Judge Stephen I. Goorvitch, Case Number: 24STCV23668, Date: 2024-11-07 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 24STCV23668, Date: 2024-11-07 Tentative Ruling

Case Number: 24STCV23668 Hearing Date: November 7, 2024 Dept: 82

Refrigerator Manufacturers, LLC Case No. 24STCV23668

v. Hearing: November 7, 2024

Location: Stanley Mosk Courthouse

Department: 82 Premier Culinary Solutions, Inc. Judge: Stephen I. Goorvitch

[Tentative] Order Denying Application for Writ of Attachment

Plaintiff and Cross-Defendant Refrigerator Manufacturers, LLC (“Plaintiff”) moves for a writ of attachment against Defendant and Cross-Complainant Premier Culinary Solutions, Inc. (“Defendant”) in the amount of $205,092. Among other things, Plaintiff must establish probable validity of the claim. (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.) “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.)

The application is based on Plaintiff’s cause of action for breach of contract. To establish a claim for breach of contract or breach of guaranty, 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.)

In or around 2019, Defendant was awarded a contract by Stronghold Engineer for equipment procurement and installation of a foodservice kitchen at the Veterans Administration Dietetics Medical Building in Los Angeles (“VA Project”). (Roczey Decl. ¶ 4.) Defendant subcontracted with Plaintiff to install a walk-in freezer and remote refrigeration system at the VA Project (the “Refrigeration Build Project”). (Bedi Decl. ¶ 2.) The contract between Plaintiff and Defendant (hereafter, the “Contract”) is evidenced by written quotes provided by Plaintiff, which include standard terms and conditions, as well as two purchase orders signed by Defendant’s president in the amounts of $385,765 and $347,000. (Bedi Decl. ¶ 3, Exh. A, B; Roczey Decl. ¶ 6, Exh. A.) Plaintiff’s “Standard Terms and Conditions,” as stated on the written quotes, include the following:

Terms and Conditions: All pricing is FOB Cerritos, California. Normal terms require a 50% deposit payable with the return of approved submittal drawings and prior to fabrication. Balance is due upon delivery or 30 days from ship date for customers with approved credit and in good standing.

….[¶]

RMI Warranty: One Year Limited Warranty – All Refrigerator Manufacturers, LLC (RMI) products are guaranteed to be free from defects in materials and/or workmanship. RMI will replace or repair the defective part without charge, exclusive of freight or labor, for a period of one year from date of shipment….

(Roczey Decl. Exh. A.)

Plaintiff submits evidence that it partially performed the Contract when it “furnished labor, services, equipment, and materials used and intended to be used in the work of improvement on the Property, including the installation of a walk-in refrigerator and freezer.” (Bedi Decl. ¶ 7.) Plaintiff acknowledges that Defendant partially performed its obligations when it paid $527,673 out of the total $732,765 Contract price. (Id. ¶¶ 6-8 and Exh. G.) Plaintiff contends that Defendant presently owes the balance of $205,092. (Ibid.)

Defendant contends that Plaintiff did not complete performance in a timely manner and materially breached the Contract, excusing the remainder of Defendant’s performance. (Oppo. 8-9.) “When a party’s failure to perform a contractual obligation constitutes a material breach of the contract, the other party may be discharged from its duty to perform under the contract.” (Brown v. Grimes (2011) 192 Cal.App.4th 265, 277.) “Normally the question of whether a breach of an obligation is a material breach, so as to excuse performance by the other party, is a question of fact.” (Ibid.) Whether a partial breach of a contract is material depends on “the importance or seriousness thereof and the probability of the injured party getting substantial performance,” among other factors. (Id. at 278.)

Defendant submits evidence that Plaintiff failed to complete installation in a timely manner and that the refrigeration system did not function correctly. “Some of the issues that existed included frozen refrigeration lines … and the roof allowing water to seep into the building.” (Roczey Decl. ¶ 8.) There were issues concerning “pitch pockets” and foam insulation installed by Plaintiff. (Id. ¶ 10.) In addition, Plaintiff did not honor the one-year warranty in the written quotes. (Id. ¶¶ 11-16.) In an email to Defendant dated August 19, 2022, and a letter dated February 22, 2022, Tony Bedi, Plaintiff’s chief executive officer, acknowledged delays on refrigeration projects, including Defendant’s project, as a result of “lack of foam,” “lack of man power,” and “lack of materials.” (Id. ¶ 17, Exh. D.) As shown in an email from Bedi, Plaintiff continued to work on completing the Refrigeration Build Project until around October 31, 2023. (Id. ¶ 19.i and Exh. L.) Defendant submits evidence that Plaintiff’s failure to timely complete the installation or honor the warranty caused the general contractor, Stronghold Engineer, to withhold more than $200,000 from Defendant related to the unfinished Refrigeration Build Project. (Id. ¶ 21-22.) Defendant also incurred additional expenses hiring other subcontractors to complete parts of the Refrigeration Build Project. (Id. ¶¶ 10-14.) This evidence sufficiently shows, for purposes of pre-judgment writ of attachment, that Plaintiff’s breach was serious, and that Defendant did not obtain substantial performance from Plaintiff. Defendant has submitted sufficient evidence that Plaintiff materially breached the Contract such that Defendant’s obligation to pay the remaining $205,092 has been excused.

Based upon the foregoing, the court finds that Plaintiff has not established probable validity of the claim. Therefore, the application for writ of attachment is denied. Plaintiff’s counsel shall provide notice and file proof of service with the court.