Judge: Salvatore Sirna, Case: 23PSCV01816, Date: 2023-09-21 Tentative Ruling

Case Number: 23PSCV01816    Hearing Date: March 26, 2024    Dept: G

Defendants Oceanus Decor & Flooring, Inc. and Zhigang Cui’s Motion to Set Aside Right to Attach Order and Quash Writ

Respondent: Plaintiff Andes Harvest, Inc.

TENTATIVE RULING

Defendants Oceanus Decor & Flooring, Inc. and Zhigang Cui’s Motion to Set Aside Right to Attach Order and Quash Writ is CONTINUED to a date to be determined at the hearing set in Department G (Pomona).

Parties are ordered to provide further briefing on the applicability of the original lease’s termination provisions in accordance with the briefing schedule set by the court.

BACKGROUND

This is a breach of contract action arising from a series of sublease agreements. Defendants Cups (DE) LP (Cups) and Wadd-II (TN) LP (Wadd) are alleged to be the owners of a commercial property in the City of Industry. Since 2001, Defendant Novolex Holdings, LLC (Novolex) allegedly rented the City of Industry property from Cups and Wadd and had been subleasing the property to Defendant Oceanus Decor & Flooring, Inc. (Oceanus) since 2022. In May 2023, Plaintiff Andes Harvest, Inc. (Andes) agreed to sublease the City of Industry property from Oceanus. After Andes made a payment of $182,420.08 which included the first month’s rent and a security deposit, Andes discovered the electrical system for the City of Industry property had been removed. When Andes demanded return of first months’ rent and security deposit in June 2023, Oceanus only offered to return the payment in installments, Novolex denied liability, and Cups and Wadd both ignored Andes’s demand.

On June 20, 2023, Andes filed a complaint against Cups, Wadd, Novolex, Oceanus, Zhigang Cui, CBRE, Inc. (CBRE), and Does 1-25, alleging the following causes of action: (1) breach of contract, (2) breach of implied covenant of good faith and fair dealing, (3) concealment, (4) conversion, (5) restitution, and (6) breach of the duty of disclosure.

On November 28, 2023, the court granted Andes’s application for a right to attach order and a writ of attachment against Oceanus.

On January 16, 2024, the court granted Oceanus and Cui’s motion to vacate the entry of default against them. On the same day, Oceanus and Cui filed a cross-complaint against Andes and Does 1-10, alleging a single cause of action for breach of contract.

On February 27, 2024, Oceanus and Cui filed the present motion. A hearing on their motion is set for March 26 with a post-mediation status conference/trial setting conference set for August 8.

ANALYSIS

Oceanus and Cui move for the court to set aside the right to attach order granted on November 28, 2023, and to quash Andes’s writ of attachment. For the following reasons, the court CONTINUES the hearing on their motion.

Legal Standard

Motion to Set Aside and Quash

Pursuant to Code of Civil Procedure section 485.240, subdivision (a), “[a]ny defendant whose property has been attached pursuant to a writ issued under this chapter may apply for an order (1) that the right to attach order be set aside, the writ of attachment quashed, and any property levied upon pursuant to the writ be released, or (2) that the amount to be secured by the attachment be reduced as provided in Section 483.015. Such application shall be made by filing with the court and serving on the plaintiff a notice of motion.”

“At the hearing on the motion, the court shall determine whether the plaintiff is entitled to the right to attach order or whether the amount to be secured by the attachment should be reduced. If the court finds that the plaintiff is not entitled to the right to attach order, it shall order the right to attach order set aside, the writ of attachment quashed, and any property levied on pursuant to the writ released.” (Code Civ. Proc., § 485.240, subd. (c).) “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 such additional evidence or points and authorities.” (Code Civ. Proc., § 485.240, subd. (d).)

Application for Right to Attach Order and Writ of Attachment

Attachment is proper where: (1) “[t]he claim is one upon which an attachment may be issued;” (2) “plaintiff has established the probable validity of the claim upon which the attachment is based;” (3) “[t]he attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based;” and (4) “[t]he amount to be secured by the attachment is greater than zero.” (Code Civ. Proc., § 480.090, subd. (a); see also Bank of America v. Salinas Nissan, Inc. (1989) 207 Cal.App.3d 260, 271 (Salinas Nissan) [party pursuing attachment remedy carries burden of establishing grounds justifying attachment, including presenting facts that show probable validity of underlying claim].) The court may issue an attachment on a claim for money arising under contract, so long as the amount claimed by the party seeking attachment is reasonably ascertainable in an amount greater than $500.00. (Code Civ. Proc., § 483.010, subd. (a).)

“Probable validity means that ‘more likely than not’ the plaintiff will obtain a judgment on that claim.” (Santa Clara Waste Water Co. v. Allied World National Assurance Co. (2017) 18 Cal.App.5th 881, 885, citing Code Civ. Proc., § 481.190.) Plaintiff’s application must “be supported by an affidavit or declaration showing that the applicant, on the facts presented, would be entitled to a judgment on the claim upon which the attachment is based.” (Lydig Construction, Inc. v. Martinez Steel Corp. (2015) 234 Cal.App.4th 937, 944, citing Code Civ. Proc., § 484.030.) The affidavits must set forth facts with particularity and a verified complaint may be utilized in lieu of such affidavits. (Code Civ. Proc., § 482.040.) Furthermore, any documentary evidence must be presented in admissible form. (Id., at p. 944.)

Discussion

On August 16, 2023, Andes first applied for a right to attach order and writ of attachment against Oceanus. On September 21, the court denied Andes’s application on the grounds that Andes had failed to establish how Oceanus breached the sublease agreement between Oceanus and Andes. (9/21/2023 Ruling, p. 2.) While Andes argued the lack of a functioning electrical system failed to satisfy the required conditions of the City of Industry property, the court found Andes failed to demonstrate where those requirements were specified in the sublease. (9/21/2023 Ruling, p. 2.)

On September 29, 2023, Andes reapplied for a right to attach order and writ of attachment against Oceanus. On October 19, the court continued the hearing on Andes’s application, finding Andes still failed to clarify how Oceanus breached the sublease agreement. (10/19/2023 Ruling, p. 2.) On November 28, the court granted Andes’s application after Andes provided additional evidence and argument in support of its application. (11/28/2023 Ruling, p. 3.) In arguing Oceanus had breached the sublease agreement by failing to provide a functioning electrical system, Andes relied on provisions in the original sublease agreement that stated the leased premises included fixtures such as electrical and power systems. (11/28/2023 Ruling, p. 3.) Because these fixtures were not included in the premises as alleged by Andes, the court found Andes’s claim that Oceanus breached the sublease agreement had probable validity. (11/28/2023 Ruling, p. 3.)

In the present motion, however, Oceanus and Cui point the court to another provision in the same lease agreement. In section 18(a), the lease agreement describes the following termination events:

“If (i) all of any Related Premises shall be taken by a Taking, (ii) any substantial portion of any Related Premises shall be taken by a Taking or all or any substantial portion of any Related Premises shall be totally damaged or destroyed by a Casualty, or (iii) any portion of any Related Premises be taken by a Taking or damaged or destroyed by a Casualty and under applicable law such Related Premises cannot be rebuilt to at least the same square footage and otherwise substantially the same as existed prior to the Casualty or Condemnation and, in the case of (ii) above, Tenant certifies and covenants to Landlord that it will cease operations at the Related Premises for no less than two (2) years . . . then (x) in the case (i) or (iii) above, Tenant shall be obligated, within thirty (30) days after the Casualty, as the case may be, and (y) in the case of (ii) above, Tenant shall have the option, within thirty (30) days after Tenant receives a Condemnation Notice or thirty (30) days after the Casualty, as the case may be, to give to Landlord written notice . . . in the form described in Paragraph 18(b) of the Tenant’s election to terminate this Lease as to the Affected Premises.” (Cui Decl., Ex. C, § 18(a).)

In section 2, the lease agreement defines “casualty” as follows:

“‘Casualty’ shall mean any injury to or death of any person or any loss of or damage to any property (including the Leased Premises) included within or related to the Leased Premises or arising from the Adjoining Property resulting from a fire or other casualty affecting the Leased Premises or the Adjoining Property.” (Cui Decl., Ex. C, § 2.)

Based upon the above provisions, it appears Andes Harvest was only entitled to terminate the lease agreement if a substantial portion of the premises was totally destroyed. But Andes Harvest failed to address or mention these provisions in its applications for a right to attach order and writ of attachment. And even after Oceanus and Cui raised this issue in the present motion, Andes Harvest failed to address it in their opposition.

Accordingly, the court will CONTINUE the hearing on Oceanus and Cui’s motion in order for parties to provide further briefing on this specific issue.

CONCLUSION

Based on the foregoing, the hearing on Oceanus and Cui’s motion is CONTINUED to a date to be determined at the hearing set in Department G (Pomona). Parties are also ordered to provide further briefing on the applicability of the original lease’s termination provisions in accordance with the briefing schedule set by the court.