Judge James C. Chalfant, Case Number: 24STCV31332, Date: 2025-02-13 Tentative Ruling

Plaintiff NFS Leasing, Inc. (“NFS”) applies for right to attach orders against Defendants Newport Whaler LLC (“Newport Whaler”), Pier House, LLC (“Pier House”), Santa Monica Whaler, LLC (“Santa Monica Whaler”), and Michael Dobson (“Dobson”).

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

A. Statement of the Case

1. The Complaint

Plaintiff NFS filed the Complaint on November 26, 2024 against Defendants Newport Whaler, Pier House, Santa Monica Whaler, and Dobson for (1) breach of the master equipment lease as to Newport Whaler, (2) breach of personal guaranty as to Dobson, (3) breach of corporate guaranty as to Pier House, (4) breach of corporate guaranty as to Santa Monica Whaler, and (5) claim and delivery. The Complaint alleges in pertinent part as follows.

On or about October 13, 2022, Newport Whaler, as lessee, executed Master Equipment Lease Number 2022-0298 (the “Master Lease”) in favor of NFS, as lessor, whereby Newport Whaler agreed to lease certain equipment (the “Equipment”) described in Schedule 4, Schedule 5, and Schedule 6 to the Master Lease (collectively, with all schedules, amendments, or addenda, the “Lease Agreement”).

In connection with the execution of the Lease Agreement, on or about October 18, 2022, Dobson, who is the owner of Newport Whaler, executed a Personal Guaranty and Security Agreement (the “Dobson Guaranty”). Further, on or about October 19, 2022, Dobson, as owner of Pier House and Santa Monica Whaler, executed a Corporate Guaranty Agreement for each (the “Pier House Guaranty” and the “Santa Monica Whaler Guaranty”, respectively).

On or about April 12, 2023, in order to secure the due and punctual payment of all of the obligations of Newport Whaler, Dobson, as owner of Newport Whaler, executed a Security Agreement.

Newport Whaler breached its Lease Agreement and Security Agreement, and Pier House, Santa Monica Whaler, and Dobson breached their respective Guaranty Agreements.

On or about October 7, 2024, NFS sent a notice of past due payment and default (the “Default Notice”) to Newport Whaler with copies to Dobson, Pier House, and Santa Monica Whaler. Despite demand, Defendants have failed and refused to repay NFS the amounts due under the Lease Agreement. As a result of the defaults, NFS is entitled to accelerate and declare immediately due and payable all sums due and to become due under the Lease Agreement.

On the first through fourth causes of action, NFS prays for damages respectively against Newport Whaler, Dobson, Pier House, and Santa Monica Whaler in the principal sum of at least $775,590.35, with continuing interest, fees, costs and expenses, and other charges as allowed by the Lease Agreement.

On the fifth cause of action, NFS prays for possession of all Equipment and collateral in which NFS has a security interest.

NFS also prays for costs of suit, reasonable attorneys’ fees, and such other and further relief as the Court may deem just and proper.

2. Course of Proceedings

A proof of service on file show that Newport Whaler was served with Summons, Complaint, and moving papers by substituted service on December 29, 2024, effective January 9, 2025.

A proof of service on file show that Santa Monica Whaler was served with Summons, Complaint, and moving papers by substituted service on December 29, 2024, effective January 9, 2025.

A proof of service on file show that Pier House was served with Summons, Complaint, and moving papers by substituted service on December 29, 2024, effective January 9, 2025.

A proof of service on file shows that Dobson was served with Summons, Complaint, and the moving papers on December 29, 2024.

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 or about October 13, 2022, Newport Whaler, as lessee, executed the Master Lease in favor of NFS, as lessor, whereby Newport Whaler agreed to the terms pursuant to which it would lease the Equipment. Calumby Decl., ¶5, Ex. A. Pursuant to the Lease Agreement, Newport Whaler agreed: (1) to pay to NFS periodic monthly rent for the Equipment; and (2) if any payment was not received within five days of when due, Newport Whaler would be required to pay a late charge of $250 for administrative costs plus interest at the Late Payment Rate of 1.5% per month on any overdue amount. Calumby Decl., ¶6, Ex. A, p. 1 (¶¶ 1.1, 2.2). NFS perfected its security interest in the Equipment by filing UCC-1 financing statements with the Secretary of State. Calumby Decl., ¶15, Ex. B.

In connection with the Lease Agreement, Dobson executed a Personal Guaranty and Security Agreement. Dobson, as owner of Pier House and Santa Monica Whaler, also executed Corporate Guarantee Agreements for Pier House and Santa Monica Whaler (collectively, “Guaranties”). Calumby Decl., ¶¶ 19, 26, 30, Exs. E, G, H. Under the Guaranties, Dobson, Pier House, and Santa Monica Whaler guaranteed NFS full payment of all obligations under the Lease Agreement. Calumby Decl., ¶45.

To secure its obligations to NFS under the Lease Agreement, Newport Whaler executed and delivered to NFS a Security Agreement. Calumby Decl., ¶16, Ex. C. Pursuant to the Security Agreement, Newport Whaler granted to NFS a continuing security interest in Newport Whaler’s assets, including the collateral therein described. Calumby Dec., ¶¶16-17, Ex. C. NFS perfected its security interest in the Newport Whaler Collateral by filing a UCC-1 financing statement with the Secretary of State. Calumby Dec., ¶18, Ex. D, UCC-1.

The amount financed under Schedule 4 of the Lease Agreement was $561,059.25 and Newport Whaler agreed to pay NFS 36 monthly payments pursuant to Schedule 4. Calumby Decl., ¶ 7, Ex. A. The amount financed under Schedule 5 was $189,607.78 and Newport Whaler agreed to pay NFS 36 monthly payments pursuant to Schedule 5. Calumby Decl., ¶ 8, Exhibit A. The amount financed under Schedule 6 was $83,965.99 and Newport Whaler agreed to pay NFS 36 monthly payments pursuant to Schedule 6. Calumby Decl., ¶ 9.

The Lease Agreement states in relevant part that a “default” or an “Event of Default” shall be deemed to have occurred thereunder if Lessee fails to pay when due any Rent, including any interest thereon, or any other amount due hereunder, and such failure continues unremedied for a period of 5 days after written notice thereof from Lessor to Lessee. Calumby Decl., ¶ 10, Ex. A, p.3 (¶ 9). Upon default, NFS may accelerate and declare immediately payable all sums due and to become due, take immediate possession of the Equipment without prejudice to any other remedy or claim under the Lease Agreement, and exercise any other right or remedy which may be available to NFS under the Uniform Commercial Code or any other applicable law. Calumby Decl., ¶ 11, Ex. A, pp. 3-4 (¶10).

Newport Whaler also agreed that it waives all possessory rights or interests which it may have to any Equipment upon the occurrence of any Event of Default. Calumby Decl., ¶12, Ex. A, pp. 3-4 (¶10). Newport Whaler further agreed that NFS shall be entitled to injunctive relief against Newport Whaler to recover possession of such Equipment if Newport Whaler refuses or otherwise fails to assemble and allow NFS access to any Equipment NFS seeks to repossess. Calumby Decl., ¶ 13, Ex. A, pp. 3-4 (¶10).

The Lease Agreement also states that its remedies shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity. Lessee shall be liable for all costs, expenses and reasonable attorneys’ or other collection fees incurred by Lessor in enforcing the Lease Agreement or pursuing any remedy provided to Lessor hereunder. Calumby Decl., ¶14, Ex. A, pp. 3-4 (¶10).

Newport Whaler defaulted on its obligations under the Lease Agreement by failing to make payments as required. Calumby Decl., ¶34. On or about October 7, 2024, NFS sent, or caused to be sent, a notice of past due payment and default (the “Default Notice”) to Newport Whaler with copies to Dobson, Pier House, and Santa Monica Whaler. Calumby Decl., ¶35, Ex. I.

Despite demand, Newport Whaler, Dobson, Pier House, and Santa Monica Whaler neglected, failed, and refused to repay NFS the amounts due under the Lease Agreement and Guaranties. Calumby Decl., ¶36. As a result of the default, NFS is entitled to accelerate and declare immediately due and payable all sums due and to become due under the Lease Agreement. Calumby Decl., ¶37, Ex. A, (¶10).

Pursuant to the terms of the Lease Agreement, upon default, Newport Whaler is required either to return the Equipment to NFS or to pay NFS its fair market value. Calumby Decl., ¶38, Ex. A, pp. 3-4 (¶10). To date, Newport Whaler has not returned any Equipment to NFS. Calumby Decl., ¶39.

Pursuant to the terms of the Lease Agreement and Guaranties, Newport Whaler, Dobson, Pier House, and Santa Monica Whaler are jointly and severally obligated to NFS in the total amount of at least $775,590.35, exclusive of collection costs, accruing interest, and attorneys’ fees. Calumby Decl., ¶¶ 43-44, Ex. J.

The Fair Market Value calculation for the Equipment is based on (1) NFS’s experience with selling similar equipment, (2) the equipment at issue is newer than the equipment that was sold in NFS’s prior experience, (3) the Lease Agreement has, as of the filing of the Complaint, 20 months remaining (for Schedules 4 and 5) and 25 months remaining (for Schedule 6), and (4) an assumption that none of the equipment has been removed by Defendants. Calumby Decl., ¶44.j.

Plaintiff NFS applies for right to attach orders against Defendants Newport Whaler, Pier House, Santa Monica Whaler, and Dobson for $775,590.35. Defendants have not opposed.

NFS’ claims are based on the Lease Agreement and Guaranties, and the $775,590.35 sought 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., (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 $775,590.35 owed is readily ascertainable from the Lease Agreement and includes the present value of accelerated rent and present value of the Equipment.

NFS has shown a probability that Newport Whaler is in default on its payment obligations under the Lease Agreement, and that Dobson, Pier House, and the Santa Monica Whaler are in default on their respective Guaranties. NFS provides evidence that the amount owed, as of November 15, 2025, is $775,590.35. Defendants are jointly and severally obligated to NFS for this amount, which is exclusive of collection costs in the present action, accruing interest, and attorneys’ fees.

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

NFS’ claim based on the Dobson Guaranty arises from Dobson’s ownership and operation of Newport Whaler, a restaurant. See Calumby Decl., ¶20, Ex. A, p. 7. This is a commercial claim on which attachment may be based.

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.

NFS seeks to attach all of the property of Dobson individually and in his capacity as Trustee of the MJD Trust dated June 21, 2006 for which a method of levy is provided, including a list of categories. App., Attachment 9.c. This complies with CCP section 484.020(e).

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). NFS seeks attachment for a proper purpose.

The applications for right to attach orders are granted against each Defendant in the amount of $775,590.35. No writ shall issue for a Defendant until Plaintiff posts a $10,000 undertaking for that Defendant.

[1] These itemized damages are calculated through November 15, 2024.

Item[1]	Amount
Past Due Payments	$67,902.68
Interest Accrued on Past Due Payments	$1,016.08
Administrative Collection Fees	$2,000.00
Remaining Contractual Payments	$626,858.60
Less 5% Present Value Discount on Remaining Payments	($27,354.80)
Fair Market Value of Unreturned Schedule 4 Equipment	$99,000.00
Fair Market Value of Unreturned Schedule 5 Equipment	$34,000.00
Fair Market Value of Unreturned Schedule 6 Equipment	$15,000.00
Less 5% Present Value Discount on Fair Market Value of Equipment	($12,631.61)
Termination Filing Fees	$375.00
Less Advance Payments Applied	($30,575.60)
Total Owed Exclusive of Collection Costs in Present Action, Accruing Interest, and Attorneys’ Fees	$775,590.35