Judge: Peter A. Hernandez, Case: 23PSCV02590, Date: 2024-04-11 Tentative Ruling
Case Number: 23PSCV02590 Hearing Date: April 11, 2024 Dept: K
Plaintiff Accutec, Inc. dba Accutec Blades, Inc.’s
Application
for Right to Attach Order and Order for Issuance of Writ of Attachment is DENIED.
Background
Plaintiff Accutec, Inc. dba Accutec Blades, Inc. (“Plaintiff”) alleges as follows:
Plaintiff applies for a right to attach order and writ of attachment against Defendant. The amount to be secured by the attachment is $112,055.34, which includes estimated costs of $600.00 and estimated allowable attorney fees of $1,000.00.
Analysis
“Attachment is a prejudgment remedy which requires a court to make a preliminary determination of the merits of a dispute. It allows a creditor who has applied for an attachment following the statutory guidelines and established a prima facie claim to have a debtor's assets seized and held until final adjudication at trial.” (Lorber Industries, Inc. v. Turbulence, Inc. (1985) 175 Cal.App.3d 532, 535.) “A purpose of the attachment statutes is to confine attachments to commercial situations and to prohibit them in consumer transactions. The language, ‘trade, business or profession,’ in section 483.010, subdivision (c) fulfills that purpose by limiting the use of attachments to ‘commercial transactions’ and precluding them in ‘consumer transactions.’” (Kadison, Phaelzer, Woodard, Quinn & Rossi v. Wilson (1987) 197 Cal.App.3d 1, 4 [citation omitted].)
Attachment is governed by Attachment Law, Title 6.5 of the Code of Civil Procedure, sections 481.010-493.060. “[A]ttachment procedures are solely creatures of statute and . . . such statutes must be strictly construed.” (Arcata Publications Group v. Beverly Hills Publishing Co. (1984) 154 Cal.App.3d 276, 279.)
On October 26, 2023, Plaintiff filed a “Notice and Acknowledgment of Receipt,” which reflected that Defendant’s counsel acknowledged receipt of, inter alia, the summons and complaint on October 12, 2023. On December 1, 2023, Defendant filed an answer.
On January 4, 2024, the instant application and supporting documents were filed. On April 2, 2024, Plaintiff filed a “Proof of Service Cia USPS Mail Re: Application for Right to Attach Order, Notice of Application and Hearing for Right to Attach Order, Declaration of Rick Gagliano In Support of Application for Writ of Attachment, Memorandum of Points and Authorities,” which reflected that the foregoing documents had been served, via mail, on January 4, 2024.
The court, then, determines that adequate notice has been provided.
Substantive Considerations: “At the hearing, the court shall consider the showing made by the parties appearing and shall issue a right to attach order, which shall state the amount to be secured by the attachment determined by the court in accordance with Section 483.015 or 483.020, if it 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.” (Code
Civ. Proc., § 484.090, subd. (a).)
“The court's determinations shall be made upon the basis of the pleadings and other papers in the record; but, upon good cause shown, the court may receive and consider at the hearing additional evidence, oral or documentary, and additional points and authorities, or it may continue the hearing for the production of the additional evidence or points and authorities.” (Code Civ. Proc., § 484.090, subd. (d).) “The court has the power to determine disputed facts on the basis of a preponderance of the evidence as disclosed in the affidavits and declarations… [Hobbs v. Weiss (1999) 73 Cal.App.4th 76, 80…].” (Weil & Brown, et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2023) ¶ 9:948 (emphasis theirs).)
“The following property of the defendant is subject to attachment: (a) Where the defendant is a corporation, all corporate property for which a method of levy is provided by Article 2 (commencing with Section 488.300) of Chapter 8. (b) Where the defendant is a partnership or other unincorporated association, all partnership or association property for which a method of levy is provided by Article 2 (commencing with Section 488.300) of Chapter 8. . .” (Code Civ. Proc., § 487.010.)
Plaintiff must provide a statement that the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based, a statement that the applicant has no information or belief that the claim is discharged in a proceeding under Title 11 of the United States Code (Bankruptcy) or that the prosecution of the action is stayed in a proceeding under Title 11 of the United States Code (Bankruptcy). (Code Civ. Proc., § 484.020, subds. (c) and (d).) Plaintiff has complied with these requirements.
Plaintiff must also provide a description of the property to be attached under the writ of attachment and a statement that the plaintiff is informed and believes that such property is subject to attachment. (Code Civ. Proc., § 484.020, subd. (e).) “Where the defendant is a corporation, a reference to ‘all corporate property which is subject to attachment pursuant to subdivision (a) of Code of Civil Procedure Section 487.010’ satisfies the requirements of this subdivision. Where the defendant is a partnership or other unincorporated association, a reference to ‘all property of the partnership or other unincorporated association which is subject to attachment pursuant to subdivision (b) of Code of Civil Procedure Section 487.010’ satisfies the requirements of this subdivision. 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.” (Id.) Plaintiff has sufficiently complied with this requirement.
CLAIM:
“[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].)
“An attachment may not be issued on a claim which is secured by any interest in real property arising from agreement, statute, or other rule or law . . . [h]owever, an attachment may be issued where the claim was originally so secured but, without any act of the plaintiff or the person to whom the security was given, the security has become valueless or has decreased in value to less than the amount then owing on the claim . . .” (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.” (Code Civ. Proc., § 483.010, subd. (c).)
Plaintiff asserts that the claim is for money, and based upon a contract, whose total sum is more than $500. (Gagliano Decl., ¶ 4, Exh. 1.) Defendant, however, contends that purported contract attached as Exhibit 1 to both the complaint and Declaration of Rick Gagliano (“Gagliano”) is actually an unsigned invoice titled “Order Acknowledgment,” that “an invoice, standing alone, is not a contract” (India Paint & Lacquer Co. v. United Steel Products Corp. (1954) 123 Cal.App.2d 597, 697) and that “[a]n invoice is a mere detailed statement of the nature, quantity, and the cost or price of the things invoiced.” (Id. [quotations and citation omitted].)
Defendant further asserts that the alleged debt is not readily fixed or ascertainable, on the basis that while Plaintiff’s complaint and Gagliano’s declaration allege the parties entered into a written agreement in the amount of $180,260.62, the “Order Acknowledgment” indicates that the amount owed is $101,761.60. (See Opp., 6:5-18). Plaintiff has alleged that Defendant made two payments of $1,851.20 and $126.26 and obtained a refund in the total amount of $77,817.58 after certain merchandise was returned, such that $100,465.58 is owing. (Complaint, ¶¶ 8, 9 and 11; see also Gagliano Decl., ¶¶ 5-8). Plaintiff, however, has failed to provide any admissible evidence reflecting how the refund amount was calculated and documenting what merchandise was returned.
Probable Validity:
“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.) “In determining the probable validity of a claim where the defendant makes an appearance, 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.” (Loeb & Loeb v. Beverly Glen Music, Inc. (1985) 166 Cal.App.3d 1110, 1120.)
The court determines that Plaintiff has not shown the probable validity of the claim upon which the attachment is based. “[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) Plaintiff has failed to provide the court with admissible evidence demonstrating that it is more likely than not that it will obtain a judgment against Defendant on the contract claim. Again, an invoice is not a contract. Again, Plaintiff has failed to provide any admissible evidence reflecting how the refund amount was calculated and documenting what merchandise was returned. Additionally, Defendant’s Chief Executive Officer Craig Silvers (“Silvers”) attests that approximately four years ago, the parties entered into an arrangement whereby Defendant would serve as the exclusive distributor of Plaintiff’s products; that, according to this arrangement, Plaintiff would supply Defendant with Plaintiff’s product, which Defendant would sell to third parties at a marked up price and then pay Plaintiff for the items sold; that, during this exclusive distributor arrangement, Plaintiff negotiated a deal to appoint a new distributor without Defendant’s knowledge or consent; that in April 2022, while knowing it intended to terminate the parties’ exclusive distributor relationship, Plaintiff encouraged Defendant to place larger than normal orders for product Plaintiff represented was saleable, which Defendant did; that in May 2022, Plaintiff terminated Defendant’s exclusive distributor relationship, which rendered the product Plaintiff encouraged Defendant to order significantly less valuable as customers could now purchase Plaintiff’s products through other distributors; that Plaintiff refused Defendant’s request that Plaintiff reimburse Defendant for expenses related to the unexpected termination and accept a return of the product Defendant was now unable to sell and that Defendant remains ready and willing to return Plaintiff’s inventory. (Silvers Decl., ¶¶ 2-12).
RULING:
The application is denied.