Judge Mitchell L. Beckloff, Case Number: 23STCV07227, Date: 2023-12-20 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 23STCV07227, Date: 2023-12-20 Tentative Ruling

Plaintiff, Prime Electric Wholesale, Corp., moves for writs of attachment against Defendants, Ara Petrosyan and LA Solar Group, Inc., in the amount of $336,926.53.

Plaintiff’s request for judicial notice of Exhibit 1 is denied. Plaintiff has not furnished the court with sufficient information to enable it to take judicial notice of the contents of the website shown on Exhibit 1. (Evid. Code, § 453, subd. (g).) The contents of the LoopNet website (an apparent sale listing) are not facts that are common knowledge or not reasonably subject to dispute. (Evid. Code, § 452, subds. (g), (h).) Further, Exhibit 1 is irrelevant to Plaintiff’s noticed applications for writs of attachment.

On April 3, 2023, Plaintiff filed a complaint against Defendants LA Solar Group, Inc. and Petrosyan, along with two other defendants, for breach of contract as well as other claims.

On November 21, 2023, Plaintiff filed and served an ex parte application for writs of attachment against Defendants Petrosyan and LA Solar. On November 22, 2023, after finding no urgency, the court set the applications for hearing on today’s date and ordered briefing pursuant to Code of Civil Procedure section 1005. On December 7, 2023, Defendant Petrosyan filed and served an opposition to the application. On December 13, 2023, Plaintiff filed and served a reply to Defendant Petrosyan’s opposition. On December 15, 2023, Plaintiff filed and served a notice of non-opposition from Defendant LA Solar Group, Inc.[1]

“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.” (Code Civ. Proc., § 484.010.)

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.” (Id., § 481.190.) “The application 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.”¿(Id., § 484.030.)¿“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.”¿(Hobbs v. Weiss (1999) 73 Cal.App.4th 76, 80.)

“The Attachment Law statutes are subject to strict construction.” (Epstein v. Abrams (1997) 57 Cal.App.4th 1159, 1168.)

As discussed earlier, notice appears proper as to both Defendant Petrosyan and Defendant LA Solar Group, Inc. Both Defendants appeared at the ex parte hearing, and the parties waived notice of the court’s orders made on November 22, 2023.

Plaintiff’s applications are based on Plaintiff’s cause of action for breach of contract and breach of a guaranty agreement. To establish a claim for breach of contract, a plaintiff must prove:

(1) the 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.)

Plaintiff submits evidence supporting all elements of its contract claims against Defendants Petrosyan and LA Solar Group, Inc. Specifically, Plaintiff’s credit manager, Lina Ammari, attests Plaintiff is a supplier of materials to the construction industry; LA Solar Group, Inc. is a solar contractor and customer of Plaintiff; and Defendant Petrosyan is LA Solar Group Inc.’s owner, shareholder, and/or officer. (Ammari Decl. ¶¶ 4-6.) Ammari declares Plaintiff and Defendant LA Solar Group, Inc. entered into a written credit agreement in April 2022 whereby Defendant LA Solar Group, Inc. purchased materials from Plaintiff on credit. As part of the credit agreement, Defendant Petrosyan executed a written personal guaranty of LA Solar Group Inc.’s obligations to Plaintiff. Between April and November of 2022, Defendant LA Solar Group, Inc. ordered and purchased materials from Plaintiff. Plaintiff caused the materials to be delivered to Defendant LA Solar Group Inc. (or Plaintiff allowed them to be picked up), and Plaintiff invoiced Defendant LA Solar Group, Inc. for $316,885.28. (Ammari Decl. ¶¶ 15, 17-38, Exh. A-C.)

Plaintiff seeks attachment of principal damages of $246,003.74, the balance owing of $316,885.28 less a $70,881.54 credit claimed by Defendants, along with interest, costs, and attorney’s fees. (Id. ¶¶ 17, 32, Exh. C.)[2]

Code of Civil Procedure section 482.110, subdivision (b) states “[i]n the discretion of the court, the amount to be secured by the attachment may include an estimated amount for costs and allowable attorney’s fees.” Plaintiff seeks attachment of $6,316.35 in costs, which is comprised of the “$435 filing fee, $549.70 service of process fees, efiling fees, and deposition fees.” (Ammari Decl. ¶ 32.) Plaintiff’s attorney, Milene Apanian, does not describe the estimated efiling fees or deposition fees or provide other support for her estimate of such costs. (Apanian Decl. ¶ 15.) Based on the lack of evidence provided in the moving papers, the court allows attachment of the $435 filing fee and $549.70 service of process fees only.

The credit agreement and guaranty authorize Plaintiff to recover reasonable attorney’s fees to enforce the contracts. (See Ammari Decl. Exh. A.) Although Plaintiff’s attorney describes hours that have been worked by her and an associate on this case, those hours do not correspond to the amount of fees requested in the motion. (See Apanian Decl. ¶¶ 11-14; see also Memo 8:19-22 [requesting $27,601.50 and $5,000 for fees] and Opposition 8:10-17 [showing discrepancy].) Plaintiff’s attorney has not explained the discrepancy, including in reply, and has not provided the court with a sufficiently clear or reliable estimate of the amount of estimated attorney’s fees for this case. Nonetheless, based on its review of the pleadings and attachment papers and the nature of the action and the court’s familiarity with attorney’s fees generally, the court concludes $20,000 to be a reasonable estimate of attorney’s fees for this collection action. The court will allow attachment for attorney’s fees in the reduced amount of $20,000.

Plaintiff also seeks attachment of the 1.5 percent per month in interest accrued against both Defendants. (See Memo 5:19-21.) In the credit agreement, Defendant LA Solar Group, Inc. agreed to the terms and conditions in Plaintiff’s invoices. The invoices specify that “past due invoices are subject to 1.50 % late charge.” (Ammari Decl. Exh. B.) However, the invoices do not specify the 1.5 percent late charge accrues monthly or over some other time period. Nor do the invoices refer to the 1.5 percent late charge as “interest.” In addition, the balance statement refers to a 1.5 percent “service charge.” (Ammari Decl. Exh. C.)

Plaintiff does not address these potentially conflicting interest/service charge provisions as to Defendant LA Solar Group, Inc. (See Memo 5:19-21.) Nor does Plaintiff explain why the court should interpret the invoices as requiring payment of a 1.5 percent service charge per month, when the invoices refer to a late charge and do not specify that the late charge purportedly accrues on a monthly basis.

For purposes of attachment today, the court declines to grant an attachment based on purported interest that has accrued on Defendant LA Solar Group, Inc.’s obligation. (See Nelson v. Avondale Homeowners Assn. (2009) 172 Cal.App.4th 857, 862-863 [argument waived if not raised or adequately briefed]; see also Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197 Cal.App.4th 927, 934 [same].) Of course, nothing precludes Plaintiff from pursuing the ”interest/service charge” claim in the future.

In the guaranty agreement, Defendant Petrosyan agreed to pay interest at the rate of 1.5 percent (or the maximum rate allowed by law if higher) on the outstanding delinquent balance. (Ammari Decl. Exh. A, Guaranty ¶ 7.) Accordingly, unlike the terms of the credit agreement for Defendant LA Solar Group, Inc., the guaranty agreement clearly imposed 1.5 percent monthly interest (or 18 percent annual interest) on the outstanding obligation owed to Plaintiff by Defendant Petrosyan. Defendant Petrosyan does not challenge Plaintiff’s calculation of interest at the rate of 1.5 percent now totaling $50,831.79. (See Ammari Decl. ¶ 32.)

Defendant Petrosyan argues “Plaintiff claims a usurious 18% interest rate without citing to any authority which would permit Plaintiff such an interest rate.” (Opposition 9:5-6.) Since Defendant Petrosyan is raising an affirmative defense of usury, he bears the burden of proof and must show the 18 percent annual interest rate is usurious. He has not done so.

Accordingly, for purposes of this application, Defendant Petrosyan’s usury argument is not persuasive—Defendant Petrosyan failed to meet his burden on the defense.

In any event, Plaintiff has cited authority in response to the claim that “interest payments on overdue commercial accounts are not subject to usury law.” (Southwest Concrete Products v. Gosh Construction Corp. (1990) 51 Cal.3d 701, 704.) Specifically, the California Supreme Court held “the late charge provided in the contract is not subject to the usury law because it does not constitute payment for the ‘loan or forbearance of any money.’ (Cal. Const., art. XV, § 1.) It is exempt from the usury law under the time-price doctrine and the principle that a debtor by voluntary act cannot render an otherwise valid contract usurious.” (Id. at 709.) Defendant Petrosyan has not addressed this apparently controlling Supreme Court authority. Accordingly, for this application, Defendant Petrosyan has not demonstrated the 1.5 percent interest provision in the guaranty agreement is usurious. The court will therefore allow attachment of the interest claimed against Defendant Petrosyan.

In all other respects, Defendant Petrosyan has not developed any argument Plaintiff lacks a probably valid contract claim for the principal amount of $246,003.74. As noted earlier, Defendant LA Solar Group, Inc. and therefore may not contest the issuance of an attachment order. (Code Civ. Proc., § 484.060, subd. (a).)

Based on the foregoing, Plaintiff has shown a probably valid contract claim against Defendant Petrosyan in the reduced amount of $317,820.23 ($246,003.74 + $50,831.79 + $435 + $549.70 + $20,000). Plaintiff has shown a probably valid contract claim against Defendant LA Solar in the reduced amount of $266,988.44 (same calculation less $50,831.79 in interest).

“[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).) “An attachment may not be issued on a claim which is secured by any interest in real property arising from agreement . . . .” (Id., § 483.010, subd. (b).) “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. (Id., § 483.010, subd. (c); see Advance Transformer Co. v. Superior Court (1974) 44 Cal.App.3d 127, 143-144.)

Here, Plaintiff’s applications for writs of attachment are based on contracts where the total amount allegedly due exceeds $500. The contracts are not secured by real property. Plaintiff’s damages are fixed and readily ascertainable from the terms of the contracts and Plaintiff’s declaration and exhibits. The evidence shows Defendant Petrosyan executed the guaranty agreement as part of his trade, business or profession. (See Ammari Decl. ¶¶ 7-12, Exh. A.)

Defendant Petrosyan contends Plaintiff’s damages are not fixed or readily ascertainable because “the amount claimed is not specifically stated in the ‘Credit Line Application’ or ‘Personal Guaranty Agreement’.” (Opposition 6:23-24.) Defendant Petrosyan’s argument is unpersuasive.

“[A]n 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. . . . [I]t is not necessary that the amount owed appear on the face of the contract; it often happens that the amount due under a contract does not appear on the contract itself.” (CIT Group/Equipment Financing, Inc. v. Super DVD, Inc. (2004) 115 Cal.App.4th 537, 541 [emphasis added].) Here, the credit agreement states all sales are based on the “terms and conditions in creditor’s invoices.” (Ammari Decl. Exh. A.) The invoices, in turn, specify the amount due on the credit agreement for the specific materials purchased by Defendants. (Ammari Decl. Exh. B.) Accordingly, the amount of damages is fixed and readily ascertainable from the terms of the credit agreement and invoices.

Defendant Petrosyan also argues Plaintiff’s statements of damages are “contradictory” and Apanian’s declaration does not show a reasonable estimate of attorney’s fees and costs. As discussed earlier, the court agrees Apanian has not provided a sufficiently reliable estimate of attorney’s fees and certain of the claimed costs. The court has therefore reduced the amount of the attachment permitted. In all other respects, Plaintiff has sufficiently calculated damages, as discussed earlier. Defendant does not show any material contradiction between the calculations of damages in the applications and any statements in the complaint.

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.”

Plaintiff declares, and the court finds, attachment is not sought for a purpose other than the recovery on Plaintiff’s contract claim. (Appl. ¶ 4.) The amount to be secured is greater than zero.

Defendant has not argued or demonstrated the attachment should be reduced by an attachable claim for offset or an affirmative defense. (Code Civ. Proc., § 483.015, subd. (b).)

Plaintiff requests attachment against Defendant Petrosyan, a natural person, of items listed in Code of Civil Procedure section 487.010, subdivisions (c) and (d). (Appl. ¶ 9c, Exh. A.) That request is proper. (See Bank of America v. Salinas Nissan, Inc. (1989) 207 Cal. App. 3d 260, 267-268 [“all-inclusive” application satisfies Code of Civil Procedure section 484.020, subdivision (e)].)

LA Solar Group, Inc. is a corporation. Accordingly, “all corporate property for which a method of levy is provided by Article 2 (commencing with Section 488.300) of Chapter 8” may be attached. (Code Civ. Proc., § 487.010, subd. (a).) Accordingly, Plaintiff’s request for attachment of all of LA Solar Group Inc.’s property is proper. (Apply. ¶ 9c, Attach. A.)

Defendant Petrosyan reports: “The real property located at 520, 540, 550, 558 and 560 Library St., San Fernando, CA 91340, is not owned by me. It is owned by Library Holdings, LLC.” (Petrosyan Decl. ¶ 3.) Plaintiff does not rebut that evidence in reply. (Reply 4-6.) Accordingly, the court will not grant attachment as to real property located at 520, 540, 550, 558 and 560 Library St., San Fernando, California. By not addressing the remaining real properties specified the application, Defendant Petrosyan impliedly concedes an ownership interest in such properties. Accordingly, pre-judgment attachment of Defendant Petrosyan’s interests in such properties is proper.

Defendant Petrosyan also declares he is “not the only shareholder or member in the following companies: A. Barnes Solar Inc. B. Fiber LA, LLC.” (Petrosyan Decl. ¶ 4.) Stated another way, Defendant Petrosyan acknowledges that he is one of the shareholders or members of these business entities. The writ of attachment will only apply to Defendant Petrosyan’s interests in the business entities. Defendant Petrosyan cites no authority suggesting a pre-judgment writ of attachment cannot be issued as to the defendant’s partial interests in business entities, which the defendant co-owns with other persons or entities. Defendant Petrosyan also does not identify any exemptions that apply to his interests in these business entities.

Finally, Defendant Petrosyan asserts “by claiming a $316,885.28 writ on thirty-five properties, Plaintiff is essentially seeking a writ in excess of $11,000,000.” (Opposition 9:21-22.) The argument is not fully developed, lacks discussion of pertinent statutes or authorities, and is unsupported by any evidence. On that basis, the court rejects the argument. (Nelson v. Avondale Homeowners Assn. (2009) 172 Cal.App.4th 857, 862-863 [argument waived if not raised or adequately briefed].)[3]

Defendant Petrosyan “claims his paid earnings from any source as exempt pursuant to California Code of Civil Procedure §704.070.” (Opposition 11:2-3.)

“If a defendant filing a notice of opposition desires to make any claim of exemption as provided in Section 484.070, the defendant may include that claim in the notice of opposition filed pursuant to this section.” (Code Civ. Proc., § 484.060, subd. (b).) A claim of exemption must describe the property to be exempted and specify the statute section supporting the claim. (Code Civ. Proc., § 484.070, subd. (c).) “The claim of exemption shall be accompanied by an affidavit supporting any factual issues raised by the claim and points and authorities supporting any legal issues raised.” (Id., § 484.070, subd. (d).)

“If the plaintiff desires to oppose the claim of exemption, the plaintiff shall file and serve on the defendant, not less than two days before the date set for the hearing, a notice of opposition to the claim of exemption, accompanied by an affidavit supporting any factual issues raised and points and authorities supporting any legal issues raised. If the plaintiff does not file and serve a notice of opposition as provided in this subdivision, no writ of attachment shall be issued as to the property claimed to be exempt.” (Id., § 484.070, subd. (f) [emphasis added].) As noted earlier, “[t]he Attachment Law statutes are subject to strict construction.” (Epstein v. Abrams, supra, 57 Cal.App.4th 1159, 1168.)

Here, consistent with Code of Civil Procedure sections 484.060 and 484.070, Defendant Petrosyan filed an opposition specifying the statutory basis for exemption (Code Civ. Proc., section 704.070) and the type of property subject to exemption (paid earnings). While Defendant Petrosyan did not describe any specific source of paid earnings to be exempted, the court may reasonably infer Defendant Petrosyan intended to include the following categories of property specified in the application: “Salary from LA Solar Group, Inc.” and “salary from any and all sources.” (See Appl. Attach. A.) Those items specifically refer to and seek to attach Defendant Petrosyan’s salary and earnings.

Plaintiff has not filed any response to the claim of exemption, as required by Code of Civil Procedure section 484.070, subdivision (f). Accordingly, the court concludes that no writ of attachment may issue as to Defendant Petrosyan’s “Salary from LA Solar Group, Inc.” and “salary from any and all sources.”

Code of Civil Procedure section 489.210 requires a plaintiff to file an undertaking before issuance of a writ of attachment. Code of Civil Procedure section 489.220 generally provides for an undertaking in the amount of $10,000. The court concludes that the statutory undertaking of $10,000 here is appropriate.

If, upon objection to the undertaking, the court determines that the probable recovery for wrongful attachment exceeds the amount of the undertaking, it shall order the amount of the undertaking increased to the amount it determines to be the probable recovery for wrongful attachment if it is ultimately determined that the attachment was wrongful.

Defendant Petrosyan’s argument the court should impose an undertaking of $11 million is unpersuasive. (Opposition 10:17.) While Defendant Petrosyan refers to Code of Civil Procedure section 489.220, subdivision (b), he cites no evidence from which the court could determine that the “probable recovery for wrongful attachment” exceeds $10,000 or is anywhere close to $11 million.

Defendant Petrosyan requests he be permitted to post a bond in lieu of attachment of his assets. (Opposition 10:19-20 [citing Code Civ. Proc., § 489.310].) Code of Civil Procedure section 489.310, subdivision (a) provides:

Whenever a writ is issued, a defendant who has appeared in the action may apply by noticed motion to the court in which the action is pending for an order permitting the defendant to substitute an undertaking for any of his property in the state which has been or is subject to being attached. (Emphasis added.)

Defendant Petrosyan has not identified any specific property for which he seeks to substitute an undertaking. The court does not grant Defendant Petrosyan’s request to substitute a bond in lieu of attachment at this time. Defendant Petrosyan may proceed with such request by notice motion as provided by statute.

The application for writ of attachment is GRANTED IN PART against Defendant Petrosyan in the reduced amount of $317,820.23 and against Defendant LA Solar Group, Inc. in the reduced amount of $266,988.44.

Defendant Petrosyan’s claim of exemption is GRANTED as to “Salary from LA Solar Group, Inc.” and “salary from any and all sources.” On this evidentiary record, the court also finds the real property located at 520, 540, 550, 558 and 560 Library Street in San Fernando, California is not owned by Defendant Petrosyan. Accordingly, the writ of attachment against Defendant Petrosyan shall not apply to: (1) real property located at 520, 540, 550, 558 and 560 Library St., San Fernando, CA 91340; and (2) “Salary from LA Solar Group, Inc.” and “salary from any and all sources”.

[1] In his opposition filed December 7, 2023, Defendant Petrosyan reports “Plaintiff does not seek an Order for Issuance of Writ of Attachment against any property of Defendant LA SOLAR GROUP, INC.” (Opposition 3:6-7.) The court file reflects Plaintiff noticed, filed and served that an application for writ of attachment as to Defendant LA Solar Group, Inc. Accordingly, the court concludes Plaintiff properly served Defendant LA Solar Group, Inc. with the application and given notice of this hearing. The court also notes that Defendants’ attorney, Geoffrey Melkonian, appeared at the ex parte hearing on November 22. The notice for the ex parte hearing reflected Plaintiff’s request for a writ of attachment against both Defendants. (See Memo filed November 21, 2023, Exh. G.)

[2] There appears to be a typographical error in paragraph 17 of Ammari’s declaration, which refers to $316,685.28 in principal damages. The remainder of Ammari’s declaration, as well as the balance statement attached as Exhibit C, refer to principal damages of $316,885.28. (Compared Ammari Decl. ¶¶ 17 and 32, and Exh. C.) The court uses the latter figure from Ammari’s declaration, as it is corroborated by the written balance statement.

[3] While it is not entirely clear, Defendant Petrosyan may be suggesting Plaintiff seeks an excess amount of levy. While the court has discretion under Code of Civil Procedure section 482.120 to restrict the property subject to attachment, the court cannot exercise such discretion based on the briefing and evidence (or lack thereof) provided by Defendant Petrosyan. Specifically, to the extent Defendant refers to Code of Civil Procedure section 482.120 (which is unclear), Defendant has not provided the court with evidence that would support a factual determination that the “value of the defendant's interest in the property described in the plaintiff's application clearly exceeds the amount necessary to satisfy the amount to be secured.” (See Code Civ. Proc., § 482.120 [emphasis added].)