Judge Mitchell L. Beckloff, Case 22STCV25535 2023-05-05 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 22STCV25535, Date: 2023-05-05 Tentative Ruling

Plaintiff, Transportation Commodities, Inc., seeks writs of attachment against Defendants Seaside Refrigerated Transport, Inc. and Beverly Johnson, in the amount of $224,271.56.[1]

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.

“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 (emphasis added); 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].)

“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.)

Plaintiff seeks an attachment based on a written “CREDIT APPLICATION” to extend credit to Defendant Seaside for the rental of equipment owned by Plaintiff,[2] invoices and a written guaranty executed by Defendant Johnson.

According to Plaintiff, on February 5, 2013, Plaintiff and “Defendants” entered into an agreement whereby Plaintiff extended credit to Defendant Seaside for the rental of "single or tandem tractor(s)" owned by Plaintiffs. (Lubin Decl., ¶ 5.) To induce Plaintiff to enter into the leasing arrangement, Defendant Johnson executed a personal guaranty. (Lubin Decl., ¶¶ 4-10.) Plaintiff reports pursuant to the leasing arrangement, Plaintiff invoiced a series of “lease contract and repair orders invoices, among other associated charges, to [Defendant] Seaside for use of the leased equipment owned by” Plaintiff. (Lubin Decl., ¶ 8.)

Based on the language on the invoices (dated between April 6, 2022 and October 10, 2022) payment was due to Plaintiff from Defendant Seaside within 30 days. A current summary statement of account prepared by Plaintiff shows $224,271.56 as due and owing to Plaintiff. (Lubin Decl., ¶ 8.) Plaintiff represents it performed all acts required of it by supplying the equipment rental and related services to Defendant Seaside. (Lubin Decl., ¶ 10.) Defendant Seaside has failed to perform by paying all amounts owed and made only a partial payment of $5,000 to Plaintiff. (Lubin Decl., ¶ 11.) Similarly, Plaintiff advises Defendant Johnson failed to perform on the guaranty by neglecting to pay Defendant Seaside’s obligation to Plaintiff. (Lubin Decl., ¶ 11.)

As noted by Plaintiff, Defendants submit no evidence in opposition. Instead, Defendants argue the parties have no binding contract. Defendants further argues no contract exists from which damages could be reasonably ascertained.

Code of Civil Procedure section 483.010, subdivision (a), “authorizes an attachment in an action ‘upon a contract . . . where the total amount of the claim or claims is a fixed or readily ascertainable amount . . . .’ (Italics added.)” (CIT Group/Equipment Financing, Inc. v. Super DVD, Inc. (2004) 115 Cal.App.4th 537, 539-540.)

“The Legislature has determined attachments may properly issue only to secure anticipated recoveries on contract claims in fixed or readily ascertainable amounts.” (Baker v. Superior Court (1983) 150 Cal.App.3d 140, 146-147; see also Waffer Internat. Corp. v. Khorsandi (1999) 69 Cal.App.4th 1261, 1277.) “ ‘ “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.” ’ [Citations.]” (CIT Group/Equipment Financing, Inc. v. Super DVD, Inc., supra, 115 Cal.App.4th at 540.) While it is not necessary the amount owed appear on the face of the contract, damages must be measurable by reference to the contract sued upon, and the basis of the damages must be reasonable and certain. (Ibid.; Baker v. Superior Court, supra, at 146-147; Walker v. Phillips (1962) 205 Cal.App.2d 26, 31.)

In support of the amount claimed, Plaintiff submits a invoices and a summary of account showing a debt of $224,271.56. Thus, Plaintiff’s evidence of the obligation owed to it consists only of invoices. However, “[t]he prevailing rule is that an invoice, standing alone, is not a contract . . . .” (India Paint & Lacquer Co. v. United Steel Products Corp. (1954) 123 Cal.App.2d 597, 607.)

The credit application submitted by Plaintiff does not constitute a contract upon which an order to attach may issue. The credit application contains no terms or conditions outlining the rights and responsibilities of the parties—the credit application is merely a request to extend credit. The credit agreement does not provide evidence of any agreement by Defendant concerning the rental transaction such as lease rates and terms.

Moreover, some of the invoices provided by Plaintiff suggest each invoice is a separate contract. (See invoice 02S230487, Lubin Decl., Ex. 2 [unpaginated].) There are no signatures on those particular invoices. The court acknowledges the guaranty states“ ‘each purchase or charge shall serve to reaffirm this Agreement’ . . . .” (Reply 5:21-22.) Nonetheless, the statement does not establish the terms of any contract between the parties.

Additionally, Defendants also correctly note Plaintiff has not provided evidence of any binding prevailing party attorney fee provision.[3]

For purposes of attachment, there some evidence the parties had some contract. The court cannot determine the terms of any such contract. While the invoices indicate a 30-day term, there is no evidence the parties agreed to such a term. Moreover, it does not appear Daniel Lubin, Plaintiff’s credit and collections manager, has any percipient knowledge of any terms agreed to by the parties. Plaintiff has elected not to provide the court with any “equipment lease request” prepared by Defendant Seaside and submitted to Plaintiff. (See Lubin Decl., ¶ 9; Reply 5: 9.) There is also no evidence concerning the parties’ course of dealing. (See Reply 5:13-14.) As there is no evidence of breach, the court cannot find Plaintiff’s claim—on the evidence presented—is probably valid.

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) [emphasis added].) “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 in excess of five hundred dollars. It is based on some agreement between the parties.

Plaintiff asserts, and Defendants do not contest, that Plaintiff’s claims against Defendant Johnson arise out of the conduct of a trade, business, or profession. (Memo 7:24-8:7.) Defendant Johnson also signed the guaranty as “VP & CEO.” (Lubin Decl., Ex. 1.)

Nonetheless, the court cannot find the claim is in a fixed or readily ascertainable amount based on the terms of the contract. As discussed, the court cannot determine the specific terms of the parties’ agreement.

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.”

Here, Plaintiff, through David Lubin, attests the application for attachment is not sought for a purpose other than the recovery on a claim upon which the attachments are based. (Judicial Council Form AT-105, ¶ 4.) Accordingly, the court finds Plaintiff has complied with Code of Civil Procedure sections 484.020 and 484.090.

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. Where the defendant is a natural person, the description of the property shall be reasonably adequate to permit the defendant to identify the specific property sought to be attached.” (Code Civ. Proc., § 484.020, subd. (e).)

Plaintiff properly identifies the property subject to attachment as the property identified at item 9(a) and 9(e) of the Judicial Council form attachment applications.

[1] Plaintiff repeatedly refers to Defendant Seaside as a suspended corporation. Plaintiff has provided no evidence to support its statement. The court notes Defendant Seaside is represented by counsel and has filed a general denial.

[2] Plaintiff twice misleadingly refers to a “TCI/Rental Agreement with credit application, trade references, bank references, and insurance information . . . .” (Memo 2:13-14; Lubin Decl., ¶ 5.) There is no evidence of a “TCI/Rental Agreement.” Instead, there is a “CREDIT APPLICATION” on a “TCI LEASING/RENTALS” form. (Lubin Decl., Ex. 1.)” The “trade references, bank references, and insurance information” are not separate documents as intimated. Instead, they are areas of inquiry on the CREDIT APPLICATION. (See Lubin Decl., Ex. 1.) In reply, Plaintiff again refers to an “executed ‘leasing agreement’ ” but does not address the lack of a fixed and readily ascertainable amount of damages due based on the contract terms. (Reply 4:15, 4:22.)

[3] Plaintiff reports such language exists on the “invoices.” The court cannot locate any such language on any invoice provided.