Judge: Theodore R. Howard, Case: 22-1266856, Date: 2022-12-08 Tentative Ruling
The Application for Right to Attach Order brought by Plaintiff Fusion LLF, LLC is DENIED, as Plaintiff has not demonstrated a probability of prevailing, on a contract claim in a readily ascertainable amount.
Evidentiary Objections
Initially, the Court SUSTAINS Objections Nos. 1 through 3, 5 and 6 to the Declaration of Alex Arzetti, for lack of foundation and hearsay. In addition, the Court also SUSTAINS Objections Nos. 4 through 6 on relevance.
Mr. Levy declares that he is “the Credit Operations Manager for Plaintiff, FUSION LLF, LLC (hereinafter "Plaintiff' or "Fusion")” and asserts that he has personal knowledge of the following facts (¶1 of Levy Declaration); however, no additional facts are offered which establish personal knowledge of the relevant contract or invoices.
As explained by the Court in Snider v. Snider (1962) 200 Cal.App.2d 74, a “bare statement” of personal knowledge “has no redeeming value and should be ignored,” where the facts alleged in a declaration do not demonstrate personal knowledge. (Id. at 754; See also Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 692, fn. 1).
Here, while Mr. Levy declares that “Plaintiff and Defendant UNRIVALED BRANDS, INC., (hereinafter "Defendant") entered a contract entitled Flexible Payments Retailer Terms & Conditions ("Retailer Terms"),” a review of the attached contract demonstrates that it was unsigned by any party, including the declarant. (¶2 of Levy Declaration and Exs. 1 & 2 thereto). In fact, the attached documents and Mr. Levy reference 9701 Enterprises, Inc. and LTRMN Inc. as parties to the transactions with Fusion, but nothing establishes the relationship between Defendant and either 9701 Enterprises, Inc. or LTRMN Inc.
Moreover, Mr. Levy discusses the Vendors Terms in which Plaintiff purportedly entered into with various vendors, but fails to establish a valid agreement, as again, the documents are unsigned and he does not declare that he signed the agreement attached as Ex. 3.
Further of note, Mr. Levy does not declare that his declaration is based on a review of the business records nor does he indicate the attached documents were located within such records. Similarly, he offers no testimony relevant to establishing the “business records” hearsay exception articulated in Evidence Code §1271. Mr. Levy insufficiently states that in his role as Credit Operations Manager, he is responsible for reviewing, documenting and overseeing credit related issues on behalf of Plaintiff including documenting delivery of invoices sent between Retailers and Vendors, documenting communications between Plaintiff and Retailers and Vendors and collecting overdue funds from Retailers. Levy Decl. para. 2.
With regard to the purported spreadsheet of invoices attached as Ex. 4, as noted by the California Supreme Court in Pacific Gas & Elec. Co. v. G.W. Thomas Drayage & Rigging Co. (1968) 69 Cal.2d 33, “[s]ince invoices, bills, and receipt for repairs are hearsay, they are inadmissible independently to prove that liability for the repairs was incurred, that payment was made, or that the charges were reasonable.” (Id. at 42-43). “If, however, a party testifies that he incurred or discharged a liability for repairs, any of these documents may be admitted for the limited purpose of corroborating his testimony…” (Id. at 43). The Court went on to note that invoices are not admissible to prove the truth of the matters therein “unless it can be admitted under some recognized exception to the hearsay rule.” (Id.; See also discussion in Mai v. HKT Cal, Inc. (2021) 66 Cal.App.5th 504, 520-522).
Here, Plaintiff does not even offer the invoices, themselves, for their truth, only a compilation/spreadsheet of a list of invoices it claims non-party Vendors to have sent – to establish the amount owed by Defendant; however, no testimony has been offered to demonstrate these charges were in fact incurred by Defendant or that a hearsay exception applies. In addition, Plaintiff has failed to establish that all of the non-party Vendors, listed (but redacted) from Ex. 4 all agreed to an assignment.
Based on all of the above, the identified evidence is insufficiently supported and there has been no concession by Defendant, of its authenticity or accuracy.
Based on the above, the Court SUSTAINS Objections Nos. 1 through 6 to the Levy Declaration.
Analysis
Thereafter, pursuant to C.C.P. §483.010(a)(2), a Court cannot issue an attachment unless it finds “[t]he plaintiff has established the probable validity of 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. (C.C.P. §481.190).
"In determining the probable validity of a claim where the defendant makes an appearance, 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.” (Loeb & Loeb v. Beverly Glen Music, Inc. (1985) 166 Cal.App.3d 1110, 1120). The burden is on the applicant to establish each element necessary for an attachment order by a preponderance of the evidence. (Id. at 1116).
Here, Plaintiff seeks an attachment based on its claim for breach of contract. The elements of a breach of contract claim are: (1) the existence of the contract; (2) performance by the plaintiff or excuse for nonperformance; (3) breach by the defendant; and (4) damages. (First Commercial Mortgage Co. v. Reece (2001) 89 Cal.App.4th 731, 745).
Here, given the order sustaining Defendant’s objections to the Declaration of David Levy, the Court has very little evidence to support Plaintiff’s breach of contract claim. In particular, given the objections, there is insufficient evidence of a contract. Additionally, Mr. Levy offers no testimony which establishes a relationship between Defendant and 9701 Enterprises, Inc. or LTRMN Inc. Moreover, Mr. Levy offers no testimony which establishes that either Plaintiff (or the Vendor assignees) performed under any agreement. At best, the court has testimony from Mr. Levy which asserts invoices have not been paid; however, absent an agreement to pay them and performance, the same is unavailing.
Moreover, the Court has no admissible evidence as to damages or the amount of the claim, which would support an attachment in the requested amount. As discussed more fully above, the attached spreadsheet of invoices are hearsay, for which Plaintiff has not demonstrated an exception. Additionally, Plaintiff has offered no evidence which demonstrates how the spreadsheet of invoices or underlying invoices were compiled which indicates their accuracy.
Further, even assuming the admissibility of spreadsheet, Plaintiff has failed to establish it has the right to prosecute these claims and the amount owed on behalf of the non-party Vendors.
As noted by the Court in California Ins. Guarantee Assn. v. Workers’ Comp. Appeals Bd. (2012) 203 Cal.App.4th 1328, “[t]o ‘assign’ ordinarily means to transfer title or ownership of property.” (Id. at 1335).
Pursuant to C.C.P. §367, “[e]very action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute.” “Generally, ‘the person possessing the right sued upon by reason of substantive law is the real party in interest.’” (Gantman v. United Pac. Ins. Co. (1991) 232 Cal.App.3d 1560, 1566).
Based on all of the above, Plaintiff has not demonstrated a probability of prevailing, sufficient to support attachment. (C.C.P. §484.090(a)(2)).
Moving Party to give notice.