Judge Stephen I. Goorvitch, Case Number: 24STCV05759, Date: 2025-03-19 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 24STCV05759, Date: 2025-03-19 Tentative Ruling

Case Number: 24STCV05759 Hearing Date: March 19, 2025 Dept: 82

Creditors Adjustment Bureau, Inc. Case No. 24STCV05759

v. Hearing: March 19, 2025

Location: Stanley Mosk Courthouse

Department: 82 Arte Milano Textile, Inc., et al. Judge: Stephen I. Goorvitch

[Tentative] Order Denying Applications for Writs of Attachment

INTRODUCTION

Plaintiff Creditors Adjustment Bureau, Inc. (“Plaintiff”) moves for writs of attachment against Defendants Arte Milano Textile, Inc. (“Arte Milano”) and Lavitex, Inc. (“Lavitex”) (collectively, “Defendants”). Plaintiff alleges as follows: A third party—Shaoxingbocheng Texitle Co Ltd. (“Bocheng”)—entered into a settlement agreement with Defendants pursuant to which Defendants agreed to pay Bocheng $912.632.84 in 15 monthly installments. To date, Defendants have not made any payments. Bocheng assigned its claim to Plaintiff, which filed this action against Defendants. Plaintiff now seeks writs of attachment against Defendants in the total amount of $1,274,130.43, which is the principal and interest, as well as costs. The court denies the applications because they are procedurally defective. In the alternative, the court denies the applications because they lack evidentiary support.

LEGAL STANDARD

“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.

(4) The amount to be secured by the attachment is greater than zero.

(Code Civ. Proc. § 484.090.)

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.)¿ “The facts stated in each affidavit filed pursuant to this title shall be set forth with particularity.” (Code Civ. Proc. § 482.040.) “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.)

EVIDENTIARY ISSUES

The court sustains Defendants’ evidentiary objections to the declaration of Tiffanie Brown. The court rules as follows on Defendants’ evidentiary objections to the declaration of Yanming Zhou:

1. Overruled

2. Overruled

3. Overruled

4. Sustained

5. Sustained

6. Overruled

7. Sustained

DISCUSSION

A. Inadequate Notice

Code of Civil Procedure section 484.050 requires that the party seeking attachment serve a notice that includes various statements and warnings to the defendant whose assets may be subject to pre-judgment attachment. Generally, the notice is served on Judicial Council form AT-115. Here, Plaintiff did not serve a notice on form AT-115. Plaintiff’s notice and applications did not include all the information required by section 484.050, e.g., the information required in subsections (c), (d), (e), (f), (g), and (h). “The Attachment Law statutes are subject to strict construction.” (Epstein v. Abrams (1997) 57 Cal.App.4th 1159, 1168.) Accordingly, the applications are denied because Plaintiff did not comply with section 484.050.

B. Probable Validity of Plaintiff’s Claim

In the alternative, Plaintiff has not established the probable validity of its claim. 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.)

Plaintiff does not meet its initial burden of proof on this claim. An application for writ of attachment “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.)¿ “The facts stated in each affidavit … shall be set forth with particularity.” (Code Civ. Proc. § 482.040 [emphasis added].) Plaintiff has not satisfied this standard. In support of the application, Plaintiff relies on two declarations: (1) Attorney Tiffanie Brown, and (2) Yanming Zhou, a manager of Bocheng. These declarations are not set forth with particularity and they lack foundation and personal knowledge to support the statements made therein, as reflected in the court’s rulings on evidentiary objections. For example, Ms. Brown does not demonstrate personal knowledge of the parties’ execution of the Settlement Agreement Forbearance and Mutual Release (“Settlement Agreement”), the purported assignments of claims to Plaintiff, or the current amount of indebtedness under the Settlement Agreement. (See Brown Decl. ¶¶ 2, 3, 8.) Yanming Zhou does not demonstrate personal knowledge of the purported assignment of the Settlement Agreement to Plaintiff. (See Yanming Zhou Decl. ¶ 10.) Also, Yanming Zhou does provide any testimony about the current amount of indebtedness under the Settlement Agreement. Nor does Zhou provide any detail concerning who from Defendants “demanded that Bocheng place an indefinite hold on the depositing of all post-dated checks.” (Id. ¶ 6.)

This alone is a basis to deny the applications. But there are additional issues. Plaintiff’s complaint and first amended complaint allege that Bocheng assigned its claims to Plaintiff, but Plaintiff did not attach a copy of the assignment to the complaint. Defendants provide a copy of the assignment, and the assignment only covers claims against Arte Milano, not Lavitex. (Ezra Decl. Exh. A.) As Defendants argue in opposition, only Arte Milano agreed to make monthly payments on the Settlement Agreement during the forbearance period; Plaintiff has not shown that it provided a notice of default and cure period pursuant to the terms of the Settlement Agreement; and Lavitex cannot be in breach of the Settlement Agreement because the insurance claim is still pending. (Oppo. 3-4; Ezra Decl. ¶¶ 2-5; Lavi Decl. ¶¶ 2-6.)

In reply, Plaintiff seeks to raise an alter ego claim against Lavitex. (Reply 2-3.) “The salutary rule is that points raised in a reply brief for the first time will not be considered unless good cause is shown for the failure to present them before.” (Balboa Ins. Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010.) Plaintiff was required to prove its attachment claim in the moving papers. (See Code Civ. Proc. §§ 484.030, 482.040.) Plaintiff does not show good cause to raise this argument for the first time in reply.

Based on the foregoing, Plaintiff has not met its initial burden to prove a probably valid claim for any specific amount of damages. Accordingly, the applications for writ of attachment are denied.

CONCLUSION AND ORDER

The applications for writs of attachment are denied. The court’s clerk shall provide notice.

IT IS SO ORDERED

Dated: March 19, 2025 ______________________

Stephen I. Goorvitch

Superior Court Judge