Judge Mitchell L. Beckloff, Case 22STCV30787 2023-02-17 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 22STCV30787, Date: 2023-02-17 Tentative Ruling

Plaintiff, Shunnu Jin DBA Nalin Trading, seeks a writ of attachment against Defendant, Amy's House, Inc. DBA L'Atiste, in the amount of $1,147,362.20, which includes estimated costs of $10,000 and estimated attorney’s fees of $100,000.

The application is granted. The amount of the attachment authorized herein, however, represents a reduction to estimated attorney’s fees and costs.

Defendant’s objections to the Declaration of Shunnu Jin: All objections are overruled except objection number 4, 17 and 20 which are sustained. Objection number 12 is sustained in part as to the word “false.”

Defendant’s objections to the Declaration of Yong Bom Lee: All objections are sustained except objection number 1 and 7 which are overruled.

Plaintiff’s objections to the Declaration of Ben Park: All objections are overruled except the objection to paragraph 7 which is sustained.

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; 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 series of invoices and purchases orders for goods (clothing products) sold to Defendant.

Plaintiff explains “a few years ago” she and Defendant began engaging in a series of business transactions where Defendant would issue purchase orders to Plaintiff. After receiving the purchase orders, Plaintiff would have “its manufacturers and suppliers in China [] manufacture and supply those products to [Defendant] with the payment term of mostly fifteen (15) days from the date of delivery.”[1] (Jin Decl., ¶ 6.)

During the COVID-19 pandemic,[2] Defendant requested discounts on products already produced and delivered. Defendant complained to Plaintiff about its customers’ cancellations of orders. (Jin Decl., ¶ 8.) Defendant and Plaintiff agreed Plaintiff would provide a 10 percent discount on the products it sold to Defendant between January and May 15, 2020. (Jim Decl., ¶ 8.)

Starting in mid-2021, Defendant became behind on its payments to Plaintiff. Defendant made payments periodically, and repeatedly promised to catch up on the payments when Defendant placed additional purchase orders with Plaintiff. As of today’s date, however, Defendant has an outstanding balance due to Plaintiff of $1,037,362.20. (Jin Decl., ¶¶ 9, 13, Ex. A; see also Jin Supp. Decl., ¶¶ 2-6, 13.)

Plaintiff supports its narrative with “[s]ome samples of the transactions documents, such as purchase orders, packing lists, invoices . . . .” Plaintiff contends these types of documents form the parties’ contractual arrangements. (Jin Decl., ¶ 9, Ex. B [emphasis added].)

Defendant challenges the admissibility of Plaintiff’s evidence. As reflected in the court’s ruling on evidentiary objections, the evidence is largely admissible.

Defendant also suggests Plaintiff’s evidence, if admitted, should be afforded limited evidentiary value. Defendant’s argument is well taken. The documentary evidence to support Plaintiff’s claim is—given the scope of the alleged debt—minor. She submits three orders, three commercial invoices and three packing lists evidencing an obligation of $23,860.80. (Jin Decl., B.) Curiously, the “samples” Plaintiff has provided do not even appear to be part of her purported Accounting Summary. (Jin Decl., Ex. A.)

That said, Plaintiff has submitted evidence to support her claim—her testimony. She uses her Accounting Summary as well as the “samples” to demonstrate the total debt owed to her by Defendant. Plaintiff is not required to submit documentation to prove her claim—she must persuade of the validity of her claim with evidence. Her Accounting Summary (similar to one submitted by Defendant) represents and details, according to her testimony, the debt owed to her. Moreover, this matter has been pending for nearly five months and parties have had an opportunity to conduct discovery.

Of course, Plaintiff’s lack of detailed corroborating material informs on Plaintiff’s showing and her burden of demonstrating the probable validity of her claim. Certainly, written documentation to corroborate her testimony would have strengthened the showing on her application.

Defendant relies on a similar accounting summary to support its claim of offset. Specifically, Defendant reports it filed a cross-complaint for damages against Plaintiff in the amount of $721,304.40. (B. Park Decl., ¶ 10, Ex. 1.) Importantly, Defendant does not directly dispute any line-item entries in Plaintiff’s Accounting Summary. That is, it does not dispute the existence of the obligations or contend Plaintiff has misrepresented the facts. Defendant does not identify any entry in the Accounting Summary as false.

Given the competing claims and the similar showings, neither party is overwhelmingly persuasive. Plaintiff did, however, submit communications between the parties that corroborate Plaintiff’s claims for outstanding payments in substantial amounts prior to litigation. In addition, those communications do not reflect any complaint by Defendant about Plaintiff’s performance under the contracts. Nothing in that pre-litigation context suggests Defendant claimed losses based on late deliveries causing cancelled orders. (Jin Decl., ¶ 12, Ex. C.)

Additionally, Plaintiff attests she never received any loss claims from Defendant based on late deliveries and customer cancellations. Defendant first raised such claims after Plaintiff filed this action. (Jin Supp. Decl., ¶ 9.) Moreover, Defendant provides no documentary evidence to corroborate its claims—aside from its own self-generated reports. Despite Defendant’s claim it advised Plaintiff “in e-mail and text communications” about its losses or complaints, Defendant provides no such communications. (Evid. Code, § 412.)

Plaintiff concedes Defendant cancelled orders. Plaintiff argues, however, Defendant failed to identify any entry in her Accounting Summary as a cancelled order. Plaintiff reports none of the entries in her Accounting Summary represent cancelled orders. (Jin Supp. Decl., ¶ 10.)

Finally, on August 1, 2022, just about one month prior to initiating litigation, Plaintiff, through her daughter advised Defendant it had an outstanding overdue balance owed of $1,040,880. (Jin Supp. Decl., ¶ 11, Ex. L.) Plaintiff’s daughter wrote: “Hello, we are in great difficulty due to the short of funds. Next month, it will be a year overdue in payment. Please rush the payments.” (Jin Supp. Decl., ¶ 11, Ex. L.)

Significantly, Defendant did not dispute the amount owed. Instead, Defendant, through Ben Park, wrote: “Hello. I do not know what to say. I could not work for about 2 weeks due to Covid. I was sick at home.” (Jin Supp. Decl., ¶ 11, Ex. L.) Park also indicated Defendant had been fraudulently induced to wire $250,000 to a fraudster. (Jin Supp. Decl., ¶ 11, Ex. L.) In another message, Park apologized and indicated “we can send some money next week.” (Jin Supp. Decl., ¶ 11, Ex. L.) He concluded: “We are trying our best, so we will keep you updated.” (Jin Supp. Decl., ¶ 11, Ex. L.) It strains credulity that Defendant would not object to Plaintiff’s claims if, in fact, Defendant contested the $1,040,880 owed.

Based on the evidence before the court, the court finds, for the attachment purposes, Plaintiff has met its burden of demonstrating the probable validity of her breach of contract claim. As to Defendant’s claim of offset, the court finds Defendant has failed to meet its burden. The court finds Defendant not credible given the evidence (and lack of evidence) before the court. (Evid. Code, § 412.)

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).)

Plaintiff’s claim is based on written contracts—a series of invoices, purchase orders and packing lists—and is in excess of five hundred dollars.

Accordingly, the court finds Plaintiff’s claim is a proper basis for attachment.

Code of Civil Procedure section 484.090 states 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 attests her application for a right to attach order is not sought for a purpose other than recovery on a claim upon which the attachment is based. (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.

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

For the foregoing reasons, the court will grant the application for a writ of attachment in the amount of $1,092,362,20. (The court has added to the amount owed $50,000 for attorney’s fees and $5,000 for costs.) Plaintiff shall post a $10,000 undertaking prior to the issuance of the writ.

[1] The parties’ payment arrangements are not clear. (Jin Decl., ¶ 7.) It appears some payments were not due until the products sold. (Jin Decl., ¶ 7.)

[2] Plaintiff is unspecific about dates.