Judge: Mary H. Strobel, Case: 22STCV06238, Date: 2022-12-06 Tentative Ruling

Case Number: 22STCV06238    Hearing Date: December 6, 2022    Dept: 82

            Plaintiff RCB Equities #19, LLC (“Plaintiff”) moves for writs of attachment against Defendants Claremount Capital Partners, LLC (“Claremont”) and Casey Dalton (“Dalton”) (collectively, “Defendants”) in the amounts of $1,499,765.11 and $136,795.82, respectively. 

Claremont’s and Dalton’s Evidentiary Objections to Declarations of Avi Ryzman

(1)  Overruled. 

(2)  Overruled. 

(3)  Sustained. 

(4)  Sustained. 

(5)  Sustained. 

Plaintiff’s Objections to Declaration of Casey Dalton

(1)  – (13) Overruled. 

(14) Sustained as to “As a direct result of RCB’s actions, Claremont Capital has incurred at least the following damages in the following approximate amount of $1,700,000.00 in monies wrongfully paid out to RCB.”  Overruled as to remainder. 

(15)-(21) Overruled. 

Relevant Procedural History

On June 29, 2022, Plaintiff filed the operative, first amended complaint (“FAC”) for breach of contract, breach of implied covenant, and breach of guaranty. 

On July 8, 2022, Claremont filed an answer asserting numerous affirmative defenses.  As relevant to the applications for attachment, the Third Affirmative Defense for Breach of Contract alleges that “Plaintiff breached the Standard Industrial/Commercial Single-Tenant Gross Lease … and as such, Claremont Capital is relieved of its payment obligations, if any, under the Lease.”  Relatedly, the Thirty-Second Affirmative Defense alleges that Plaintiff failed to perform its obligations under the Lease.  (See also Claremont Oppo. 13, citing 7^th, 13^th, 28^th, 32^nd, and 35^th affirmative defenses.) 

On August 3, 2022, Claremont filed a cross-complaint.  On October 3, 2022, the trial court (Judge Richard Fruin) overruled Plaintiff’s demurrer to the cross-claim for breach of commercial lease.  On October 21, 2022, Claremont filed a first-amended cross-complaint with additional allegations for its fraud and UCL causes of action.  (See Claremont Oppo. 10:1-6.)

On September 6, 2022, Plaintiff filed the instant applications for writ of attachment.  The court has received Defendants’ oppositions and Plaintiff’s reply. 

Plaintiff electronically filed its reply at 12:00 am on December 5, 2022, the day before the hearing.  The reply was due by Friday, December 2, 2022, and was untimely.  (CCP § 484.060.) 

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 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.) 

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 Attachment Law statutes are subject to strict construction.” (Epstein v. Abrams (1997) 57 Cal.App.4th 1159, 1168.) 

“The court’s determinations [for an application for writ of attachment] shall have no effect on the determination of any issues in the action other than issues relevant to proceedings [for attachment]. The court’s determinations under this chapter shall not be given in evidence nor referred to at the trial of any such action.”  (CCP § 484.100.)

Analysis 

1.    Probable Validity of Plaintiff’s Claims

The applications are based on Plaintiff’s causes of action for breach of contract and breach of guaranty.  To establish a claim for breach of contract, a plaintiff must generally 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.) 

In support of the applications, Plaintiff has submitted declarations of property manager Avi Ryzman to prove its contract claims, and also declarations of Niv Davidovich to support Plaintiff’s estimate of attorney fees.  Ryzman’s declarations include a copy of the lease between Plaintiff and Claremont (“Lease”), the guaranty signed by Dalton (“Guaranty”), and Plaintiff’s “most recent ledger for the Lease/Premises.”  (See Ryzman Decl. Exh. A, B.)  In opposition, Defendants submit a declaration of Dalton, with exhibits, and a declaration of attorney Kevin Connelly, with exhibits. 

“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.”  (See Loeb & Loeb v. Beverly Glen Music, Inc. (1985) 166 Cal.App.3d 1110, 1120.)

Plaintiff relies on the declarations of property manager Avi Ryzman to establish the elements of its claims.  However, Ryzman’s declarations do not include any statement that Plaintiff performed its obligations under the Lease or was excused from performance.  While unclear, Plaintiff may imply that it performed its obligations under the Lease simply because it made the Premises available for Claremont to use.  (See Mot. 2:18-19, citing Ryzman Decl. ¶ 4.)  However, the Lease imposes other obligations on the lessor and Ryzman does not state, even generally, that Plaintiff performed all those obligations or was excused from doing so.  (See e.g. Ryzman Decl. generally and Exh. A §§ 2.2-2.3, 7.2, 9.) 

Plaintiff’s failure to submit evidence of performance is significant because Defendants contend that Plaintiff materially breached the Lease.  On July 8, 2022, before the applications for writ of attachment were filed, Claremont filed an answer asserting numerous affirmative defenses, including that Plaintiff breached the Lease and failed to perform its obligations.  (See also Claremont Oppo. 13, citing 7^th, 13^th, 28^th, 32^nd, and 35^th affirmative defenses.)  To meet its initial burden of proof, it was incumbent on Plaintiff to submit affirmative evidence that it performed all its obligations under the Lease.  Plaintiff failed to submit that evidence.  Plaintiff was required to address the element of performance or excuse from performance in its opening brief.  Plaintiff did not do so.

            In addition to the absence of evidence of performance, Plaintiff also fails to provide adequate calculations of its damages.  In the moving briefs and declarations of Avi Ryzman, Plaintiff provides a chart asserting total damages of $1,499,765.11, which is comprised of unpaid rent for certain dates, additional rent for insurance and property taxes, late charges, attorney fees and costs, and future rent due and payable.  (See Mot. 4-5; Ryzman Decl. ¶ 13.)  Plaintiff provides no calculation for the future rent due and payable, which allegedly totals $729,631.91 and makes up nearly half the total damages.  Furthermore, as summarized in opposition, Plaintiff’s descriptions of damages contain several discrepancies.  (Claremont Oppo. 14-15.)  The dollar figures for the various items of damages in Plaintiff’s chart do not add up to the “total attachment sought” of $1,499,765.11, but rather to $1,130,815.92.  The discrepancy is not explained by Plaintiff.  Plaintiff also states that Defendant “owes at least $364,388.19,” but Plaintiff’s chart states that the sub-total attachment is $368,949.19.  (Mot. 4-5; see also Ryzman Decl. Exh. B.)  That discrepancy also is not explained.  In his declaration, Ryzman also states that Plaintiff seeks attachment of “1,104,02.10,” again without explanation of the discrepancy from the other calculations.   (Ryzman Decl. ¶ 18.)  It is not the court’s function to perform the calculations for Plaintiff.  Given these discrepancies in Plaintiff’s calculations of damages, Plaintiff has not met its initial burden to prove damages in a specific amount. 

In opposition, Defendants submit the declaration of Dalton, and argue that Plaintiff did not perform certain obligations of the Lease.  Defendants claim the premises included unpermitted sheds which the city required them to remove, substantially reducing the square footage available for their operations.  Defendants also contend there were certain structural defects in the roof and walls.  Defendants argue that Plaintiff’s non-performance resulted in a material breach, excusing Defendants from performance and causing Defendants damages of $1,700,000, which would entirely offset the attachment sought by Plaintiff.  (See Dalton Decl. ¶¶ 5-28, Exh. 2-8; Claremont Oppo. 10-18.)  However, other than a conclusory statement in Dalton’s declaration, Defendants have not supported their claim that these breaches caused them damages of $1,700,000.

Plaintiff’s reply was untimely filed pursuant to CCP section 484.060(c).  “The Attachment Law statutes are subject to strict construction.” (Epstein v. Abrams (1997) 57 Cal.App.4th 1159, 1168.)  The court disregards the reply as being untimely filed.

            Because Plaintiff did not initially provide evidence of performance, Defendants have presented some evidence that Plaintiff failed to perform, and Plaintiff has not opposed this evidence in a timely reply, the court finds that Plaintiff has not shown probably valid claims for breach of contract or breach of guaranty in a particular amount. 

2.    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 lease and guaranty where the total amount allegedly due is in excess of $500.  The lease and guaranty are not secured by real property.  Dalton executed the guaranty as part of her trade, business, or profession.  (See e.g. Dalton Decl. ¶¶ 1-10.)

The lease provides standards under which Plaintiff’s damages could be calculated and ascertained with proof.  However, to obtain attachment, Plaintiff must also submit evidence from which its damages can be readily ascertained.  Plaintiff did not satisfy that burden.  For the reasons discussed above, Plaintiff’s calculations of damages contain several discrepancies that prevent the court from finding that Plaintiff has been damaged in any specific amount. 

3.    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 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.

4.    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.)  

Defendants seek to reduce the amount of attachment based on their cross-claims and claims for offset.  (Claremont Oppo. 12-18.)  Defendants have not satisfied all elements of attachment for their cross-claims, including by supporting its claim it was damaged in a specific amount. 

5.    Subject Property

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

Code of Civil Procedure section 487.010(a) provides that “[w]here the defendant is a corporation, all corporate property for which a method of levy is provided” is subject to attachment.   Thus, the request for attachment of all of Claremont’s property is appropriate.  (Application ¶ 9c.) 

6.    Exemptions

“If a defendant filing a notice of opposition desires to make any claim of exemption as provided in Section 484.070, the defendant may include that claim in the notice of opposition filed pursuant to this section.”  (CCP § 484.060(b).)  A claim of exemption must describe the property to be exempted and specify the statute section supporting the claim.  (§ 484.070(c).)  “The claim of exemption shall be accompanied by an affidavit supporting any factual issues raised by the claim and points and authorities supporting any legal issues raised.”  (§ 484.070(d).)

The plaintiff must oppose any claim of exemption filed by the defendant by filing a “notice of opposition” not less than two days before the hearing.  (CCP § 484.070(f).)  “If the plaintiff does not file and serve a notice of opposition as provided in this subdivision, no writ of attachment shall be issued as to the property claimed to be exempt.”  (Ibid.; see also Bank of America v. Salinas Nissan, Inc. (1989) 207 Cal.App.3d 260, 270.) 

Here, Dalton timely filed claims of exemptions.  While Plaintiff objected to some of Dalton’s evidence in support of the exemptions, Plaintiff did not file a “Notice of Opposition” as required by CCP section 484.070(f).   Accordingly, no writ of attachment may be issued as to all property Dalton claimed to be exempt. 

7.    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. 

Because the court denies the applications, an undertaking is not required.   

8.    Turnover Order  

Plaintiff’s request for a turnover order is derivative of the application for writ of attachment.  For the reasons discussed above, the request for a turnover order is also denied.

Conclusion

The applications are DENIED.  If Plaintiff contends it timely filed its reply, Plaintiff should provide evidence of this to the court at the hearing.