Judge: Melvin D. Sandvig, Case: 23CHCV00288, Date: 2023-02-24 Tentative Ruling
Case Number: 23CHCV00288 Hearing Date: February 24, 2023 Dept: F47
Dept. F47
Date: 2/24/23
Case #23CHCV00288
WRIT OF
ATTACHMENT
Application filed on 2/9/23.
MOVING PARTY: Plaintiff Steffanie Stelnick
RESPONDING PARTY: Defendants Ryan House and Tamar House
NOTICE: ok
RULING: The application is denied in its
entirety.
SUMMARY OF FACTS & PROCEDURAL HISTORY
This action arises out of Plaintiffs Steffanie Stelnick,
Todd Stelnick, and Southern California Real Estate Management, Inc.’s (collectively,
Plaintiffs) claim that Defendants Ryan House and Tamar House (collectively,
Defendants) have breached a Settlement Agreement that ended a prior
lawsuit. Plaintiffs contend that
Defendants have repeatedly breached the Settlement Agreement by engaging in
competing activity in violation of a non-compete clauses in the Settlement
Agreement. (See Stelnick Decl.) Plaintiffs contend that the Settlement
Agreement provides that Defendants will owe liquidated damages of $54,000 per
violation. Id. Plaintiffs contend that they recently learned
that the sale of Defendants’ residence is pending. Id.
On 2/1/23, Plaintiffs filed this action against
Defendants and Southern California Property Management Company, Inc. for: (1)
Breach of Contract and (2) Trademark Infringement (15 U.S.C. 1114(1)). On 2/3/23, Plaintiffs filed an ex parte
application for a right to attach order and writ of attachment with
$1,055,000.00 as the amount to be secured by the attachment which includes
$5,000.00 in estimated costs and $50,000.00 in estimated allowable attorney
fees. The property sought to be attached
is real property commonly known as 28125 Graciosa Street, Valencia, CA 91355
(the Property). Alternatively,
Plaintiffs requested a temporary protective order barring the transfer or
encumbrance of the Property. Defendants
opposed the ex parte application. On
2/8/23, this Court denied Plaintiffs’ ex parte application. (See 2/8/23 Minute Order).
On 2/9/23, Plaintiffs filed their First Amended Complaint
which alleges the same causes of action as the original complaint but now
includes an allegation that Defendants breached the confidentiality of the
Settlement Agreement by attaching the Settlement Agreement to their opposition
to Plaintiffs’ ex parte application for writ of attachment.
On 2/9/23, Plaintiffs also filed noticed application for
writ of attachment which originally had a 3/24/23 hearing date. On 2/9/23, Plaintiffs filed an ex parte
application for order shortening time for hearing on the application for writ
of attachment. On 2/10/23, this Court
granted the ex parte application in part by advancing and continuing the
3/24/23 hearing date to 2/24/23. (See
2/10/23 Minute Order). Defendants have
opposed the application and Plaintiffs have filed a reply to the
opposition.
ANALYSIS
Defendants’ objections to the declaration of Steffanie
Stelnick (numbers 1-14) are sustained.
Defendants’ request to strike the new evidence submitted
with the reply is granted. Such evidence
was available and could have been submitted with the moving papers. The Court finds Plaintiffs’ reasons for
failing to include the evidence with their moving papers to be unavailing. Additionally, Plaintiffs provide no authority
which would require Defendants to serve and file a sur-reply/response (which is
not a permitted filing in relation to the application) in response to this new
evidence. As such, the Court exercises
its discretion to not consider such evidence.
See Jay (2013) 218 CA4th 1522, 1537-1538. However, the Court notes that even if such
evidence were considered, it would not change the ruling to deny the
application on the merits.
Although the application for
writ of attachment is no longer an “ex parte application,” Plaintiffs still
include authority as to why the relief should be granted on an ex parte
basis. (See Plaintiffs Memorandum
of Points & Authorities, p.8:13-p.9:17).
In the reply, Plaintiffs also contend that they have satisfied the
requirements for ex parte relief. (See
Reply, p.1:25-27). The issue of ex parte
relief is moot since the Court specially set this matter as a noticed hearing. However, the Court addresses the issue of ex
parte relief because Plaintiffs still argue that they have met the requirements
for such relief. The Court finds that
Plaintiffs have failed to establish that they are entitled to the relief on an
ex parte basis or on a noticed hearing on an application for writ of
attachment, or in the alternative, for a protective order.
With regard to an ex parte application for a right to
attach order and/or writ of attachment, CCP 485.010 provides:
“(a) Except as otherwise provided
by statute, no right to attach order or writ of attachment may be issued
pursuant to this chapter unless it appears from facts shown by affidavit that
great or irreparable injury would result to the plaintiff if issuance of the
order were delayed until the matter could be heard on notice.
(b) The requirement of subdivision
(a) is satisfied if any of the following are shown:
(1) Under the circumstances of the
case, it may be inferred that there is a danger that the property sought to be
attached would be concealed, substantially impaired in value, or otherwise made
unavailable to levy if issuance of the order were delayed until the matter
could be heard on notice.
(2) Under
the circumstances of the case, it may be inferred that the defendant has failed
to pay the debt underlying the requested attachment and the defendant is
insolvent in the sense that the defendant is generally not paying his or her
debts as those debts become due, unless the debts are subject to a bona fide
dispute. Plaintiff's affidavit filed in support of the ex parte attachment
shall state, in addition to the requirements of Section
485.530, the known undisputed debts of the defendant, that the debts are
not subject to bona fide dispute, and the basis for plaintiff's determination
that the defendant's debts are undisputed.
(3) A
bulk sales notice has been recorded and published pursuant to Division
6 (commencing with Section 6101) of the Commercial Code with respect
to a bulk transfer by the defendant.
(4) An
escrow has been opened pursuant to the provisions of Section
24074 of the Business and Professions Code with respect to the sale by
the defendant of a liquor license.
(5) Any
other circumstance showing that great or irreparable injury would result to the
plaintiff if issuance of the order were delayed until the matter could be heard
on notice.
(c) Upon
a writ being issued solely on a showing under paragraph (2) of subdivision (b),
if the defendant requests the court to review the issuance of the writ, the
court shall conduct a hearing within five court days after the plaintiff is
served with notice of the defendant's request. A writ issued
solely on a showing under paragraph (3) of
subdivision (b) shall be limited to the property covered by the bulk sales
notice or the proceeds of the sale of such property. In addition to any other
service required by this title, such writ shall be served by the levying
officer on the transferee or auctioneer identified by the bulk sales notice not
more than five days after the levy of such writ. A writ issued solely on a
showing under paragraph (4) of
subdivision (b) shall be limited to the plaintiff's pro rata share of the
proceeds of the sale in escrow.”
Plaintiffs offer only the declaration of Steffanie
Stelnick to support their claim that ex parte relief is necessary. However, Ms. Stelnick merely claims that the
equity in the Property “may be [the Houses] only substantial asset that
could be used to satisfy a Judgment” and then states, without any supporting
evidence, that “The HOUSES may seek to hide the proceeds of the sale of
the home, barring an attachment and/or TPO preventing such abuse.” (emphasis
added) (See Stelnick Decl. ¶16). The foregoing is insufficient to satisfy the
requirements of CCP 485.010(b)(1), (2) or (5) relied on by Plaintiffs. (See Memorandum of Points &
Authorities, p.8:26-p.9:12).
As a noticed application, Plaintiffs have also failed to
establish that they are entitled to the relief requested.
CCP 483.010(a) provides that an attachment may be issued
in an action on a claim or claims for money, each of which is based on a
contract where the total amount of the claim or claims is a fixed or readily
ascertainable amount not less than $500, exclusive of costs, interest and
attorney’s fees.
CCP 484.090(a) provides that the Court shall issue a
right to attach order if it finds all of the following:
“(1) The
claim upon which the attachment is based is one upon which 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.”
Plaintiffs have not shown that
the claims on which the relief are based are for a fixed or readily
ascertainable amount, that such claims have probable validity, and/or that the
attachment is not sought for a purpose other than the recovery on the claim
upon which the attachment is based. See
CCP 483.010(a); CCP 484.090(a)(1), (2), (3).
Plaintiffs have failed to establish the probable validity
of their claims. Plaintiffs did not
initially provide the underlying contract (the Settlement Agreement) which they
contend Defendants breached. Instead,
Plaintiffs stated that the Settlement Agreement “is confidential and will be
filed with the court under separate cover at a later date.” (See Stelnick Decl. ¶2). However, Defendants provided a copy of the
Settlement Agreement as did Plaintiffs with their reply. (Freeburg Decl., Ex.B; Reply, Ex.6). The Court notes that a review of the entire
Settlement Agreement was necessary to determine the agreement’s actual terms
and whether or not Plaintiffs’ claims that Defendants breached same have
probable validity.
Based upon review of the Settlement Agreement, the Court
finds that Ms. Stelnick failed to mention the very important part of the
non-compete clause which provides that “[c]ommercial property management and
residential and commercial leasing are specifically excluded from this
agreement not to compete… .” (See
Stelnick Decl. ¶¶4-6; Freeburg Decl., Ex.B, p.1, ¶f. of “Settlement
Terms”). Additionally, the only evidence
Plaintiffs offered with their moving papers of the claimed breaches of the
Settlement Agreement are unsupported statements in Ms. Stelnick’s declaration. (See Stelnick Decl. ¶¶9-13). Even if the Court considered the new evidence
submitted with the reply, such evidence does not establish that Defendants
breached the Settlement Agreement. As
noted above, pursuant to the Settlement Agreement, “[c]ommercial property
management and residential and commercial leasing are specifically excluded
from this agreement not to compete… .”
(Freeburg Decl., Ex.B, p.1 ¶f of “Settlement Terms; Reply Ex.6). The exhibits attached to the reply do not
establish that Defendants were engaging in residential property management
during the two-year non-compete period provided in the agreement. Also, Ms. Stelnick cannot testify as to what
Defendants’ “understood” the Settlement Agreement to mean. (See Stelnick Decl. ¶5). Similarly, Ms. Stelnick’s interpretation of
the Settlement Agreement cannot alter its clear terms. (See Stelnick Decl. ¶6).
It also appears that Plaintiffs may be seeking the
attachment of the Property for a purpose other than the recovery on the claim
upon which the attachment is based. Ms.
Stelnick indicates that Defendants began breaching the Settlement Agreement on
or about 11/16/20. (Stelnick Decl. ¶10). However, Plaintiffs did not file this action
until 2/1/23 when they claim that the sale of Defendants’ personal residence is
pending. As such, it appears that
Plaintiffs may be attempting to interfere with the sale for other reasons,
especially since they have presented no evidence, other than the
unsubstantiated statement in Ms. Stelnick’s declaration, that Defendants have
no other assets to satisfy a judgment and that Defendants may seek to hide the
proceeds of the sale. (See
Stelnick Decl. ¶16). Further, Defendants’
declarations refute Plaintiffs’ claims that they listed their home for sale in
response to Plaintiffs’ claims in this action.
(T. House Decl. ¶¶9-11; R. House Decl. ¶¶7-8).
Further, Plaintiffs’ admit that their “total damages are
unknown” and claim that they will be “some multiple of the $54,000 per breach
figure in the Agreement.” (See
Plaintiffs’ Memorandum of Points & Authorities, p.6:15-18). As such, damages are not for a fixed or
readily ascertainable amount, especially considering Plaintiffs have not
established any specific number of breaches of the Settlement Agreement by
Defendants. CCP 483.010(a).
CONCLUSION
Based on the foregoing, the application is denied in its
entirety.