Judge: John J. Kralik, Case: 24NNCV06672, Date: 2025-05-09 Tentative Ruling

Case Number: 24NNCV06672    Hearing Date: May 9, 2025    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations

Plaintiff Harvest Small Business Finance, LLC (“Plaintiff”) alleges that on May 11, 2022, Defendant JDE Mason Brand, LLC (“JDE Mason Brand” or “Borrower”) executed and delivered to Plaintiff a Promissory Note and a Loan Agreement in connection with a term loan in the amount of $3,450,000.  (FAC, ¶13, Ex. 1.)  Plaintiff alleges that Borrower executed a Security Agreement and a Deed of Trust in favor of Plaintiff for the real property located at 9120 Airport Blvd., Houston, TX 77061 (“Hotel Property”).  (Id., ¶¶14-15, Exs. 2-3.)  Plaintiff alleges that in order to induce Plaintiff to enter the terms of the Loan Agreement, Defendant Rita Khachikyan (“Khachikyan”) and Defendant JDE Brand, Inc. (“JDE Brand”) executed and delivered to Plaintiff continuing commercial guarantees.  (Id., ¶¶17, 19, Exs. 5 and 7.)  Plaintiff alleges that concurrently with the Khachikyan Guaranty, Khachikyan executed a Deed of Trust with respect to the real property located at 455 East Ocean Blvd., Unit 417, Long Beach, CA 90802 (“Condo Property”).  (Id., ¶18, Ex. 6.)  Plaintiff alleges that on July 1, 2023, Borrower defaulted on the obligations of the loan documents and thereafter sold the Hotel Property via a short sale in January 2024, such that Plaintiff received $2,853,841.30 in payment at closing.  (Id., ¶¶23, 25.)  Plaintiff alleges that in June 2024, Khachikyan sold the Condo Property, such that Plaintiff received $104,500 in payment at closing.  (Id., ¶26.)  Plaintiff alleges that despite these payments, outstanding balances remain in the amount of $864,650.20 (= $470,565.52 in principal, plus $343,341.98 in accrued interest, plus $135.34 per diem in interest at 10.5%, plus $30,327 in late fees, plus $20,515.70 in miscellaneous charges).  (Id., ¶¶28-29.)

The first amended complaint (“FAC”), filed on March 18, 2025, alleges causes of action for: (1) breach of written agreement; (2) breach of guaranty; (3) breach of guaranty; (4) money lent; (5) account stated; and (6) unjust enrichment.

B.     Motions on Calendar

On March 18, 2025, Plaintiff filed 3 applications for writ of attachment against: (1) JDE Mason Brand, LLC; (2) JDE Brand, Inc.; and (3) Rita Khachikyan. 

The Court is not in receipt of an opposition brief.

On April 30, 2025, Plaintiff filed a proof of service of the summons, complaint, and writ papers regarding JDE Mason Brand, LLC, showing JDE Mason Brand, LLC was served by personal service on March 24, 2025 at 12:20 p.m. by serving Michelle Baggins, the agent of Registered Agents Inc., which is the registered agent for service for JDE Mason Brand, LLC.

On May 1, 2025, Plaintiff filed proofs of service of the summons, complaint, and writ papers regarding Rita Khachikyan and JDE Brand, Inc., showing they were personally served on March 23, 2025 at 2:44 p.m. at 6528 Cahuenga Terrace, Los Angeles, CA 90068 by serving Rita Khachikyan. 

LEGAL STANDARD

“Upon the filing of the complaint or at any time thereafter, the plaintiff may apply pursuant to this article for a right to attach order and a writ of attachment by filing an application for the order and writ with the court in which the action is brought.”  (CCP § 484.010.)

The application shall be executed under oath and must include:

(1)               a statement showing that the attachment is sought to secure the recovery on a claim upon which an attachment may be issued;

(2)               a statement of the amount to be secured by the attachment;

(3)               a statement that the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based;

(4)               a statement that the applicant has no information or belief that the claim is discharged or that the prosecution of the action is stayed in a proceeding under the Bankruptcy Act (11 U.S.C. section 101 et seq.); and

(5)               a description of the property to be attached under the writ of attachment and a statement that the plaintiff is informed and believes that such property is subject to attachment.

(CCP § 484.020.)

“The application [for a writ of attachment] shall 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.)  Statutory attachment procedures are purely creations of the legislature and as such “are subject to ‘strict construction.’”  (Hobbs v. Weiss (1999) 73 Cal.App.4th 76, 79 [citing Vershbow v. Reiner (1991) 231 Cal.App.3d 879, 882]; see also Nakasone v. Randall (1982) 129 Cal.App.3d 757, 761.)  A judge does not have authority to order any attachment that is not provided for by the attachment statutes.  (Jordan-Lyon Productions, Ltd. v. Cineplex Odeon Corp. (1994) 29 Cal.App.4th 1459, 1466.)  “The declarations in the moving papers must contain evidentiary facts, stated ‘with particularity,’ and based on actual personal knowledge with all documentary evidence properly identified and authenticated.”  (Hobbs, supra, 73 Cal.App.4th at 79–80 [citing CCP § 482.040].)  “In contested applications, the court must consider the relative merits of the positions of the respective parties and make a determination of the probable outcome of the litigation.”  (Id. at 80 [ellipses and quotation marks omitted].)  “A claim has ‘probable validity’ where it is more likely than not that the plaintiff will obtain a judgment against the defendant on that claim.”  (CCP § 481.190.) 

The Court shall issue a right to attach order if the Court finds all of the following:

(1)               The claim upon which the attachment is based is one upon which an attachment may be issued.

(2)               The plaintiff has established the probable validity of the claim upon which the attachment is based.

(3)               The attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based.

(4)               The amount to be secured by the attachment is greater than zero.

(CCP § 484.090(a).) 

A claim of exemption must describe the property to be exempted and specify the statute section supporting the claim.  (CCP § 484.070(c).)  The plaintiff has the burden of opposing the defendant’s claim of exemption, and if the plaintiff fails to oppose a claim of exemption, “no right to attach order or writ of attachment shall be issued as to the property claimed to be exempted.”  (CCP § 484.070(f).)

DISCUSSION

A.    Probable Validity of Plaintiff’s Claims

Plaintiff applies for writ of attachment against Defendants JDE Mason Brand, LLC, JDE Brand, Inc., and Rita Khachikyan. 

“The standard elements of a claim for breach of contract are: “(1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) damage to plaintiff therefrom. [Citation.]”  (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.) 

In support of the application, Plaintiff provides the declaration of Eric Jiang, who is employed by Plaintiff as a VP, Special Assets Officer who is charged with collection of the obligation sued upon in this action.  (Jiang Decl., ¶1.)  Mr. Jiang states that he is the custodian of records.  (Id., ¶¶1-2.)  Mr. Jiang states that on May 11, 2022, JDE Mason Brand executed and delivered to Plaintiff a Promissory Note and a Loan Agreement in connection with a term loan in the amount of $3,450,000.  (Id., ¶3.)  He states that on May 11, 2022, JDE Mason Brand executed a Security Agreement in Plaintiff’s favor.  (Id., ¶4.)  He states that concurrently with the Loan Agreement, JDE Mason Brand executed a Deed of Trust in Plaintiff’s favor with respect to the Hotel Property.  (Id., ¶5.)  Mr. Jiang states that Plaintiff filed its financing statement (UCC-1) perfecting its blanket lien on JDE Mason Brand’s assets on June 14, 2022.  (Id., ¶6.)  He states that Khachikyan executed and delivered to Plaintiff a continuing commercial guaranty, and Khachikyan also executed a Deed of Trust in favor of Plaintiff with respect to the Condo Property.  (Id., ¶¶7-8.)  He states that JDE Inc. also executed and delivered to Plaintiff a continuing commercial guaranty.  (Id., ¶9.)  Mr. Jiang states that on July 1, 2023, JDE Mason Brand defaulted on the obligations of the loan documents and thereafter JDE Mason Brand sold the Hotel Property via a short sale in January 2024, such that Plaintiff received $2,853,841.30 in payment at closing.  (Id., ¶¶13, 15.)  He states that in June 2024, Khachikyan sold the Condo Property, such that Plaintiff received $104,500 in payment at closing.  (Id., ¶16.)  Mr. Jiang states that despite these payments, outstanding balances remain in the amount of $864,650.20 (= $470,565.52 in principal, plus $343,341.98 in accrued interest, plus $135.34 per diem in interest at 10.5%, plus $30,327 in late fees, plus $20,515.70 in miscellaneous charges).  (Id., ¶¶18-19.)  Mr. Jiang states that Plaintiff seeks $864,650.20 in principal, $3,000 (estimated) attorney’s fees, and $2,500 (estimated) costs, for a total of $870,150.20.  (Id., ¶29.) 

Based on the declaration of Mr. Jiang, the Court finds that Plaintiff has preliminarily established the probable validity of its claims for breach of the underlying loan agreements upon which the attachment is based.  Plaintiff has shown each of the elements of a breach of contract claims by way of the declaration of Mr. Jiang and the exhibits attached to the complaint.  The motion is not opposed and no contradictory evidence has been presented.

B.     Basis of Attachment

The Court shall issue a right to attach order if the claim upon which the attachment is based is one upon which an attachment may be issued.  (CCP § 484.090.)  “[A]n 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) exclusive of costs, interest, and attorney’s fees.”  (CCP § 483.010(a).)  “If the action is against a defendant who is a natural person, an attachment may be issued only on a claim which arises out of the conduct by the defendant of a trade, business, or profession.”  (CCP § 483.010(c).)

This first requirement has been met.  Plaintiff’s claim is based on Defendants’ default of the agreements and their outstanding debt owed to Plaintiff as a result of breaches of the agreements.  The amount Plaintiff seeks to be secured by the attachment is $870,150.20 (which includes $864,650.20 in principal, $3,000 in estimated attorney’s fees, and $2,500 in estimated costs), which is greater than $500.00.  (See AT-105, §8; Jiang Decl., ¶29.)  

C.     Purpose and Amount of Attachment

CCP § 484.090(a)(3)-(4) states that the Court shall issue a right to attach order if “the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based . . . [and] the amount to be secured by the attachment is greater than zero.”

In this case, Plaintiff attests on Form AT-105 that the attachment is not sought for a purpose other than the recovery on a claim upon which the attachment is based.  (AT-105, §4.)  Also, it is clear from the evidence presented that the amount to be secured is greater than zero.  There is no indication that the application is sought for any other purpose, and Defendants do not argue that the action is brought for any other purpose. 

Accordingly, the Court determines that Plaintiff has complied with CCP §§ 484.020 and 484.090.

D.    Subject Property

CCP § 484.020(e) provides, as follows:

Where the defendant is a corporation, a reference to “all corporate property which is subject to attachment pursuant to subdivision (a) of Code of Civil Procedure Section 487.010” satisfies the requirements of this subdivision. 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” satisfies the requirements of this subdivision. Where the defendant is a natural person, the description of the property shall be reasonably adequate to permit the defendant to identify the specific property sought to be attached.

(CCP § 484.020(e).) 

Plaintiff seeks: (a) any property of a defendant who is not a natural person against JDE Mason Brand and JDE Brand; and (b) property of a defendant who is a natural person pursuant to CCP § 487.010 against Khachikyan, including “(1) Deposit accounts pursuant to CCP Section 488.455; (2) Any accounts receivable or general intangibles pursuant to CCP Section 488.470; (3) Real property pursuant to CCP Section 488.315 and/or 488.41.”  (AT-105, §9.) 

Plaintiff has properly described the property sought to be attached.  (See CCP § 487.010.)

E.     Exemptions

As the motion is not opposed, Defendants have not stated whether they are claiming an entitlement to any exemptions.  Accordingly, the Court finds that Defendants are not entitled to any exemptions in connection with the issuance of these orders. 

CONCLUSION AND ORDER

Plaintiff’s applications for writs of attachment against Defendants JDE Mason Brand, LLC, JDE Brand, Inc., and Rita Khachikyan are granted.

CCP § 489.210 requires the plaintiff to file an undertaking before issuance of a writ of attachment.  CCP § 489.220 provides that “the amount of an undertaking filed pursuant to this article shall be ten thousand dollars ($10,000).”  The Court may increase this amount “to the amount it determines to be the probable recovery for wrongful attachment if it is ultimately determined that the attachment was wrongful.”  (CCP § 489.220(b).)  Accordingly, upon granting the application, Plaintiff is ordered to post an undertaking in the amount of $10,000.00 per writ prior to the issuance of the writs of attachment against Defendants.

Plaintiff shall provide notice of this order.

DATED:  May 9, 2025                                                           ___________________________

                                                                                          John J. Kralik

                                                                                          Judge of the Superior Court