Judge: John C. Gastelum, Case: 21-01237069, Date: 2023-11-01 Tentative Ruling
(1) Motion -Other (2) CMC
Tentative Ruling: Plaintiff Global Finance Group, Inc. (“Plaintiff”) moves for an order finding the second counter-bond of Defendants Precision Forging Dies, Inc. and Dan Kloss (“Defendants”), filed on August 8, 2022, is insufficient and ordering the levying officer to deliver the property to Plaintiff, or that Plaintiff shall retain possession if Plaintiff has previously been given possession of the property. Plaintiff contends there is insufficient evidence or factual support for the counter-bond. Plaintiff also seeks an order preventing Defendants from attempting to file a third counter-bond and further delay the enforcement of Plaintiff’s writ of possession. Alternatively, Plaintiff asks the Court to order an appraisal of 2Rich Trading, Inc. (“2Rich”), the company underlying Defendants’ second counter-bond.
Plaintiff’s Motion was timely filed under Code of Civil Procedure section 515.030(b).
Defendants’ counter-bond lists two personal sureties: David Lahiji and Qiong aka “Joy” Chen, who are President and CEO of 2Rich Trading, Inc. (“2Rich”), respectively. Both sureties reside in California. The counterbond states each surety owns a 50 percent ownership interest in 2Rich and their best estimate of the fair market value of each 50 percent ownership is $900,000. On its face, the affidavit in support of the counterbond complies with all requirements under Code of Civil Procedure sections 995.510 and 995.520.
Plaintiff argues the counter-bond is insufficient because public records show Chen was only granted 5 percent of her residence property on January 3, 2019 and the last recorded transfer for Lahiji’s residence property was a quitclaim deed dated May 16, 2014 to Xiaoli Wang, which shows Lahiji has no ownership interest in the property. As Defendants point out, the sureties provided their residences to show they reside within the state as required by Code of Civil Procedure section 995.510(c), rather than to show that they are worth the amount of the bond in that real property. Thus, the ownership and fair market value of the residence properties are irrelevant.
Plaintiff also argues the counter-bond is insufficient because the sureties offer no facts in support of their estimate of the fair market value of 2Rich. Plaintiff contends public records only list Chen as the sole director of 2Rich and Lahiji is not identified as the company’s president, officer, or director, which calls into question whether the sureties truly own 2Rich. Plaintiff also states that its own investigation has revealed that 2Rich operates a smoke shop located in Moreno Valley and argues that the affidavit does not support the assertion that a smoke shop has a market value sufficient to qualify the sureties on the counter-bond.
In support of their Opposition, Defendants provide the Declaration of Qiong “Joy” Chen, which states Chen incorporated 2Rich on April 26, 2021 and was the sole shareholder, officer, and director until May 8, 2022. (Declaration of Qiong “Joy” Chen, ¶ 2.) On May 8, 2022, Lahiji acquired a 50 percent interest in 2Rich in exchange for services rendered, including consulting services and the establishment of relationships with trade partners. (Ibid.) 2Rich’s main business operation is trading/wholesaling various types of merchandise and it currently owns $2 million of various types of merchandise stored in warehouses located within California. (Id., ¶ 3.) 2Rich also operates a smoke shop in Moreno Valley, California with annual sales at approximately $300,000. (Id., ¶ 4.)
As stated above, the affidavit complies with the Code of Civil Procedure. The sureties have averred that they are worth the amount of the bond in personal property situated in this state, over and above all debts and liabilities. Plaintiff cites no legal authority holding that more is required in support of the affidavit. Nor has Plaintiff provided any evidence establishing that the sureties’ interest in 2Rich is insufficient to support the counterbond.
Considering that 2Rich has $2 million in inventory and each surety holds a 50 percent interest in the company, along with the fact that it conducts annual sales of approximately $300,000, the Court estimates the value of 2Rich at $1.8 million and therefore finds that the sureties and the counter-bond are sufficient.
Given the above, the Court DENIES the Motion.
Plaintiff to give notice.