Judge: Theodore R. Howard, Case: 22-12766745, Date: 2022-11-10 Tentative Ruling

Before the Court at present are two requests for issuance of a Right to Attach Order and for Issuance of a Writ of Attachment (“the Applications”), filed on 10/14/22 by Plaintiff Michael Lowitz (here, “Plaintiff”), against Defendants Mark Rapparport (“Rapparport”) and Cascade Development Company, LLC (“Cascade”). These applications were specially set for hearing on 11/10/22 per an ex parte application heard on 10/27/22.

The Application as to Cascade is GRANTED in the amount of $220,297. As to Cascade, Plaintiff has demonstrated that the requirements for attachment under C.C.P. §483.010 and §484.090 are met. Plaintiff’s claim is for money based on express or implied contracts in amounts greater than $500. (See ROA 22 at Lowitz Decl. ¶¶ 3-22 and Exs. 1-5.) The claims at issue are not secured by real property: although the Promissory Notes (at Exs. 1 and 2) refer to Plaintiff as the “Secured Lender,” it is undisputed that no deed of trust was recorded on either of the properties identified, and Defendants do not argue contra. The claim as to Cascade is not as to a natural person and is for a fixed or readily ascertainable sum. (See ROA 22, Exs. 1-5.) (Although the Notes also provided for profit participation, the claim presented here does not seek attachment based thereon, and the balance of the claim is for a readily ascertainable sum.)

Defendants argue that their cross-complaint for usury would allow an offset. But there is sufficient evidence presented here as to Rappaport’s status as a broker at the time, and as the drafter, and as to Defendants’ alleged promises to record a security interest for the loans, to make that cross-claim doubtful. (See ROA 131 at Ex. 1, ROA 122 at Exs. 1-5, Bock v. California Capital Loans, Inc. (2013) 216 Cal.App.4th 264, 266-271, and Stoneridge Parkway Partners, LLC v. MW Housing Partners III (2007) 153 Cal.App.4th 1373, 1379.) In addition, the Notes he drafted contain a “usury savings clauses” stating an intent to reform as necessary. (ROA 22 at Exs. 1 and 2 at §5.) Defendants have also offered no evidence as to what sum they believe would still be owed if their usury claim is found to have merit, while the Applications reflect that much of what is claimed here would still be owed in any event.

For these same reasons, probable validity as to Cascade is shown. Plaintiff has also presented evidence to show that attachment is sought here for a proper purpose. (See ROA 22, Lowitz Decl., at ¶ 35.) And the claim is clearly for a sum greater than zero.

As for the sum to be attached, Plaintiff has adequately shown that the sum claimed here, in the amount of $220,297, is appropriate in this context. The Application as to Cascade is therefore GRANTED, subject to the posting of a $10,000 undertaking pursuant to C.C.P. § 489.220.

However, the Application as to Rapparport is DENIED without prejudice. The sole basis for the Application as to him is an alter-ego allegation. There is some support for that claim, as he was the managing member for Cascade, he both drafted and signed the Notes at issue, and he appears to have exercised complete control over the entity and treated it as if it were indistinct from himself, including making use of its assets for his personal benefit. (ROA 82, Rapparport Decl., ¶ 11; ROA 22, Lowitz Decl., ¶¶ 3-24, Exs. 3, 4.) But none of that is sufficient to establish alter-ego for purposes of this Application. The Application as to Rapparport is therefore denied, without prejudice to a renewed motion if further support for the alter-ego claim is identified.

Defendants’ Request for Judicial Notice is GRANTED under Ev. Code §452(c) and (d), as to the existence of the records presented, but not as to the truth of any disputed facts asserted therein. (Fontenot v. Wells Fargo Bank, NA (2011) 198 Cal.App.4th 256, 264; Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482.)

Counsel for Plaintiff Lowitz is to give notice of this ruling