2013-00146750-CU-OE

David Wagner vs. Rackwise Inc

Nature of Proceeding:    Writ of Attachment

Filed By:   Lovell, Tre

Plaintiff David Wagner’s (“Wagner”) Application for Right to Attach Order and Writ of
Attachment is GRANTED.

This case involves an employment dispute.  Wagner alleges that he served as
Defendant Rackwise, Inc.’s (“Rackwise”) Executive Vice President, but that Rackwise
failed to provide certain agreed-upon compensation.  Wagner further alleges that,
when he persisted in his efforts to obtain his compensation, Rackwise and its
President, Co-Defendant Guy Archibold (collectively “Defendants”) demoted him and
ultimately forced him to resign.  Wagner has pleaded statutory and common law
causes of action sounding in contract, tort and equity.   By the instant application,
Wagner seeks a right to attach order and writ of attachment for the amount of
$134,815.72 in unpaid sales commissions.  He also seeks $11,764.01 in statutory
attorney fees under Labor Code § 218.50 [fees incurred to force payment of unpaid
compensation] and $7,868.22 in prejudgment interest.

Wagner bases the application on the terms of his written employment agreement with
Rackwise.  Among other things, the agreement appears to provide for “commission
compensation” as various percentages of net sales, depending on the circumstances.
(See Wagner Decl., Exh. A.)  In support of the application, Wagner has attached a
copy of an email from Rackwise’s Chief Financial Officer in which Wagner’s
commissions owed as of his resignation on April 30, 2013 were stated as $134,815.72.
(See Wagner Decl., Exh. B.)

Rackwise opposes the application primarily on grounds that Wagner has not met his
burden of demonstrating the probable validity of his claim to the commissions.  (See
CCP § 484.090(a)(2).)  Rackwise argues that entitlement to commissions is based on
performance criteria that Wagner has failed to analyze.  The court rejects this
argument because Rackwise’s CFO’s email totaling Wagner’s commissions is
persuasive evidence that, from Rackwise’s perspective, Wagner had met such criteria.

Next, Rackwise argues that the court should not enter a right to attach order given the
early stage of the case, and especially in light of the early stage of discovery.  The
court rejects this argument as well because the availability of a right to attach order
does not depend on the point in the case at which the order is sought.  Instead, the
propriety of a right to attach order depends on statutory criteria that Wagner has met.
(See CCP §§ 583.010(a), 584.090(a).)  The court notes, however, that its decision to
enter a right to attach order does not amount to an ultimate finding on the merits.  (See
id., § 584.100.)

Finally, Rackwise argues that, even if the court enters a right to attach order for the
amount of unpaid commission, it should not include attorney fees or prejudgment
interest in the order.  The court agrees with Rackwise that Wagner is not entitled to a
right to attach order that includes statutory attorney fees under Labor Code § 218.50.             Such fees are not contractual in nature and therefore are not allowable.  (See CCP §
483.110(a).)  The court likewise agrees that Wagner is not entitle to a right to attach
order for an amount that includes prejudgment interest, since the attachment statutes
do not allow for attachment based upon such interest.  (See CCP § 483.015.)

Conclusion

The court finds that Wagner has established the probable validity of his claim for
unpaid commissions and that he has established the statutory elements needed to
secure a right to attach order and writ of attachment for the amount of $134,815.72.
(See CCP §§ 583.010(a), 584.090(a).)

Wagner shall post a $10,000 bond.

Pursuant to CRC 3.1312, Wagner is further directed to lodge for the court’s signature a
formal order on the appropriate Judicial Council form.  The court will not sign the order
until the bond is posted.

The notice of motion does not provide notice of the court’s tentative ruling system, as
required by Local Rule 1.06(D).  Counsel for moving party is directed to contact
counsel for opposing party forthwith and advise counsel of Local Rule 1.06 and the
court’s tentative ruling procedure.  If counsel for moving party is unable to contact
counsel for opposing party prior to hearing, counsel for moving party shall be available
at the hearing, in person or by telephone, in the event opposing party appears without
following the procedures set forth in Local Rule 1.06(B).