Judge Stephen I. Goorvitch, Case Number: 24STCV05010, Date: 2025-03-05 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 24STCV05010, Date: 2025-03-05 Tentative Ruling

The court posts this tentative order on Friday, February 28, 2025. The court provides notice: If Defendants do not request a hearing on or before Monday, March 3, 2025, at 9:30 a.m., the court will take the hearing off-calendar and will adopt this tentative order. Defendants may request a hearing by emailing the court’s clerk at WRDept82@LACourt.org (and copying Plaintiff’s counsel).

Plaintiff Regina Fair (“Plaintiff”), as Trustee of the Frank R. Fair, Jr. Living Trust U/A dated May 21, 2022 (the “Trust”), moves for writs of attachment against Defendants Glenis Cardona (“Defendant Cardona”) and Debbie Leary (“Defendant Leary”) (collectively, “Defendants”). Defendants filed no oppositions to the applications. The court grants the applications and issues writs of attachment in the amount of $724,182.90.

“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.) “Except as otherwise provided by statute, 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.)

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.

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.) “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.” ¿(Code Civ. Proc. § 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.)

Plaintiff requests judicial notice of two grant deeds. There is no opposition to the request. The request is granted under Evidence Code section 452(c).

On January 17, 2025, Plaintiff filed proof of service of the applications for writ of attachment, notices of hearing, and supporting papers. The proof of service states that the papers were served electronically both on attorney Donna Bullock, for Defendant Cardona, and also on Defendant Leary, who is self-represented. Electronic service on Defendant Cardona, who is represented by counsel, is proper. (See Code Civ. Proc. § 1010.6(b).) A self-represented party must consent to electronic service. (See Code Civ. Proc. § 1010.6(c).) However, Defendant Leary appears to have consented to electronic service because she included her email address on her answer, which was filed on December 17, 2024. (See § 1010.6(c)(3)(i).) More important, Defendant Leary has not objected to the application due to lack of personal service. Therefore, the court finds that notice was proper.

The application is based on Plaintiff’s cause of action for breach of contract. To establish a claim for breach of contract, a plaintiff must prove: (1) the 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 as a result of the breach. (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1367.)

Here, Plaintiff, as trustee, entered an agreement to sell real property owned by the Trust. Pursuant to written escrow instructions, Plaintiff and the buyers selected Golden Escrow to provide the escrow services. Defendant Cardona is the owner and operator of Golden Escrow and is listed as the “escrow officer” in the escrow instructions. Defendant Leary, an employee of Golden Escrow, handled the subject escrow transaction.

An escrow holder must comply strictly with the instructions of the parties. Upon the escrow holder’s breach of an instruction that it has contracted to perform or of an implied promise arising out of the agreement with the buyer or seller, the injured party acquires a cause of action for breach of contract.

(Amen v. Merced County Title Co. (1962) 58 Cal.2d 528, 531-532, citations omitted.) “[E]scrow instructions may be oral, even when some are in writing … and … some escrow instructions may be implicit in the express instructions given.” (Kirk Corp. v. First American Title Co. (1990) 220 Cal.App.3d 785, 807; accord Zang v. Northwestern Title Co. (1982) 135 Cal.App.3d 159, 167-168 [holding that the Financial Code does not require escrow instructions to be in writing].)

Escrow closed on or about February 13, 2024, and the property was transferred to the buyers by recordation of a grant deed. After deducting broker fees, the escrow held net proceeds from the sale in the amount of $724,182.90. Plaintiff gave instructions to Golden Escrow to transfer the sale proceeds to IPX 1031 as part of a section 1031 tax exchange. As of January 17, 2025, Defendants have not complied with Plaintiff’s instructions. There is also evidence from Golden Escrow’s bank records that Defendants used part of the sale proceeds to pay for expenses unrelated to the sale of the Trust’s property. (Fair Decl. ¶¶ 3-10, Exh. 1-7; see also Snyder Decl. ¶ 2, Exh. 1.) This evidence is sufficient to establish the probable validity of Plaintiff’s claim for breach of contract in the amount of $724,182.90. Defendants have not filed an opposition and have not rebutted this evidence.

Plaintiff also requests attachment of $200,000 in attorney’s fees. (Snyder Decl. ¶ 4.) Plaintiff has not identified the contractual or statutory basis for an award of attorney’s fees against Defendants. Accordingly, Plaintiff has not shown the probable validity of this part of her claim. (See Code Civ. Proc. § 482.110(b) [“the amount to be secured by the attachment may include … allowable attorney’s fees”].)

Finally, Plaintiff requests attachment of $218,025 for capital gains taxes that the Trust will allegedly need to pay because “the 1031 exchange was not timely completed.” (Fair Decl. ¶ 9.) These capital gains taxes are consequential damages and are not fixed and readily ascertainable by reference to the contract at issue. Stated differently, neither the written escrow instructions nor the instructions to distribute the sales proceeds to IPX 1031 furnish a standard by which the Trust’s consequential damages, such as increased tax liability, can be determined by proof. (See Friar Decl. Exh. 2, 5; see also CIT Group/Equipment Financing, Inc., supra, 115 Cal.App.4th at 541.) Accordingly, Plaintiff is not entitled to attachment for these alleged damages.[1]

D. Purpose and Amount of Attachment – Plaintiff satisfies the statutory requirement.

E. Reduction of Amount to be Secured – Defendants have not argued, or shown, that the amount of attachment should be reduced pursuant to Code of Civil Procedure section 483.015(b).

G. Subject Property – Plaintiff requests attachment against Defendants, natural persons, of items listed in Code of Civil Procedure section 487.010(c) and (d), including real property. (Application ¶ 9c and Attachment 9(c).) That 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(e)].) Attachment is limited to those items specifically listed in section 487.010(c) and (d).

H. Undertaking – Code of Civil Procedure section 489.210 requires the plaintiff to file an undertaking before issuance of a writ of attachment. Section 489.220 provides, with exceptions, for an undertaking in the amount of $10,000. Neither party has argued for a different amount of undertaking.

1. The applications for writs of attachment are granted in the reduced amount of $724,182.90. This amount shall be joint and several amongst Defendants.

2. Plaintiff shall post an undertaking of $10,000 for Defendant Cardona, and a separate undertaking of $10,000 for Defenant Leary.

3. The court limits attachment to the items, including interests in real property, listed in Code of Civil Procedure section 487.010(c) and (d).

4. Plaintiff’s counsel shall provide notice and file proof of service with the court.

[1] Alternatively, Plaintiff does not show that the Trust has actually paid the capital gains taxes. (See Ibid.) Thus, on this record, Plaintiff does not establish the probable validity of its claim for $218,025.