Judge: Mitchell L. Beckloff, Case: 23STCV24665, Date: 2023-12-15 Tentative Ruling

Case Number: 23STCV24665    Hearing Date: December 15, 2023    Dept: 86

NFS LEASING, INC. v. ACUITAS GROUP HOLDINGS, LLC, ET AL.

Case Number: 23STCV24665

Hearing Date: December 15, 2023 

[Tentative]       ORDER GRANTING APPLICATION FOR WRIT OF ATTACHMENT

Plaintiff, NFS Leasing, Inc., moves for a writ of attachment against Defendant, Terren Peizer, in the amount of $600,000.

Plaintiff’s Request for Judicial Notice (RJN) of Exhibits A through G is granted.

RELEVANT PROCEDURAL HISTORY

On October 10, 2023, Plaintiff filed a verified complaint for breach of contract against Defendants Acuitas Group Holdings, LLC and Terren Peizer. 

On October 30, 2023, Plaintiff filed an ex parte application for a writ of attachment or, in the alternative, a temporary protective order against Defendant Peizer.

On October 31, 2023, Plaintiff filed a proof of service of summons as to Defendant Peizer and also an Affidavit of Service for Plaintiff’s ex parte application. The proof of service and affidavit show personal service of the summons, complaint, and ex parte application for writ of attachment on an authorized agent of Defendant Peizer in Dorado, Puerto Rico on October 28, 2023.

On October 31, 2023, the court continued the hearing on the ex parte application to November 1, 2023. Attorney James Unger appeared at the October 31 ex parte hearing on behalf of Defendant Peizer.

On November 1, 2023, the court denied the ex parte application finding that Plaintiff had not met its burden for an attachment on an ex parte basis.  The court set a hearing on an application for writ of attachment for December 15, 2023; ordered that the ex parte papers would be considered the moving papers; and ordered counsel for Plaintiff to give notice.  Attorney James Unger appeared at the November 1 ex parte hearing on behalf of Defendant Peizer.

On November 3, 2023, Plaintiff filed and served a notice of ruling re: Plaintiff’s ex parte application for writ of attachment. Plaintiff served the notice by mail on Defendant Peizer’s attorneys, David Willingham and James Unger

Defendant Peizer has not opposed the application. 

APPLICABLE LAW

“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. 

(4)   The amount to be secured by the attachment is greater than zero.  

(Id. at § 484.090.) 

“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.) “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.)¿“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.) 

“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).)

ANALYSIS 

Notice

Notice appears proper as stated above. 

Probable Validity of Plaintiff’s Claim

The application is based on Plaintiff’s cause of action for breach of a guaranty agreement. 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 resulting from the breach. (Durell v. Sharp Healthcare, (2010) 183 Cal.App.4th 1350, 1367.) 

Plaintiff submits evidence supporting all elements of its contract claim against Defendant Peizer. Specifically, as relevant here, Plaintiff, as lender, entered a Master Equipment Finance Agreement with Distinct Cars LLC, as borrower. Defendant Peizer executed a written personal guaranty (Guaranty) of up to $600,00 of Distinct’s obligations under the finance agreement.  Thereafter, Distinct failed to make payments to Plaintiff on the finance agreement in the amount of $1,030,010.17. Plaintiff sent Distinct a notice of default demanding that Distinct cure its default. Distinct failed to cure the default. Pursuant to paragraph 8(vii) of the finance agreement, because Distinct defaulted on its obligations to Plaintiff, Plaintiff was permitted to accelerate and declare immediately due and payable all sums due under the finance agreement. Plaintiff sent a demand letter and notice to Defendant Peizer, demanding payment to Plaintiff for $600,000.00, as permitted by the Guaranty following Distinct's default. Since receiving the demand letter, Defendant Peizer has refused to make payment to Plaintiff as required by the Guaranty. (Calumby Decl. ¶¶ 3-10, Exh. A-E.)

Defendant has not filed an opposition and has not rebutted any of Plaintiff’s evidence summarized above. Based on Plaintiff’s evidence, Plaintiff has demonstrated a probably valid claim for breach of contract in the amount of $600,000 against Defendant Peizer.

Basis of Attachment

“[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).) “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. at § 483.010, subd. (c); see Advance Transformer co. v. Sup.Ct. (1974) 44 Cal.App.3d 127, 143-144.)

Here, Plaintiff’s application for writ of attachment is based on an agreement where the total amount allegedly due exceeds $500. The Guaranty is not secured by real property. Plaintiff’s damages are fixed and readily ascertainable from the terms of the Guaranty and Plaintiff’s declaration and exhibits. The evidence shows Defendant executed the guaranty as part of his trade, business, or profession. (See Calumby Decl. ¶¶ 4-7, Exh. B, C.)

Purpose and Amount of 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.”

Plaintiff declares, and the court finds, attachment here 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.

Reduction of Amount to be Secured by Attachment

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

Subject Property

Plaintiff requests attachment against Defendant, a natural person, of items listed in Code of Civil Procedure section 487.010, subdivisions (c) and (d). (Application ¶ 9c.) Plaintiff’s 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, subd. (e)].) 

Undertaking

Code of Civil Procedure section 489.210 requires 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.

Turnover Order

Plaintiff seeks a turnover order. (See Proposed Order ¶ 3.d.) “If a writ of attachment is issued, the court may also issue an order directing the defendant to transfer to the levying officer either or both of the following: [¶] (1) Possession of the property to be attached if the property is sought to be attached by taking it into custody. [¶] (2) Possession of documentary evidence of title to property of or a debt owed to the defendant that is sought to be attached.” (Code Civ. Proc., § 482.080.) 

Plaintiff has not shown the applicability of this section to its attachment request or briefed the necessity of this additional remedy. The request for a turnover order is therefore denied.

Temporary Protective Order

Plaintiff also seeks a temporary protective order (TPO) with respect to all of Defendant’s assets.  (Proposed TPO ¶¶ 2.i and 3.) Plaintiff’s request for a TPO is moot and unnecessary because the court is granting the application for writ of attachment. 

CONCLUSION 

The application for writ of attachment is GRANTED in the amount of $600,000. Plaintiff shall post an undertaking in the amount of $10,000. 

The request for a turnover order is denied.

The request for a temporary protective order is denied.

 IT IS SO ORDERED. 

December 15, 2023                                                              ________________________________ 

Hon. Mitchell Beckloff  

Judge of the Superior Court