Judge James C. Chalfant, Case Number: 24STCV20902, Date: 2025-01-23 Tentative Ruling

Plaintiff 9000 Arlington Ave LLC (“Arlington”) applies for a right to attach order against Defendant, Karina Castillo Romero (“Romero”) in the amount of $1,350,000.

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

A. Statement of the Case

1. Complaint

On August 19, 2024, Plaintiff Arlington filed the Complaint against Defendants Ultimate Floors, Romero, City Plumbing and Rooter, Andy Bernabe Torres dba Ultimate Electrical, and Business Alliance Insurance Company, alleging claims for breach of contract, negligence, breach of warranty, recovery of payments to unlicensed contractor (Business and Professions Code §7031), and recovery on license bond. The Complaint alleges in pertinent part as follows.

On November 8, 2023, Arlington entered a contract with Defendants for construction work to be performed on its property. The initial contract took the form of Invoice No. 1072, which constituted the written contract between Plaintiff and Defendants in exchange for payment of the amount of $219,740.09. Compl., ¶12.

Soon after entering into the Contract, Defendants hired subcontractors to perform the work and demanded a down payment of $84,422.70. Compl., ¶13. By April of 2024, Arlington had paid Romero (individually) and Ultimate Floors a total of $524,115.54. Defendants were unlicensed contractors from the date of the Contract and while the work was performed. Compl., ¶37.

On or about April 13, 2024, Defendant Romero essentially stopped all further work on the property. Compl., ¶16. There were numerous defects in the work performed by Defendants and their subcontractors. Compl., ¶16. Since Defendants abandoned the project, the amounted needed repair the work performed by Defendants to be not less than $750,000. Compl., ¶37.

Arlington seeks disgorgement and return of all sums paid to for the work, pursuant to Business and Professions Code section 7031, in a sum no less than $600,000.

Arlington also seeks compensatory damages of not less than $750,000.00 which includes costs to repair damage caused by faulty installation of flooring, plumbing and electrical systems, faulty roofing work, improperly manufactured, assembled and installed custom cabinetry, all of which has and is causing damage to Arlington’s real and personal property including interior and exterior walls, roofing and exterior components which have been damaged by water intrusion, damaged wood and stone flooring, faulty windows, and cabinets, costs to complete the work, excess living expenses, including rent and utilities for alternative housing, costs to formulate and implement a plan of repair, diminution in value, architectural, engineering costs, planning and permitting costs, legal expenses, including attorney’s fees and costs, according to proof at trial.

2. Cross-Complaint

Defendant Andy Bernabe Torres dba Ultimate Electrical (“Ultimate Electrical”) filed a Cross-Complaint against Arlington on October 21, 2024, amended on January 13, 2025, alleging breach of contract and common counts for goods and services rendered. The amended Cross-Complaint alleges in pertinent part as follows.

Ultimate Electrical is a licensed electrical contractor. During the periods alleged in the Complaint, Ultimate Electrical provided electrical contractor services at the Property consisting of labor, equipment, and materials in the sum of no less than $68,000. Cross-Compl., ¶6.

At all times Ultimate Electrical was instructed and authorized to complete the involved electrical contracting work by Cross-Defendants. At no time did Arlington complain that Ultimate Electrical’s work was substandard or otherwise “defective” as alleged in the Complaint. Cross-Compl., ¶7. Ultimate Electrical’s work was within industry standards and complied with all applicable building codes and was approved by all involved governmental departments.

Cross-Defendant Arlington failed and refused to pay the $68,000 due to Ultimate Electrical. Cross-Compl., ¶7. Ultimate Electrical has performed all its obligations under the parties’ agreement except to the extent such obligations have been excused as a result of Cross-Defendants’ breach. As a proximate cause of Cross-Defendants’ material breach of the agreement, Ultimate Electrical has suffered general, special and consequential damages in a sum to be proved at trial, but believed to exceed $68,000. Cross-Compl., ¶11.

3. Course of Proceedings

On August 21, 2024, Arlington served Business Alliance Insurance Company with the Complaint and Summons by substitute service, effective September 1, 2024.

On August 23, 2024, Arlington served Ultimate Floors, Romero, and Andy Bernabe Torres with the Complaint and Summons by substitute service, effective September 9. 2024.

On August 27, 2024, Arlington served City Plumbing & Rooter with the Complaint and Summons by substitute service, effective September 9, 2024.

On October 21, 2024, Andy Bernabe Torres filed an Answer and the Cross-Complaint and served Arlington by email.

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 November 8, 2023, Arlington, through managing member Cole Moscatel, entered into a contract with Defendants for construction work to be performed on its property. Moscatel Decl., ¶¶ 1, 3. Invoice No. 1072 constituted the initial written contract between Arlington and Defendants in exchange for payment of the amount of $219,740.09. Moscatel Decl., ¶3, Ex. 1.

Soon after entering the Contract, Defendants proceeded to hire subcontractors to perform the work and demanded a down payment of $84,422.70. Moscatel Decl., ¶4, Ex. 2. By April of 2024, Arlington had paid Romero (individually) and Ultimate Floors a total of $524,115.54. Moscatel Decl., ¶6, Ex. 4.

On or about April 13, 2024, Romero essentially stopped all further work on the property. Moscatel Decl., ¶7. During this work stoppage, Arlington discovered numerous defects in the work performed by Defendants and their subcontractors. Moscatel Decl., ¶7. Arlington also discovered that Defendants were unlicensed contractors from the time of contracting and while the work was performed. Moscatel Decl., ¶8, Ex. 5.

After Defendants abandoned the project, Arlington retained the services of a construction expert and obtained estimates from other contractors to repair the work performed by Defendants, which is believed will cost not less than $750,000. Moscatel Decl., ¶9.

As Defendants did not pull permits for any of the work performed at the property, Arlington has received a Notice of Violation from the City of Calabasas requiring that Arlington tender fees, complete permit applications and submit a complete set of Rehabilitation Building Permit Construction Plans for review. Moscatel Decl., ¶¶ 9, 10, Ex. 6.

Romero is a principal of Ultimate Floors. Romero Decl., ¶1. Arlington paid $490,000 for work that Romero completed at Arlington’s property during the period October, 2023 through April 2024. Romero Decl., ¶2. Romero fully and competently performed all requested construction work. Romero Decl., ¶2. The $490,000 was used to pay for labor and materials, primarily replacing the flooring in the approximately 11,000 square foot luxury residential property. Romero spent no less than $250,000 on materials. Romero Decl., ¶2. The balance was spent on labor, including packing the house’s entire contents, moving and storage, and related expenses. Romero Decl., ¶2.

Defendant Romero claims a homestead exemption on the property 8656 Indiana Ave., Riverside, CA, which is her personal residence. Romero Decl., ¶3. Romero does not own 8644 Indiana Ave., Riverside, CA. Romero Decl., ¶3. Romero does not have title to 3230 Cherokee St., Riverside, CA 92504, which is owned by her husband Hector Romero as sole and separate property. Romero Decl., ¶3. He has owned the property 21 years and they have been separated since 2019. Romero Decl., ¶3.

Plaintiff Arlington seeks a right to attach order against Defendant Romero for $1,300,000. Defendants oppose and Romero makes a claim of exemption.

Arlington’s claim is based on the Contract. On November 8, 2023, Arlington, through managing member Cole Moscatel, entered into the Contract with Ultimate Flooring for construction work to be performed on its property. Moscatel Decl., ¶¶ 1, 3. Invoice No. 1072 was the initial invoice between the parties for $219,740.09. Moscatel Decl., ¶3, Ex. 1. Upon receipt of invoices, Arlington paid Ultimate Floors a total of $524,115.54. Moscatel Decl., ¶6, Ex. 4.

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).

As stated, Arlington paid Ultimate Floors’ invoices totaling $524,115.54. Moscatel Decl., ¶6, Ex. 4. This amount is readily ascertainable from the Contract.

However, Arlington seeks an additional $750,000 in damages based on expert estimates to repair the work performed by Defendants. Moscatel Decl., ¶9. This amount is not readily ascertainable from the Contract and is disallowed.

Arlington notes that Business & Professions (“B&P”) Code section 7031 permits a plaintiff to disgorge all monies paid to an unlicensed contractor for work performed due solely to the unlicensed status of the contractor. B&P Code section 7031 is intended to discourage persons who have failed to comply with the licensing law from offering or providing their unlicensed services. San Francisco CDC LLC v. Webcor Construction LP, (2021) 62 Cal.App.5th 266, 277. BP Code section 7031 is a strict liability statute; disgorgement is permitted regardless of the quality of the work performed. Id. The statute of limitations for a disgorgement claim accrues within one year after the unlicensed contractor completes the work pursuant to Code of Civil Procedure section 340(a). Id. at 279. Mem. at 9-10.

Arlington argues that Ultimate Floors failed to hold an active California Contractor’s License when performing the work at the property. Ultimate Floors became licensed on or about March 12, 2024, just a month before abandoning the work, and then solely as a limited specialty clean-up contractor, and not as a general contractor, or as a contractor holding a specialty classification. Moscatel Decl. ¶8, Ex. 5. As such, Ultimate Floors was unlicensed for the near entire duration that the work was being performed, for which Arlington paid Defendants no less than $600,000.00. Defendants commenced work in November of 2023 and Arlington filed its civil action in August of 2024, well within the one-year statute of limitations for disgorgement. Mem. at 10.

Where the law implies an obligation to return money paid, an implied contract justifies attachment. 6 Witkin, California Procedure, (5^th Ed. 2008) §60, p.71. Fraud furnishes a foundation upon which rests the rescission of a promise or obligation, resulting in an implied-in-law contract to repay the funds. Filipan v. The Television Mart, (1951) 105 Cal.App.2d 404 (attachment proper where plaintiff induced by the defendants’ false representations to buy one-half of their business, forming foundation for a promise or obligation to return the money on a contract theory). Misrepresentation or concealment of a material fact is ground for rescission. See Santa Clara Waste Water Co. v. Allied World Nat’l Assur. Co., (“Santa Clara Waste”) (2017) 18 Cal.App.5th 881, 886-87 Attachment is proper where the plaintiff is entitled to rescission. Id. The law implies a promise to return the consideration paid where a transaction is rescinded. Klein v. Benaron, (1967) 247 Cal.App.2d 607, 608-09 (finding attachment proper for plaintiff fraudulently induced to make loan). Similarly, Arlington’s B&P Code section 7031 claim creates an implied contract supporting attachment.

The problem is, however, that Arlington’s attachment claim is against Ultimate Floors, not Romero. Arlington entered into the Contract with Ultimate Floors, which is an LLC. Moscatel Decl., Ex. 1. Strict compliance is required with statutory requirements for affidavits for attachment (Anaheim National Bank v. Kraemer, (1932) 120 Cal.App. 63, 65), and facts stated in affidavit must be set forth with particularity. CCP §482.040; 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. All of the invoices, and Arlington’s payments, were to Ultimate Floors. Moscatel Decl., Exs. 3-4. Nowhere does Arlington show that an LLC principal is statutorily liable for unlicensed services under B&P Code section 7031. Nor does Arlington show under the alter ego doctrine of piercing the corporate veil applies such that it would be inequitable for Romero not to be personally liable for Ultimate Floors debt.

It is true that Defendants do not raise this defense, and Romero comes close to admitting that Ultimate Floors is her alter ego. See Romero Decl., ¶2. Nonetheless, attachment is a pre-judgment remedy and the court will not grant it where a prima facie case has not been made.

If Romero is personally liable, Arlington’s claim is a commercial claim arising out of Romero’s conduct of a business.

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). Arlington seeks attachment for a proper purpose.

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.

Arlington seeks to attach a specific real property purportedly owned by Romero. Although she denies ownership of two properties (Romero Decl., ¶3), the description is adequate.

The application for a right to attach order is denied. There is no need to rule on Romero’s claim of exemption.

[1] A defendant who opposes issuance of attachment 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). Defendants’ opposition was due on January 15, 2025 and was untimely filed on January 16, 2025. Defense counsel explains this was due to a calendaring error. Benice Decl., ¶2. Arlington fails to show prejudice and the court has considered the untimely opposition.