Judge James C. Chalfant, Case Number: 23STCV27583, Date: 2024-02-15 Tentative Ruling

Plaintiff Pacific Walnut Center (“Landlord”) applies for a right to attach order against Defendant Joseph Esfandi (“Tenant”) in the amount of $261,395.

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

A. Statement of the Case

1. Complaint

Landlord filed its Complaint on November 7, 2023, alleging breach of lease in pertinent part as follows.

On July 1, 2017, Landlord and Tenant entered a lease (“Lease”) for 784 East Twelfth Street, Los Angeles, CA 90021 (“Premises”). On June 1, 2019, the parties entered into an Amendment to the Lease (“First Amendment”) extending the term for two years from June 2019 to May 2021. Rent during this extension was $8,000 per month. Another amendment on June 8, 2020 (“Second Amendment”) reduced the rent to $4,000 per month for the period of April, May, and June 2020.

Tenant continued to occupy the Premises after the Lease expired on June 1, 2021. He has been a holdover tenant since. Paragraph 26 of the Lease increased the base rent for this period to 150% of its previous amount, or an additional $4,000 per month.

Tenant did not pay the rent owed in July 2020. Tenant only paid $6,000 per month in rent from August 2020 thereafter, $2,000 less than the base rent owed before the term expired. Tenant owes $86,000 in unpaid base rent based on the $8,000 rental rate, $116,000 based on the additional $4,000 rent as a holdover tenant from June 2021 thereafter, and $20,200 in late fees under paragraph 13.4 of the Lease. Damages total $222,200.

Landlord seeks compensatory damages totaling $222,200, interest thereon, and attorney’s fees and costs.

2. Course of Proceedings

No proof of service is on file for the Complaint and Summons. On January 16, 2024, Tenant filed an Answer.

B. Applicable Law

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

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

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

If the action is against a defendant who is a natural person, an attachment may be issued only on a commercial claim which arises out of the defendant’s conduct of a trade, business, or profession. CCP §483.010(c). Consumer transactions cannot form a basis for attachment. CCP §483.010(c); Kadison, Pfaelzer, Woodard, Quinn & Rossi v. Wilson, (1987) 197 Cal.App.3d 1, 4 (action involving trust property was a commercial, not a consumer, transaction).

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

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

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

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

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

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

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

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

Except in unlawful detainer actions, the amount to be secured by the attachment is the sum of (1) the amount of the defendant’s indebtedness claimed by the plaintiff, and (2) any additional amount included by the court for estimate of costs and any allowable attorneys’ fees under CCP section 482.110. CCP §483.015(a); Goldstein v. Barak Construction, (2008) 164 Cal.App.4th 845, 852. This amount must be reduced by the sum of (1) the amount of indebtedness that the defendant has in a money judgment against plaintiff, (2) the amount claimed in a cross-complaint or affirmative defense and shown would be subject to attachment against the plaintiff, and (3) the value of any security interest held by the plaintiff in the defendant’s property, together with the amount by which the acts of the plaintiff (or a prior holder of the security interest) have decreased that security interest’s value. CCP §483.015(b). A defendant claiming that the amount to be secured should be reduced because of a cross-claim or affirmative defense must make a prima facie showing that the claim would result in an attachment against the plaintiff.

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

On July 1, 2017, Landlord and Tenant entered a Lease for the Premises. Bral Decl., ¶3, Ex. A. The Lease was titled as a “Standard Industrial/Commercial” lease and described the Premises as a “single commercial unit.” Bral Decl., ¶14, Ex. A, §1.2(a). Tenant agreed to use the Premises for wholesale women’s clothing. Bral Decl., ¶14, Ex. A, §1.7.

Tenant agreed under section 13.4 that any rent not paid within five days of its due date accrues a late fee that is the greater of $100 and 10% of the payment owed. Bral Decl., ¶3, Ex. A. Paragraph 26 states that Tenant has no right to retain possession of the Premises after the Lease expires. Bral Decl., ¶3, Ex. A. If he does, the Base Rent would be 150% of whatever it last was under the Lease. Bral Decl., ¶3, Ex. A.

Paragraph 46 of the Lease requires that any amendment to the Lease must be in writing and signed by both parties. Bral Decl., ¶3, Ex. A.

On June 1, 2019, Landlord and Tenant entered the First Amendment, extending the term of the Lease for two years from June 2019 to May 2021. Bral Decl., ¶4, Ex. A. Rent during this period was set at $8,000 per month. Bral Decl., ¶4, Ex. A. A Second Amendment, on June 8, 2020, reduced the rent to $4,000 per month for period of April, May, and June 2020. Bral Decl., ¶4, Ex. A.

Tenant continued to occupy the Premises after the Lease expired on June 1, 2021. Bral Decl., ¶5. He has been a holdover tenant since that date. Bral Decl., ¶5.

Landlord’s ledger shows Tenant did not pay the rent owed in July 2020. Bral Decl., ¶¶ 6, 11, Ex. B. When Tenant asserted after commencement of this action that he paid it, Landlord told him it would remove this amount from the outstanding balance if Tenant provided proof. Bral Decl., ¶6, n.1. Tenant has not provided proof of such payment. Bral Decl., ¶6, n.1.

Tenant also only paid $6,000 rent per month beginning in August 2020, $2,000 less than the base rent owed. Bral Decl., ¶¶ 6, 11, Ex. B. The unpaid base rent from August 2020 through January 2024 totals $82,000. Bral Decl., ¶¶ 6, 11, Ex. B. When combined with the unpaid rent of $8,000 for July 2020, Tenant owes $90,000 through the Lease term. Bral Decl., ¶¶ 6, 11, Ex. B.

As a holdover tenant beginning in June 2021, the rent was increased by $4,000. Bral Decl., ¶¶ 7, 11, Ex. B. There is $124,000 in unpaid rent from June 2021 to January 2024. Bral Decl., ¶¶ 7, 11, Ex. B.

Tenant also owes late fees of 10%, or $21,400. Bral Decl., ¶¶ 7, 11, Ex. B.[2] The total amount owed under the Lease is $90,000 + $124,000 + $21,400 = $235,400. Bral Decl., ¶10.

Paragraph 31 of the Lease entitles Landlord to attorney’s fees and costs incurred to enforce the Lease. Bral Decl., ¶12, Ex. A. Landlord’s counsel charges a $600 hourly rate, has already spent 12.5 hours on this action, and expects to spend another 30 hours. Kohan Decl., ¶¶ 5-7. The estimated attorney’s fees total $25,500 ($600 x 12.5 = $7,500) + ($600 x 30=$18,000) ($18,000 +$7500= $25,500). Kohan Decl., ¶7. Landlord has also paid a $435 filing fee for the Complaint and a $60 filing fee for this application. Kohan Decl., ¶9.

Because of Tenant’s relationship with Landlord’s previous representative, a “Mr. Brai” (“Brai”), their dealings were more informal than most landlord-tenant dealings. Esfandi Decl., ¶2. Only some amendments to the Lease were ever in writing. Esfandi Decl., ¶3.

Because of the COVID-19 pandemic, the Second Amendment reduced the rent to $4,000 per month for the period of April, May, and June 2020. Esfandi Decl., ¶4, Ex. 1. Sometime after, Tenant met with Brai and another tenant, Yi Zhou of Reebees Fashion, Inc. (“Zhou”), to discuss continuing rent reductions and they agreed to $6000 a month. Esfandi Decl., ¶5. Tenant has since paid this $6,000 timely with no objection from Brai. Esfandi Decl., ¶6, Exs. 2-3.

On January 23, 2024, Landlord emailed Tenant’s counsel notice of this application and all moving papers. Linzer Decl., ¶2, Ex. A. Landlord never served Tenant by mail. Linzer Decl., ¶3.

Sean Bral and his deceased father, Said Bral, have owned and/or managed several properties together until Said Bral’s passing in July 2021. Reply Bral Decl., ¶3. Said Bral’s practice was to prepare a document reflecting any change in tenant relations. Reply Bral Decl., ¶4. This was true for the First and Second Amendments with Tenant. Reply Bral Decl., ¶5. In their 20 year relationship, Said Bral never agreed to a rent reduction that was not in writing and he always discussed this issues with his son. Reply Bral Decl., ¶5. Prior to this lawsuit, Tenant never claimed to Sean Bral that Said Bral had agreed to a rent reduction to $600. Reply Bral Decl., ¶6.

Written notice of a notice of application and hearing for writ of attachment shall be served and filed at least 16 court days before the hearing. CCP §§ 1005(a)(1), (b). If the notice is served by mail, the required 16-day notice before the hearing shall be increased by five calendar days if the place of mailing and the place of address are within the State of California. CCP §1005(b).

Landlord served Tenant with this application by email on January 23, 2024. Linzer Decl., ¶¶ 2-3, Ex. A. Tenant asserts that CCP section 482.070, 684.040, and 684.120 required service by mail, not email. Opp. at 1. CCP sections 484.040 and 1005(b) then required service by January 18, 2024 to reflect the five-day extension for service by mail. Opp. at 1-2.

CCP section 684.040 only applies to service under that article, which concerns service on an attorney of a judgment creditor or debtor. CCP section 684.120 describes service by mail of a writ, notice, order, or other paper under that title, which is the “Enforcement of Judgments Law.” CCP §680.010. These statutes concern judgments and do not apply to an application for a right to attach order.

CCP section 482.070 states that legal process required or permitted to be served under Attachment Law may be served personally or by mail. CCP §482.070(a)(1). Legal process is a reference to service of the moving papers for attachment. CCP §482.070(b). Service personally or by mail under CCP section 482.070 does not describe the exclusive means of service. CCP section 1010.6 expressly authorizes electronic service of documents that otherwise may be served by mail so long as in compliance with Judicial Council rules. CCP §1010.6(a), (3)(A), (h). The Judicial Council’s rule states that where a document may be served by mail, it may be served electronically. CRC 2.251. Express consent is required, but a party is deemed to consent to electronic service by using the court’s electronic filing system. CRC 2.251(b)(1)(B). The Presiding Judge’s First Amended Order re: Electronic Filing requires that trial court records must be electronically filed. Tenant answered on January 16, 2024 and is subject to electronic service. Electronic service extends the deadline to respond by two court days. CCP 1010.6(a)(3)(B).

CCP section 484.040 provides that a writ of attachment may not issue unless the defendant has been served with summons and complaint and the moving papers pursuant to CCP section 1005(b). CCP section 1005(b) provides for service of attachment moving papers and extends the 16-day period by two days for service “providing for overnight delivery”. CCP §1005(b).

Landlord was permitted to electronically serve the moving papers and was required to do so 16 court days, plus two additional days for electronic service, before the hearing. Landlord’s January 23, 2024 electronic service was exactly 16 court days before the February 15, 2024 hearing.[4] Therefore, it was two days late. However, Tenant shows no prejudice. He was required to file and serve any opposition no later than five court days before the hearing date. CCP §§ 484.050(e); 1005(b). He instead filed and served the opposition on February 9, only three court days before the hearing. Tenant’s untimely opposition will be considered, but so will Landlord’s moving papers.

Landlord claims $235,400 in damages, plus attorney’s fees and costs, for breach of the Lease and Amendments thereto. Bral Decl., ¶¶ 3, 10-11, Ex. A. Landlord has a contract claim on which to base attachment.

A claim is “readily ascertainable” where the damages may be readily ascertained by reference to the contract and the basis of the calculation appears to be reasonable and definite. CIT Group/Equipment Financing, Inc. v. Super DVD, Inc., (2004) 115 Cal.App.4th 537, 540-41. The fact that the damages are unliquidated is not determinative. Id. But the contract must furnish a standard by which the amount may be ascertained and there must be a basis by which the damages can be determined by proof. Id. (citations omitted).

Under the First Amendment, the rent from June 2019 to May 2021 was $8,000 per month. Bral Decl., ¶4, Ex. A. Landlord’s ledger shows Tenant did not pay any rent owed in July 2020 and underpaid by $2,000 per month through the end of the Lease. Bral Decl., ¶¶ 6, 11, Ex. B. Unpaid base rent from August 2020 through January 2024 totals $82,000. Bral Decl., ¶¶ 6, 11, Ex. B. When combined with $8,000 for July 2020, Tenant owes $90,000. Bral Decl., ¶¶ 6, 11, Ex. B.

The Lease also increased the monthly rent by 50%, or an additional $4,000, from June 2021, the month after the Lease expired. Bral Decl., ¶¶ 3, 7, 11, Exs. A-B. Landlord’s ledger shows this adds $124,000 in unpaid rent from June 2021 to January 2024. Bral Decl., ¶¶ 7, 11, Ex. B.

Under section 13.4 of the Lease, any rent not paid within five days of its due date accrues a late fee that is the greater of $100 and 10% of the payment owed. Bral Decl., ¶3, Ex. A. Based on unpaid rent of $90,000 + $124,000 = $214,000, Landlord asserts Tenant owes late fees of 10%, or $21,400. Bral Decl., ¶¶ 7, 11, Ex. B.

Tenant asserts that Landlord ignores an August 2020 amendment to the Lease decreasing his monthly rent to $6,000, which he has paid. Esfandi Decl., ¶5, Ex. 3. Because of Tenant’s relationship with Landlord’s father, only some amendments to the Lease were made in writing. Esfandi Decl., ¶3. Tenant further notes that Sean Brai did not object to his $6,000 rent payment for over three years. Esfandi Decl., ¶6.

Assuming arguendo that Said Brai and Tenant did enter an oral amendment, Paragraph 46 of the Lease requires that amendment to be in writing and signed by both parties in interest at the time of such an amendment. Bral Decl., ¶3, Ex. A. An oral amendment violates the parties’ agreement and probably the statute of frauds. Civil Code §1624. Nor does Tenant cite any authority that a landlord waives the right to pursue unpaid rent by accepting partial payment. Landlord points out that Paragraphs 24 and 4.3 of the Lease expressly permit Landlord to accept less than full rent without waiving the right to balance due. Reply at 5.

Tenant asserts that he should not be considered a holdover tenant subject to greater rent because of the oral amendment. Opp. at 2. Any oral amendment is irrelevant to whether Tenant was a holdover tenant. The purported oral amendment did not extend the Lease term beyond June 2021, after which Tenant was subject to the 150% holdover rate. Bral Decl., ¶3, Ex. A.

The total amount owed based on the Lease is $90,000 + $124,000 + $21,400 = $235,400. Bral Decl., ¶10.

Paragraph 31 of the Lease also entitled Landlord to attorney’s fees and costs incurred to enforce the Lease. Bral Decl., ¶12, Ex. A. Counsel has calculated that anticipated attorney’s fees total $7,500 + $18,000 = $25,500. Kohan Decl., ¶7. Landlord has also paid a $435 filing fee for the Complaint and a $60 filing fee for this application. Kohan Decl., ¶9.

On July 1, 2017, Landlord and Tenant entered a Lease for the Premises. Bral Decl., ¶3, Ex. A. They later entered two Amendments, extending the Lease term to May 2021 and setting the rent for that period. Bral Decl., ¶4, Ex. A. The Lease also provided for an increase in rent to 150% of its previous level if Tenant remained in possession beyond the Lease’s term. Bral Decl., ¶3, Ex. A.

The ledger shows that since July 2020, Tenant has not paid all rent owed as it became due. Bral Decl., ¶¶ 6-7, 11, Ex. B. Although Tenant asserts that an oral amendment reduced the rent to the $6,000 he then paid, the Lease prohibits any oral amendment thereto. See supra. Because Tenant remains in possession of the Premises, rent continues to accrue at a higher rate than during the term of the Lease. Bral Decl., ¶¶ 7, 11, Ex. B.

If the action is against a defendant who is a natural person, an attachment may be issued only on a commercial claim which arises out of the defendant’s conduct of a trade, business, or profession. CCP §483.010(c). Consumer transactions cannot form a basis for attachment. CCP §483.010(c); Kadison, Pfaelzer, Woodard, Quinn & Rossi v. Wilson, (“Kadison”) (1987) 197 Cal.App.3d 1, 4 (action involving trust property was a commercial, not a consumer, transaction).

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

The Lease was titled as a “Standard Industrial/Commercial” lease and described the Premises as a “single commercial unit.” Bral Decl., ¶14, Ex. A, §1.2(a). Tenant agreed to use the Premises for wholesale women’s clothing. Bral Decl., ¶14, Ex. A, §1.7. The claim against Tenant is a commercial claim.

Where the defendant is a natural person, the description of the property must be reasonably adequate to permit the defendant to identify the specific property sought to be attached. CCP §484.020(e). Although the property must be specifically described, the plaintiff may target for attachment everything the individual defendant owns. Bank of America v. Salinas Nissan, Inc., (1989) 207 Cal.App.3d 260, 268. The requirement of specificity avoids unnecessary hearings where an individual defendant is willing to concede that the described property is subject to attachment. Ibid. A general list of categories - e.g., “real property, personal property, equipment, motor vehicles, chattel paper, negotiable and other instruments, securities, deposit accounts, safe-deposit boxes, accounts receivable, general intangibles, property subject to pending actions, final money judgments, and personal property in decedents’ estates” – is sufficient. Ibid.

Landlord seeks to attach Tenant’s interest in real property except for leasehold estates with unexpired terms of less than one year; chattel paper, accounts receivable, and general intangibles arising out of a trade, business, or profession, except for individual claims with a principal balance of less than $150; final money judgments arising from the same; equipment; farm products; inventory; money on the premises where a trade, business, or profession is conducted by the defendant, plus money located elsewhere beyond the first collective $1,000; negotiable documents of title; instruments; securities; minerals to be extracted; and community property that would be subject to enforcement of the judgment obtained in this action. The description of attachable property is adequate.

Attachment must not be sought for a purpose other than the recovery on the claim upon which attachment is based. CCP §484.090(a)(3). Landlord seeks attachment for a proper purpose.

Before issuance of a writ of attachment, the plaintiff shall file an undertaking to pay the defendant any amount the defendant may recover for any wrongful attachment by the plaintiff in the action. CCO §489.210.

Tenant requests the court to require Landlord to post a $90,000 bond to reflect the proper $90,000 amount for a right to attach order. Opp. at 3-4. As discussed above, the attachable amount is $261,395. In any case, the damages for wrongful attachment do not equal the amount attached. Rather, those damages concern the lost use of attached property and the attorney’s fees necessary to set aside the attachment. The request to increase the undertaking is denied.

The application for a right to attach order is granted against Tenant for $261,395. No right to attach order shall issue until Landlord posts a $10,000 undertaking.

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

[2] The declaration of Sean Bral (“Bral”) labels two paragraphs as Paragraph 7. Bral Decl., ¶7. Bral asserts that late fees total $200 per month. Bral Decl., ¶7. As the ledger shows, late fees total 10% of the total owed, even for months where the result exceeds $200. Bral Decl., Ex. B. This still follows the terms of the Lease. Bral Decl., ¶3, Ex. A.

[3] Landlord’s evidentiary objections to the Esfandi declaration are sustained as to Exhibit 2 and overruled for lines 23-24.

[4] Monday, February 12, 2024 was a court holiday.