Judge Ralph C. Hofer, Case Number: 24NNCV04104, Date: 2025-01-31 Tentative Ruling

Plaintiff Ikuo Ogihara alleges that in June of 2013, plaintiff entered into a Revolving Line of Credit Agreement (RLCA), accompanying Promissory Note (Note) and Personal Guaranty (Guaranty) pursuant to which plaintiff agreed to loan defendants $500,000 in exchange for defendants’ repayment of the principal amount in five years with an interest rate of 3% per annum compounding on the original principal of the loan. Plaintiff alleges that defendant Kim executed the RLCA in his capacity as owner of Sports Med Care, Inc., which was later amended to name only HBSM Care, Inc. Kim also executed the Note, and, as an additional term to the RLCA and to provide further assurance to plaintiff, defendant Kim also executed the Guaranty to the Note in his individual capacity as personal guarantor.

The complaint alleges that the Note was originally due and payable on July 14, 2018, with defendants allowed to make only the interest payments during the first 3 years of the loan and then to pay the principal plus accrued interest in the remaining final two years. Defendants, however, failed to make timely interest payments and instead made sporadic interest payments over time, and also failed to make any payments toward the principal loan balance. The sporadic payments continued until 2021, and, despite promises of repayment, defendants failed to make any additional payments to plaintiff since May 23, 2021. The complaint alleges that as of the filing of the complaint, the total outstanding amount owed by defendants is approximately $609,621.17. The complaint alleges causes of action for breach of contract—revolving line of credit, breach of contract—promissory note, breach of contract—personal guarantee, and account stated.

[Attachment may only be issued in an action on a claim for money based upon a contract, express or implied, where the total amount of the claim is a fixed or readily ascertainable amount not less than $500, exclusive of costs, interest and attorney’s fees]

Claim is for amount due under written Revolving Line of Credit Agreement between plaintiff Ikuo Ogihara, and Sports Med Care Inc. pursuant to which plaintiff provided Sports Med Care Inc with a line of credit in the principal amount of $500,000, and Sports Med Care Inc agreed to repay the outstanding principal balance with interest. [Jang Decl., paras. 5-7; Ex. 1]. Defendants made sporadic interest payments throughout the years, with the last payment made on April 2, 2021. [Jang Decl., para. 10]. As a result of defendant’s breach of the agreement, plaintiff incurred monetary damages in the sum not less than $613,237.61, which excludes attorney’s fees and costs. [Ogihara Decl., para. 8; Jang Decl., Exs. 4, 5]. Defendant Kim executed a written Personal Guarantee of the debt to the lender by the borrower under the terms of the RLCA. [Jang Decl., para. 6, Ex. 3].

Defendant borrowed funds, and has failed to repay plaintiff as agreed. [Ogihara Decl., paras. 5-9; Jang Decl., paras. 6-10; Exs. 1-5]. Defendant Kim has failed to honor Guaranty. [Jang Decl., para. 12, Exs. 6, 7].

There is no separate application submitted with the moving papers; the application appears to consist of the notice of application, three declarations, a memorandum of points and authorities, and a writ of attachment after hearing order. These documents collectively fail to include a substantial amount of the required information to be provided to the court and to the defendants, and some of it is not presented under penalty of perjury. (While there is no express requirement that documents be prepared on Judicial Council forms, we rarely see applications which are not so prepared).

Statutory procedures for attachment of property are subject to the strictures of the Fourteenth Amendment Due Process Clause, and the Attachment Law is subject to strict construction; unless specifically provided for by the attachment law, no attachment procedure may be issued by the court. Pacific Decision Sciences Corp. v. Superior Court (2004) 121 Cal.App.4th 1100, 1106.

(d) 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).

(e) 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. 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.

Here, although there are separate declarations submitted under penalty of perjury, with the possible exceptions of a statement of the amount sought to be attached, and a statement that the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based, the declarations fail to provide any of the other statements or descriptions required, such as a statement concerning any bankruptcy proceedings, or a description of the property to be attached, or, with respect to defendant Kim, a natural person, such a description reasonably adequate to permit the defendant to identify the specific property sought to be attached. The matter of the property sought to be attached is addressed in the memorandum of points and authorities, but that document is not executed under penalty of perjury. No statements, verified or unverified, are offered concerning the discharge in bankruptcy or with respect to Kim as a natural person.

The statute concerning the contents of the application executed under oath are mandatory. As noted above, the procedures permitting attachment in advance of the determination of a matter on its merits are subject to strict compliance with the statutory requirements. The requirements have not been met here. The application accordingly cannot be granted.

Only if plaintiff is able at the hearing to produce a verified application which was timely served or point to verified representations of all the information required above will the court consider the application on its merits.

“an 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 is a fixed or readily ascertainable amount not less than five hundred dollars ($500), exclusive of costs, interest and attorney’s fees.”

“(a) 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:

(d) 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.”

The burden to show probable validity is on the party seeking attachment. Lorber Industries v. Turbulence, Inc. (1985, 2nd Dist.) 175 Cal.App.3d 532, 535. The trial court’s determination of probable validity will not be disturbed if there is substantial evidence to support the determination. Id.

First, the moving papers seek an attachment against named defendant HBSM Care Inc., indicating that this entity was formerly doing business as Sports Med Care Inc. The documentation attached to the moving papers clearly identifies as the borrower in the transaction Sports Med Care Inc., which is not a named defendant in this action. [Jang Decl., Ex. 1]. There is no evidence offered with the moving papers to show how HBSM Care Inc. is responsible for the debts of the borrower Sports Med Care Inc., or how defendant Kim is responsible under the Guaranty for debts other than those owed by Sports Med Care Inc. [Jang Decl., Ex. 3].

In such a situation, it would be expected that evidence would be presented showing the assumption of the obligations of the borrower Sports Med Care Inc. by defendant HBSM Care Inc. None has been presented here. There is accordingly a significant gap in any showing of a probability of prevailing on the claims against the named defendants, as there is no showing that HBSM Care Inc. is bound in this action to satisfy the debts of borrower Sports Med Care Inc. Moreover, since Sports Med Care Inc. is not a named defendant, it is not clear how defendant Kim is bound to honor a guaranty which does not guaranty the obligations of HBSM Care Inc.

In addition, the showing that the claim involves a “fixed or readily ascertainable amount” also appears insufficient, as the moving papers claim an amount owing of $628,737.61. [See Ogihara Cecl., para. 8, citing to Jang Decl., Ex. 4, 5]. This assertion is based on documentary evidence which is confusing, as the headings of the purported “accounting” are in another language, with no English translation submitted, and, even considering the numbers, appear to at best show an amount owing of $500,000 plus $108,470.48, for a total of $608,470.48, less than the sum designated. [Jang Decl., para. 11, Ex. 5]. This situation gives rise to uncertainty concerning whether the amount owing is in fact a fixed or readily ascertainable amount, and, in any case, whether plaintiff has established a probability of the validity of the claim being made in this amount.

“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.”

There is no application executed under oath submitted. To the extent the declarations submitted under oath are intended to constitute an application, the declarations fail to include all of the statements and descriptions required under CCP § 484.020.

Statutory procedures for attachment of property are subject to the strictures of the Fourteenth Amendment Due Process Clause, and the Attachment Law is subject to strict construction. Pacific Decision Sciences Corp. v. Superior Court (2004) 121 Cal.App.4th 1100, 1106.

Moreover, the moving papers fail to sufficiently establish by appropriate evidence that the total amount of the claim is a fixed or readily ascertainable amount, or the probable validity of the claim upon which the attachment is based, as required under CCP § 484.090.

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