Judge James C. Chalfant, Case Number: 23STCV07962, Date: 2023-09-28 Tentative Ruling

Defendant and Cross-Complainant GCX, LLC (“GCX” or “Contractor”) applies for a right to attach order against Cross-Defendant Jackson Lewis, PC (“Jackson” or “Law Firm”) for $5,763,298.19.

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

A. Statement of the Case

1. First Amended Complaint

Plaintiff Clay Dunn Enterprises, Inc., doing business as Air-Tec (“Air-Tec” or “Subcontractor”), filed the Complaint against Contractor and Landlord Realty, LLC (“Landlord”) on April 11, 2023. The operative pleading is the First Amended Complaint (“FAC”), filed on April 17, 2023 and alleging (1) foreclosure on a mechanic’s lien against all Defendants, and (2) breach of contract, (3) account stated, (4) reasonable value of labor and materials, and (5) open book account only as to GCX. The FAC alleges in pertinent part as follows.

EYP Realty, LLC (“EYP” or “Landlord”) owns 725 S. Figueroa Street, Los Angeles, California 90017 (“Property”). Before February 28, 2023, Contractor executed a written contract and change orders for heating ventilation and air conditioning labor and materials with Subcontractor for the Property. On February 10, 2023, to secure its claim under that contract, Subcontractor recorded a lien against the Property.

Subcontractor performed all duties under the contract. Defendants now owe $1,098,716 plus 10% annual interest accruing beginning on February 28, 2023.

Subcontractor seeks damages of $1,098,716, plus 10% annual interest calculated from February 28, 2023, $103 for fees to record the lien, sale of the Property with proceeds applied to the amount owed, as necessary, and attorney’s fees and costs.

2. Cross-Complaint

On May 15, 2023, Contractor filed the Cross-Complaint against Landlord and Law Firm, alleging (1) breach of contract, (2) foreclosure of mechanics lien, (3) unjust enrichment, (4) open book account, (5) account stated, and (6) quantum meruit. The Cross-Complaint alleges in pertinent part as follows.

Law Firm has a principal office in Suite 2500 of the Property. On September 16, 2022, Law Firm and Landlord entered into General Conditions of the Contract for Construction (“Conditions”) for construction and remodeling of two office floors for Law Firm’s use (“Project”).

Also on September 16, 2022, Law Firm and Contractor executed a Standard Form of Agreement Between Owner and Contractor (“Construction Contract”). Under the Construction Contract, Contractor agreed to construct the Project for $6,397,038. Law Firm agreed to make progress payments on the total amount owed based on Applications for Payment (“Application”) that Contractor submitted and Certificates for Payment (“Certificate”) that Law Firm issued. If Law Firm received the Application before the 25th day of any given month, payment was due by the 25th day of the next month. If not, payment was due 30 days after receipt of the Application.

Contractor strictly adhered to the Construction Contract, but Law Firm has failed to pay Contractor pursuant to the submitted Applications. Because Contractor was responsible for hiring subcontractors, these subcontractors have now sued it. On April 21, 2023, Contractor had a lien recorded against the Property to secure its claim.

Contractor seeks specific performance of Law Firm’s duty under the Construction Contract. Contractor seeks $5,763,298.19 plus 10% annual interest accruing from April 4, 2023. It also requests that the court adjudge that sum as a lien on the Property or so much thereof as necessary, to be sold with proceeds applied to the amount owed. Upon prevailing on this Cross-Complaint, GCX seeks attorney’s fees and costs.

3. Course of Proceedings

On April 12, 2023, Air-Tec served EYP with the Complaint and Summons.

On April 13, 2023, Air-Tec served GCX with the Complaint and Summons.

On May 15, 2023, GCX filed an Answer to the Complaint. It also filed its Cross-Complaint and served it on Air-Tec by email.

On May 22, 2023, GCX filed notice of a related case, Comet Electric, Inc. v. GCX, LLC, Case No. 23STCV11352.

On June 12, 2023, GCX served Jackson with the Cross-Complaint.

On June 23, 2023, Department 86 (Hon. Mitchell Beckloff) confirmed the appointment of a receiver in Wilmington Trust et al v. EYP Realty, (“Wilmington”) Case No. 23STCV10983. Pursuant to the order confirming the appointment, all claims against EYP and its subsidiaries were stayed.

On August 15, 2023, GCX and Jackson stipulated to submit the dispute in the Cross-Complaint for arbitration and to stay this action, provided GCX could proceed with this application for a right to attach order. Both parties preserved all rights, defenses, and arguments for this matter.

B. Applicable Law

Attachment is a prejudgment remedy providing for the seizure of one or more of the defendant’s assets to aid in the collection of a money demand pending the outcome of the trial of the action. See Whitehouse v. Six Corporation, (1995) 40 Cal.App.4th 527, 533. In 1972, and in a 1977 comprehensive revision, the Legislature enacted attachment legislation (CCP §481.010 et seq.) that meets the due process requirements set forth in Randone v. Appellate Department, (1971) 5 Cal.3d 536. See Western Steel & Ship Repair v. RMI, (12986) 176 Cal.App.3d 1108, 1115. As the attachment statutes are purely the creation of the Legislature, they are strictly construed. Vershbow v. Reiner, (1991) 231 Cal.App.3d 879, 882.

A writ of attachment may be issued only in an action on a claim or claims for money, each of which is based upon a contract, express or implied, where the total amount of the claim or claims is a fixed or readily ascertainable amount not less than five hundred dollars ($500). CCP §483.010(a). A claim is “readily ascertainable” where the amount due may be clearly ascertained from the contract and calculated by evidence; the fact that damages are unliquidated is not determinative. CIT Group/Equipment Financing, Inc. v. Super DVD, Inc., (2004) 115 Cal.App.4th 537, 540-41 (attachment appropriate for claim based on rent calculation for lease of commercial equipment).

All property within California of a corporation, association, or partnership is subject to attachment if there is a method of levy for the property. CCP §487.010(a), (b). While a trustee is a natural person, a trust is not. Therefore, a trust’s property is subject to attachment on the same basis as a corporation or partnership. Kadison, Pfaelzer, Woodard, Quinn & Rossi v. Wilson, supra, 197 Cal.App.3d at 4.

The plaintiff may apply for a right to attach order by noticing a hearing for the order and serving the defendant with summons and complaint, notice of the application, and supporting papers any time after filing the complaint. CCP §484.010. Notice of the application must be given pursuant to CCP section 1005, sixteen court days before the hearing. See ibid.

The notice of the application and the application may be made on Judicial Council forms (Optional Forms AT-105, 115). The application must be supported by an affidavit showing that the plaintiff on the facts presented would be entitled to a judgment on the claim upon which the attachment is based. CCP §484.030.

Where the defendant is a corporation, a general reference to “all corporate property which is subject to attachment pursuant to subdivision (a) of Code of Civil Procedure Section 487.010” is sufficient. CCP §484.020(e). Where the defendant is a partnership or other unincorporated association, a reference to “all property of the partnership or other unincorporated association which is subject to attachment pursuant to subdivision (b) of Code of Civil Procedure Section 487.010” is sufficient. CCP §484.020(e). A specific description of property is not required for corporations and partnerships as they generally have no exempt property. Bank of America v. Salinas Nissan, Inc., (“Bank of America”) (1989) 207 Cal.App.3d 260, 268.

A defendant who opposes issuance of the order must file and serve a notice of opposition and supporting affidavit as required by CCP section 484.060 not later than five court days prior to the date set for hearing. CCP §484.050(e). The notice of opposition may be made on a Judicial Council form (Optional Form AT-155).

The plaintiff may file and serve a reply two court days prior to the date set for the hearing. CCP §484.060(c).

At the hearing, the court determines whether the plaintiff should receive a right to attach order and whether any property which the plaintiff seeks to attach is exempt from attachment. The defendant may appear the hearing. CCP §484.050(h). The court generally will evaluate the attachment application based solely on the pleadings and supporting affidavits without taking additional evidence. Bank of America, supra, 207 Cal.App.3d at 273. A verified complaint may be used in lieu of or in addition to an affidavit if it states evidentiary facts. CCP §482.040. The plaintiff has the burden of proof, and the court is not required to accept as true any affidavit even if it is undisputed. See Bank of America, supra, at 271, 273.

The court may issue a right to attach order (Optional Form AT-120) if the plaintiff shows all of the following: (1) the claim on which the attachment is based is one on which an attachment may be issued (CCP §484.090(a)(1)); (2) the plaintiff has established the probable validity of the claim (CCP §484.090(a)(2)); (3) attachment is sought for no purpose other than the recovery on the subject claim (CCP §484.090(a)(3); and (4) the amount to be secured by the attachment is greater than zero (CCP §484.090(a)(4)).

A claim has “probable validity” where it is more likely than not that the plaintiff will recover on that claim. CCP §481.190. In determining this issue, the court must consider the relative merits of the positions of the respective parties. Kemp Bros. Construction, Inc. v. Titan Electric Corp., (2007) 146 Cal.App.4th 1474, 1484. The court does not determine whether the claim is actually valid; that determination will be made at trial and is not affected by the decision on the application for the order. CCP §484.050(b).

Except in unlawful detainer actions, the amount to be secured by the attachment is the sum of (1) the amount of the defendant’s indebtedness claimed by the plaintiff, and (2) any additional amount included by the court for estimate of costs and any allowable attorneys’ fees under CCP section 482.110. CCP §483.015(a); Goldstein v. Barak Construction, (2008) 164 Cal.App.4th 845, 852. This amount must be reduced by the sum of (1) the amount of indebtedness that the defendant has in a money judgment against plaintiff, (2) the amount claimed in a cross-complaint or affirmative defense and shown would be subject to attachment against the plaintiff, and (3) the value of any security interest held by the plaintiff in the defendant’s property, together with the amount by which the acts of the plaintiff (or a prior holder of the security interest) have decreased that security interest’s value. CCP §483.015(b); see also CCP §483.010(b) (“an attachment may not be issued on a claim which is secured by any interest in real property arising from agreement, statute, or other rule of law…However, an attachment may be issued where the claim was originally so secured but, without any act of the plaintiff or the person to whom the security was given, the security has become valueless or has decreased in value to less than the amount then owing on the claim). A defendant claiming that the amount to be secured should be reduced because of a cross-claim or affirmative defense must make a prima facie showing that the claim would result in an attachment against the plaintiff.

Before the issuance of a writ of attachment, the plaintiff is required to file an undertaking to pay the defendant any amount the defendant may recover for any wrongful attachment by the plaintiff in the action. CCP §489.210. The undertaking ordinarily is $10,000. CCP §489.220. If the defendant objects, the court may increase the amount of undertaking to the amount determined as the probable recovery for wrongful attachment. CCP §489.220. The court also has inherent authority to increase the amount of the undertaking sua sponte. North Hollywood Marble Co. v. Superior Court, (1984) 157 Cal.App.3d 683, 691.

On September 16, 2022, Law Firm as Owner and GCX as Contractor executed the Construction Contract. Walker Decl., ¶¶ 9-10, Ex. B. Under the Construction Contract, GCX agreed to act as a contractor on the Project for $6,397,038. Walker Decl., Ex. B.

Contractor uses a two-part billing process. Walker Decl., ¶6. First, the Project Administration Team compiles all services performed into a monthly Pencil Draft Billing with billing requests from subcontractors and suppliers, Contractor Daily Reports, and accompanying site photos. Walker Decl., ¶6. The Project’s Management & Field Staff then reviews the Pencil Draft Billing. Walker Decl., ¶6. The Project Team, client representatives, and the architect of record then review each package to ensure it accurately reflects construction progress. Walker Decl., ¶6. Once the architect of record approves the Pencil Draft Billing, Contractor uses it to generate an Application and Certificates. Walker Decl., ¶6.

Within seven days of receipt of an Application, section 9.4.1 requires the architect to either issue Law Firm a Certificate for the full amount of the Application, issue one for the amount the architect deems due, or withhold certification entirely. Walker Decl., ¶6(d)(i), Ex. B. If the architect chooses to withhold certification in full or part, it must notify Contractor. Walker Decl., ¶6(d)(i), Ex. B. The architect never gave such notice. Walker Decl., ¶6(e).

Under section 5.1.1 of the Construction Contract, Law Firm agreed to make progress payments based on submitted Applications and issued Certificates. Walker Decl., ¶6(c)(i), Ex. B. Under section 5.1.3, if Law Firm received an Application before the 25th day of any given month, payment was due by the 25th day of the next month. Walker Decl., ¶6(c)(ii), Ex. B. If not, payment was due 30 days after receipt of the Application. Walker Decl., ¶6(c)(ii), Ex. B.

The Construction Contract incorporates the Conditions by reference as part of the “Contract Documents.” Walker Decl., ¶9, Ex. C. Section 1.1.2 of the Conditions contains an integration clause limiting any amendment of the Contract Documents to a Modification. Walker Decl., Ex. C. Section 1.1.1 defines a “Modification” as (1) a written amendment to the Contract Documents signed by both parties, (2) a Change Order, (3) a Construction Change Directive, or (4) a written order for a minor change in the Work issued by the Architect. Walker Decl., Ex. C.

Section 6.2 of the Construction Contract requires arbitration of any dispute between the parties pursuant to the section 15.4 of the Conditions. Walker Decl., Ex. B. Section 15.4 of the Conditions requires the initiating party to make a written demand for arbitration asserting all claims then known to that party. Walker Decl., Ex. C.

Between November 2022 and January 2023, Contractor issued four Applications for completed work and materials. Walker Decl., ¶¶ 11-14, Exs. D-G. On January 26, 2023, the architect approved the third and fourth Applications. Walker Decl., ¶16, Ex. H. On February 8, 2023, Contractor followed up with Law Firm via email about outstanding amounts owed under two of the Applications. Walker Decl., ¶17, Ex. I. After various exchanges, on February 21, 2023, Law Firm asserted it was diligently pursuing payment of invoices by Landlord. Walker Decl., ¶17, Ex. I.

On February 22, 2023, Contractor issued a fifth Application and Certificate, which the architect approved. Walker Decl., ¶18.[2]

On February 24, 2023, Contractor advised Law Firm that several subcontractors had threatened to record a lien or stop work unless they received payment. Walker Decl., ¶17, Ex. I. Contractor feared they might act on these threats the following week unless paid immediately. Walker Decl., ¶17, Ex. I.

On March 3, 2023, Contractor spoke with Law Firm’s counsel about the continued failure to make payments. Walker Decl., ¶19. In an email that day memorializing the conversation, Contractor explained that it would demobilize at the end of the shift that day if Law Firm could not pay Contractor, which in turn would prevent Contractor from paying the subcontractors. Walker Decl., ¶19, Ex. J. It also expected the subcontractors to file liens. Walker Decl., ¶19, Ex. J. Contractor would hold Law Firm responsible for any added costs from this delay, including the introduction of a new team if the current team became unavailable before work could resume. Walker Decl., ¶19, Ex. J. On April 5, 2023, Contractor issued a sixth Application and Certificate. Walker Decl., ¶20.

The value of completed work and materials in the Applications total $5,855,741.69. Walker Decl., ¶8. The only payment Contractor has received under the Construction Contract is a $92,443.50 payment from Law Firm on November 21, 2022. Walker Decl., ¶¶ 7-8. This reduces the amount owed for completed work under the Applications from $5,855,741.69 to $5,763,298.19. Walker Decl., ¶8; Gizer Decl., ¶3. Contractor owes this much of this money to subcontractors for work on the Project. Gizer Decl., ¶4. The only purpose of this application is to recover for the breach of contract. Gizer Decl., ¶2.

Law Firm is an employment law firm with 60 offices nationwide. Charwat Decl., ¶4. It has been a tenant in the Property for over 20 years. Charwat Decl., ¶5. It currently holds three client trust accounts with Wells Fargo Bank, with account numbers ending in 2561, 8326, and 3114. Charwat Decl., ¶11.

Law Firm is neither insolvent nor at risk of insolvency. Charwat Decl., ¶7. In 2022, it saw a 5.2% year-over-year revenue growth from $550.7 million to $579.6 million. Charwat Decl., ¶8. It also saw a 5.4% net income growth to $220 million. Charwat Decl., ¶8. It expects further growth in 2023. Charwat Decl., ¶9. It has the financial capacity to pay amounts owed under the Applications and Construction Contract. Charwat Decl., ¶10. It has not done so, but only because it believes that Landlord owes the claimed amount instead. Charwat Decl., ¶10; Pareso Decl., ¶11.

Law Firm’s lease on the Property was set to expire on September 30, 2023. Charwat Decl., ¶6. To induce Law Firm to renew it through 2038, Landlord promised to relocate Law Firm to two contiguous floors and finance tenant improvements of up to $6,931,120 (“Construction Allowance”). Charwat Decl., ¶6, Ex. 1; Pareso Decl., ¶4.

In section 8.2 of Exhibit C to Addendum No. 6 to the lease, dated December 21, 2021, Landlord agreed to disburse the Construction Allowance periodically to pay construction costs pursuant to a Draw Request from Law Firm. Charwat Decl., ¶6, Ex. 1. Under section 8.2(c)(1), a Draw Request could direct Landlord to either reimburse Law Firm for paid invoices or directly pay the contractor with which Law Firm has incurred outstanding costs. Charwat Decl., ¶6, Ex. 1.

Law Firm verbally told Contractor that Landlord would pay Contractor instead of Law Firm. Pareso Decl., ¶5. Both Landlord and Contractor agreed to this. Pareso Decl., ¶5. It was Landlord that made the $92,443.50 payment pursuant to Law Firm’s Draw Request. Pareso Decl., ¶5, Ex. 1. Law Firm had requested that Landlord pay Contractor directly for its first Application. Pareso Decl., ¶5, Ex. 1.

On January 16, 2023, Contractor emailed both Landlord and Law Firm about payment of the second Application. Pareso Decl., ¶5, Ex. 2. Landlord, under the name Brookfield Properties, replied that it was expecting funding within the next two weeks and would keep Contractor updated. Pareso Decl., ¶5, Ex. 2. Contractor thanked Landlord for the update and did not object. Pareso Decl., ¶5, Ex. 2.

On January 27, 2023, Contractor emailed Law Firm’s Facilities Project Manager Robert Pareso (“Pareso”) about the third Application. Pareso Decl., ¶6, Ex. 3. Pareso asked Landlord if the provided information was sufficient to process payment. Pareso Decl., ¶6, Ex. 3. Landlord replied that it would “go ahead and get this processed.” Pareso Decl., ¶6, Ex. 3.

However, after the first $92,443.50 payment, Landlord refused without explanation to honor its commitment. Pareso Decl., ¶8. With the Project over 50% complete and millions of dollars of outstanding debt, Contractor walked off the job. Pareso Decl., ¶9. The Project has been suspended and remains in jeopardy. Pareso Decl., ¶10.

Six related lawsuits are pending. Bolstad Decl., ¶4. One is between Law Firm and Landlord. Bolstad Decl., ¶4. Other than Contractor, three subcontractors have separately filed suit against Law Firm and Landlord as co-defendants. Bolstad Decl., ¶4. In the sixth case, Wilmington, Landlord was placed in receivership. Bolstad Decl., ¶4, Ex. 2.

Due to the disputes in related actions, Contractor and others have recorded mechanic’s liens against the Property. Bolstad Decl., ¶3, Ex. 1.

After Contractor filed the Cross-Complaint, Law Firm demanded that the parties stipulate to arbitration. Bolstad Decl., ¶¶ 5-6, Ex. 3. On August 28, 2023, Department 52 (Hon. Armen Tamzarian) ordered the Cross-Complaint stayed pending a final award in arbitration. Bolstad Decl., ¶6, Ex. 4. Pursuant to the parties’ stipulation, Contractor could still proceed with the instant application for a right to attach order. Bolstad Decl., ¶6, Ex. 4. Both parties preserved all rights, defenses, and arguments they could raise therein. Bolstad Decl., ¶6, Ex. 4.

Rule R-38(a) of the Construction Industry Arbitration Rules allows the arbitrator to take interim measures deemed necessary, including injunctive relief and measures for the protection or conservation of property and disposition of perishable goods. Bolstad Decl., ¶7, Ex. 5.

Contractor never agreed to modify the Construction Contract to make Landlord responsible for payment thereunder instead of Law Firm. Walker Reply Decl., ¶4. Contractor always submitted Applications to Law Firm and the architect. Walker Reply Decl., ¶4. Its cooperation with Law Firm’s efforts to extract payment from Landlord did not create such a modification. Walker Reply Decl., ¶4. Contractor’s email about the third Application (Pareso Decl., ¶6, Ex. 3) was directed at Pareso as a Law Firm employee. Walker Reply Decl., ¶5.

On April 24, 2023, Contractor emailed Law Firm to seek amenable resolution of the current dispute. See Gizer Reply Decl., ¶2. On May 4, 2023, Contractor’s counsel emailed Law Firm that it had no choice but to proceed with litigation for breach of contract and lien foreclosure. Gizer Reply Decl., ¶3, Ex. A. Counsel noted the arbitration clause in the Construction Contract and asked to discuss the process for initiating arbitration. Gizer Reply Decl., ¶3, Ex. A. Law Firm never responded to the request to discuss how to initiate arbitration. Gizer Reply Decl., ¶4.

When Contractor filed the Cross-Complaint and this application for a writ of attachment, it believed in good faith that Law Firm had waived its right to arbitration. Gizer Reply Decl., ¶¶ 4, 6. Despite ongoing negotiations, Law Firm did not invoke its right to arbitrate until August 2, 2023, after Contractor filed this application on July 24, 2023. Gizer Reply Decl., ¶¶ 5, 7.

Plaintiff Contractor applies for a right to attach order against Defendant Law Firm in the amount of $5,763,298.19.

Contractor’s application is based on a series of Applications and Certificates issued pursuant to the Construction Contract. Walker Decl., ¶¶ 6(c)(i), 11-14, 18, 20, Exs. B, D-G. 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).

Under section 5.1.1 of the Construction Contract, Law Firm as Owner was required to make progress payments based on submitted Applications and issued Certificates. Walker Decl., ¶6(c)(i), Ex. B. Contractor asserts that Law Firm accrued $5,855,741.69 in Certificates but only paid $92,443.50, for an outstanding balance of $5,763,298.19. Walker Decl., ¶¶ 7-8; Gizer Decl., ¶3. Although it purports to submit six Certificates, it inadvertently failed to attach two of them to its declarations. Walker Decl., ¶¶ 6(c)(i), 11-14, 18, 20, Exs. B, D-G. Because Law Firm does not dispute that the outstanding balance on the Construction Contract is $5,763,298.19, this defect is waived. $5,763,298.19 in damages are ascertainable.

The only dispute as to the merits is whether Landlord or Law Firm is liable for the breach. In an addendum to Law Firm’s lease for the Property, Landlord agreed to disburse up to $6,931,120 in Construction Allowances to either Law Firm or to a contractor with which Law Firm incurs renovation costs. Charwat Decl., ¶6, Ex. 1. Law Firm had Landlord make a $92,443.50 payment pursuant to Law Firm’s Draw Request. Pareso Decl., ¶5, Ex. 1. It now alleges that Contractor orally agreed to modify the Construction Agreement so Landlord was responsible for payments owed thereunder instead of Law Firm. Opp. at 13; Pareso Decl., ¶5. It further assented to this arrangement insofar as it did not object when Law Firm deferred to Landlord in emails about future payments. Opp. at 13; Pareso Decl., Exs. 2-3.

The Construction Agreement and accompanying Conditions do not permit oral modification. Reply at 5; Walker Decl., Exs. B-C. Additionally, Law Firm’s evidence that Contractor agreed that Landlord would be responsible for payment both lacks foundation and does not obviate Law Firm’s liability. The parties could agree that Landlord would make direct payments to Contractor without assignment of Law Firm’s liability. Further, Contractor’s cooperation with efforts to extract payment from Landlord does not modify the contract to exempt Law Firm from liability. Walker Reply Decl., ¶4. Contractor has demonstrated a probability of success on the merits.

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). Contractor seeks attachment for a proper purpose.

CCP section 1281.8(b) provides that a party to an arbitration agreement may apply to the court for provisional relief in connection with an arbitrable controversy, but only upon the ground that the award may be rendered ineffectual without provisional relief. The requirements of CCP section 1281.8 are in addition to the other elements of proof for provisional relief. See Woolley v. Embassy Suites, Inc., (1991) 227 Cal.App.3d 1520, 1529 (applying section 1281.8 to preliminary injunction). The “ineffectual” element exists to ensure that the court does not invade the province of the arbitrator; the court is empowered to grant relief only where the arbitrator’s award may be inadequate to make the moving party whole. California Retail Portfolio Fund GMBH & Co. v. Hopkins Real Estate Group, (2011) 193 Cal.App.4th 849, 856 (citing Woolley). In the context of attachment, the irreparable harm requirement for ex parte attachment provides guidance on the issue of, and is similar to, ineffectual relief under section 1281.8. Id. at 859. This includes both insolvency and the inability to otherwise pay damages that might be awarded in the arbitration. Ibid.

Section 6.2 of the Construction Contract subjects any disputes between the parties to arbitration. Walker Decl., Exs. B-C. After Contractor filed this application, the parties stipulated to arbitrate the Cross-Complaint. Bolstad Decl., ¶6, Ex. 4.

Law Firm argues that Contractor’s moving papers do not address CCP section 1281.8 and do not explain why an arbitration award would be rendered ineffectual without provisional relief. Law Firm also presents evidence that the applicable arbitration rules would permit provisional remedies as part of the arbitration. Bolstad Decl., ¶7, Ex. 5.

Contractor replies that that CCP section 1281.8 does not apply. In an email on May 4, 2023, Contractor cited the arbitration clause and asked to discuss the process for initiating arbitration. Gizer Reply Decl., ¶3, Ex. A. When Law Firm did not respond, Contractor treated it as a waiver of the arbitration agreement. Reply at 2; Gizer Reply Decl., ¶4. By the time Contractor filed this application, it believed in good faith that Law Firm had waived its right to arbitration. Gizer Reply Decl., ¶¶ 4, 6. Despite ongoing negotiations, Law Firm did not invoke its right to arbitration until August 2, 2023, after Contractor filed this application. Gizer Reply Decl., ¶¶ 5, 7. When it did, the parties stipulated to arbitration, and that Contractor could still proceed with this application. Bolstad Decl., ¶6, Ex. 4. Reply at 2.

This is a circumstance with which the court is not unfamiliar. The parties have an arbitration agreement but a complaint (in this case, a cross-complaint) is filed by the plaintiff. The defendant fails to make any reference to the parties’ arbitration agreement in discussions before the complaint is filed. Because it is perfectly happy to try the case in court, the plaintiff applies for a right to attach order without referring to CCP section 1281.8 or trying to show that an arbitration award would be ineffectual without attachment. Only when it files the opposition does the defendant contend that the plaintiff is required to comply with CCP section 1281.8. In this circumstance, the court does not believe it just to allow an ineffectual award defense to the plaintiff’s application. Contractor is not required to show that an arbitration award would be ineffectual.[3]

Although it barely raises the issue, Law Firm suggests that Contractor’s claim is ineligible for attachment because it is secured by a mechanic’s lien on the Property. Bolstad Decl., ¶3, Ex. 1. Opp. at 12, n. 2.

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 (including any mortgage or deed of trust of realty and any statutory, common law, or equitable lien on real property.¿ CCP §483.010(b).¿ An attachment may be issued where the claim was original secured by real property 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, in which event the amount to be secured by the attachment shall not exceed the lesser of the amount of the decrease or the difference between the value of the security and the amount then owing on the claim.¿ CCP §483.010(b).

Contractor’s claim is secured by its mechanic’s lien on the Property. A mechanic’s lien is not an interest in real property but is a right to have property sold or otherwise applied in satisfaction of a debt. See Civil Code §8440 (lien attaches to the improvement and the real property on which it is situated). The claimant’s recording of a mechanic’s lien does not affect the right to a writ of attachment. Civil Code §8468(b). See San Diego Wholesale Credit Men's Ass'n v Superior Court (1973) 35 Cal.App.3d 458, 463-64 (finding the same for Civil Code section 3152, section 8468's predecessor).[4]

The application for a right to attach order is granted in the amount of $5,763,298.19. Law Firm may post a bond to avoid the issuance of a writ of attachment in the next four calendar days. See CCP §489.310.

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

[2] Although the declarant purports to attach this Application and Certificate as Exhibit J, he does not. Walker Decl., ¶18. Exhibit J, the last exhibit, is the chain of emails identified in the declaration as Exhibit K. Walker Decl., ¶19. None of Exhibits K-M are attached.

[3] The court need not consider Contractor’s argument that it has fulfilled the requirements of CCP section 1281.8(b) on the basis that Law Firm has demonstrated an unwillingness to pay. See China Nat. Metal Products Import/Export Co. v. Apex Digital, Inc., (C.D. Cal. 2001) 141 F.Supp.2d 1013, 1028. Reply at 3.

[4] Contractor agrees with Law Firm that its client trust accounts are not subject to attachment. Reply at 2.