Judge Stephen I. Goorvitch, Case Number: 25STCV05398, Date: 2025-05-14 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 25STCV05398, Date: 2025-05-14 Tentative Ruling

Plaintiff Neman Brothers & Assoc., Inc. (“Plaintiff”) moves for a writ of attachment against Defendant Gilbert Tex, Inc. (“Defendant” or “Gilbert”) in the amount of $161,250.88. Defendant opposes the application, which is denied.

“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.)

The court rules as follows on Defendant’s evidentiary objections to the Declaration of Yoel Neman:

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.)

Plaintiff is a wholesaler of yarn and fabrics. (Neman Decl. ¶ 4.) Defendant’s “primary business is to purchase unprocessed yarn, manufacture them into large sheets of fabric with various designs, colors, and styles, and sell to clothing manufacturers.” (Bae Decl. ¶ 2.) Plaintiff and Defendant “have done business together several times in the past, and have known each other for several years.” (Ibid.) “Between November 2023 and February 2024, [Defendant] agreed to purchase several hundred thousand pounds of unprocessed yarn from Neman.” (Id.

¶ 3.) Plaintiff delivered the yarn and Defendant received it. (Neman Decl. ¶¶ 6-7.) Plaintiff issued written invoices to Defendant showing the purchase and delivery of $201,640.89 in yarn between November 2023 and February 2024. (Id. ¶ 6, Exh. 1.) The invoices show that the vast majority of the yarn was sold and delivered in November and December 2023. (Ibid.) Defendant made a partial payment and/or received a partial credit against the purchase price in the amount of $50,390.01. (Id. ¶ 8.) Defendant has not paid the remaining balance of $151,250.88. (Ibid.)

Defendant acknowledges the existence of the contract and Plaintiff’s delivery of the yarn. (See Bae Decl. ¶¶ 3-7.) Rather, Defendant contends that some of the yard had defects, and Defendant rejected the yarn within a reasonable time after discovering the defects. (Oppo. 7-9.) Defendant relies on Commercial Code section 2607(3)(A), which states: “Where a tender has been accepted: (A) The buyer must, within a reasonable time after he or she discovers or should have discovered any breach, notify the seller of breach or be barred from any remedy . . . .” Commercial Code section 2602(1) similarly provides that “[r]ejection of goods must be within a reasonable time after their delivery or tender.” “[I]n cases arising under the Uniform Commercial Code, where such notification is required, the question of whether the buyer notified the seller of a breach within a reasonable time is usually a question of fact.” (Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1307.)

Here, the invoices show “ship dates” of November 27, 2023, December 8, 2023, January 5, and 24, 2024, and February 23, 2024. (Neman Decl. ¶ 6, Exh. 1.) The invoices also state:

1. CLAIMS - All claims or demands for defective merchandise must be made in writing by certified mail within 10 days of receipt goods. Failure to give such notice shall constitute unqualified acceptance ….

2. TESTING OF GOODS – It is the buyer’s responsibility to test and sample the goods received before cutting to meet specific requirements, performance standards, or applications especially for color-fastness, shrinkage, sewable, stretch, weight/yield, and general appearance…. Absolutely no returns will be accepted or allowances made after good have been cut or altered from original delivered form.

In a declaration, Defendant’s president, David Bae, acknowledges that Defendant received the yarn and did not give notice of any defects with 10 days of receipt. (Bae Decl. ¶¶ 4-7.) Rather, Bae declares that Defendant could not discover the defects until it processed the yarn:

The unprocessed yarn, however, was irreparably defective, containing color bleeding, flying, hairing, and significant quality deteriorations. These defects are impossible to discover until Gilbert processes the unprocessed yarn through its usual manufacturing process. Several of these defects can only be seen once Gilbert creates finalized fabric that reveals the color bleeding in the patterns and the hairing on the fringes.

(Id. ¶ 4.) On June 3, 2024, Defendant sent Plaintiff a debit memo (“Debit Memo”) that demanded that Plaintiff reimburse Defendant $112,446.99 for yarn “due to damage fabric.” (Id. ¶ 5, Exh. A.) According to Bae’s declaration, “[t]he Debit Memo demanded Neman repay Gilbert for all defective unprocessed yarn Gilbert paid for, but did not include defective yarn that Gilbert had not yet paid Neman, as well as yarn that were not defective.” (Id. ¶ 5.) Bae also declares that Plaintiff’s employee, Rajiv Srviastava, visited Bae’s brother’s factory “three to four times” on unspecified dates and “inspected the defective yarn.” Bae declares that “Rajiv confirmed the unprocessed yarn was defective” and offered credits. (Id. ¶ 7.)

“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 court cannot resolve the disputed issues on this record. Defendant argues that the 10-day deadline is unreasonable under the circumstances, and therefore this invoice provision conflicts with California Commercial Code section 2607. (See Oppo. at 5-22.) Defendant argues that “[t]hese defects are impossible to discover until [Defendant] processes the unprocessed yard through its usual manufacturing process” and that “[s]everal of these defects can only be seen once [Defendant] creates finalized fabric that reveals the color bleeding in the patterns and the hairings on the fringes.” (Bae Decl. ¶ 4.) Plaintiff does not provide a sufficient discussion of this industry to dispute Defendant’s argument or to demonstrate that Plaintiff took an inordinate amount of time to discover the defects. Moreover, the parties’ course of conduct contradicts the 10-day deadline, because Plaintiff’s agent investigated the issues long after this deadline and offered credits, notwithstanding the date of the notifications. (Id. ¶ 7.)

Plaintiff argues that “Plaintiff is informed and believes that [Defendant] has converted said yarn goods to its own use, by either cutting, dyeing, and/or incorporating same into finished fabric/clothing items for resale and/or by reselling such goods/items.” (Memorandum of Points & Authorities in Support of Application at 5:23-26.) There is no citation to the record in support of this assertion.[1] The declaration of Yoel Neman merely states: “I am further informed and believe that [Defendant] has converted said yard goods to its own use, by either cutting, dyeing, and/or incorporating same into finished fabric/clothing items for resale and/or by reselling such goods/items.” (Neman Decl. ¶ 9.) There is no foundation for this assertion, which is likely based upon hearsay.

Based upon the foregoing, the court cannot determine whether Defendant’s rejection of the goods approximately three to six months after the various shipping dates was reasonable under the circumstances. Therefore, Plaintiff has not demonstrated that there is probable validity in its claim. The court need not address any of the remaining issues.

Plaintiff’s application for a writ of attachment in the amount of $161,250.88 is denied. Plaintiff’s counsel shall provide notice and file proof of service with the court.

[1] “Judges are not like pigs, hunting for truffles buried in briefs.” (See United States v. Dunkel, 927 F.2d 955, 956.)