Judge: Mitchell L. Beckloff, Case: 22STCV10616, Date: 2022-08-10 Tentative Ruling
Case Number: 22STCV10616 Hearing Date: August 10, 2022 Dept: 86
2M TEXTILE, INC. v. ACTING PRO BZ, INC.
Case Number: 22STCV10616
Hearing Date: August 10, 2022
[Tentative] ORDER GRANTING APPLICATION FOR WRIT OF ATTACHMENT
On April 18, 2022, Plaintiff, 2M Textile, Inc., filed its first amended complaint (1AC) against Defendants, Acting Pro BZ, Inc. (APBZ) and Kon I. Moon. The 1AC contains three causes of action: (1) breach of contract; (2) common count; and (3) account stated.
Plaintiff now applies for writ of attachment against Defendant APBZ in the amount of $167,144.86 which includes $100.00 in costs and $3,000.00 in attorney fees.
Defendant APBZ opposes.
The application is GRANTED.
Plaintiff’s evidentiary objections are overruled except as to paragraph 8 and 9 which are sustained. In addition, the court sustains in part the objection to paragraph 12 as to “in saleable condition” only.
LEGAL STANDARD
The court shall issue a right to attach order if the court finds all of the following:
The claim upon which the attachment is based is one upon which an attachment may be issued.
The plaintiff has established the probable validity of the claim upon which the attachment is based.
The attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based.
The amount to be secured by the attachment is greater than zero.
(Code Civ. Proc. § 484.090.)
“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.” (Code Civ. Proc. § 484.030.) Statutory attachment procedures are purely creations of the legislature and as such “are subject to ‘strict construction.’ ” (Hobbs v. Weiss (1999) 73 Cal.App.4th 76, 79 [citing Vershbow v. Reiner (1991) 231 Cal.App.3d 879, 882]; see also Nakasone v. Randall (1982) 129 Cal.App.3d 757, 761.) A judge does not have authority to order any attachment that is not provided for by the attachment statutes. (Jordan-Lyon Productions, Ltd. v. Cineplex Odeon Corp. (1994) 29 Cal.App.4th 1459, 1466.) “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, supra, 73 Cal.App.4th at 79-80.) “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 80 [cleaned up].)
ANALYSIS
Probable Validity of Plaintiff’s Claims:
“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.)
The application is based on a claim for breach of a contract, common count, and account stated. The primary claim is a breach of contract claim. 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.)
In support of its contract claim against Defendant APBZ, Plaintiff provides the purchase orders and invoices whereby Plaintiff as seller sold fabrics to Defendant APBZ as buyer during August 2021 to October 2021. (Kim Decl. ¶¶ 7-12, Ex. 1-40.) According to the testimony of Chief Executive Officer, the unpaid balance due on the invoices is $164,044.86. (Id. ¶¶ 13-14.)
This evidence, if not rebutted, is sufficient to show the probable validity of Plaintiff’s breach of contract claim.
Defendant APBZ opposes Plaintiff’s application. As a preliminary matter, the court notes Defendant APBZ’s opposition is set forth on the form notice of opposition and claim of exemption (form AT-155) along with a supporting declaration. Defendant APBZ does not submit a memorandum of points and authorities in support of its opposition. The notice appears to contain legal arguments, but at least one argument is cut off mid-sentence. (See AT-155 ¶ 4a.) It appears Defendant APBZ contends: (1) Plaintiff breached its implied contractual obligation of good faith and fair dealing by changing terms, shipping unreasonable goods, and not negotiating in good faith; (2) Plaintiff did not mitigate its damages; (3) the amount of damages is incorrect; and (4) Plaintiff refuses to accept Defendant APBZ’s return of wrong materials. (Id. ¶ 4a-b.)
In the admissible attestations in the supporting declaration of Moon Kon, Kon declares generally: (1) he has been paying Plaintiff consistently until March 2022 when he needed more time, and the parties reached an agreement based on credit (Kon Decl. ¶¶ 5-7); (2) Plaintiff shipped material late for the summer season; and (3) Defendant APBZ has stored the late-shipped material and is willing to store it or use the material next summer if Kon can pay for it in installments. (Id. ¶¶ 10-14).
Kon does not sufficiently explain with supporting or corroborating evidence how the parties reached an agreement on the terms of credit, including the necessary details of how and when the agreement was formed. (Id. ¶ 7. [“I believed we reached an agreement common in the industry where the parties offer credit on accounts payable.”]) Kon also does not provide any persuasive evidence Defendant APBZ does not owe the obligation. Finally, Kon does not sufficiently explain with supporting or corroborating evidence which material was late and Kon’s actual attempts to return the merchandise for a refund instead of merely offering to do so. (Id. ¶ 10. [“I was shipped material for summer material. This material was late and shipped in Autumn after the summer season. I cannot use this material. I have informed 2M that I need to return the material.”].) Additionally, the court notes that the invoices themselves indicate that “[n]o return of merchandise after one month of receipt” and “[n]o returns accepted without prior authorization,” (e.g., Kim Decl. Ex. 1) which would mean Kon’s belated offers to return the merchandise are inconsistent with the terms of the purchase orders.
Defendant APBZ does not otherwise provide any evidence to supports its contention Plaintiff failed to mitigate its damages.
Based on all the evidence before the court, the court finds Plaintiff has demonstrated a probable validity of its claim against Defendant APBZ.
Finally, Plaintiff requests the amount of the attachment include $3,000 for attorney fees and $100 for costs. The court notes the purchase orders include an attorney fees provision for collection costs. (E.g., Kim Decl. Ex. 1. [“Buyer hereunder agrees to pay all collection expenses and costs including attorney’s fees.”]) Plaintiff does not provide any explanation of how it calculated the amount for attorney fees and costs. Nonetheless, based on the complaint and the underlying facts, the court finds the amounts reasonable.
Basis of Attachment:
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.) “[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).) “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.” (Code Civ. Proc. § 483.010, subd. (c).)
Plaintiff’s claim is based on a written contract—the purchase orders—and is in excess of five hundred dollars. Accordingly, the court finds Plaintiff’s claim is a proper basis for attachment.
Purpose and Amount of Attachment:
As noted earlier, statutory attachment procedures are purely creations of the legislature and as such “are subject to ‘strict construction.’ ” (Hobbs v. Weiss, supra, 73 Cal.App.4th at 79.) “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.” (Id. at 79-80.)
Code of Civil Procedure section 484.090 provides 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.” A plaintiff seeking attachment must make this showing.
Here, Plaintiff attests the application for attachment is not sought for a purpose other than the recovery on a claim upon which the attachment is based. (Application. ¶ 4.) The amount of attachment is indisputably greater than zero.
Accordingly, the court finds that Plaintiff has complied with this statutory requirement and attachment is sought for a proper purpose.
Subject Property:
Code Civil Procedure section 487.010, subdivision (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.
Plaintiff identifies the property subject to attachment as any property of Defendant APBZ. This is property is properly subject to attachment.
Defendant APBZ has claimed exemptions. (AT-155 ¶ 4c.) Specifically, Defendant APBZ claims an exemption for equipment and machinery for its business and payroll wages to operate the business. The court overrules any requests for exemptions. “Exemptions are available only to natural persons, not business entities.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2022) ¶¶ 9:887.) In any event, the claim for exemption is insufficiently supported. The supporting declaration does not provide any facts explaining why particular property should be exempt. (See Code Civ. Proc., § 484.070, subd. (a). [“If the defendant fails to make the claim or makes the claim but fails to prove that the personal property is exempt, the defendant may not later claim the exemption except as provided in Section 482.100.”]) Accordingly, the court denies the claimed exemptions.
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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. Plaintiff does not argue an undertaking in a different amount is appropriate here.
Accordingly, the court sets the undertaking at $10,000.
CONCLUSION
Based on the foregoing, Plaintiff’s application for a writ of attachment is GRANTED in the amount of $167,144.86. Plaintiff shall post a $10,000.00 undertaking prior to the writ issuing.
IT IS SO ORDERED.
August 10, 2022 ________________________________
Hon. Mitchell Beckloff
Judge of the Superior Court