Judge Randolph M. Hammock, Case 21STCV06525 2023-04-14 Tentative Ruling

Judge: Randolph M. Hammock, Case: 21STCV06525, Date: 2023-04-14 Tentative Ruling

Plaintiff TDI, LLC, alleges that it entered into a sales and purchase agreement with Defendant Sam Vaziri Vance, Inc., for the purchase of nitrile rubber gloves, by which Defendant agreed to deliver the gloves to Plaintiff in the United States by air freight. Plaintiff alleges it wired $825,000.00 for air freight by chartered plane—however, Defendant had not obtained the gloves and had failed to take the legal steps necessary to ship them. Defendant then made repeated misrepresentations regarding the status of the shipment. At the time of the FAC’s filing, Defendant had not delivered the gloves or returned the $825,000.00.

Plaintiff now moves for a writ of attachment or, in the alternative, for a temporary protective order. Defendant opposed. This court previously granted Plaintiff’s motion to shorten the time on the hearing for the instant motion.

Plaintiff is to file a proposed order an writ consistent with this ruling. Plaintiff is also ordered to post an undertaking in the amount of $10,000.00.

Section 483.010 provides that “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 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).) “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., subd. (c).)

“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 does not determine whether the claim is actually valid; that determination will be made at trial and is not affected by the decision on the application for the order. (CCP §484.050(b).)

Plaintiff moves for a writ of attachment. The amount to be secured by the attachment is $1,788,000.00. This amount reflects $825,000.00 for TDI’s actual damages, plus attorneys’ fees in the amount of $35,000.00 for the instant motion, plus costs in the amount of $3,000.00, plus $700,000.00 in fees and costs already incurred to date, plus an estimated $250,000.00 in fees and costs if this matter proceeds through trial.

Plaintiff TDI represents that it learned “through discovery and investigation information regarding Defendant Sam Vaziri Vance Inc. d/b/a Sama Eyewear [] and its owner’s financial condition that has caused TDI to become concerned about Sama’s ability to satisfy a judgment in this case, should one enter in TDI’s favor.” (Mtn. 1: 4-8.) This motion followed.

First, the claim upon which the attachment is based is one upon which an attachment may be issued. There is nothing to suggest the purpose is for something other than the recovery on the claim upon which the attachment is based. Also, the amount to be secured by the attachment is greater than zero. Thus, the main issue is whether Plaintiff has established the probable validity of the claim upon which the attachment is based.

The First Amended Complaint includes one cause of action for breach of written contract, and a second cause of action for breach of oral contract. The alleged contract here was for the purchase of nitrile rubber gloves, executed in writing as the “Sales and Purchase Agreement”. (FAC ¶¶ 12-15.) Under that contract, Plaintiff agreed to purchase, and Defendant would provide, 330,000 boxes of nitrile rubber gloves for $7.75 per box—a Total purchase price of $2,557,500. As part of the agreement, Plaintiff would cover 50% of the Air Freight Cost up front. (Id.)

To prevail on breach of contract claim, Plaintiff must establish “(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.” (D'Arrigo Bros. of California v. United Farmworkers of Am. (2014) 224 Cal. App. 4th 790, 800.)

Based on the agreement—and potentially following some modifications to same—Plaintiff wired $825,000 to third-party Smeed to obtain a cargo plane. (Tran Decl. ¶ 20.) Plaintiff also signed an escrow agreement and transferred $2,557,500 into an escrow account, which demonstrates that Plaintiff was ready and willing to—and apparently did—perform its end of the agreement. (Id. ¶ 21.)

Defendant, however, failed to transport or deliver any gloves, and allegedly misrepresented the status of the transaction. (Id. ¶ 23.) To this date, Defendant has not delivered any gloves, and has not refunded the $825,000 wire for air freight. (Id. ¶¶ 24, 25.)

In opposition, Defendant contends Plaintiff breached the contract by failing to wire $750,000 within 24 hours of the signing of this Agreement and failing to pay the full $1,500,000 that it had agreed to pay, among other things. (Wiggins Decl. ¶ 4.) Defendant also contends that fault for the alleged breach lies with other parties, such as Argus Global. (Id. ¶ 5.) Defendant further contends it made attempts to mitigate or completely offset Plaintiff’s damages, but that Plaintiff refused any accommodation. (Id. ¶ 7.)

This much is clear: whether oral or written, a contract apparently existed between the parties for the shipment of nitrile gloves. That exact terms of that contract may have been—and likely were—modified in the days following to the accommodation of both parties. Consistent with the agreement, Plaintiff wired $825,000 to a third-party for air freight to the United States. Defendant received a portion of this fee. Defendant, however, never obtained the gloves, but falsely represented that the shipment was in process. To this day, Plaintiff has not received the gloves and has not received a refund of the amount paid.

Considering the relative merits, Plaintiff has sufficiently demonstrated “it is more probable than not” that it will prevail on its breach of contract claim(s). The burden rests on Defendant to present any valid defenses to enforcement of the Agreement. At this point, it has not done so. Plaintiff is therefore entitled to the attachment.

The remaining issue is the appropriate amount of the attachment. In addition to the $825,000 amount paid to the third party for air freight, Plaintiff also seeks to include an additional $963,000.00 in attorney’s fees and costs that it contends have or will be incurred during this litigation.

A right to attach order and a writ of attachment “may include an estimate of the costs and allowable attorney’s fees,” and “[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.” (CCP § 482.110(a),(b) [emphasis added].)

In any proceedings between any of the Parties arising out of this Agreement or the transactions it contemplates, the prevailing Party will be entitled to recover from the other Party, in addition to any other relief awarded, all expenses that the prevailing Party incurs, including legal fees and expenses.

However, as Plaintiff concedes by bringing a separate cause of action for breach of oral contract, it is not clear at this stage that the written contract containing the attorney’s fee clause is valid or enforceable. Thus, the court cannot find that Plaintiff is entitled to recover its attorney’s fees if it prevails in this action. The court therefore exercises its discretion to omit the sought attorney’s fees in the attachment order.

Accordingly, Plaintiff’s Application is GRANTED in part. The order and writ are issued in the amount of $825,000.00. Plaintiff is ordered to file an undertaking in the amount of $10,000.00.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.