Judge: Mary H. Strobel, Case: 21STCV47089, Date: 2023-01-31 Tentative Ruling

Case Number: 21STCV47089    Hearing Date: January 31, 2023    Dept: 82

Plaintiff MSN Forensic Solution Experts LLC (“Plaintiff”) moves for a writ of attachment against Defendant Charles O. Agege dba Law Office of Charles O. Agege (“Defendant”) in the amount of $83,150. 

Judicial Notice

Defendant’s Request for Judicial Notice, Exhibits 1-9 – Granted.  Plaintiff’s objection is overruled.  (Reply 1.)  Generally, courts do not judicially notice the truth of hearsay statements in court filings.  (Aixtron, Inc. v. Veeco Instruments, Inc. (2020) 52 Cal.App.5th 360, 382.)  However, Defendant requests judicial notice of evidence submitted in this case, and for which Plaintiff submitted evidentiary objections for the prior application.  The court ruled on those objections and overruled many of them.  (See Minute Order dated 10/4/22 at 1-2.)  Plaintiff cites no authority that the court cannot judicially notice and consider evidence from the court file in this case. 

Relevant Procedural History

            On December 27, 2021, Plaintiff filed a complaint against Defendants for breach of contract and common counts.

On June 3, 2022, Plaintiff filed applications for writ of attachment.  The court received Defendants’ opposition and Plaintiff’s reply.

On October 4, 2022, the court denied the application for attachment against Defendant Kavosi on the merits.  The court denied the application for attachment against Agege on procedural grounds, specifically because Plaintiff had not complied with the mandatory requirements of CCP section 484.020 to submit a verified application on Judicial Council form AT-105.  The court ruled that “[i]f counsel for plaintiff refiles the applications, he is to comply with Code of Civil Procedure Section 1008.”

On October 14, 2022, Plaintiff filed and served a renewed application for writ of attachment against Defendant Agege.  The court has received Defendant’s opposition and Plaintiff’s reply.

On November 3, 2022, Defendants filed an answer and a cross-complaint. 

Summary of Applicable Law

“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 [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.) 

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 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’s determination in an attachment proceeding “shall have no effect” on the main action.  (CCP § 484.100.)

Analysis 

1.    CCP Section 1008

Legal Standard

Code of Civil Procedure section 1008 governs applications to reconsider and provides, in relevant part:

(a)  When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.

(b)  A party who originally made an application for an order which was refused in whole or part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown. For a failure to comply with this subdivision, any order made on a subsequent application may be revoked or set aside on ex parte motion.

….[¶]

(e) This section specifies the court's jurisdiction.... No application to reconsider any order … may be considered by any judge or court unless made according to this section.

“A motion for reconsideration may only be brought if the party moving for reconsideration can offer ‘new or different facts, circumstances, or law’ which it could not, with reasonable diligence, have discovered and produced at the time of the prior motion.  . . .A motion for reconsideration will be denied absent a strong showing of diligence.”  (Forrest v. State Of Cal. Dept. Of Corps. (2007) 150 Cal.App.4th 183, 202.)  A renewal motion pursuant to CCP section 1008(b) is also subject to this reasonable diligence requirement.  (See California Correctional Peace Officers Ass’n v. Virga (2010) 181 Cal.App.4th 30, 47.) 

Plaintiff Satisfies the Requirements of CCP Section 1008(a) and (b) for Reconsideration and a Renewed Application

            Here, Plaintiff filed and served its renewed application on October 14, 2022, within 10 days of the court’s denial of the first application.  Accordingly, the motion may be considered either as a motion for reconsideration under CCP section 1008(a), or a renewed motion under section 1008(b).

            Plaintiff has now properly verified the application on form AT-105.  Contrary to Defendant’s assertion (Oppo. 4), the verified application is a new or different fact and circumstance that was not considered by the court in its first ruling. 

            Plaintiff has also satisfied the reasonable diligence requirement.  Plaintiff’s failure to submit a verified application on form AT-105 was a procedural defect in the prior application, not a substantive one.  The original application was signed by attorney Tokar, but the “declaration” section of form AT-105 was left blank.  Plaintiff filed a separate sworn declaration in support of the first application.  Plaintiff has now verified the application, and there is no evidence that Plaintiff’s failure to verify it the first time was intentional.  While not so stated in attorney Tokar’s declaration, it is reasonably inferred that Plaintiff’s attorneys neglected to have Plaintiff verify the application when it was filed in June 2022.  That initial neglect may or may not have been reasonable.  Regardless, if the procedural defect had been corrected with Plaintiff’s reply for the first hearing, the court would have considered the application on the merits. 

Significantly, Tokar explains why he did not correct the defect in Plaintiff’s reply:

At the time that Plaintiff’s reply was filed on September 29, 2022, I briefly stepped away from Cedars Sinai Medical Hospital as my daughter was born late in the evening on September 28, 2022. I was in the hospital from September 27, 2022 to October 1, 2022 as a result of my daughter’s birth. I wanted to ensure that Plaintiff’s interests were adequately represented in the Writ of Attachment proceedings, and that a reply was filed to rebut the arguments made by Defendants in their opposition. I submit that the failure to provide a verified Judicial Council Form AT-105 was a result of my mistake, inadvertence, surprise, or neglect given my circumstances at the time the reply was filed after a review of the opposition.

(Tokar Decl. ¶ 6.)

The reply was filed on September 29, 2022, when Tokar was in the hospital as the result of his daughter’s birth.  Given the procedural mistake at issue, a reasonably prudent attorney in similar circumstances could have neglected to file a notice of errata or otherwise correct the defect in verification with the reply. 

Notably, this is not a circumstance in which Plaintiff has “conjure[d] up a legal theory different from those previously rejected” or sought to make “seriatim motions” based on new facts that could have been presented earlier.  (See California Correctional Peace Officers Ass’n v. Virga (2010) 181 Cal.App.4th 30, 45-47.) 

Plaintiff satisfies the requirements of CCP section 1008.  The court will consider the application on the merits.

2.    Probable Validity of Plaintiff’s Claim

The application is based on Plaintiff’s cause of action for breach of contract.  To establish a claim for breach of contract, a plaintiff must prove: (1) existence of a contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach of the contract; and (4) damages incurred by plaintiff as a result of the breach.  (Durell v. Sharp Healthcare, (2010) 183 Cal.App.4th 1350, 1367.)  

Plaintiff submits evidence of the existence of a contract with Defendant.  Specifically, on March 11, 2020, Plaintiff entered into a written services agreement (“Agreement”) with Defendant to provide forensic accounting services in connection with Defendant Kavosi’s family law dissolution with her husband, Mr. Younes Abrishamchi in Los Angeles Superior Court Case No. 19STFL05224.  The Agreement states that Plaintiff would charge $250 to $350 per hour “depending on the level of expertise and resources necessary.”  The Agreement described the scope of work as follows:

Your client is the Petitioner in this action. The Respondent, Younes Abrishamchi, contends all assets are his separate property and all income is from Iran. He has provided translated Iranian bank documents to Gursey Schneider and obtained a forensic accounting report tracing all marital assets, which she has challenged. She has already attempted mediation with no resolution. A Request For Order (RFO) hearing is currently scheduled for early June, 2020, subject to potential postponement due to the current shelter-in-place order and the consequences of the COVID-19 pandemic. You have requested our assistance in assessing the accuracy of the Gursey Schneider report, and for an alternative sourcing of property in the event we do not find the Gursey Schneider report accurate.

Our services will include reviewing the report and supporting schedules provided by Gursey Schneider, and the evidence on which that report is based. To the extent necessary, we will examine any additional evidence available and perform the tracing of funds independently from the Gursey Schneider report.

(Razani Decl. ¶ 2, Exh. A.)

            Plaintiff also submits evidence of its performance of the Agreement, Defendant’s breach, and damages of $83,150.  Specifically, between March 20, 2020 to September 21, 2021, Plaintiff provided accounting services to Defendant in the amount of $108,150.00 in connection with Kavosi’s dissolution action. (Razani Decl. ¶¶ 8-9; Exh. F and G.) During the same time period, Plaintiff provided interim reports to Defendant of the accounting work Plaintiff was hired to perform. (Id. ¶¶ 4-7, Exh. B -E.) In December of 2021, Plaintiff received a onetime payment of $25,000.00 on behalf of Defendant, making the new balance owed $83,150 not including interest and costs. (Id. ¶ 11.)  Plaintiff’s evidence, if not rebutted, is sufficient to show the probable validity of all elements of its contract claim.

            In its opposition, Defendant has not submitted any new evidence to rebut Plaintiff’s claim.  Rather, Defendant incorporates its opposition filed June 23, 2022, and requests judicial notice of the supporting evidence.  (Oppo. filed 1/24/23 at 10.)  This was improper.  Generally, the court cannot judicially notice the truth of hearsay statements in court filings.  (Aixtron, Inc. v. Veeco Instruments, Inc. (2020) 52 Cal.App.5th 360, 382.)  Defendant should have submitted any argument and evidence with its current opposition, rather than incorporating arguments made in a different filing.  Nonetheless, Defendant’s prior evidence was submitted in this case in June 2022.  While the evidence is now somewhat dated, the court overruled all of Plaintiff’s objections to the Anfuso declaration, and some of the objections to the Agege declaration for the October 4, 2022, hearing.  (Minute Order dated 10/4/22 at 1-2.)  The court will exercise its discretion to consider the prior opposition (hereafter “Oppo.”) and evidence submitted in support of that opposition, including the declarations of Defendant and CPA Ron Anfuso. 

            In opposition, Defendant does not dispute that he caused $25,000 to be paid to Plaintiff under the Agreement.  Defendant has not developed an argument that Plaintiff failed to perform, at least in part, by providing accounting services in connection with Kavosi’s dissolution action.  (Oppo. 4-5.) 

Defendant seems to contend that Plaintiff partially breached the Agreement because, according to Defendant’s expert Ron Anfuso, “Plaintiff lacked the experience to conduct the tracing work that it was hired to do by Defendants” and “the two reports prepared by Plaintiff do not contain a direct tracing as required in family.”  (Oppo. 4.)  Defendant also contends that “Anfuso opined that the fees charged by Plaintiff were excessive.”  Defendant states that “although the Agreement stated that the hourly rates were between $250 and $350, the entire time on Plaintiff's bill was billed at the higher $350 rate, even though at least some of the work could have been done by lower billing rate individuals.”  (Oppo. 5, citing Anfuso Decl. ¶ 6.)  Defendant contends that it should be excused in full or in part from its payment obligation under the Agreement based on these alleged breaches.  (Oppo. 5-6.) 

As a preliminary issue, only a material breach of contract is sufficient to allow the other party to suspend or be excused from its performance under the contract. (Brown v. Grimes (2011) 192 Cal.App.4th 265, 277.)  Whether a partial breach of a contract is material depends on “the importance or seriousness thereof and the probability of the injured party getting substantial performance,” among other factors.  (Ibid.)  As the party asserting Plaintiff’s breach, Defendant had the burden to address this issue in its opposition brief.  Defendant fail to do so.  Given that Defendant hired Plaintiff to perform the accounting work, Defendant fails to explain how Plaintiff could have materially breached the Agreement based on “lack of experience.”  To the extent Defendant alleges that Plaintiff fraudulently misrepresented its experience (see Cross-Compl. ¶¶ 11-15), such claim is not developed in the opposition brief as a basis to reduce or deny attachment.   While Plaintiff did agree to “perform the tracing of funds” to the extent necessary (Razani Decl. Exh. A), Defendant fails to explain, with discussion of the relevant materiality factors, how Plaintiff’s alleged failure to include direct tracing in two reports was a material breach.  Finally, Defendant agreed that Plaintiff would charge $250-$350/hour depending on the type of work.  Defendant does not dispute that Plaintiff charged within that range.

Aside from Defendant’s failure to address the issue of materiality, the court also finds Plaintiff’s evidence to be somewhat stronger with respect to Defendant’s contentions that Plaintiff breached or failed to perform the Agreement.  “In determining the probable validity of a claim where the defendant makes an appearance, 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.”  (Loeb & Loeb v. Beverly Glen Music, Inc. (1985) 166 Cal.App.3d 1110, 1120.) 

CPA Anfuso opines that two reports prepared by Plaintiff “do not contain a direct tracing as required in family law cases.”  (Anfuso Decl. ¶ 5.)  However, Anfuso does not discuss these reports in any detail.  Plaintiff submits evidence that, as it contracted to do, Plaintiff reviewed the tracing report provided by Gursey Schneider; contacted Gursey Schneider to obtain relevant source documents; and performed forensic accounting services based on the report and documents provided.  Plaintiff further submits evidence that it determined Gursey Schneider had not provided all relevant source documents; that it made efforts to obtain such documents from Gursey Schneider and Defendant; that Plaintiff did not receive such documents, including from Defendant; and that the missing information hindered Plaintiff’s ability to perform a tracing analysis.  Plaintiff also submits evidence that “some of the source data provided through discovery was of extremely poor quality, requiring considerable time to review and comprehend, and extract the proper relevant data.”  (Razani Decl. ¶¶ 4-18 and Exh. A-N.)  Plaintiff thus submits evidence that it did perform extensive accounting work under the Agreement, and that any failure to perform tracing work was caused by factors outside of its control. 

Considering that Plaintiff’s evidence is more detailed and supported by emails and other corroborating documents, the court finds it to be somewhat more persuasive than Defendant’s evidence as to whether Plaintiff performed its obligations under the Agreement.  In opposition, Defendant has not submitted a declaration responding to Plaintiff’s assertion that its tracing work was hindered by a lack of documentation, and that Defendant was aware of this issue and also did not obtain the necessary documents from Gursey Schneider. 

Anfuso opines that Plaintiff’s billing entries “appear excessive.”  (Anfuso Decl. ¶ 6.)  However, Defendant does not dispute that Plaintiff performed the work reflected in its billing invoices and for which it requests payment in this action.  (See Razani Decl. Exh. G.)  Also, Plaintiff billed within the range of $250-$350/hour to which the parties agreed.  While Anfuso’s opinion regarding Plaintiff’s fees has been considered (see Anfuso Decl. ¶ 6), the court finds it insufficient to prove, under the probable validity standard, a material breach or failure of performance given that Plaintiff billed within the range to which the parties agreed. 

For purposes of this application for writ of attachment, Plaintiff shows the probable validity of its contract claim in the amount of damages requested. 

3.    Basis of Attachment

“[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).)  “An attachment may not be issued on a claim which is secured by any interest in real property arising from agreement ….”  (CCP § 483.010(b).) “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.  (§ 483.010(c); see Advance Transformer co. v. Sup.Ct. (1974) 44 Cal.App.3d 127, 143-144.)

Here, Plaintiff’s application for writ of attachment is based on a contract where the total amount allegedly due is in excess of $500.  The contract is not secured by real property.  Defendant entered the contract as part of his trade, business, or profession as an attorney.  (Razani Decl. ¶¶ 2-3, Exh. A.)  Plaintiff’s damages are fixed and readily ascertainable from the contract and Plaintiff’s declaration. 

4.    Purpose and Amount of Attachment

Code of Civil Procedure section 484.090 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.”

Plaintiff declares, and the court finds, that attachment is not sought for a purpose other than the recovery on Plaintiff’s claim.  (Appl. ¶ 4.)  The amount to be secured is greater than zero.

5.    Reduction of Amount to be Secured Based on Offset Claims or Affirmative Defenses

Code of Civil Procedure section 483.015(b) provides that the amount to be secured by the attachment shall be reduced by, inter alia:  “(2) The amount of any indebtedness of the plaintiff that the defendant has claimed in a cross-complaint filed in the action if the defendant’s claim is one upon which an attachment could be issued.”

“[T]o sustain reduction in a writ amount, most courts require that the defendant provide enough evidence about its counterclaims and/or defenses to prove a prima facie case [for attachment against Plaintiff].”  (Ahart, California Practice Guide: Enforcing Judgments and Debts, ¶ 4:64 (1998 rev.).)  Defendant has the burden of proof to satisfy the requirements of attachment for any offset claim.  (See CCP § 483.015 and Lydig Construction, Inc. v. Martinez Steel Corp. (2015) 234 Cal.App.4th 937, 945.)  

Defendant asserts that the attachment should be offset by Defendants’ cross-claim for breach of contract.  (Oppo. filed 1/24/23 at 11.)  However, Defendant provides no legal analysis of any of the cross-claims, and it does not show that all requirements of attachment are met.  Accordingly, Defendant does not show that the attachment should be reduced by a claim for offset. 

6.    Subject Property

Plaintiff requests attachment against Defendant Agege, a natural person, of items listed in CCP § 487.010(c) and (d).  (Application ¶ 9c.)  That request is proper. 

7.    Exemptions

Defendant does not claim any exemptions. 

8.    Undertaking

Code of Civil Procedure section 489.210 requires the plaintiff to file an undertaking before issuance of a writ of attachment.  Code of Civil Procedure section 489.220 provides, with exceptions, for an undertaking in the amount of $10,000.  Neither party argues for a different amount of undertaking. 

Conclusion

            The application is GRANTED.  Plaintiff to post an undertaking of $10,000.