Judge: James C. Chalfant, Case: 24STCV00051, Date: 2025-04-22 Tentative Ruling

Case Number: 24STCV00051    Hearing Date: April 22, 2025    Dept: 85

            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.

C. Statement of Facts

1. Hamrick’s Evidence

In 2012, Medversant retained Hamrick to provide legal services and representation for the Litigation.  Hamrick Decl., ¶2.  Hamrick and Medversant executed the Retainer Agreement wherein Medversant agreed to pay Hamrick for legal services and costs incurred in the Litigation.  Hamrick Decl., ¶3, Ex. 1.

Hamrick provided the agreed upon legal services and invoiced Medversant for the same, thereby materially fulfilling its obligations under the Retainer Agreement.  Hamrick Decl., ¶5.  Hamrick has fulfilled all other obligations except for any for which Hamrick’s performance has been excused, waived, or prevented.  Hamrick Decl., ¶5.

Hamrick has maintained records of the services provided and costs incurred on behalf of Medversant in the Litigation, prepared and maintained by Hamrick staff in the ordinary course of business, at or near the occurrence thereof.  Hamrick Decl., ¶9.  Entries of payments are input into the PCLaw billing system in the ordinary course and scope of its business operations on a day-to-day basis.  Hamrick Decl., ¶9.

Medversant materially breached the Retainer Agreement by failing to pay Hamrick the full amount owed for legal services provided and costs and expenses incurred.  Hamrick Decl., ¶6.  Medversant paid $407,094.62, but subsequently failed to pay the remainder owed.  Hamrick Decl., ¶6.

An Accounting Statement reflects all of Hamrick’s charges and payments for time and costs from October 2012 through June 2015, as well as monthly billing statements generated by the PCLaw billing system for the same period.  Hamrick Decl., ¶10, Ex. 2. 

Medversant has failed to pay Hamrick the full amount owed.  Hamrick Decl., ¶13.  A cumulative Past Due Statement reflects all charges and payments for time and costs from July 2015 through October 2017.  Hamrick Decl., ¶11, Ex. 3.  The Past Due Statement includes reductions and backing out of interest charges resulting in the final calculated amount of $272,286.61.  Hamrick Decl., ¶11.  This is the amount outstanding and sought by Hamrick.  Hamrick Decl., ¶11.  Any amounts previously written off on prior invoices are also excluded in the calculated outstanding balance.  Hamrick Decl., ¶12.

The total amount owed is readily ascertainable and not less than $500.  Hamrick Decl., ¶13.  Hamrick seeks attachment for no other purpose than recovery on the claims in the SAC.  Hamrick Decl., ¶14.

The Confidential Settlement and Mutual General Release (the “Settlement Agreement”) in the Litigation is dated December 22, 2015.  Hamrick Decl., ¶15.  The requests for dismissal of the complaint and cross-complaint in the Litigation were filed on January 21 and February 18, 2016, respectively.  Hamrick Decl., ¶15.  Hamrick’s last substantive billing entry was dated February 22, 2016 for an appearance by CourtCall to advise the court regarding the status of the dismissal. Hamrick Decl., ¶15.  Hamrick continued to correspond with Medversant and expert witnesses retained for the Litigation through August 2017.  Hamrick Decl., ¶15.

The parties entered into tolling agreements for the statute of limitations four times.  Hamrick Decl., ¶17-20, Exs. 4-7.  The first tolling agreement was in January 2020 (Ex. 4) and the last tolling agreement was in December 2022, extending the tolling date to January 1, 2024.  Exs. 4, 7.

2. Medversant’s Evidence

In 2012, Medversant engaged Hamrick to represent it in the Litigation, wherein Medversant sued the law firm of CPH for malpractice, breach of fiduciary duty, and breach of contract.  Haddad Decl., ¶2.

Medversant retained Hamrick based on the representation of A. Raymond Hamrick, Esq. (“Attorney Hamrick”) that he had particular expertise in legal malpractice litigation and that Medversant would not have to pay any portion of CPH’s sought fees and would instead recover from CPH.  Haddad Decl., ¶3.  Medversant later learned that Attorney Hamrick was not an expert in legal malpractice.  Haddad Decl., ¶3.

Two years later, Hamrick recommended that Medversant settle and pay CPH a large sum because it would be difficult to prove the malpractice where Medversant had settled the underlying patent case and then sued CPH.  Haddad Decl., ¶4.  This is something Hamrick should have communicated to Medversant, which would not have sued CPH if it had been so advised.  Haddad Decl., ¶5.  Medversant ultimately settled the Litigation with CPH, and the case was dismissed in February 2016.  Haddad Decl., ¶6.

Hamrick billed Medversant approximately monthly with invoices.  Haddad Decl., ¶7.  Medversant consistently disputed the invoices because Hamrick billed paralegal time at an attorney rate, and because Hamrick invoiced for interest to which Medversant never agreed.  Haddad Decl., ¶7.  Hamrick calculated the interest at 10% from the date of each separate invoice.  Haddad Dec., ¶9, Exs. 1-2.

Medversant and Hamrick first tolled the statute of limitations on January 10, 2020.  Haddad Decl., ¶10, Ex. 3.  The January 10, 2020 tolling agreement did not revive claims already barred on that date.  Haddad Decl., ¶10.  As such, $257,117.86  of Hamrick’s claim is already time-barred.  Haddad Decl., ¶11.

Counsel for Medversant and Haddad and estimates Medversant will incur at least $100,000 in attorney fees and costs to defend against Hamrick’s claims, including hiring expert witnesses as necessary.  Correll Decl., ¶¶ 1, 3.

D. Analysis

Plaintiff Hamrick applies for a right to attach order against Defendant Medversant in the amount of $272,286.61.  Medversant opposes.

            1. A Claim Based on a Contract and on Which Attachment May Be Based

            A writ of attachment may be issued only in an action on a claim or claims for money, each of which is based upon a contract, express or implied, where the total amount of the claim or claims is a fixed or readily ascertainable amount not less than five hundred dollars ($500).  CCP §483.010(a).

Hamrick’s breach of contract claim is based on the Retainer Agreement and invoices, and the $272,286.61 sought exceeds $500.

            2. An Amount Due That is Fixed and Readily Ascertainable

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

            Hamrick states that the $27,286.61 amount owed is fixed and readily ascertainable from the Retainer Agreement and invoices.  Mem. at 7.  Medversant does not dispute this contention.

3. Probability of Success

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

Hamrick contends that it has established the probable success of its breach of contract claim.  As set forth in Attorney Hamrick’s declaration, Hamrick has established the existence of a valid contract with Medversant, Hamrick’s performance thereunder, Medversant’s breach, and the resulting damage to Hamrick.  Mem. at 8.

Specifically, in 2012, Hamrick and Medversant executed the Retainer Agreement wherein Medversant agreed to pay Hamrick for legal services and costs incurred in the Litigation.  Hamrick Decl., ¶3, Ex. 1.  Hamrick provided the agreed upon legal services and invoiced Medversant for the same, thereby materially fulfilling its obligations under the Retainer Agreement.  Hamrick Decl., ¶5.  Medversant materially breached the Retainer Agreement by failing to pay Hamrick the full amount owed for legal services provided and costs and expenses incurred.  Hamrick Decl., ¶6.  A cumulative Past Due Statement reflects all charges and payments for time and costs from July 2015 through October 2017 and the total unpaid amount owed is $272,286.61.  Hamrick Decl., ¶11, Ex. 3.

Medversant raises two defenses: (1) the statute of limitations and (2) Hamrick’s fees are unreasonable. 

Medversant argues that Hamrick’s fees are unreasonable.  It cites federal case law that when a law firm sues a former client for unpaid legal fees, the law firm has the burden for summary judgment of establishing that it provided competent legal services.  See Eclipse Group LLP v. Fortune Mfg. Co., (S.D. Cal. Mar. 4, 2015) No. 14CV0441-GPC-WVG, 2015 WL 1511033, at *4  (“In sum, based on the current record, Plaintiff has failed to demonstrate the absence of any genuine dispute of material fact as to whether Plaintiff's legal representation constituted a material breach of the engagement letter excusing Defendant from making payments, and therefore has failed to meet its burden to show that it is entitled to summary judgment on its breach of contract claim.”); Greenberg Traurig, LLP v. Gale Corp., (E.D. Cal. Aug.4, 2009) No. 07–cv– 01572–MCE–DAD, 2009 WL 2422815, at *3.

Perhaps so, but this is not a summary judgment motion.  More important, Medversant has the initial burden of raising the defect in Hamrick’s fees.  See Evid. Code §550.[2]  Medversant does so by noting that it selected Hamrick as its counsel for the Litigation against CPH because Attorney Hamrick held himself out as having particular expertise in legal malpractice litigation (which Medversant later learned was not true).  Medversant paid substantial amounts to Hamrick over the next two years before Hamrick admitted to Medversant for the first time that proving damages against CPH would be difficult due to the “settle and sue” nature of the case and recommended that Medversant settle the Litigation by paying a substantial sum to CPH.  Medversant’s Decl., ¶4.  The difficulty of proving Medversant’s damages against CPH is something that Hamrick should have communicated to Medversant at the outset of the litigation, not after Medversant had paid substantial fees and costs.  Medversant’s Decl., ¶5.  Medversant would not have pursued its claims against CPH if it had been so advised.  Medversant’s Decl., ¶5.  Hamrick’s failure to provide competent legal representation constituted a material breach of the Retainer Agreement, which excused Medversant from making payments.  Opp. at 9.

Medversant’s evidence that Attorney Hamrick misrepresented his expertise can, but does not necessarily, undermine the reasonableness of his fees.  A non-expert lawyer can still do a wonderful job in a case.  Medversant’s argument that it would not have sued CPH in the first place if it had been informed by Hamrick that a settle and sue malpractice claim is difficult to prove would negate most or all of Hamrick’s fees, if believed.  This argument is not sufficiently presented with admissible evidence about the parties’ communications and Hamrick’s representations and evaluation of Medversant’s claim against CPH.

Hamrick anticipates MEdversant’s statute of limitations defense, noting that the four-year statute of limitations in CCP section 337(a) applies to breach of written contract claims and that a cause of action based upon a breach of contract accrues at the time of the breach.  In the case of a personal performance contract, a defendant breaches his obligation to pay at the time plaintiff completes performance of the requested act.  See E.O.C. Ord, Inc. v. Kovakovich, (1988) 200 Cal.App.3d 1194, 1203.  Mem. at 10.

Hamrick argues that the Settlement Agreement in the Litigation is dated December 22, 2015, the requests for dismissal of the complaint and cross-complaint in the Litigation were filed on January 21 and February 18, 2016, respectively, and Hamrick’s last substantive billing entry was dated February 22, 2016 for an appearance by CourtCall to advise the court regarding the status of the dismissal. Hamrick Decl., ¶15.  Thereafter, Hamrick continued to correspond with Medversant and retained experts for over a year, through August 25, 2017, in an effort to obtain payment from Medversant of outstanding invoices for expert fees and expenses.  Hamrick Decl., ¶15.  Mem. at 10-11.

During the course of efforts to resolve the parties’ dispute, the parties recognized in the second half of 2019 that the statute of limitations for an attorney fee action arguably would expire on or about February 22, 2020.  Hamrick Decl., ¶16.  They entered into successive tolling agreements, which extended the filing deadline to January 1, 2024.[3]  Hamrick’s Complaint was filed on January 2, 2024, which was within the tolling limit because January 1, 2024 was a holiday.  See Govt. Code §6700; CCP §§ 135, 12a(a).  Mem. at 11-12.

Medversant does not dispute application of the four-year statute of limitations, the last dates of Hamrick’s representation, the existence of the tolling agreements, or the timeliness of the Complaint with respect to the Termination Date.  It contends that most of Hamrick’s claims are nonetheless time-barred for a breach of contract theory.  Opp. at 3-4.

Medversant notes that Hamrick’s breach of contract claim seeks payment of invoices issued between July 31, 2015, and October 3, 2017. Hamrick Decl., Ex. 3.  Under the “continuous accrual doctrine,” the statute of limitations as to each invoice issued to Medversant began to run when the invoice became due.  See Eloquence Corp. v. Home Consignment Ctr., (2020) 49 Cal. App. 5th 655, 663 (breach of contract claim was a “failure to perform [a] discrete and specific obligation[ ] to pay . . . invoices,” and the “statute of limitations began running when the invoices came due”).  Yet, the first Tolling Agreement between the parties did not take effect until January 10, 2020.  Haddad Decl., Ex. 3, §2.  That Tolling Agreement explicitly states: “The Parties agree that this Agreement shall not revive any claims or causes of action that were barred as of the Effective Date of this Agreement by any statute of limitations, laches or other limitations period . . . .”  Ex. 3, §5.  Opp. at 4.

Because the Tolling Agreement explicitly disclaims any revival of time-barred claims, Hamrick cannot use it to salvage claims that were already stale as of January 10, 2020.  Thus, as of January 10, 2020, when the parties entered into the Tolling Agreement, all invoices before January 10, 2016 were already time-barred. The vast majority of the amount Hamrick seeks to attach - $257,117.86 of the $272,286.61, or 94.4% – is based on invoices issued between July 31 and November 30, 2015, which are outside of the four-year statute of limitations period.  Hamrick Ex. 3.  When the time-barred invoices are excluded from the attachment request, the remaining amount is only $15,168.75.  Opp. at 4.[4]

The court agrees and attachment is limited to the conceded amount of $15,168.75.

4. Attachment Sought for a Proper Purpose 

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

E. Conclusion

The application is granted in the amount of $15,168.75.  No writ shall issue until Hamrick posts a $10,000 bond.  See CCP §489.220.