Judge Mary H. Strobel, Case 22STCV17289 2022-09-13 Tentative Ruling

Plaintiff High Precision Gas, LLC (“Plaintiff”) moves for a writ of possession against Defendant Xtractor Depot, LLC (“Defendant” or “Xtractor”) and Defendant So Cal Medical Supplies (“So Cal Medical Supplies”; collectively “Defendants”) with respect to “1,405 compressed gas cylinders, size 100 lb. with detailed description on Exhibit H to Declaration of Jonathan Wai” (hereafter “Property” or “Cylinders”). Plaintiff also moves for a temporary restraining order (“TRO”) with respect to the property described in the application for writ of possession. Finally, Plaintiff moves for a writ of attachment against Defendants in the amount of “$140,271.60, or according to proof,” and a temporary protective order (“TPO”) with respect to “any assets subject to attachment.”

Defendant’s Evidentiary Objections to Evidence Submitted In Support of Applications for Writ of Possession and TRO

Defendant’s Evidentiary Objections to Evidence Submitted In Support of Application for Writ of Attachment and TPO

Plaintiff’s Evidentiary Objections to Declaration of Andrew Yoo Submitted in Opposition to Applications for Writ of Possession and TRO

Plaintiff’s Evidentiary Objections to Declaration of Andrew Yoo Submitted in Opposition to Applications for Writ of Attachment and TPO

Defendant’s objection to the reply declaration of Matthew Reinstein is sustained. “The salutary rule is that points raised in a reply brief for the first time will not be considered unless good cause is shown for the failure to present them before.” (Balboa Ins. Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010.) The evidence is not rebuttal, but rather evidence to establish Plaintiff’s initial burden of proof. Plaintiff does not show good cause to submit new evidence in reply to meet its burden of proof. Even if the deposition had occurred on August 11, 2022, Plaintiff could not have submitted the evidence with its moving papers, which were filed in June 2022. Plaintiff should have submitted all evidence necessary to meet its burden of proof with the motion and not relied on a deposition noticed for after the motion was filed. If Plaintiff desired to rely on the deposition evidence, Plaintiff should have filed the motion only after obtaining such evidence, or taken the motion off calendar and then re-filed it with all relevant evidence. Any alleged agreement of Defendant’s counsel for Plaintiff to use the deposition transcript for this hearing is not binding on the court and does not, in any event, show good cause to submit new reply evidence.

On May 25, 2022, Plaintiff filed a complaint against Defendants for breach of contract, common counts, claim and delivery, and conversion.

On June 17, 2022, Plaintiff filed the instant applications for writ of possession and TRO. On June 23, 2022, Plaintiff filed an application for writ of attachment and TPO.

On July 29, 2022, Xtractor filed an answer and a cross-complaint. Plaintiff has answered the cross-complaint. Xtractor’s answer asserted the statute of frauds as a defense.

On August 22, 2022, Xtractor filed oppositions to the applications for writ of possession and TRO and evidentiary objections.

On September 1, 2022, Xtractor filed an opposition to the application for a writ of attachment and TPO and evidentiary objections.

No opposition or responsive pleading has been received from Defendant So Cal Medical Supplies. Plaintiff “believes” that Xtractor and So Cal Medical Supplies are the same company. (Wai Decl. ¶ 3.)

On September 2, 2022, Plaintiff filed a reply to the opposition to the applications for writ of possession and TRO, evidentiary objections, and a response to Xtractor’s evidentiary objections.

On September 8, 2022, Xtractor filed objections to the reply declaration of Matthew Reinstein.

On September 9, 2022, Plaintiff filed a reply to the opposition to the applications for writ of attachment and TPO, evidentiary objections, and a response to Xtractor’s evidentiary objections.

“Upon the filing of the complaint or at any time thereafter, the plaintiff may apply pursuant to this chapter for a writ of possession by filing a written application for the writ with the court in which the action is brought.” (CCP § 512.010(a).)

Pursuant to Code of Civil Procedure section 512.010(b), the application must be submitted under oath and include:

(1) A showing of the basis of the plaintiff's claim and that the plaintiff is entitled to possession of the property claimed. If the basis of the plaintiff's claim is a written instrument, a copy of the instrument shall be attached.

(2) A showing that the property is wrongfully detained by the defendant, of the manner in which the defendant came into possession of the property, and, according to the best knowledge, information, and belief of the plaintiff, of the reason for the detention.

(4) A statement, according to the best knowledge, information, and belief of the plaintiff, of the location of the property and, if the property, or some part of it, is within a private place which may have to be entered to take possession, a showing that there is probable cause to believe that such property is located there.

(5) A statement that the property has not been taken for a tax, assessment, or fine, pursuant to a statute; or seized under an execution against the property of the plaintiff; or, if so seized, that it is by statute exempt from such seizure.

Before the hearing on the Writ of Possession, the Defendant must be served with (1) a copy of the summons and complaint; (2) a Notice of Application and Hearing; and (3) a copy of the application and any affidavit in support thereof. (CCP § 512.030.)

“The writ will be issued if the court finds that the plaintiff's claim is probably valid and the other requirements for issuing the writ are established.” (CCP § 512.040(b).) “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 § 511.090.)

Prior to the issuance of a writ of possession, the Plaintiff must file an undertaking “in an amount not less than twice the value of the defendant's interest in the property or in a greater amount.” (CCP § 515.010(a).)

“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.

“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.)

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

Pursuant to Code of Civil Procedure section 512.010(b)(3), the application must include a particular description of the property and a statement of its value.

The application describes the property as follows: “1,405 compressed gas cylinders, size 100 lb. with detailed description on Exhibit H to Declaration of Jonathan Wai.” The application states that “[t]he value of the missing cylinders is $456,625.00 (1,405 at $325/cyl).”

Defendant contends that Plaintiff has failed to provide a sufficient description of the property. (Oppo. 10.) The court agrees.

In his declaration, Jonathan Wai states, in pertinent part: “Attached as Exhibit H is a true and correct copy of the list of HPG cylinders checked out to Defendants, including serial numbers. The total number of cylinders on this list is 2,300, but only 1,405 are required to be returned to HPG and are the subject of this Writ of Possession proceeding.” (Wai Decl. ¶ 33.) Thus, Wai admits that the description of the Property in Exhibit H includes nearly 900 cylinders that are not at issue. However, Plaintiff never specifies which of the 2,300 cylinders are at issue, and which are not. Neither the court, not Plaintiff, nor the levying officer can determine from the application which specific property is at issue.

In opposition, Defendant also submits evidence that “customers were returning the cylinders directly to HPG, and this was not being tracked.” (Yoon Decl. in opposition to application for writ of possession ¶ 8.) Defendant raised this concern in an email dated December 1, 2020, sent to Jonathan Wai. (Id. Exh. A.) In reply, Plaintiff has not submitted a declaration disputing that some customers return the cylinders directly to Plaintiff. Nor does Plaintiff dispute the issue in its reply brief. (Reply 6; Sehulster Tunnels/Pre-Con v. Traylor Brothers, Inc. (2003) 111 Cal.App.4th 1328, 1345, fn. 16 [failure to address point is “equivalent to a concession”].) This evidence further adds to the lack of clarity about which cylinders are at issue.

In reply, Plaintiff argues that “[t]he evidence offered by HPG specifically identifies every single transaction of cylinders ‘to’ and ‘from’ HPG and Xtractor Depot going back to 2018 (Wai, Ex. F) and includes the manufacturer serial number of each of the cylinders still checked out to Xtractor Depot (Wai, Ex. H).” (Reply 5.) Exhibit F to the Wai declaration does not appear to include the serial numbers from Exhibit H. Furthermore, while Wai claims that Exhibit F “tracks the balance back to 2018, shows the deliveries and pick-ups for various types of cylinders, and shows that Defendants currently have possession of 1,405 of HPG’s 100# cylinders that have not been returned,” he does not explain the columns in Exhibit F or support this statement in his declaration. (Wai Decl. ¶ 13.) Moreover, it is not the court’s function, in ruling on an application for writ of possession, to search through and decipher Plaintiff’s evidence and try to determine for Plaintiff which specific property is at issue.

Plaintiff has not provided a particular description of the property. Plaintiff therefore does not satisfy section 512.010(b)(3). Because Plaintiff has not provided a sufficient description of the property, the court does not decide Defendant’s contention that Plaintiff has not provided a sufficient statement of value. (Oppo. 11.)

Pursuant to Code of Civil Procedure section 512.010(b)(4)-(5), the application must include:

Plaintiff has provided a statement that the property has not been taken for a tax, assessment, or fine, pursuant to statute and has not been seized under an execution against the Plaintiff’s property.

In the application, Plaintiff states that the Cylinders are located at (1) Xtractor Depot warehouse, 855 Washington Blvd., Montebello, CA 90640; (2) Xtractor Depot warehouse, 804 E Mill St, San Bernardino, CA 92408; and (3) Unknown Xtractor Depot customer locations in California. Because the application asks for an order permitting a levying officer to enter private property and take possession of the Cylinders, Plaintiff must establish “probable cause” to believe that the Cylinders are located at the stated addresses. (See CCP §§ 512.010(b)(4), 512.080.)

Plaintiff does not satisfy this standard as to “unknown” customer locations. Plaintiff also does not show probable cause to believe the Cylinders are located at 855 Washington Blvd., Montebello, CA 90640 and 804 E Mill St, San Bernardino, CA 92408. Plaintiff sent representatives to these locations to take the Cylinders, but the representatives were not able to verify which Cylinders, if any, were present at each location. (Lee Decl. ¶¶ 4-11; Wai Decl. ¶¶ 19-33.) Plaintiff does not submit any written contract, email admissions of Defendant, or other documentary evidence showing probable cause to believe any specific Cylinders are located at the stated address.

Because Plaintiff does not show probable cause to believe the Cylinders are located at the stated addresses, the application is denied. Furthermore, as discussed above, Plaintiff does not provide a sufficient description of the Cylinders. The court cannot issue a writ directing the levying officer to enter private property and search for Cylinders based on a list with thousands of serial numbers, 900 of which Plaintiff admits are not at issue and which Plaintiff had not identified in the application.

Plaintiff has not filed a memorandum of points and authorities in support of the application for writ of possession. From the application itself, Plaintiff appears to seek a writ of possession based on its third cause of action for claim and delivery. (Appl. ¶¶ 3-5.) That cause of action requires Plaintiff to prove that it is the owner of the personal property; and that Defendant is in wrongful possession of the property. (Compl. Third Cause of Action ¶¶ 1-2.)

For the reasons stated above, Plaintiff has not sufficiently identified the Cylinders that Defendant has allegedly detained. Accordingly, Plaintiff does not show a probably valid claim on this record.

Plaintiff also seeks a temporary restraining order retraining Defendant from transferring any interest in the Cylinders; concealing the Cylinders; or impairing its value. A TRO may be issued on an ex parte basis if the court makes certain findings, including that “plaintiff has established the probability that there is an immediate danger that the property claimed may become unavailable to levy by reason of being transferred, concealed, or removed or may become substantially impaired in value.” (CCP § 513.10(b).) “If at the hearing on issuance of the writ of possession the court determines that the plaintiff is not entitled to a writ of possession, the court shall dissolve any temporary restraining order; otherwise, the court may issue a preliminary injunction to remain in effect until the property claimed is seized pursuant to the writ of possession.” (CCP § 513.10(c).)

Here, Plaintiff seeks a writ of possession by noticed motion, not ex parte application. Thus, Plaintiff does not seek a TRO but rather a preliminary injunction. Without a sufficient description of the property at issue, the court does not issue any type of injunction.

The application for writ of attachment is based on Plaintiff’s cause of action for breach of contract. Plaintiff submits evidence that Plaintiff and Defendant entered a contract whereby “HPG sold compressed gases to Defendants on credit [and] HPG provided the gases in cylinders owned by HPG.” (Wai Decl. ¶ 5.) Plaintiff submits evidence that beginning on January 18, 2022, Defendant breached the contract by failing to make the required payments. (Id. ¶ 13.) Plaintiff authenticates a balance statement showing that $140,271.60 is past due on nine invoices issued to Defendant pursuant to the parties’ contractual relationship. (Id. ¶ 13, Exh. E.)

In opposition to the application for writ of attachment, Defendant contends that Plaintiff “fails to substantiate any duty or obligation actually included within the implied contract.” (Oppo. to Writ of Attach. 7.) The court is not persuaded. Plaintiff submits evidence that Defendant agreed to pay the amounts due for the gas, as reflected in the invoices. (Wai Decl. ¶¶ 5-13, Exh. A-E.) In the opposing declaration of Andrew Yoon, Defendant has not disputed that it received the gas or failed to timely pay the invoices, as reflected in the balance statement attached as Exhibit E to the Wai declaration. (See Yoon Decl. generally.)[1]

Considering the relative merits of the parties’ positions, the court concludes that Plaintiff has a probably valid contract claim against Defendant for $140,271.6.

“[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).)

“It is a well-recognized rule of law in this state that an attachment will lie upon a cause of action for damages for a breach of contract where the damages are readily ascertainable by reference to the contract and the basis of the computation of damages appears to be reasonable and definite. [Citations.] The fact that the damages are unliquidated is not determinative. [Citations.] But the contract sued on must furnish a standard by which the amount due may be clearly ascertained and there must exist a basis upon which the damages can be determined by proof.’ ” (See CIT Group/Equipment Financing, Inc. v. Super DVD, Inc. (2004) 115 Cal.App. 4th 537, 541.)

Here, Plaintiff’s application for writ of attachment is based on a contract where the total amount allegedly due is in excess of $500. It does not appear this contract claim is secured by real property. Plaintiff’s damages are fixed and readily ascertainable from the invoices and Plaintiff’s declaration.

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.

The court has considered Defendant’s arguments that the application is made for an improper purpose and finds them unpersuasive. (Oppo. 7-8.) As discussed, Defendant has not materially disputed that it owes $140,271.60 on the invoices reflected in Exhibit E to the Wai declaration. The unchallenged debt belies an assertion of improper purpose for the application for writ of attachment. Defendant cites generally to the declaration of Andrew Yoon and claims, inter alia, that “Plaintiff’s [sic] trespassed onto Defendant’s property on two separate occasions, and caused disruptions to Defendant’s business.” (Oppo. 8.) The evidence does not show a trespass onto Defendant’s property. Moreover, the dispute about whether the Cylinders were wrongfully detained by Defendant, were not properly accounted for by Plaintiff, and were already returned by customers to Plaintiff, is not relevant to Plaintiff’s separate claim for damages based on unpaid invoices.

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, a request for attachment of all of Defendant’s property is appropriate.

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.)

While unclear, Defendant may seek to reduce the attachment based on a cross-claim that Plaintiff “poached” clients from Defendant “resulting in a substantial loss in revenue.” (Oppo. 5; Yoon Decl.) Defendant does not address all requirements of attachment for this cross-claim. For instance, Defendant does not show that the claim is based on a contract; that damages are fixed or readily ascertainable; or that there are damages in any specific amount.

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.

Plaintiff also seeks a temporary protective order against Defendant. Because the attachment order is issued, the court does not issue a TPO.

In opposition, Xtractor has not disputed operating as So Cal Medical Supplies, as stated by Wai and as suggested in business records submitted by Wai. (See Wai Decl. Exh. A-G.) It would appear that So Cal Medical Supplies is a “dba” for Xtractor, the formal business entity. Subject to argument at the hearing, the court tentatively concludes that attachment should issue against “Xtractor Depot, LLC; So Cal Medical Supplies,” as requested in the application.

Plaintiff’s application for a writ of attachment is GRANTED in the amount of $140,271.60. Plaintiff to post an undertaking of $10,000.

[1] In its evidentiary objections, Defendant refers to the “Statute of Frauds (California Civil Code section 1624(a)(1) and (7)),” but then argues that the agreement is “unenforceable within the Statute of Limitations.” (Objections filed 9/1/22 at 2:23-3:11.) To the extent Defendant seeks to raise a defense based on the statute of frauds, the argument was not made at all in the opposition brief. Defendant is not precluded from properly developing the defense in future proceedings.