Judge: James C. Chalfant, Case: 24STLC02143, Date: 2024-07-16 Tentative Ruling

Case Number: 24STLC02143    Hearing Date: July 16, 2024    Dept: 85

            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.

            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.

            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.

C. Statement of Facts[1]

1. MLG’s Evidence

On or about February 22, 2021, 21 Choices and Husson retained MLG to perform legal services in connection with the Lawsuit.  Mashian Decl. ¶3, Ex. 1.  21 Choices is a California limited liability company, and its manager is Husson.  Mashian Decl., ¶¶3, 14, RJN Ex. 101.  Husson signed the Retainer Agreement, in his capacity as manager of 21 Choices and as an individual.  Mashian Decl., ¶3.  Brian Mashian, Esq. (“Mashian”), President of MLG, signed the Retainer Agreement on behalf of MLG.  Mashian Decl., ¶3.

Pursuant to Paragraphs 2 and 3 of the Retainer Agreement, Defendants agreed to pay MLG for legal services at the hourly rates stated and for all costs and expenses incurred by MLG in representing Defendants in connection with the matters described in the Retainer Agreement.  Mashian Decl. ¶¶4-5, Ex. 1.  MLG performed all conditions, covenants and promises required of MLG in accordance with the terms and conditions of the Retainer Agreement and performed legal services for Defendants.  Mashian Decl., ¶7.

During the months of February 2021 through January 2023, MLG represented Defendants in the Lawsuit and provided legal services and advice pursuant to the Retainer Agreement.  Mashian Decl., ¶¶7-8.  Defendants incurred legal fees and costs for which MLG issued invoices.  Mashian Decl., ¶9.  On or about April 10, 2023, MLG provided an invoice to Defendants, requesting payment for professional services rendered.  Mashian Decl., ¶9, Ex. 2.  While Defendants made payments toward their legal fees and costs, the April invoice reflects that there remains unpaid $19,116.54 in legal fees and costs.  Mashian Decl., ¶¶9-10, Ex. 2.

Despite demands, Defendants have failed and refused to pay the balance due in breach of the agreement between the parties. Mashian Decl., ¶10.

The debt owed by Defendants is not secured by real property.  Mashian Decl., ¶12.  Mashian is unaware of any past or pending bankruptcy of 21 Choices or Husson that has either stayed or discharged MLG’s claims against either of the Defendants.  Mashian Decl., ¶15. 

As of April 3, 2024, Defendants, jointly and severally, owe a total of $20,886.78 balance due under the Retainer Agreement, including interest (at the rate of 10% pursuant to the Retainer Agreement); $2,255 in legal fees and $420.34 in costs incurred in this case to date, plus $1,595 in estimated legal fees and $310 in estimated costs, for a total of $25,467.12.  Mashian Decl., ¶11; Stanton Decl., ¶5.

2. Defendants’ Evidence

21 Choices has served delicious cold desserts and other items in Old Town Pasadena for decades. The current location in Pasadena was to have been built out with certain modifications important to the flow of business – in particular a second door so customers could come in, make their selections, are served their orders, and have a convenient way to exit without getting in the way of incoming customers. There were other issues with the landlord.  21 Choices and Husson hired MLG to resolve these issues.  Husson Decl., ¶3.

Husson told MLG’s owner, Mashian, that he did not want to spend more than $20,000 and that if MLG wanted to bill more, or did bill more, he would find a different route towards resolving construction and build out issues with my company’s commercial landlord.  Husson Decl., ¶3.

As it turned out, Mashian and MLG did not follow Husson’s desires and kept 21 Choices in the dispute and kept sending bills that were paid up to at least $45,000.  MLG represented them so poorly and fraudulently that it owes the large amount of money it was paid ($45,000).  Husson Decl., ¶4.

Husson wanted Mashian to negotiate with the landlord to settle the lawsuit with the general contractor since the general contractor was the landlord’s contractor.  He thought the landlord had more leverage with the general contractor than 21 Choices and that there was no need to deal with the general contractor or litigate against him.  Based on Husson’s prior experience with Mashian when he worked at a big law firm, Buchalter Nemer Younger, Mashian knew leases yet never referred to 21 Choices’ lease even once.  Husson sent Mashian a detailed description of how much leverage 21 Choices had per section 2 of the lease for the landlord to complete the buildout that was never completed, Mashian made no comment as if he did not know the lease.  In hindsight, he was set on litigation in this case to bill us more money than a simple set of phone calls in negotiation with the landlord.  Husson Decl., ¶5.

The landlord did not like the general contractor and was upset with the general contractor for delaying the project. So, it was a slam dunk to go through a leasing lawyer like Mashian and, if necessary, he could use a litigator to respond to the lawsuit only since Husson told him he did not want a trial and wanted the lawsuit with the general contractor settled fast.  Mashian’s job to explore a landlord approach to resolve the construction issues and not to drive up litigation costs against the general contractor.  Husson Decl., ¶5.

The landlord sent Mashian a letter saying that the landlord was not aware 21 Choices had a permit for the side door.  Husson urged Mashian to use this opening to once again get side door installed, but he refused to respond to that letter from the landlord. That negligent failure left the landlord with the false impression that there was no urgency on installing the side door.  It was rude to the landlord and totally against our interest as the clients.  Husson Decl., ¶5.

Mashian was paid $5,000 in trust to 21 Choices by the general contractor for moneys owed to 21 Choices.  Mashian kept that money even though no money was owed to his firm at that time.  Husson Decl., ¶5.

Mashian’s declaration does not provide any invoice that shows the work done or when it was done, or the payments of $45,000 that his firm billed and was paid. There is no itemization of charges. Husson Decl., ¶6.

Mashian told Husson that he was an attorney who worked with transactions and was experienced with real estate and commercial leases, but did not do trials.  He assured Husson that his law firm had experienced trial lawyers to handle litigation. Husson and 21 Choices were prejudiced by the lack of trial experience.  Husson Decl., 7.

Mashian was told not to work more than $20,000 worth so that 21 Choices and Husson would have the option of changing the approach. They ignored these instructions for their own enrichment.  Husson Decl., ¶7.

3. Reply Evidence

In response, at no time prior to the execution of the Retainer Agreement did Husson communicate to Mashian that Defendants intended MLG’s representation to be for a purpose other than representing Defendants in the 21 Choices Lawsuit.  Mashian Reply Decl., ¶19.  Husson did not tell Mashian that he was entering the Retainer Agreement specifically to resolve issues with 21 Choices’ commercial landlord.  Mashian Reply Decl., ¶19.  The Retainer Agreement also applies to MLG’s representation of Defendants in other ancillary matters.  Mashian Reply Decl., ¶20. 

MLG provides copies of all invoices sent to Defendants showing in detail MLG’s legal fees and costs in providing services to Defendants from the inception of MLG’s representation of Defendants in February 2021 through January 2023.  Mashian Reply Decl., ¶21, Ex. 4.  These invoices also record, where appropriate, all payments made by Defendants.  Mashian Reply Decl., ¶21, Ex. 4.

The parties to the Retainer Agreement never agreed to cap MLG’s fees at $20,000.  Mashian Reply Decl., ¶22.  The Retainer Agreement states: “An estimate of fees, if any, is not a guarantee as actual fees will vary from any estimates given.”  Mashian Reply Decl., ¶22; Ex. 1, ¶6.  Defendants’ invoices show that Defendants had incurred over $20,000 by May 2021, but MLG’s representation of Defendants continued for another 19 months through the end of January 2023.  Mashian Reply Decl., ¶22, Ex. 4.

Although Husson asserts that he wanted MLG “to negotiate with the landlord to settle the lawsuit with the general contractor since the general contractor was the landlord’s contractor,” 21 Choices was suing its contractor, Guinart Construction, Inc. (“Guinart”), not 21 Choices’ landlord.  Mashian Reply Decl., ¶26.  MLG could not negotiate with a third party to effect a settlement of the 21 Choices Lawsuit; only Guinart could agree to a settlement.  Mashian Reply Decl., ¶26.

The two litigators who worked with Mashian on the case were not inexperienced attorneys.  Mashian Reply Decl., ¶25.  At the time MLG represented Defendants under the Retainer Agreement, Martha Cohen, Esq. had been practicing for over 25 years and Kelsey Solberg, Esq. had been practicing for approximately five years.  Mashian Reply Decl., ¶25.  Ms. Cohen and Ms. Solberg both have significant litigation experience, including trial experience.  Mashian Reply Decl., ¶25.  The purpose of MLG’s representation was the 21 Choices Lawsuit, as the Retainer Agreement reveals on its face, and Mashian and other MLG attorneys and staff provided legal services to that end, eventually bringing the 21 Choices Lawsuit to a settlement freely negotiated by the parties and executed by Defendants.  Mashian Reply Decl., ¶24. 

D. Analysis

Plaintiff MLG applies for right to attach orders against Defendants 21 Choices and in the amount of $25,467.12, which includes estimated costs of $310 and estimated attorney fees of $1,595.00. 

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

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

            MLG’s claims are based on the Retainer Agreement.  Mashian Decl., ¶3.  The asserted damages under the Retainer Agreement exceed $500.  MLG has claims on which to base attachment.

            2. An Amount Due That is Fixed and Readily Ascertainable

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

Pursuant to Paragraphs 2 and 3 of the Retainer Agreement, Defendants agreed to pay MLG for legal services at the hourly rates stated and for all costs and expenses incurred by MLG in representing Defendants in connection with the matters described in the Retainer Agreement.  Mashian Decl. ¶¶4-5, Ex. 1.  During the months of February 2021 through January 2023, MLG represented Defendants in the Lawsuit and provided legal services and advice pursuant to the Retainer Agreement.  Mashian Decl., ¶¶7-8.  Defendants incurred legal fees and costs for which MLG issued invoices.  Mashian Decl., ¶9.  While Defendants made payments toward their legal fees and costs, the April invoice reflects that there remains unpaid $19,116.54 in legal fees and costs.  Mashian Decl., ¶¶9-10, Ex. 2.  These damages are readily ascertainable.

            MLG claims $1770.24 in interest at 10% pursuant to the Retainer Agreement.  MLG fails to provide any calculation or ledger for this amount and it is disallowed.

            MLG also claims $2255 in legal fees and $420.34 in costs incurred to date in this action, plus an estimated $1595 in legal fees and $310 in costs for the reply and writs of attachment.  Stanton Decl., ¶¶ 3-4.  MLG fails to show that the parties agreed to an award of attorney fees to the prevailing party in an enforcement action and the attorney fees are disallowed.  The total of $730.34 in costs is permitted.

            The total readily ascertainable amount shown is $19,846.88.

            3. Probability of Success

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

The facts showing the Retainer Agreement, MLG’s performance, and unpaid invoices show a probability of success on the merits. During the months of February 2021 through January 2023, MLG represented Defendants in the Lawsuit and provided legal services and advice pursuant to the Retainer Agreement.  Mashian Decl., ¶¶7-8.  Defendants incurred legal fees and costs for which MLG issued invoices.  Mashian Decl., ¶9.  On or about April 10, 2023, MLG provided an invoice to Defendants, requesting payment for professional services rendered.  Mashian Decl., ¶9, Ex. 2.  While Defendants made payments toward their legal fees and costs, the April invoice reflects that there remains unpaid $19,116.54 in legal fees and costs.  Mashian Decl., ¶¶9-10, Ex. 2.

Defendants raise two issues with respect to probability of success.  First, Defendants rely on a claim of offset.  A defendant may raise a claim of offset for any indebtedness of the plaintiff to the defendant raised in a cross-complaint or affirmative defense in an answer.  CCP §483.015(b)(2), (3).  The defendant’s offset claim under CCP section 483.015(b)(2) or (3) must be supported by sufficient evidence to prove a prima facie case of attachment in its own right. Lydig Construction, Inc. v. Martinez Steel, (2015) 234 Cal.App.4th 937; Pos-A-Traction, Inc. v. Kelly Springfield, (C.D. Cal. 1999) 112 F.Supp.2d 1178, 1183.

Strict compliance is required with statutory requirements for affidavits for attachment (Anaheim National Bank v. Kraemer, (1932) 120 Cal.App. 63, 65), and 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.4^th 937, 944; Pos-A-Traction, Inc., v. Kepplly-Springfield Tire Co., supra, 112 F.Supp.2d at 1182. 

Defendants’ evidence consists of conclusions that lack foundation and, where appropriate, supporting documentation.  Their argument is insufficient to make a prima facie case of offset.

Second, Defendants contend that the moving papers attach invoices but fail to show any invoice that shows the work done or when it was done, or the payments of $45,000 that were paid.  Opp. at 2.  While MLG has not provided timesheets, it has provided evidence supported by invoices that it performed and billed for legal services and that some portion of the bill remains unpaid.  Defendants do not show that a timesheet is required.  In any event, MLG provides the timesheet summary in reply.  Mashian Reply Decl., Ex. 4.

4. Attachment Based on Commercial Claim

            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).

            Husson is the manager of 21 Choices.  Mashian Decl., ¶¶3, 14, RJN Ex. 101.  MLG was retained to represent Husson and 21 Choices in the Lawsuit.  MLG does not explain what the Lawsuit was about.  However, the fact that both 21 Choices and Husson were represented indicates  that it was commercial in nature and not a personal matter for Husson.

            MLG’s action against Husson arises out of his conduct of a business or profession. 

            5. 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).  MLG seeks attachment for a proper purpose.

            6. Description of Property to be Attached

            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.

            For Husson, MLG seeks to attach interests in real property except leasehold estates with unexpired terms of less than one year; accounts receivable; chattel paper; equipment; farm products; inventory; general intangibles and final money judgments arising out of the conduct by the defendant of a trade, business, or profession; money on the premises where a trade, business, or profession is conducted and elsewhere; deposit accounts; negotiable documents of title; instruments; securities; minerals or the like to be extracted; and any community property that would be subject to enforcement of judgment obtained in this case.  The description of attachable property is adequate.

            E. Conclusion

            The applications for right to attach orders are granted against Defendants 21 Choices and Husson, jointly and severally, in the amount of $19,846.88.  No writ shall issue for either Defendant until MLG posts a $10,000 undertaking for that Defendant.