Judge Lisa K. Sepe-Wiesenfeld, Case Number: 23STCV31755, Date: 2024-06-06 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 23STCV31755, Date: 2024-06-06 Tentative Ruling

“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.” (Code Civ. Proc., § 484.010.) Code of Civil Procedure section 484.020 provides that the application must be executed under oath and include all of the following information:

(e)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. 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.

The application for a right to attach order and 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.” (Code Civ. Proc., § 484.030.) “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 v. Weiss (1999) 73 Cal.App.4th 76, 79-80 [citing Code Civ. Proc., § 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 p. 80, ellipsis and quotation marks omitted.)

(Code Civ. Proc., § 484.090, subd. (a).) “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.” (Code Civ. Proc., § 481.190.) “In the discretion of the court, the amount to be secured by the attachment may include an estimated amount for costs and allowable attorney’s fees.” (Code Civ. Proc., § 482.110, subd. (b).)

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. (Code Civ. Proc., § 484.090, subd. (a)(1).) “[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.” (Code Civ. Proc., § 483.010, subd. (a).)

In this case, Plaintiff Kapa Investment (“Plaintiff”)’s claims for breach of written contract and breach of guaranty are based on a written lease agreement between the parties, addenda to the lease, a personal guaranty of lease, and the alleged breach thereof, and the claims exceed five hundred dollars, as Plaintiff seeks compensatory damages in the amount of $242,837.86, plus interest. Accordingly, the Court finds that Plaintiff’s claims provide a proper basis for attachment.

Code of Civil Procedure section 484.090, subdivisions (a)(1) and (a)(2), state 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 No. AT-105 that attachment is not sought for a purpose other than the recovery on a claim upon which the attachment is based. (AT-105 ¶ 4.) Further, the amount sought to be secured is greater than zero, as Plaintiff seeks to secure an amount of $247,747.86 as to Defendant Collision Craft Inc. (“Collision Craft”), which includes estimated attorney fees of $4,910.00, and $255,077.86 as to Defendant Richard Jay Rogers (“Rogers”) (collectively with Collision Craft “Defendants”), which includes estimated attorney fees of $12,240.00. There is no indication that the application is sought for any other purpose, and Defendant does not argue that the action is brought for any other purpose.

Plaintiff’s counsel represents that Plaintiff will incur $4,910.00 in attorney fees as to Collision Craft (Mot., Warshaw Decl. ¶ 8; AT-105 ¶ 8) and $12,240.00 as to Rogers (Mot., Warshaw Decl. ¶ 12; AT-105 ¶ 8). Defendants do not dispute there is a provision in the lease requiring the prevailing party in a dispute to recover attorneys’ fees. (See Mot., Warshaw Decl. ¶ 3, Ex. A, at § 31; Mot., Pahlavan Decl. ¶ 6, Ex. A, at p. 2.) Accordingly, the Court determines that Plaintiff has properly set forth that the attachment is not sought for a purpose other than recovery of the claim for breach of subject agreement, and the amount sought to be secured is greater than zero.

Code of Civil Procedure section 484.020, subdivision (e), requires “[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.” Because Collision Craft 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.” (Code Civ. Proc., § 484.020, subd. (e); see also AT-105 ¶ 9(a).) As to Rogers, Plaintiff states that it seeks to attach Rogers’ interest in real property, accounts, paper, intangibles, equipment, money judgments, and instruments, among other items. (AT-105 ¶ 9(c).) The Court finds that Plaintiff has properly described the property sought to be attached. (See Bank of America v. Salinas Nissan, Inc. (1989) 207 Cal.App.3d 260, 267-268.)

Collision Craft states that the amount sought for attachment is offset pursuant to Code of Civil Procedure section 483.015 because Plaintiff is permitted to use the security deposit to pay certain charges, but the lease only allows Plaintiff to do so; it does not require that Plaintiff use the funds to offset any charges. (See Mot., Warshaw Decl. ¶ 3, Ex. A, at § 5.) As to any attorney fees recovered in another case, Plaintiff agrees to offset the damages here by those fees when that litigation is final, but there is no evidence before the Court that other litigation is final and complete. (See Reply, p. 5, ll. 11-12.) Rogers claims a homestead exemption in his real property in the amount of $699,426 pursuant to Code of Civil Procedure sections 704.730 and 704.740, but Plaintiff clarifies that it is not seeking to attach the equity Rogers has builty and only seeks to attach any gains above the equity that may be realized from its pending sale. (See Reply, p. 5, ll. 14-20.

In this action, Plaintiff alleges it owns the premises at 2001 South La Cienega Boulevard, and it entered into an agreement with Collision Craft and Rogers for Defendants to lease the premises for five years plus an option pursuant to a written agreement, and on January 24, 2019, the parties entered into a written Second Addendum to the lease for another 60-month term with annual rent increases each July 1. (Compl. ¶¶ 10-12.) Defendants failed to pay the amounts owed, and Defendants owe $242,837.86 through December 13, 2023. (Compl. ¶¶ 24-25.)

Plaintiff supports its applications with the declaration of Kami Pahlavan, President of Plaintiff Kapa Investment, who states that Collision Craft is a for-profit business venture with Rogers acting as its President and principal operator, and on May 30, 2014, Collision Craft entered into a five-year lease agreement and addendum to provide an option to extend the lease by 60 months if certain conditions were satisfied. (Mot., Pahlavan Decl. ¶¶ 1, 4-5.) On the same day, Rogers personally guaranteed the lease and accepted personal responsibility and liability of the prompt payment by Collision Craft of all rents and other sums payable to Plaintiff. (Mot., Pahlavan Decl. ¶ 6.) Collision Craft has failed to make timely payments, including those for rent, base rent, insurance premiums, late charges, property taxes, and interest; it has failed to maintain requisite service contracts; and it failed to provide evidence of insurance as required by the lease. (Mot., Pahlavan Decl. ¶ 7.) Between January 1, 2019 and December 13, 2023, Collision Craft failed to make timely rent payments for 51 of the 60 months, and it also failed to pay the full monthly rent due on several occasions, such that Plaintiff is owed $242,837.86 through December 13, 2023. (Mot., Pahlavan Decl. ¶ 9.) As to estimated attorney fees, Plaintiff’s counsel Daniel L. Warshaw states that Plaintiff will incur $4,910.00 in attorney fees as to Collision Craft (Mot., Warshaw Decl. ¶ 8; AT-105 ¶ 8) and $12,240.00 as to Rogers (Mot., Warshaw Decl. ¶ 12; AT-105 ¶ 8), and counsel describes the hourly rate and work expended.

Defendants argue that Plaintiff was not permitted to assess additional late charges each month simply because Collision Craft had an outstanding rent balance from prior months, but the lease provides that payment is first applied to accrued late charges and attorney fees, second to accrued interest, then to base rent, insurance, and real property taxes, and any remaining amount to other outstanding charges or costs. (See Mot., Warshaw Decl. ¶ 3, Ex. A, at § 4.2.) Thus, if Defendants failed to timely pay base rent and insurance, a late charge would be assessed, and the next payment made would first apply to any late charges, such that if only the rent amount was paid, there would likely be a remaining amount due, resulting in a late charge, and this was permissible under the lease. Insofar as Defendants argue that Plaintiff is seeking damages dating back to 2019, which are barred by the statute of limitations, Plaintiff states that it is only seeking damages related to the failure to fully satisfy base rent in months and years within the statute of limitations, and the 2019 entries on the accounting ledger are for historical purposes and document all transactions between the parties, i.e., the itemization of 2019 charges do not mean that there are damages from 2019. (See Reply, Pahlavan Supplemental Decl. ¶ 2, Ex. A.)

“Before issuance of a writ of attachment, . . . the plaintiff shall file an undertaking to pay the defendant any amount the defendant may recover for any wrongful attachment by the plaintiff in the action.” (Code Civ. Proc., § 489.210.) Plaintiff shall file two undertakings in the amount of $10,000 each within twenty (20) days of entry of this order.

Plaintiff Kapa Investment’s Application for Right to Attach Order and Writ of Attachment [Against Defendant Collision Craft, Inc.] is GRANTED in the amount of $247,747.86. Defendant Collision Craft, Inc. shall file an undertaking in the amount of $10,000 within twenty (20) days of entry of this order. Plaintiff Kapa Investment’s Application for Right to Attach Order and Writ of Attachment [Against Defendant Richard Jay Rogers] is also GRANTED in the amount of $255,077.86. Defendant Richard Jay Rogers shall file an undertaking in the amount of $10,000 within twenty (20) days of entry of this order.