Judge James C. Chalfant, Case Number: 24STCV13312, Date: 2024-11-12 Tentative Ruling

Bouquet Plaza SDS, LLC v. 4’s A Charm, LLC, LA Kids Couture Inc., Janell Costello, Daniel H. Lawrie, Christen Lawrie, 24STCV13312

Tentative decision on applications for right to attach orders: granted

Plaintiff Bouquet Plaza SDS, LLC (“Bouquet Plaza” or “Landlord”) apply for right to attach orders against Defendants LA Kids Couture Inc. (“LA Kids”), 4’s A Charm LLC (“Charm”), Janell Costello (“Costello”), Daniel H. Lawrie (“Daniel”), and Christen Lawrie (“Christen”) in the amount of $242,158.08.

The court has read and considered the moving papers (no opposition was filed) and renders the following tentative decision.

Landlord filed the Complaint against Defendants LA Kids, Charm, Costello, Daniel, and Christen on May 29, 2024 alleging claims for breach of lease and breach of guaranty. The Complaint alleges in pertinent part as follows.

On or about February 14, 2017, Plaintiff Bouquet Plaza, as landlord, and LA Kids, as tenant, entered into a written Standard Industrial/Commercial Multi-Tenant Lease - Net (the “Lease”) (a) for an initial term of six years and five months, (b) for real property located at 26063 Bouquet Canyon Road, Santa Clarita, CA 91350, in an approximately 3,100 square foot retail space in a shopping center (the “Premises”).

In connection with the execution of the Lease, to induce Landlord to enter into the Lease, on or about March 7, 2017, Defendant Costello executed a written Guaranty of Lease (the “First Guaranty"), whereby Costello agreed to guarantee Tenant’s prompt payment of all sums payable by Tenant and the full performance of Tenant’s obligations under the Lease.

As more fully set forth in the Lease, Tenant is required to pay rent under the Lease every month. The Lease, at Section 1.5 provides, “Base Rent: $5,735.00 per month (‘Base Rent’), payable on the 1st day of each month commencing Sept. 1, 2017…”. Pursuant to Section 50 of the Addendum the monthly Base Rent was increased to $6,647.68 for Months 54-65, and increased to $6,665.83 for Months 66-77.

On or about May 7, 2019, LA Kids, as assignor, and Charm, as assignee, entered into the Assignment of Lease with Consent of Landlord (the “Assignment”), whereby the Lease was assigned from LA Kids to A Charm.

In connection with the execution of the Assignment, in order to induce Landlord to enter into the Assignment, on or about May 7, 2019, Defendant Christen agreed to guarantee Tenant’s prompt payment of all sums payable by Tenant and the full performance of Tenant’s obligations under the Lease.

As of March 2024, Tenant has failed to pay the Base Rent for the months of December 2021 to August 2023 in the amount of $119,854.34.

On or about September 18, 2024, Landlord served on Tenant a demand for payment of rent pursuant to the Lease.

On or about March 22, 2024, Landlord’s counsel served on Tenant a second demand for payment of rent.

Notwithstanding the requirements of the Lease, and despite written demand, Tenant failed to deliver the Rent to Plaintiff and continues to fail to pay all of the Rent due thereafter.

On June 28, 2024, Defendants Charm, Daniel, and Christen answered the Complaint.

On July 9, 2024, Defendants LA Kids and Costello answered the Complaint. On July 12, 2024 they filed a Cross-Complaint against Cross-Defendants Charm, Daniel, and Christen.

On August 20, 2024, Defendants Charm, Daniel, and Christen answered the Cross-Complaint.

Proof of service on file show that defense counsel were electronically served with the instant applications on October 4, 2024.

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.

On or about February 14, 2017, Plaintiff Bouquet Plaza, as landlord, and LA KIDS, as tenant, entered into a written Standard Industrial/Commercial Multi-Tenant Lease - Net for (a) an initial term of six years and five months, (b) for real property at 26063 Bouquet Canyon Road, Santa Clarita, CA 91350, in an approximately 3,100 square foot retail space located in a shopping center. Goodman Decl., ¶2, Ex. A.

On or about May 7, 2019, LA Kids, assignor, and Charm, as assignee, entered into the Assignment of Lease with Consent of Landlord, whereby the Lease was assigned from LA Kids to Charm., with Landlord providing consent of the Assignment. Goodman Decl., ¶3, Ex. B.

To induce Landlord to enter into the Lease, on or about March 7, 2017, Defendant Costello executed a guaranty whereby Costello agreed to guarantee Tenant’s prompt payment of all sums payable by Tenant and the full performance of Tenant’s obligations under the Lease. Goodman Decl., ¶4; Goodman Decl., Ex. C.

To induce Landlord to enter into the Assignment, on or about May 7, 2019, Defendant Daniel executed a guaranty whereby Daniel agreed to guarantee the Tenant’s prompt payment of all sums payable by Tenant and the full performance of Tenant’s obligations under the Lease. Goodman Decl., ¶5; Goodman Decl., Ex. D.

To induce Landlord to enter into the Assignment, on or about May 7, 2019, Christen agreed to guarantee Tenant’s prompt payment of all sums payable by Tenant and the full performance of Tenant’s obligations under the Lease. Goodman Decl., ¶6.

As set forth in the Lease, Tenant is required to pay rent under the Lease every month. Goodman Decl., ¶7. Specifically, pursuant to Section 4.3, the “Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction.” Goodman Decl., ¶7; Goodman Decl., Ex. A. Section 1.5 provides: “Base Rent: $5,735.00 per month, payable on the 1st day of each month commencing Sept. 1, 2017…” Goodman Decl., ¶8; Goodman Decl., Ex. A. Section 50 of the Addendum increased the monthly Base Rent to $6,647.68 for Months 54-65, and thereafter increased to $6,665.83 for Months 66-77. Goodman Decl., ¶9.

As of March 2024, Tenant has failed to pay the Base Rent for the months of January 2022 to August 2023 in the total amount of $89,419.69. Goodman Decl., ¶10.

The Lease at Section 4.2 states that “Lessee shall pay to Lessor during the term hereof, in addition to the Base Rent, Lessee's Share of all Common Area Operating Expense…” Goodman Decl., ¶11. The Tenant has failed to pay the Common Area Operating Expenses for charges for the months of January 2022 to August 2023 in the total amount of $30,434.66. Goodman Decl., ¶12.

Pursuant to Paragraph 4 of the Lease, “[a]ll monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent (“Rent”).” Goodman Decl., ¶13, Ex. A.

Tenant has been delinquent on Rent payments since December 2021. Goodman Decl., ¶14. For the months of December 2021 to August 2023, Tenant owes unpaid Rent in the amount of $119,854.24. Goodman Decl., ¶15.

On or about September 18, 2024, Landlord served on Tenant a demand notice pursuant to the Lease. Goodman Decl., ¶16. The notice advised that Tenant had failed to pay Rent for the months of December 2021 to August 2023 in the aggregate amount of $119,854.34 and that, if Tenant did not pay the amount due within ten business days, Tenant would be in default on the Lease, and Landlord would be entitled to proceed against Tenant for all unpaid Rent, late fees, and attorneys’ fees and costs incurred. Goodman Decl., ¶16, Ex. E.

On or about March 22, 2024, Landlord’s counsel served on Tenant the second demand notice pursuant to the Lease. Goodman Decl., ¶17. The notice advised that Tenant had failed to pay Rent for the months of January 2022 to August 2023 in the aggregate amount of $119,854.34 and that if Tenant did not pay the amount due within ten business days, Tenant would be in default of the Lease and Landlord would be entitled to proceed against Tenant for all unpaid Rent, late fees, and attorneys’ fees and costs incurred. Goodman Decl., ¶17, Ex. F.

Notwithstanding the written demands, Tenant failed to deliver, and continues to fail to pay, the Rent due. Goodman Decl., ¶18.

“Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $100, whichever is greater. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly in advance.” Goodman Decl., ¶19, Ex. A.

As Tenant failed to remit Rent from December 2021 to August 2023, Tenant has been assessed late charges in the total amount $22,303.74. Goodman Decl., ¶20.

“If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule but shall be such as to fully reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).” Goodman Decl., ¶21, Ex. A.

Landlord’s law firm charges competitive rates at $450 per hour for partners, $225-400 per hour for associates, and $95 per hour for paralegals. Shakouri Decl., ¶4. Landlord’s attorney estimates attorney fees in this case of $90,000 and costs of $10,000, which includes filing fees, fees for the writ of attachment, and costs to serve Defendants. Shakouri Decl., ¶5.

Plaintiff Landlord seeks right to attach orders against Defendants LA KIDS, Charm, Daniel, Christen, and Costello in the amount of $242,158.08, which consists of $119,854.34 in Rent, $22,303.74 in late charges, $10,000 in estimated costs, and $90,000 in estimated attorney fees.

Plaintiff Landlord’s claim is a claim for money based upon a debt arising out of express contract in the Lease and Guaranties and it exceeds $500.

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).

The amount sought for attachment is $242,158.08, which consists of $119,854.34 in Rent, $22,303.74 in late charges, $10,000 in estimated costs, and $90,000 in estimated attorney fees. The Rent and late charges are calculated in a September 18, 2023 demand notice with an Open Receivables attachment and a 2023 Operating Expense Reconciliation. The estimated attorney fees and costs are supported by attorney declaration. The $242,158.08 sought is fixed and readily ascertainable from the Lease.

On or about February 14, 2017, Plaintiff Bouquet Plaza, as landlord, and LA KIDS, as tenant, entered into the Lease. Goodman Decl., ¶2, Ex. A. On or about May 7, 2019, LA Kids, assignor, and Charm, as assignee, entered into the Assignment of Lease with Consent of Landlord, whereby the Lease was assigned from LA Kids to Charm. Goodman Decl., ¶3, Ex. B.

On or about March 7, 2017, Defendant Costello executed a guaranty of Tenant’s prompt payment under the Lease. Goodman Decl., ¶4, Ex. C. On or about May 7, 2019, Defendants Daniel and Christen executed guaranties whereby they agreed to guarantee the Tenant’s prompt payment of all sums payable by Tenant under the Lease. Goodman Decl., ¶¶ 5-6; Ex. D.

As set forth in the Lease, Tenant is required to pay rent under the Lease every month. Goodman Decl., ¶7. Tenant has been delinquent on Rent payments since December 2021. Goodman Decl., ¶14. For the months of December 2021 to August 2023, Tenant owes unpaid Rent in the amount of $119,854.24. Goodman Decl., ¶15.

Notwithstanding the written demands, Tenant failed to deliver, and continues to fail to pay, the Rent due. Goodman Decl., ¶18. As Tenant failed to remit Rent from December 2021 to August 2023, Tenant has been assessed late charges in the total amount $22,303.74. Goodman Decl., ¶20.

Defendants provide no opposition to this evidence and Landlord has shown a probability of success.

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 only to attach Rent, late charges, and attorney fees and costs that will be due and seeks attachment for a proper purpose.

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).

Although Landlord’s memorandum does not address this issue, Guarantors are officers of the entity Defendants. Costello is President of LA Kids, Daniell is owner of Charm, and Christen is a member of Charm. Thus, each Guarantor entered into their Guaranty as part of their business and the attachment against him or her 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.

Landlord seeks attachment of the individual Defendants’ identified property in compliance with this authority.

The applications for right to attach orders are granted. No writ shall issue against any Defendant until a $10,000 bond has been posted for that Defendant.