siemers Supp. Decl., ¶38.

Tenant did not pay for the interior doors because Shamma bought those doors without any authorization from or contract with Tenant. Siemers Supp. Decl., ¶40.

Tenant applies for a right to attach order against Landlord for $453,044.81, including $10,000 in costs and $200,000 in attorney’s fees.

Tenant’s application is based on breach of the Lease and seeks recovery of $15,372 in rent, a cash security deposit of $20,056.97, and a $207,615.84 Letter of Credit from U.S. Bank. Abruzzo Decl., ¶6, Ex. 1. Attachment may be based on this contract claim.

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., (“CIT”) (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).

When the parties executed the Lease, it required Tenant to prepay one month of rent, or $15,372. Abruzzo Decl., ¶6, Ex. 1. It also required Tenant to post a security deposit in two parts. The first was $20,056.97 in cash. Abruzzo Decl., ¶6, Ex. 1. The second was a $207,615.84 Letter of Credit from U.S. Bank. Abruzzo Decl., ¶6, Ex. 1. Landlord does not dispute that Tenant has met these obligations. Abruzzo Decl., ¶6, Ex. 1. Damages of $15,372 + $20,056.97 + $207,615.84 = $243,044.81 are ascertainable.

Article 30(xii) of the Lease entitles the prevailing party in any action to enforce the Lease to recover attorney’s fees and costs. Abruzzo Decl., Ex. 1.

Tenant asserts that counsel has already billed $53,512.50 in fees in this matter and $1,917.06 in costs, a total of $55,429.56. Salim Decl., ¶2. Based on hourly rates and the anticipated future steps in this litigation, Tenant’s counsel estimates that attorney’s fees and costs will total $200,000 and $10,000, respectively. Salim Decl., ¶3.

Landlord asserts that attorney’s estimates of fees and costs are insufficient without proper itemization. Opp. at 15. It cites Royals v. Lu, (“Royals”), (2022) 81 Cal. App. 5th 328, 348, to assert that a court may reject attorney’s fees and costs when the moving party provides no itemization. Opp. at 15-16. In Royals, the court rejected a $3,440,000 attachment based on “punitive damages and estimated attorney’s fees and costs.” 81 Cal. App. 5th at 348. The court concluded that some portion of this amount supported attachment (compensatory damages, attorney’s fees, and costs) and some did not (punitive damages). Id. at 349. On the evidence the amount was unsupported and should have been rejected by the trial court. Id. Although the court would reduce it if attachment were ordered (see post), the $210,000 in estimated attorney’s fees and costs is not disallowed.

The Lease set the deadline for substantial completion of Landlord Work as August 1, 2022. Abruzzo Decl., ¶5, Ex. 1. The Addendum changed deadline this to September 30, 2022. Abruzzo Decl., ¶7, Ex. 2. The Landlord Work included: (1) demising the Premises based on a Premises Floor Diagram attached to the Lease; (2) bringing and stubbing the plumbing, HVAC, and electricity to the perimeter of Premises; and (3) installing a dedicated 200-amp panel for Tenant’s electricity. Abruzzo Decl., ¶5, Ex. 1.

If the Landlord failed to substantially complete Landlord Work within 30 days of this deadline, Tenant had the right to terminate the Lease after ten days’ prior written notice. Abruzzo Decl., ¶8, Ex. 1. If the Landlord substantially completed the Landlord Work and delivered possession of the Premises during the ten-day notice period, the termination notice would be null and void. Abruzzo Decl., ¶8, Ex. 1.

On February 15, 2023, Tenant sent Landlord the ten-day Notice of Termination. Abruzzo Decl., ¶16, Ex. 4. Pursuant to the Notice of Termination, Tenant terminated the Lease on February 26, 2023. Abruzzo Decl., ¶17. If Landlord substantially completed the Landlord Work within ten days of the Notice of Termination, Tenant’s termination of the Lease was void.

Tenant asserts that as of February 2023, Landlord failed to: (1) demise the Premises; (2) install drywall; (3) bring and stub the building for electricity to the perimeter of the Premises; (4) provide the cooling necessary for the HVAC for the Premises; and (5) install a dedicated 200-amp panel for Tenant’s electricity. Abruzzo Decl., ¶13.

Landlord presents undisputed evidence on issues (3) and (4). By September 26, 2022, Shamma had installed electrical conduits, wires, and cans. Shamma Decl., ¶12. He had also brought and stubbed the electricity to the perimeter of the Premises. Shamma Decl., ¶12; Bailey Decl., ¶4. Because the HVAC was already stubbed to the perimeter of the Premises, it required no changes as a part of Landlord Work before Tenant took possession. Shamma Decl., ¶11. Siemers accepted the HVAC system as it was. Shamma Decl., ¶11.

Tenant cites an email from a general contractor who asserted that the electrical panel boxes were too small and needed to be 42-breaker panels per engineered electrical plans. Siemers Decl., ¶3, Ex. 2.

Landlord presents persuasive evidence that Tenant agreed to switch the original 200-amp panel for two 100-amp panels. Shamma Decl., ¶12; Bailey Decl., ¶4. When Siemers’ told Shamma to replace those panels with 42-breaker 100-amp panels, he complied. Shamma Decl., ¶16. Although the panels were improperly small (Reply at 11), Tenant does not present any evidence that Landlord or Shamma should not have complied with Tenant’s request. See Siemers Supp. Decl., ¶37.

Tenant cites pictures sent by its contractor, Sirianni, on February 15, 2023. Siemers Decl., ¶5, Ex. 4. Sirianni stated that work was still ongoing on the Premises, all in the common areas. Siemers Decl., ¶5, Ex. 4. Wires were loose and too short to connect to the panels. Siemers Supp. Decl., ¶19. Tenant asserts that these pictures showed Tenant that Landlord had not completed the Landlord Work. Siemers Decl., ¶5, Ex. 4.

Whether the unfinished work in those pictures was part of Landlord Work or Tenant Work is unclear. Tenant was responsible for all improvements and alterations to prepare the Premises for Tenant’s use and occupancy and the operation of Tenant’s business therefrom. Abruzzo Decl., Ex. 1. The pictures show the electrical panels and the lack of any drywall. Siemers Decl., ¶5, Ex. 4, pp. 32, 34. The Lease defined demising walls as part of Landlord Work. Abruzzo Decl., ¶5, Ex. 1.

However, Landlord’s evidence is that Tenant changed the nature of Landlord Work so that the electrical panels were to be placed on interior walls. On October 13, 2022, Shamma received the two 100-amp panels. Shamma Decl., ¶12. On October 18, 2022, Siemers sent modified electrical plans for Shamma to follow. Shamma Decl., ¶12, Ex. C. Siemers instructed Shamma to install these panels on interior partition walls based on the October 18, 2022 modified electrical plans. Shamma Decl., ¶12, Ex. C.

Tenant also cites to a February 2, 2023 email where subcontractor AYK informed Siemers that Shamma told it to stop work on the Premises until further notice. Siemers Decl., ¶4, Ex. 3. Tenant asserts that this is because Landlord had not installed the necessary electrical panel. Mot. at 12.

Landlord provides evidence that this email did not stem from a failure to complete the Landlord Work. The parties agreed that Shamma would contract with AYK for the electrical work. Olofinboba Decl., ¶¶ 8-9, Ex. F. Yet, on February 1, 2023, Siemers asked Olofinboba if he could pay AYK to pick up plan check comments from the City. Olofinboba Decl., ¶13, Ex. J. Olofinboba became concerned that Tenant was attempting to poach his services. Olofinboba Decl., ¶14. He told Shamma, who ordered AYK to stop work until further notice. Olofinboba Decl., ¶14. The point of AYK’s email to Tenant was that AYK would not enter into a separate contract for work on the Premises until Tenant paid Shamma in full. Olofinboba Decl., ¶15, Ex. L. AYK’s email does not suggest that either Shamma or AYK failed to complete the Landlord Work.

Tenant has not shown a probability of success with respect to the electrical panels.

Shamma started the demising walls work on September 13, 2022. Shamma Decl., ¶9; Bailey Decl., ¶4. By September 22, 2022, it had finished the wall framing. Shamma Decl., ¶9.

Landlord presents a compelling explanation for why it did not install the drywall panels on demising walls. A proposal for Tenant Work included the installation of power sources and conduits for a dental chair and other equipment. Shamma Decl., ¶13, Ex. D. Once Tenant finished interior improvements for inspection, the inspector would ask to inspect electrical work on the interior of the demising walls. Shamma Decl., ¶9; Bailey Decl., ¶5. Siemers agreed that Shamma should leave the demising walls open to allow such inspection. Opp. at 7, 14; Shamma Decl., ¶9; Moore Decl., ¶4; Bailey Decl., ¶5.

Although Tenant argues in reply (Reply at 11) that Landlord could have drywalled one side of the interior walls, it does not rebut Landlord’s point that Tenant agreed otherwise. Siemers Supp. Decl., ¶21.

Tenant has not shown a probability of success with respect to demise and drywall.

Tenant asserts that Landlord cannot have finished the Landlord Work as to the 200-amp panel because it has not had the City approve or inspect the installation. Mot. at 12. Tenant notes that the City confirmed in February 2023 that no permits have been issued as to the Premises. Siemers Decl., ¶6, Ex. 5.

The Lease does not directly address which party will pull the permits. Article 35 states that Tenant will be responsible for performing the Tenant Work pursuant to building permits, approvals, and other regulations. Abruzzo Decl., Ex. 1, p. 33. Article 36 contains no such provision. Ex. 1, p. 34.

Landlord argues that it never agreed to obtain permits, and Tenant does not demonstrate that the Landlord Work would require a permit. Opp. at 13, n. 7. On the other hand, the Tenant Work is expressly required to take place subject to completion of the Landlord Work and delivery of the Premises to Tenant. Ex. 1, p. 33 (Art. 35).

Tenant shows in reply that, with some inapplicable exceptions, the City Building Code requires permits for all construction work. Siemers Supp. Decl., ¶6, Ex. A (City Building Code §81.2.2). It would seem that permits have to be issued by the City before the Landlord Work is performed; some portion of the Landlord Work may have to be inspected by City inspectors before the Tenant Work begins. Siemers Supp. Decl., ¶6, Ex. A (City Building Code §81.2.4).

Tenant asserts that when it checked City records online in July 2023, all the permits shown concerned the Tenant Work and not the Landlord Work. Supp. Decl., Ex. B.

Tenant has an argument that the Landlord Work is not complete until permits relating to that work are issued. Landlord has yet to pull any permits for the Landlord Work and Tenant relies on that fact to conclude that the Landlord Work is not complete. However, Landlord need only “substantially complete” the Landlord Work within 30 days of the completion date of September 30, or within the ten-day cure period after the February 15, 2023 Notice of Termination. Abruzzo Decl., ¶16, Ex. 4.

There is a factual question as to which party was required to obtain permits, what permits were required, and whether Landlord’s completion of the Landlord Work within the ten-day cure deadline but without permits was substantial compliance. The court is not prepared to decide these factual issues on this application; the matter must be decided at trial.

The Lease allows Landlord to require the Tenant to execute, acknowledge, and deliver an Estoppel Certificate to either the Landlord or proposed mortgagee or purchaser. Abruzzo Decl., Ex. 1. The Landlord may then rely on such a statement or certificate. Abruzzo Decl., Ex. 1. If the Tenant did not execute and deliver such an Estoppel Certificate, the Landlord may do so in Tenant’s name and on Tenant’s behalf. Abruzzo Decl., Ex. 1.

On January 16, 2023, Tenant signed the Estoppel Certificate. Lewis Decl., ¶3, Ex. 1. It stated that the Landlord may rely upon the truth and accuracy of all statements therein. Lewis Decl., ¶3, Ex. 1. The Estoppel Certificate states that the Lease is not in default, is valid, and is in full force and effect. Lewis Decl., ¶4, Ex. 1. The Lease has not been modified and represents the entire agreement between Landlord and Tenant with respect to the Premises. Id. Tenant had accepted possession of the Premises and is performing Tenant Work as defined in the Lease. Id. The Lease began on September 30, 2022. Id.

Tenant agreed that, to the best of its knowledge, no event has occurred, and no condition exists, which would constitute Landlord’s default under the Lease. Id. Tenant affirmed that it has no defenses or offsets against Landlord’s enforcement of the Lease. Id. Landlord had made all required contributions for tenant improvements except for Landlord Work as described in Article 36 and Tenant Improvement Allowance as described in Article 35. Id. The Estoppel Certificate may be relied upon and shall inure to the benefit of Lender and Landlord knowing it will reply upon the truth and accuracy if it. Id.

Article 36 of the Lease allows Tenant to terminate if Landlord fails to both substantially complete Landlord Work and deliver possession of the Premises within 30 days of the deadline. Abruzzo Decl., ¶8, Ex. 1. Tenant does not dispute that the Estoppel Certificate shows that Tenant took possession of the Premises. Lewis Decl., ¶4, Ex. 1.

Tenant asserts that an Estoppel Certificate is not binding as to disputes between the Tenant and Landlord. Reply at 8. The Estoppel Certificate states that both Landlord and its lender can rely on the representations therein. Lewis Decl., ¶4, Ex. 1. There is no evidence that the Landlord took action, or failed to take action, in reliance on the Estoppel Certificate. Reply at 8.

The short answer is that Landlord is relying on the Estoppel Certificate now. Moreover, Article 26 of the Lease has no limit; it states that the Landlord may rely on any such certificate. Abruzzo Decl., ¶8, Ex. 1, p. 28.

Tenant asserts that the Estoppel Certificate proves Landlord’s default because it states that Landlord had made all required contributions except for the Landlord Work and the Tenant Improvement Allowance. Mot. at 13; Reply at 7.

The Estoppel Certificate states that the Landlord Work is an exception to Landlord’s contributions to tenant improvements, but the Lease requires only that the Landlord Work be substantially complete, a less rigorous standard. The Estoppel Certificate does not necessarily support Tenant on this point. Moreover, Tenant ignores the Estoppel Certificate’s other warranties that, to the best of its knowledge, no event or condition exists which would constitute Landlord’s default under the Lease and that Tenant has no defenses or offsets against Landlord’s enforcement of the Lease.

Landlord further argues that the Estoppel Certificate demonstrates Landlord’s compliance because Tenant admitted that the Tenant Work had begun. Opp. at 12; Lewis Decl., ¶4, Ex. 1. Tenant understood that it could begin the Tenant Work only after it has taken possession of the Premises, and therefore it conceded that Landlord had substantially completed the Landlord Work. Opp. at 15.

Tenant argues that the claim that it began Tenant Work is false. Reply at 7. Shamma submitted proposals for the work and acted on them before Tenant ever agreed to the proposal. Reply at 7-8; Siemers Supp. Decl., ¶¶ 38-40. To the extent that Tenant has represented otherwise in the Estoppel Certificate, this is irrelevant. Nevertheless, the Lease’s provision on the Tenant Work is not as strong as Landlord argues. Tenant was required to commence the Tenant Work promptly following Landlord’s delivery of possession of the Premises. Opp. at 12; Abruzzo Decl., ¶8, Ex. 1. That duty does not preclude Tenant from starting preliminary steps on the Tenant Work before delivery of possession.

Overall, the Estoppel Certificate is strong evidence favoring Landlord’s position. Tenant tries to minimize the blow by arguing that under the Lease either Tenant could sign, or Landlord could sign on Tenant’s behalf. Abruzzo Decl., ¶12. This apparently is a suggestion that Tenant had no choice and is frivolous. Nothing in the Lease forced Tenant to sign a false Estoppel Certificate.

Tenant has failed to demonstrate a probability of success because Landlord completed the Landlord Work within the required ten-day cure period, with the exception of any duty to obtain permits, and the Estoppel Certificate is strong evidence that Tenant believed Landlord had substantially completed the Landlord Work.

The amount of an attachment must be reduced by the amount claimed in a cross-complaint or affirmative defense and shown would be subject to attachment against the plaintiff. CCP §483.015(b)(2). 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.

Landlord asserts that it did not fail to complete the Landlord Work and Tenant breached the Lease by trying to terminate it. Opp. at 16. Damages from this breach total $5 million in unpaid future Rent under the Lease. Abruzzo Decl., ¶8, Ex. 1. These damages exceed the amount that Tenant seeks to attach. Opp. at 16. This is not an issue of offset but rather defense.

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). Tenant seeks attachment for a proper purpose.

[1] Although the parties at times refer to its President Bill Shamma (Shamma Decl., ¶1), his actions are always in his capacity as an officer of the construction company.

[2] Although Tenant purports to attach the Estoppel Certificate, the exhibit is another copy of the Addendum. Abruzzo Decl., ¶12, Ex. 3.

[3] Tenant attached search results from the City’s website on July 12, 2023 to confirm that there were no permits associated with the Premises in the past ten years. Salim Decl., ¶5, Ex. 1. It concedes in reply that this search used the wrong address. Reply at 6, n.4.

[4] Moore purports to attach three of the bids but fails to do so. Moore Decl., ¶9.

[5] On May 16, 2023, Tenant’s counsel requested that Olofinboba sign a declaration. Olofinboba Decl., ¶19, Ex. P. Olofinboba declined because the declaration was inaccurate. Olofinboba Decl., ¶19, Ex. P. He explained that AYK’s contract for electrical work was with Shamma, not Tenant, and that Siemers had agreed to this arrangement. Olofinboba Decl., ¶¶ 19-20, Ex. P. AYK always invoiced Shamma and received payment through it, not Tenant. Olofinboba Decl., ¶¶ 19-20, Ex. P.

[6] In reply, Tenant seeks judicial notice of the City’s Building Code (Ex. A) and its permit records for the Property (Ex. B). The requests are granted. Evid. Code §452(c).