Judge Mitchell L. Beckloff, Case Number: 23STCV22057, Date: 2024-02-09 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 23STCV22057, Date: 2024-02-09 Tentative Ruling

Plaintiff, Brilliant Trading International Corp., moves for a writ of attachment against Defendant, General Sound Co., Ltd., in the amount of $142,584.20. Defendant, General Sound Co., Ltd., opposes the application.

On October 5, 2023, Plaintiff filed this application for a writ of attachment. On February 2, 2024, Defendant filed and served an opposition. On February 5, 2024, Plaintiff filed and served a declaration of attorney John Medlen in reply to the opposition. Plaintiff has not filed a memorandum of points and authorities in reply to the opposition.

“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. at § 481.190.) “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 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. at § 484.030.) Code of Civil Procedure section 482.040 states in pertinent part:

The facts stated in each affidavit filed pursuant to this title shall be set forth with particularity. Except where matters are specifically permitted by this title to be shown by information and belief, each affidavit shall show affirmatively that the affiant, if sworn as a witness, can testify competently to the facts stated therein. As to matters shown by information and belief, the affidavit shall state the facts on which the affiant's belief is based, showing the nature of his information and the reliability of his informant. The affiant may be any person, whether or not a party to the action, who has knowledge of the facts.

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

Plaintiff contends Defendant must have served any opposition to the application nine court days before the hearing. Plaintiff relies upon Code of Civil Procedure sections 1005, subdivision (b) and 1010.6 to support its argument. (See Reply Medlen Decl. ¶ 3.) Plaintiff requests the court “disregard the Opposition and treat this matter as an unopposed motion.” (Medlen Decl. ¶ 4.) Plaintiff has not filed any reply to the opposition.

Contrary to Plaintiff’s assertion, Code of Civil Procedure section 1005, subdivision (b) does not apply where a writ of attachment is sought. Rather, Code of Civil Procedure section 484.060 dictates when an opposition to an application for a writ of attachment must be filed:

If the defendant desires to oppose the issuance of the right to attach order sought by plaintiff or objects to the amount sought to be secured by the attachment, the defendant shall file and serve upon the plaintiff no later than five court days prior to the date set for the hearing a notice of opposition. The notice shall state the grounds on which the defendant opposes the issuance of the order or objects to the amount sought to be secured by the attachment and shall be accompanied by an affidavit supporting any factual issues raised and points and authorities supporting any legal issues raised. If the defendant fails to file a notice of opposition within the time prescribed, the defendant shall not be permitted to oppose the issuance of the order. (Code Civ. Proc., § 484.060, subd. (a) [emphasis added].)

Defendant timely filed its opposition on February 2, 2024—five court days prior to today’s hearing. Defendant also timely served its opposition. (Code Civ. Proc., § 1010.6, subds. (a)(3)(A), (a)(4); Medlen Decl., Ex. 1.)

Defendant’s electronic service extended the time for Plaintiff to file any reply by two days. (Id. at § 1010.6, subd. (a)(3)(B).) Defendant’s electronic service was “deemed complete at the time of the electronic transmission of the document . . . .” (Id. at § 1010.6, subd. (a)(3)(A).) Thus, any timeliness issue would be focused on whether Plaintiff timely filed any reply documents—that is, Defendant’s electronic service would have extended Plaintiff’s reply time by two days.[1]

The application is based on Plaintiff’s cause of action for breach of contract. 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.)

Plaintiff submits evidence that, on or about August 31, 2022, Plaintiff and Defendant executed a written Investment Agreement (Agreement) under which Plaintiff invested “the whole and entire purchase price” of 1,200 units of “T.V.s.” (Shirazian Decl. ¶ 3, Exh. 1.)

In a section entitled “Nature of Investment,” the Agreement states: “Once the stock is received, the 1,200 Units shall then be divided equally between the Corporation [Defendant] and Investor [Plaintiff] . . . . The Corporation [Defendant] shall then purchase the 600 units from Investor [Plaintiff], based upon the ‘landed’ cost of the stock inventory. Investor [Plaintiff] shall only share the profit with Corporation [Defendant].” (Shirazian Decl. ¶ 3, Exh. 1.)

In a section entitled “Completion of Investment,” the Agreement states: “The 600 Units delegated to Investor [Plaintiff], shall be the sole responsibility of Brilliant Trading, Co. [Plaintiff] to sell. The 600 Units delegated to Corporation [Defendant], shall also solely be the responsibility of General Sound, Co. [Defendant] to sell at Wholesale.” (Shirazian Decl. ¶ 3, Exh. 1.)

The Agreement also provides “[a]ny unforeseen circumstances that may result in the loss of merchandise or any relative damages, is the sole responsibility of the Investor [Plaintiff] . . . .” (Shirazian Decl. ¶ 3, Exh. 1.) Attached to the Agreement is a “Sales Contract,” describing the sale to Defendant of 600 23.6-inch televisions and 600 32-inch televisions for $79,800. (Shirazian Decl. ¶ 3, Exh. 1.)

In its application, Plaintiff contends, in exchange for Plaintiff’s financing for importing “various electronic products,” the parties agreed “that after repayment of Plaintiff’s investment the parties share in the net profits of the sale of those products on a 40/60% basis (40% to Plaintiff and 60% to Defendants).” (Memo 2:2-5.) Plaintiff does not support its assertion. The Agreement, summarized above, pertains solely to the purchase of “1,200 Units of T.V.s,” not other electronic products. Further, the Agreement does not contain language pertaining to a 40/60 split of profits. Plaintiff does not assert in its memorandum, or submit evidence, that there was a separate oral agreement governing the purchase of other electronic products or the share of profits.[2] Plaintiff has not sufficiently demonstrated or explained the contract terms at issue for this application.

Plaintiff also contends, in three “separate transactions,” it “invested/loaned a total of $136,879.20” to Defendant. (Memo 2:5.) As evidentiary support, Plaintiff submits various checks made payable to Defendant starting in August 2022. (Shirazian Decl. ¶¶ 3-5, Exh. 2-4.)

The first of these checks, dated August 10, 2022, for $16,000, includes an endorsement and evidence of deposit. (Shirazian Decl. Exh. 2.) However, that check predates the date of execution of the Agreement (August 31, 2022). Plaintiff does not explain why the $16,000 check was made payable prior to the execution of the Agreement, which raises a question about whether that check pertained to some prior transaction not governed by the Agreement.

The second check for $63,800 lacks sufficient evidence of endorsement and deposit by Defendant. The remaining checks submitted as Exhibits 3 and 4 include notations specifying that the amounts allegedly paid to Defendant were for 13-inch televisions and CD players (“boomboxes”). However, as noted, the Agreement included an attachment indicating the 1,200 televisions purchased pursuant to the Agreement were 23.6 and 32 inches. Plaintiff does not submit evidence of a separate agreement pertaining to the purchase of 13-inch televisions or CD players. (See Shirazian Decl. ¶¶ 4-5.) Most of the checks submitted as Exhibits 3 and 4 also lack endorsement. For these reasons, Plaintiff has not submitted sufficient evidence regarding its alleged contract damages under the Agreement.

Finally, Plaintiff contends Defendant breached the Agreement because Defendant “kept all of the products mentioned herein, have failed to account for any of the profits earned from selling the products, and has failed to pay any amounts due to the Plaintiff for the purchase of the products.” (Shirazian Decl. ¶¶ 4-5.) Relatedly, Plaintiff contends Defendant’s principal, Ronny Simimrad, died April 15, 2023, and “[a]ll amounts invested became due and payable, at the very latest, when Decedent passed away.” (Shirazian Decl. ¶ 6.)

Plaintiff does not cite any terms of the Agreement requiring Defendant to make payments by a certain date. Further, Plaintiff cites no contract terms or legal authority supporting its contention all amounts invested became due upon the death of Defendant’s principal. The contract purports to be between Plaintiff and Defendant, a corporation. Since the Defendant is apparently a corporation, it appears the death of Defendant’s principal would not dictate the timing of payment, absent contract provisions to the contrary. Accordingly, Plaintiff has not adequately proven Defendant’s breach.

For all these reasons, Plaintiff has not met its initial burden to prove a probably valid claim for contract damages against Defendant in any specific amount.[3]

“[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 . . . .” (Code Civ. Proc., § 483.010, subd. (b).) “[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.” (CIT Group/Equipment Financing, Inc. v. Super DVD, Inc. (2004) 115 Cal.App.4th 537, 541.)

Plaintiff has not shown its alleged contract damages are fixed and readily ascertainable by reference to the Agreement. Specifically, as discussed above, the Agreement only pertains to the purchase of 1,200 23.6 and 32-inch televisions. Thus, to the extent Plaintiff seeks attachment for the purchase of 13-inch televisions or CD players, the damages for those electronic products cannot be ascertained by reference to the contract at issue.

[1] Given the truncated briefing schedule for applications for writs of attachment, the statutes suggest a plaintiff could file reply documents anytime prior to the hearing. As a practical matter, while such a filing may be timely, reply documents filed just before the hearing would likely result in a continuance for the court’s review of the documents.

[2] Plaintiff does not seek attachment for lost profits. (Shirazian Decl. ¶ 3.) Nonetheless, Plaintiff’s contentions regarding alleged profit sharing are relevant to a determination of the contract terms at issue.

[3] The court notes the opposing declaration of Jashua Avi Samimrad also includes evidence that, among other things, “Plaintiff has not collected its share of the inventory covered by the purported Investment Agreement, although to the extent available, it has been made available to him to pick them up.” (Samimrad Decl. ¶ 9.) However, because the court concludes Plaintiff has not met its initial burden on the application, the court need not further discuss the opposition evidence.