Judge: James C. Chalfant, Case: 24STCV05171, Date: 2024-12-10 Tentative Ruling
Case Number: 24STCV05171 Hearing Date: December 10, 2024 Dept: 85
6611-6637
Hollywood (LA) OZ Owner, LLC v. M.D.F. International, Inc., 24STCV05171
Tentative decision on application
for right to attach order: denied
Plaintiff 6611-6637 Hollywood (LA) Oz Owner, LLC (“Hollywood
Oz Owner” or “Landlord”) applies for right to attach orders against Defendant M.D.F.
International (“MDF” or “Tenant”) in the amount of $539,666.51.
The court has read and considered the moving papers and opposition
(no reply was filed) and renders the following tentative decision.
A. Statement of
the Case
1. Complaint
a. The Lease
On or about March 12, 2015, Plaintiff Hollywood Oz Owner, as
landlord, and MDF, as tenant, entered into a written 6633 Triple Net Lease (the
“Lease”) (a) for an initial term of four years, (b) for real property commonly
known by the street address 6633 Hollywood Boulevard, Los Angeles, California
90028, specifically approximately 13,500 rentable square feet on three levels
of space (the “Premises”).
On or about May 22, 2019, Landlord and Tenant entered into
the First Amendment to Lease (the “First Amendment”).
On or about November 11, 2019, Landlord and Tenant entered
into the Second Amendment to Lease (the “Second Amendment), whereby among other
things, the Lease Term was extended to October 31, 2024 (“Extension Expiration
Date”) and the base rent was modified.
As set forth in the Lease, Tenant is required to cause the
payment of the Monthly Base Rent to be received by Landlord on or before the
first day of each month. Specifically,
pursuant to the terms of the Lease at Section 3.1, which states in pertinent
part that, “Tenant shall pay to Landlord the Base Rent specified in Section
1.5, in advance on or before the first day of each calendar month during the
Term without demand, deduction or setoff, except as otherwise expressly set
forth herein.” (“Base Rent”).
Pursuant
to the Second Amendment, the monthly Base Rent for the period of November 1,
2020 to October 31, 2021 shall be $19,642.82, thereafter increasing for the
period of November 1, 2021 to October 31, 2022 to $20,323.11, and thereafter
increasing for the period of November 1, 2022 to October 31, 2023 to
$20,839.07.
The Lease at Section 3.2 provides that “[t]his Lease is what
is commonly referred to as a triple net lease, and it is the intention of the
parties that Tenant pay all the costs related to the Premises as well as its
share of certain CAM/Operating Costs in addition to the Base Rent.” The Lease
at Section 3.3, provides in pertinent part: “In addition to the Base Rent,
commencing on the Rent Commencement Date, Tenant shall pay in monthly
installments an amount equal to Tenant's Proportionate Share of the CAM/Operating
Costs for such year…” (“Additional
Rent”).
b. The Default
As of December 2023, Tenant has failed to pay the Base Rent
for the months of March 2020 to July 2021, November 2021 to July 2023, and
November 2023 in the total amount of $341,832.99.
The
estimated monthly installment of the Additional Rent for the period of March
2020 to April 2020 totals $4,083.84, for the period of May 2020 to February
2021 totals $3,849.54, and from March 2021 to December 2023 totals $3,937.35. Tenant
has failed to pay the monthly Additional Rent charges for the months of March
2020 to July 2021 in the total amount of $97,833.52.
Tenant
has been delinquent on Rent payments since March 2020. For the month of March
2020 to July 2021, November 2021 to July 2023, and November 2023, Tenant owes total
Rent in the amount of $439,666.51.
On or about February 10, 2023, Landlord’s counsel served on
Tenant a Demand for Payment of Rent pursuant to the Lease.
2. Course of Proceedings
On March 1, 2024, Plaintiff filed the Complaint.
On June 4, 2024, Defendant filed an Answer.
B. Applicable Law
1. Attachment
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., (“CIT”) (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.
C. Statement of Facts
1. Plaintiff’s Evidence
a. The Lease
Landlord is the
owner of the real property located 6633 Hollywood Boulevard, Los Angeles,
California 90028 and holds all rights, title and interests therein. Jones Decl., ¶4. On or about March 12, 2015, Landlord, and Tenant,
entered into the Lease for a period of four years for the Premises,
specifically that certain approximately 13,500 rentable square feet on three
levels of space. Jones Decl., ¶5, Ex. A.
On
or about May 22, 2019, Landlord and Tenant entered into the First
Amendment. Jones Decl., ¶6, Ex. B.
On
or about November 11, 2019, Landlord and Tenant entered into the Second
Amendment whereby, among other things, the Lease Term was extended to October
31, 2024 and the Base Rent was modified.
Jones Decl., ¶7, Ex. C.
b.
The Default
As
set forth in the Lease, Tenant is required to cause the payment of the Monthly
Base Rent to be received by Landlord on or before the first day of each
month. Jones Decl., ¶8. Specifically, Section 3.1 states in pertinent
part: “Tenant shall pay to Landlord the Base Rent specified in Section 1.5, in
advance on or before the first day of each calendar month during the Term
without demand, deduction or setoff, except as otherwise expressly set forth
herein.” Jones Decl., ¶8. Section 1.5 provides: “Base Rent: $9,000.00
per month (‘Base Rent’), payable on the 1st day of each month commencing
September 1, 2021” (the “Base Rent”).
Jones Decl., ¶8.
Section
2 of the Second Amendment states in pertinent part: “Effective on the Extension
Commencement Date, Section 3.1.2 of the Original Lease shall be deleted in its
entirety and shall be of no further force or effect. Commencing on the
Extension Commencement Date, and continuing throughout the Extended Term, tenant
shall pay Base rent for the Premises as follows: …” Jones Decl., ¶9.
Pursuant
to the Second Amendment, the monthly Base Rent for the period of November 1,
2020 to October 31, 2021 shall be $19,642.82, thereafter increasing for the
period of November 1, 2021 to October 31, 2022 to $20,323.11, and thereafter
increasing for the period of November 1, 2022 to October 31, 2023 to
$20,839.07. Jones Decl., ¶10.
Tenant failed to pay the Base Rent for the months of March
2020 to July 2021, November 2021 to July 2023, and November 2023 in the total
amount of $341,832.99. Jones Decl.,
¶11. Tenant remitted partial payments
for some months. Jones Decl., ¶12.
c.
Additional Rent
The Lease at
Section 3.2 provides: “This Lease is what is commonly referred to as a triple
net lease, and it is the intention of the parties that Tenant pay all the costs
related to the Premises as well as its share of certain CAM/Operating Costs in
addition to the Base Rent.” Jones Decl.,
¶13.
The Lease at Section 3.3, provides in pertinent part: “In
addition to the Base Rent, commencing on the Rent Commencement Date, Tenant
shall pay in monthly installments an amount equal to Tenant's Proportionate
Share of the CAM/Operating Costs for such year…” Jones Decl., ¶14.
The estimated monthly installment of the Common Area
Expenses for the period of March 2020 to April 2020 totals $4,083.84, for the
period of May 2020 to February 2021 totals $3,849.54, and from March 2021 to
December 2023 totals $3,937.35. Jones
Decl., ¶15. Tenant has failed to pay the
monthly Additional Rent charges for the months of March 2020 to July 2021 in the
total amount of $97,833.52. Jones Decl.,
¶16. This amount includes 2020, 2021,
and 2022 Common Area Expense Reconciliations which have been applied to
Tenant’s account. Jones Decl., ¶16. Accordingly,
In sum, tor the month of March 2020 to July 2021, November
2021 to July 2023, and November 2023, Tenant owes Rent in the amount of
$439,666.51. Jones Decl., ¶17.
d.
Acceptance of Partial Payment of Rent
Pursuant
to Section 30 of the Lease:
The waiver by any party
of any term, covenant, agreement or condition herein contained shall be
effective only if in writing and shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant, agreement or
condition herein contained, nor shall any custom or practice which may develop
between the parties in the administration of this Lease be construed to waive
or to lessen the right of any party to insist upon the performance by the other
party in strict accordance with all of the terms, covenants, agreements and
conditions of this Lease. The subsequent acceptance of Rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any term, covenant, agreement or condition of this Lease, other than the
failure of Tenant to timely pay, the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent. Jones Decl., ¶18.
Defendant
remitted partial payments for some months and the total amount owed is offset
by these payments. Jones Decl.,
¶19.
e.
The Demand
Tenant has been
delinquent on Rent payments since March 2020.
Jones Decl., ¶20. On or about
February 10, 2023, Landlord’s counsel served on Tenant a Demand for Payment of
Rent pursuant to the Lease. Jones Decl.,
¶21. The Demand Notice advised that
Tenant had failed all amounts owed under the Lease in the amount of $436,675.76
and that if Tenant did not pay the amount due within three business days, Landlord
would proceed with all of its rights and remedies under the Lease, at law or
inequity, including initiating an action for breach of Lease. Jones Decl., ¶21, Ex. D. Notwithstanding, Tenant failed to deliver the
Rent to Landlord. Jones Decl., ¶22. Pursuant to Section 11.2 of the Lease,
“Tenant’s failure to pay any Rent due or to make any other monetary payment
imposed under the terms of the Lease, for a period of 3 business days after
written notice from Landlord” shall constitute a default and material breach of
the Lease. Jones Decl., ¶23.
f.
Attorney Fees
Section
37 of the Lease provides:
“If either party
becomes involved in litigation or arbitration arising out of this Lease or the
performance thereof, the court in such litigation or arbitrator in such
arbitration shall, award legal expenses (including, but not limited to
attorneys and other professional and paraprofessional fees incurred) to the
prevailing party, including all such costs and attorneys' fees incurred as a
result of any appeal filed by the non-prevailing party. In the event of
Landlord's involvement in a bankruptcy proceeding, Landlord shall also be
entitled to an award of its attorneys' fees incurred in connection with such
proceeding.” Jones Decl., ¶24.
g.
Property Subject to Attachment
Tenant
owes rent in the amount of $439,666.51.
Jones Decl., ¶25. Tenant is a
corporation, and Landlord seeks attachment of all property which is subject to
attachment pursuant to subdivision (b) of the Code of Civil Procedure section
487.010. Jones Decl., ¶26.
h.
Litigation
On
March 1, 2024, Plaintiff filed this instant action for Breach of Lease against Tenant
for failing to pay the rent due and owed under the Lease. Shakouri Decl., ¶2.
On
or about October 14, 2024, Plaintiff propounded Form Interrogatories--General
(Set No. One), Requests for Admission (Set No. One), Requests for Production
(Set No. One), Special Interrogatories (Set No. One) on Defendant MDF
(collectively, the “Discovery”).
Shakouri Decl., ¶4. Tenant failed
to respond to the discovery. Shakouri
Decl., ¶5.
On
or about November 19, 2024, Plaintiff’s counsel sent a letter to defense
counsel informing counsel that Defendant’s objections had been waived. Shakouri Decl., ¶6. Plaintiff’s counsel requested Defendant to provide
responses by November 26, 2024, but no responses have been received. Shakouri Decl., ¶6, Ex. B.
On
or about March 14, 2024, Plaintiff filed an unlawful detainer action against
Defendant. Shakouri Decl., ¶7. Plaintiff elected to dismiss the action
without prejudice and pursue a breach of lease action. Shakouri Decl., ¶7. Before the dismissal, Defendant responded to
the discovery and authenticated the documents attached to the Complaint. Shakouri Decl., ¶8, Ex. C-D.
2. Defendant’s Evidence
a. The Lease
On or about May
21, 2015, MDF negotiated and executed the Lease with Plaintiff. Herczeg Decl., ¶3. The pertinent terms in the Lease included: an
initial Base Rent of $15,000.00 per month commencing on September 1, 2015; the
Tenant’s proportionate share of CAM/Operating Costs to be paid monthly; a
four-year term expiring on August 31, 2019 with a Tenant option to renew and
extend the term of the Lease; a title clause subjecting the leasehold estate to
“the effect of all Laws applicable to the use and occupancy of the Premises and
the Project;” and a Force Majeure clause.
Herczeg Decl., ¶3.
The
Force Majeure clause that I negotiated and approved states:
Section 32. Force
Majeure. Neither Landlord nor Tenant shall be chargeable with, nor be liable or
responsible to the other for, anything or in any amount for any failure to
perform or delay in performing caused by Force Majeure. Any such failure or
delay due to Force Majeure shall not be deemed a breach of or default in the
performance of this Lease by either party, provided that nothing herein shall
relieve either party of its financial obligations hereunder. Herczeg Decl., ¶4.
“Force
Majeure,” as defined in the Lease, “means fire, earthquake, explosion, flood,
hurricane, the elements, acts of God or the public enemy, action, restrictions,
limitations, or interference of governmental authorities or agents, war,
invasion, insurrection, rebellion, riots, strikes or lockouts, or any other
cause or occurrence, whether similar or dissimilar to the foregoing, which is
beyond the reasonable control of the Landlord.”
Herczeg Decl., ¶5.
On
or about May 22, 2019, MDF negotiated and executed the First Amendment to the
Lease that indemnified Landlord for any liability arising from a certain Master
Covenant and Agreement required by the City of Los Angeles. Herczeg Decl., ¶6.
On
or about November 11, 2019, MDF negotiated and executed the Second Amendment
that extended the Lease for a 60-month period until October 31, 2024, adjusted
the base rents for the extended period, and provided for a Tenant “option to
renew the term of the Lease for one additional five (5) year term.” Herczeg Decl., ¶6.
MDF
is a restaurant and “escape room” experience.
Herczeg Decl., ¶8. Its business
is a single location, family-owned operation.
Herczeg Decl., ¶8. It spent
significant funds and effort and time in making alterations to the premises to
maximize customers’ entertainment.
Herczeg Decl., ¶8.
b.
COVID-19
Prior
to March 2020, MDF was current with payments for rent and CAM. Herczeg Decl., ¶9. On or about March 2020, however, MDF was required
to cease operations when the Governor and the City of Los Angeles issued
emergency closure orders due to the COVID-19 pandemic. Herczeg Decl., ¶10. From March 2020 through July 2021, MDF was
closed by government decree, and it generated no revenue and was unable to pay
rent and CAM for that period. Herczeg
Decl., ¶10. MDF was forced to shut down
abruptly, not by choice, and worked to keep the business viable during the
pandemic. Herczeg Decl., ¶10.
Throughout
the pandemic closure, MDF maintained open communications with Landlord, and was
reassured by them that the Landlord recognized that the shutdown was due to
circumstances beyond anyone’s control and because of the COVID-19 pandemic and
resulting governmental closure orders.
Herczeg Decl., ¶12.
MDF
reasonably relied upon the extensive communications with Landlord during the
period from March 2020 through July 2021 to not make separate financial
arrangements to stay current with rent and CAM payments, which would have been
an extreme financial hardship to MDF’s business. Herczeg Decl., ¶13.
c.
August 2021 Reopening
When the State and the City of Los Angeles relaxed its
business closure orders, MDF re-opened its business in August 2021, immediately
started generating operational revenue, and immediately started making
prospective monthly rent and CAM payments to Landlord, which continue to this
day. Herczeg Decl., ¶14.
Whenever
making a rent and CAM payment, MDF explicitly states in the payment’s memo
field precisely for which month the payment applies. Herczeg Decl., ¶15.
Since
re-opening in August 2021, MDF has paid nearly a million dollars in rent and
CAM payments to Landlord. Herczeg Decl.,
¶16. Except for anticipated CAM
adjustments, made in the regular course of business, MDF is current for all
rent and CAM that has come due since August 2021. Herczeg Decl., ¶16.
MDF
stands ready to meet its financial obligations under the Lease and has
attempted to resolve the amounts still owed, including for the period from
March 2020 through July 2021. Herczeg
Decl., ¶17. Landlord has not been
cooperative. Herczeg Decl., ¶17.
MDF
has elected to exercise the Tenant option to extend the Lease another five
years that was negotiated and approved in the Second Amendment to the Lease. Herczeg Decl., ¶21. MDF has provided the required notice to Landlord
and have made rent and CAM payments for November and December 2024. Herczeg Decl., ¶21. Landlord has rejected the November 2024
payment. Herczeg Decl., ¶22.
D. Analysis
Plaintiff
Landlord seeks a right to attach order against Defendant Tenant in the amount of $539,666.51 in Rent, which includes $90,000 in estimated
attorney fees and $10,000 in estimated costs.
1. Procedural Objections
Tenant’s opposition contends that Landlord failed to serve
Summons and Complaint with the moving papers in compliance with CCP section
484.040(a), which requires service of summons complaint, and moving papers in
compliance with the 16 court days’ notice required by CCP section 1005. Opp. 3.
Tenant is not, and cannot, object that it was not served with the
Summons and Complaint. Indeed, the proof
of service on file shows that Tenant was served with both on March 1, 2024 and
filed its Answer on June 4, 2024. Tenant
is complaining that it did not get another copy of the Summons and Complaint
with the moving papers. This argument is
spurious and need not be further discussed.
Tenant also complains
that Landlord checked Item 14 in its application on Form AT-105 that it was
seeking a TPO but did not check the TPO box in the form’s caption. Tenant contends that this defect is fatal to
the application. Opp. at 3. Tenant argues too broadly. The court agrees that Landlord’s failure to
seek a TPO in the caption waives that remedy, but it does not render the entire
application defective.
2. 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).
Plaintiff Landlord seeks attachment
based on breach of the Lease, as amended, in an amount that exceeds $500. This is a claim on which attachment may be
based.
3. An Amount Due That Is Fixed
and Readily Ascertainable/Probability of Success
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).
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).
Landlord presents evidence that, pursuant to the Second
Amendment, the monthly Base Rent for the period of November 1, 2020 to October
31, 2021 shall be $19,642.82, thereafter increasing for the period of November
1, 2021 to October 31, 2022 to $20,323.11, and thereafter increasing for the
period of November 1, 2022 to October 31, 2023 to $20,839.07. Jones Decl., ¶10.
Tenant failed to pay the Base Rent for the months of March
2020 to July 2021, November 2021 to July 2023, and November 2023 in the total
amount of $341,832.99. Jones Decl.,
¶11. Tenant remitted partial payments
for some months. Jones Decl., ¶12. Tenant remitted partial payments for some
months and the total amount owed is offset by these payments. Jones Decl., ¶19.
Landlord
also presents evidence that the Lease at Section 3.3 provides that Tenant shall
pay in monthly installments an amount equal to Tenant's Proportionate Share of
the CAM/Operating Costs for such year…”
Jones Decl., ¶14. The estimated
monthly installment of the Common Area Expenses for the period of March 2020 to
April 2020 totals $4,083.84, for the period of May 2020 to February 2021 totals
$3,849.54, and from March 2021 to December 2023 totals $3,937.35. Jones Decl., ¶15. Tenant has failed to pay the monthly
Additional Rent charges for the months of March 2020 to July 2021 in the total
amount of $97,833.52. Jones Decl.,
¶16. This amount includes 2020, 2021,
and 2022 Common Area Expense Reconciliations which have been applied to
Tenant’s account. Jones Decl., ¶16.
In sum, for the month of March 2020 to July 2021, November
2021 to July 2023, and November 2023, Tenant owes Rent in the amount of
$439,666.51. Jones Decl., ¶17.
Tenant objects to most of the
Declaration of Sam Jones supporting Landlord’s application. Opp. at 6-8.
Strict compliance is required with statutory requirements for affidavits
for attachment (Anaheim National Bank v. Kraemer, (1932) 120 Cal.App.
63, 65), and technical defects in a declaration for failure to comply with CCP
section 2015.5 precludes its use as an evidentiary document. CCP §482.040 (facts stated in affidavit must
be set forth with particularity); Witchell v. Korne, (1986) 179
Cal.App.3d 965, 975. The court must
apply the same evidentiary standard to the declarations in an attachment
hearing as to a case tried on oral testimony.
VFS Financing, Inc. v. CHF Express, LLC, (2009) (C.D. Cal.) 620
F.Supp.2d 1092, 1096-97. The declarant
must show personal knowledge of the relevant facts, and such evidence must be
admissible and not objectionable. Id. All documentary evidence, including contracts
and canceled checks, must be presented in admissible form, and admissibility as
non-hearsay evidence or exception to the hearsay rule, such as the business
records exception. Lydig
Construction, Inc. v. Martinez Steel Corp., (2015) 234 Cal.App.4th
937, 944; Pos-A-Traction, Inc., v. Kepplly-Springfield Tire Co., (C.D.
Cal. 2000) 112 F.Supp.2d, 1178, 1182.
For business records, evidence should be presented to establish that the
record was made in the regular course of business, at or near the time of the
act or event, and the custodian of records or other qualified witness must
identify the record and its mode of preparation, as well as the sources of
information and method and time of preparation.
Id.
The court need not rule on all of
Tenant’s objections because it agrees that the Jones declaration is deficient. Jones states that he is Landlord’s authorized
agent who assists in property management and tenant relations (¶¶ 2-3), but
Tenant is correct that he provides no foundation for his agency such as corporate
employee, broker, realtor, or agent by written agreement. Opp. at 6.
Thus, he does not show how he has personal knowledge of the Lease
documents and Tenant payments.
Jones also concludes (¶¶11-17) that
Base Rent and Additional Rent is owed without any supporting documentation or
calculation of each monthly Base Rent due, partial payment, Additional Rent due
as estimated, and reconciliation. Tenant
correctly objects to these failures.
Opp. at 7.
Tenant further shows that
Jones errs in stating (¶8) that the Based rent is $9000 commencing September 1,
2021 when Exhibit A shows it to be $15,000 commencing September 1, 2015, and in
stating (¶10) that the Based Rent is $20,323.11 but actually was $20,232.11. Opp. at 7.[1]
Because of the objectionable
supporting evidence, Landlord fails to show that its claim is readily
ascertainable or a probability of success.[2]
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). Tenant suggests that
Landlord seeks recovery for the improper purpose of preventing exercise of
Tenant’s option to extend the Lease another five years. Herczeg Decl., ¶23. This argument is insufficiently
supported. Landlord need not seek
attachment to deny Tenant a Lease extension; its lawsuit does so.
E. Conclusion
Landlord’s
application is insufficiently supported and is denied.
[1]
Landlord seeks estimated attorney fees of $90,000 and estimated costs of
$10,000. Shakouri Decl., ¶13. These conclusions also lack foundation and
are disallowed.
[2]
The court need not address Tenant’s force majeure defense, which is raised only
in the Declaration of Kitti Herczeg and not in the opposition itself.