660 BVD LLC v. William Scott Griffiths
Case No: 19CV01138
Hearing Date: Mon Jun 17, 2019 9:30

Nature of Proceedings: Hearing Application for Right to Attach Order

660 BVD, LLC, v. William Scott Griffiths (Judge Sterne)

Case No. 19CV01138

Hearing Date: June 17, 2019

HEARING:

Application of Right to Attach Order and for Issuance of Writ of Attachment

ATTORNEYS:

For Plaintiff 660 BVD, LLC: Todd A. Amspoker, Ryan D. Zick, Price, Postel & Parma LLP

For Defendant William Scott Griffith: John A. Dells, Warren B. Campbell, Long & Delis

TENTATIVE RULING:

The application of plaintiff 660 BVD, LLC for a right to attach order is granted as requested in the amount to be attached of $528,047.32. A writ of attachment shall be issued upon the filing of an undertaking in the amount of $10,000.

Background:

This is an application for a right to attach order and issuance of a writ of attachment arising out of plaintiff’s complaint for nonpayment on a guaranty of a promissory note. This action is related to 660 BVD, LLC, v. Ultimate Brands, Inc., et al., case number 19CV01139.

On December 23, 2016, Santa Barbara Community Bank, a division of Ojai Community Bank, entered into a loan transaction with borrower Ultimate Brands, Inc. (Ultimate Brands) for the principal amount of $653,466.27, documented by a promissory note (Note) dated December 23, 2016. (Carpenter decl., ¶ 2 & exhibit A.) The Note was executed by Ultimate Brands by defendant William Scott Griffiths, in his capacity as president of Ultimate Brands. (Note, p. 3.) Concurrently with the execution of the Note, Griffiths executed a written commercial guaranty (Guaranty), guaranteeing payment and performance of the Note. (Carpenter decl., ¶ 2 & exhibit A.)

On October 2, 2017, Bank of the Sierra acquired Santa Barbara Community Bank and thereafter became the beneficiary of the loan documents. (Carpenter decl., ¶ 3.)

Ultimate Brands failed to make the balloon payment due under the Note on December 2, 2018. (Carpenter decl., ¶ 4.) Bank of the Sierra sent a notice of default letter to Ultimate Brands and Griffith on January 10, 2019. (Carpenter decl., ¶ 4 & exhibit B.)

On February 1, 2019, plaintiff 660 BVD, LLC (660 BVD), purchased the Note and interests related to the loan and received an assignment of the Note and Guaranty. (Carpenter decl., ¶ 5.)

On March 1, 2019, 660 BVD filed its complaint in this action against Griffith for breach of the Guaranty.

On April 29, 2019, Griffiths filed his answer to the complaint, generally denying the allegations thereof and asserting 28 affirmative defenses.

On May 23, 2019, 660 BVD filed this application for a right to attach order and for issuance of a writ of attachment. The application and its supporting documents were personally served on counsel for Griffith on May 23. (Proof of Service, filed May 23, 2019.) The notice of application states this hearing date of June 17, 2019.

A notice of errata including corrected exhibit C to the declaration of David R. Carpenter was filed and served on May 29, 2019.

No opposition, objection, claim of exemption, or other response has been filed to this application. However, 660 BVD filed a reply on June 11, 2019, which states that opposition was served on 660 BVD on June 4. (Reply, p. 3, fn. 2.) The reply notes that the opposition was not filed with the court. (Ibid.) There remains no filed opposition with the court.

Analysis:

“If the defendant desires to oppose the issuance of the right to attach order sought by plaintiff or objects to the amount sought to be secured by the attachment, the defendant shall file and serve upon the plaintiff no later than five court days prior to the date set for the hearing a notice of opposition. … If the defendant fails to file a notice of opposition within the time prescribed, the defendant shall not be permitted to oppose the issuance of the order.” (Code Civ. Proc., § 484.060, subd. (a).) No opposition was timely filed. As set forth in section 484.060, subdivision (a), the defendant is therefore not permitted to oppose the issuance of the order.

A right to attach order and writ of attachment may only be issued after a hearing by the Court. (Code Civ. Proc., § 484.040.) Defendant Griffith was timely served with the notice of the application and hearing, and a copy of the application and of the supporting declaration of David R. Carpenter. (Proof of Service, filed May 23, 2019; Code Civ. Proc., § 484.040.)

“At the hearing, the court shall consider the showing made by the parties appearing and shall issue a right to attach order, which shall state the amount to be secured by the attachment determined by the court in accordance with Section 483.015 or 483.020, if it 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, subd. (a).)

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, subd. (a).) This is a claim based upon a Guaranty on the Note for a claim for money greater than $500. (Complaint, ¶¶ 8-12 & exhibits A, C.) Neither the Note nor the Guaranty is secured by any interest in real property. (Carpenter decl., ¶ 8c; Code Civ. Proc., § 483.010, subd. (b).)

Griffiths is a natural person and the claim arises out of conduct by the defendant of a trade, business, or profession. (Carpenter decl., ¶ 9.) The claim against Griffiths is not 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. (Ibid.; Code Civ. Proc., § 483.010, subd. (c).) Griffiths is the majority and controlling shareholder of Ultimate Brands, is its chief executive officer, secretary, and chief financial officer, and executed the guaranty in order for Santa Barbara Community Bank to lend money to Ultimate Brands. (Carpenter decl., ¶ 9 & exhibit D.) The Court finds that the claim upon which the attachment is based is one upon which an attachment may be issued.

Plaintiff has provided evidence that it is the present owner of the rights in the Note and Guaranty, that the amount owning under the Note and Guaranty is at least $528,047.32, inclusive of late charges of $474.46, but exclusive of attorney fees and costs. (Application, ¶ 8; Carpenter decl., ¶ 8b.) Griffiths has filed no opposition or objection, and has presented no evidence to contradict the evidence provided by plaintiff. (See Code Civ. Proc., § 484.060, subd. (a).) Based on the evidence presented, the court finds that the plaintiff has established the probable validity of the claim upon which the attachment is based.

Plaintiff provides evidence that the attachment is not sought for a purpose other than the recovery on a claim upon which the attachment is based. (Carpenter decl., ¶ 8e.) The application for right to attach order appears from the evidence presented to be a regular and proper application to secure payment of the claim asserted by 660 BVD. Defendant Griffiths has provided no evidence to the contrary. The court finds that the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based.

Plaintiff has provided evidence that the amount owing and unpaid in its claim is $528,047.32, inclusive of late charges of $474.46, but exclusive of attorney fees and costs. (Carpenter decl., ¶ 8b.) As set forth below, there are no reductions in the amount to be secured by the attachment. The court finds that the amount to be secured by the attachment is greater than zero.

Based on the foregoing, the court shall issue a right to attach order. The amount to be secured by the attachment is determined in accordance with section 483.015. (Code Civ. Proc., § 484.090, subd. (a).) Code of Civil Procedure section 483.015 provides:

“(a) Subject to subdivision (b) and to Section 483.020, the amount to be secured by an attachment is the sum of the following:

“(1) The amount of the defendant’s indebtedness claimed by the plaintiff.

“(2) Any additional amount included by the court under Section 482.110.

“(b) The amount described in subdivision (a) shall be reduced by the sum of the following:

“(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.”

This is not an action in unlawful detainer and so section 483.020 is not applicable. The amount of defendant’s indebtedness claimed by the plaintiff, inclusive of late charges, is $528,047.32. (Carpenter decl., ¶ 8b.) No amount is requested for court costs or attorney fees. (Application, ¶ 8; Carpenter decl., ¶ 8b.) There is no evidence of any amount of a money judgment in favor of defendant against plaintiff nor of any security interest in property of defendant held by the plaintiff. Griffiths has not filed a cross-complaint against plaintiff. Griffiths’s answer generally asserts a claim of set-off but Griffiths provides no evidence of such set-off or whether such set-off is one upon which an attachment could be issued had an action been brought on that claim. The court does not find any amount to be set off pursuant to Code of Civil Procedure section 485.015, subdivision (b)(3). Accordingly, there is no reduction in the amount to be secured by the attachment pursuant to section 483.015, subdivision (b). The amount of the attachment is therefore $528,047.32. (Code Civ. Proc., § 483.015, subd. (a).)

Defendant Griffiths has failed to file any claim of exemption or any argument why the property of defendant would otherwise be exempt from attachment. The court therefore finds that the defendant has failed to prove that all of the property sought to be attached is exempt from attachment. The court will order a writ of attachment to be issued upon the filing of the undertaking required by Code of Civil Procedure sections 489.210 and 489.220. (Code Civ. Proc., § 484.090, subd. (b).) Defendant has not filed any objection to the undertaking. (Code Civ. Proc., § 489.220, subd. (b).) Absent an objection, the amount of the undertaking is set by statute at $10,000. (Code Civ. Proc., § 489.220, subd. (a).)