Judge: Virginia Keeny, Case: 22VECV00719, Date: 2022-09-02 Tentative Ruling

Case Number: 22VECV00719    Hearing Date: September 2, 2022    Dept: W

GENEVA CAPITAL, LLC v. CLSC, LLC, et al.

APPLICATION FOR WRIT OF ATTACHMENT

Date of Hearing:  September 2, 2022                             Trial Date: None set.

Department:  W                                                                    Case No.: 22VECV00719

Moving Party: Plaintiff Geneva Capital, LLC

Responding Party:  None

BACKGROUND

This is an action for breach of written agreement.  Plaintiff Geneva Capital, LLC alleges that, on or about October 10, 2018, Defendant CLSC, LLC entered into a written Master Equipment Financial Agreement with Plaintiff for the financing of equipment.  Plaintiff alleges Defendant Asi J. Ifrah aka Asi Ifrah aka Asi Joseph Ifrah (“Ifrah”) executed a personal Guaranty.  Plaintiff alleges Defendants failed to make payments as agreed upon.  There is an outstanding principal balance of $32,303.34. 

On May 27, 2022, Plaintiff filed a complaint against Defendants CLSC, LLC and Ifrah for (1) breach of written agreement, (2) foreclosure of security agreement and possession of collateral, (3) breach of personal guaranty, (4) account stated, (5) open book, and (6) unjust enrichment.

Plaintiff now moves for a writ of attachment against Defendant Ifrah in a total amount of $38,579.98.  No opposition has been filed.

[Tentative] Ruling

Plaintiff Geneva Capital, LLC’s Application for Writ of Attachment is GRANTED.

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.)

The application shall be executed under oath and must include: (1) a statement showing that the attachment is sought to secure the recovery on a claim upon which an attachment may be issued; (2) a statement of the amount to be secured by the attachment; (3) a statement that the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based; (4) a statement that the applicant has no information or belief that the claim is discharged or that the prosecution of the action is stayed in a proceeding under the Bankruptcy Act (11 U.S.C. section 101 et seq.); and (5) a description of the property to be attached under the writ of attachment and a statement that the plaintiff is informed and believes that such property is subject to attachment.  (Code Civ. Proc., § 484.020.)

“The application [for a 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 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.)

DISCUSSION

Probable Validity of Plaintiff’s Claim

This application is based on a claim for breach of contract.  To establish a claim for breach of contract, a plaintiff must prove: (1) 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 has submitted a declaration from Kyle Athey, Plaintiff’s Director of Legal Services.  Athey provides that Defendant CLSC, LLC entered into a written Master Equipment Financial Agreement with Plaintiff on or about October 10, 2018 for the financing of equipment, including one Brother GTX422 Garment Printer, one MAXXX2G+ Auto Release 2 Pressure Heat Press, and one Schulze Basic with stand (“Collateral”).  (Athey Decl., ¶ 6, Ex. 1.)  Athey states that, to induce Plaintiff to furnish the Collateral to CLSC, LLC, Defendant Ifrah executed a Personal Guaranty on or about October 9, 2018.  (Id., ¶ 16, Ex. 1.)  Plaintiff perfected its security interest in the Collateral on November 2, 2018 and performed all of the terms and conditions of the agreement, specifically, by delivering the Collateral to Defendants.  (Id., ¶¶ 7-8, Exs. 1, 2.)  On or about July 10, 2019, Defendants failed to make the payment then due and owing.  (Id., ¶¶ 9, 17.)  Defendant Ifrah is thus indebted to Plaintiff in the sum of $32,303.34, plus $16,981.82 in interest, $625.72 in late fees, and $60.00 in NSF fees.  (Id., ¶¶ 10-12, 17, 23, 24, Ex. 3.)

Plaintiff’s evidence is sufficient to support all elements of a breach of contract claim against Defendant Ifrah.  Plaintiff has thus established the probable validity of its breach of personal guaranty claim in the amount of $32,303.34, plus $16,981.82 in interest, $625.72 in late fees, and $60.00 in NSF fees.

Basis of Attachment

“[A]n 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(a).)  “An attachment may not be issued on a claim which is secured by any interest in real property arising from agreement . . . .”  (Id., § 483.010(b).) 

“If the action is against a defendant who is a natural person, an attachment may be issued only on a claim which arises out of the conduct by the defendant of a trade, business, or profession.”  (Code Civ. Proc., § 483.010(c).)  “An attachment may not be issued on a claim against a defendant who is a natural person if the claim is based on the sale or lease of property, a license to use property, the furnishing of services, or the loan of money where the property sold or leased, or licensed for use, the services furnished, or the money loaned was used by the defendant primarily for personal, family, or household purposes.”  (Id.) 

Whether a defendant guarantor is engaged in business so as to make issuable an attachment against him is determined on a case-by-case basis.  (Advance Transformer Co. v. Superior Court (1974) 44 Cal.App.3d 127, 143-44.)  “[I]f the sum total of the circumstances justifies the conclusion that the guarantor occupied himself to a substantial degree and on a continuing basis in promoting his own profit through provision of credit or management to the primary obligor, a guarantee executed in the course of such activity may properly be considered an obligation arising out of the guarantor’s business.”  (Id. at 144.)

Plaintiff’s application for writ of attachment is based on an express contract—i.e., the Personal Guaranty of the Master Equipment Financial Agreement.  The total amount allegedly due on the agreement is readily ascertainable and more than $500.  There are no indications Plaintiff holds an interest in real property to secure the amount of the claim.  Rather, all indications are that Plaintiff holds a security interest in the equipment.

Plaintiff has also demonstrated that the claim arises out of a Defendant Ifrah’s business.  Defendant Ifrah executed the Master Equipment Financial Agreement on behalf of CLSC, LLC as President.  (Athey Decl., ¶ 6, Ex. 1.)  Additionally, Athey declares that Ifrah executed the Personal Guaranty to induce Plaintiff to furnish the Collateral.  (Id., ¶ 16.)  Under these circumstances, the Court finds Ifrah, as guarantor, occupied himself to a substantial degree and on a continuing basis in promoting his own profit through provision of credit and management to CLSC, LLC, as the primary obligor, such that Ifrah is engaged in the business giving rise to Plaintiff’s claim.  (Advance Transformer Co., supra, 44 Cal.App.3d at 144 (finding that the required frequency and continuity of the guarantor’s involvement in the affairs of the primary obligor may be found where the obligation sued upon has resulted from an extension of credit in reliance upon defendant’s continuing guarantee or the defendant has extensively occupied himself in the management of the primary obligor on a continuing basis and has a major stake in its success).)

Purpose and Amount of Attachment

CCP section 484.090 states that the court shall issue a right to attach order if “the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based . . . [and] the amount to be secured by the attachment is greater than zero.”  (Code Civ. Proc., § 484.090.)

Plaintiff declares that the attachment is not sought for a purpose other than the recovery on its claim.  (Application, ¶ 4.)  The amount to be secured is greater than zero.

Subject Property

Plaintiff requests attachment against a natural person. 

CCP section 487.010 provides that where the defendant is a natural person, all of the following property is subject to attachment:

(1)          Interests in real property except leasehold estates with unexpired terms of less than one year.

(2)          Accounts receivable, chattel paper, and general intangibles arising out of the conduct by the defendant of a trade, business, or profession, except any such individual claim with a principal balance of less than one hundred fifty dollars ($150).

(3)          Equipment.

(4)          Farm products.

(5)          Inventory.

(6)          Final money judgments arising out of the conduct by the defendant of a trade, business, or profession.

(7)          Money on the premises where a trade, business, or profession is conducted by the defendant and, except for the first one thousand dollars ($1,000), money located elsewhere than on such premises and deposit accounts, but, if the defendant has more than one deposit account or has at least one deposit account and money located elsewhere than on the premises where a trade, business, or profession is conducted by the defendant, the court, upon application of the plaintiff, may order that the writ of attachment be levied so that an aggregate amount of one thousand dollars ($1,000) in the form of such money and in such accounts remains free of levy.

(8)          Negotiable documents of title.

(9)          Instruments.

(10)       Securities.

(11)       Minerals or the like (including oil and gas) to be extracted.

(Code Civ. Proc., § 487.010(c).)

Plaintiff sets forth a list of property to be attached in Attachment 9(c).  The Court finds that while most of the property listed is property that is subject to attachment under CCP section 487.010(c), Plaintiff has also included property that is not listed in CCP section 487.010(c).  Requested types of property that are not set forth in CCP section 487.010(c) include: (1) all tangible personal property that Defendant possesses or controls, (2) all tangible personal property of Defendant that a third party possesses or controls, (3) all vehicles of a going business in which Defendant has an interest, (4) all personal property used as a dwelling in which Defendant has an interest, (5) all vehicles, vessels, mobilehomes, or commercial coaches in which Defendant has an interest, (6) all property in any safe deposit box in which Defendant has an interest, and (7) all estates of a decedent in which Defendant has an interest.  (Application, Attachment 9(c).)  For the requested property not set forth in CCP section 487.010(c), Plaintiff has cited to various provisions in CCP section 488.300, et seq.  These statutory provisions deal with methods of levy for various types of property.  These provisions do not provide authority for attaching those types of property where the defendant is a natural person.  Thus, the only property the Court finds Plaintiff may appropriately request to be attached are those specifically set forth in CCP section 487.010(c).

Exemptions

Defendant Ifrah has not filed an opposition and thus has not claimed any exemptions.

Reduction of Amount to be Secured

CCP section 483.015(b) provides that the amount to be secured by the attachment shall be reduced by:

(1)  The amount of any money judgment in favor of the defendant and against the plaintiff that remains unsatisfied and is enforceable

(2)  The amount of any indebtedness of the plaintiff that the defendant has claimed in a cross-complaint filed in the action if the defendant’s claim is one upon which an attachment could be issued

(3)  The amount of any claim of the defendant asserted as a defense in the answer pursuant to Section 431.70 if the defendant’s claim is one upon which an attachment could be issued had an action been brought on the claim when it was not barred by the statute of limitations

(4)  The value of any security interest in the property of the defendant held by the plaintiff to secure the defendant’s indebtedness claimed by the plaintiff, together with the amount by which the value of the security interest has decreased due to the act of the plaintiff or a prior holder of the security interest

(Code Civ. Proc., § 483.015(b).)

“[T]o sustain reduction in a writ amount, most courts require that the defendant provide enough evidence about its counterclaims and/or defenses to prove a prima facie case [for attachment against Plaintiff].”  (Ahart, California Practice Guide: Enforcing Judgments and Debts, ¶ 4:64 (1998 rev.).)

Plaintiff’s Director of Legal Services has indicated that the fair market value of the Collateral is $13,500.  This fair market value was determined based on the original price of the Collateral, the equipment’s age and forecast of current market values, Athey’s conversions with various equipment vendors, and Athey’s experience in equipment leasing.  (Athey Decl., ¶ 19.) 

The amount Plaintiff requests to be secured by the attachment (i.e., $38,579.98) already accounts for a fair market value of $13,500 for the Collateral.  Therefore, no reduction to the requested amount is necessary.

Defendant Ifrah has not filed an opposition to this application and has thus not shown that the amount of attachment should be further reduced.

Undertaking

CCP section 489.210 requires the plaintiff to file an undertaking before issuance of a writ of attachment.  Pursuant to CCP section 489.220, the amount of the undertaking will be $10,000 absent an objection.  The failure to post an undertaking prior to the issuance of the writ of attachment renders the writ of attachment void ab initio.  (Vershbow v. Reiner (1991) 231 Cal.App.3d 879, 883.)

Plaintiff has not addressed nor argued for a different amount of undertaking.

Costs

CCP section 482.110 provides the court with discretion to include an estimated amount for costs and allowable attorney’s fees in the amount to be secured by the attachment.  (Code Civ. Proc., § 482.110(a).)

Plaintiff requests costs in the amount of $750.00 and attorney’s fees in the amount of $1,359.10.  (Application, ¶ 8; Athey Decl., ¶¶ 22, 24.)  Plaintiff has failed to provide evidence justifying the amount of attorney’s fees and costs requested.  The Court thus declines to include estimated costs and allowable attorney’s fees in the amount to be secured by the attachment.

CONCLUSION

Based on the foregoing, Plaintiff’s application for writ of attachment is GRANTED in the reduced amount of $36,470.88.

The granting of the application for writ of attachment is conditioned upon Plaintiff’s posting of an undertaking in the amount of $10,000.00 and submission of a proposed right to attach order and order for issuance of writ of attachment after hearing (Form AT-120).  The proposed right to attach order should only set forth property that is subject to attachment under CCP section 487.010(c).