Case Number: 19PSCV00790 Hearing Date: January 22, 2020 Dept: J

HEARING DATE: Wednesday, January 22, 2020

NOTICE: OK

RE: La Verne Village, LLC v. Towinbyed Corporation, et al. (19PSCV00790)

______________________________________________________________________________

Plaintiff La Verne Village, LLC’s APPLICATION FOR RIGHT TO ATTACH ORDER

AND WRIT OF ATTACHMENT

Responding Party: Defendant, Toby Lau

Tentative Ruling

Plaintiff La Verne Village, LLC’s Application for Right to Attach Order and Writ of

Attachment is GRANTED. The court will issue a writ for $67,482.08, which includes $8,500.00 for Plaintiff’s costs and attorneys’ fees, and order an undertaking of $10,000.00.

Background

Plaintiff La Verne Village, LLC (“Plaintiff”) is the owner of the property located at 2855

Foothill Boulevard, Building A, Suite 101, in La Verne (“subject premises”). On or about June 5,

2018, Plaintiff leased the subject premises to Towinbyed Corporation (“Towinbyed”) for a ten

year period, commencing July 25, 2018 and terminating on July 24, 2028. Plaintiff alleges that

Towinbyed abandoned the subject premises on or about August 9, 2019. On September 3, 2019,

Plaintiff filed a complaint, asserting causes of action against Defendants Towinbyed, Toby Lau

(“Lau”) and Does 1-100 for:

Breach of Contract (Written Lease Agreement)
Breach of Contract (Written Guaranty Agreement)
Money Had and Received
Account Stated

On December 11, 2019, Towinbyed’s default was entered. A Case Management Conference is set for January 29, 2019.

Discussion

Plaintiff applies for a right to attach order and writ of attachment against Lau. The amount to be secured by the attachment is $67,482.08, which includes estimated costs of $1,000.00 and estimated allowable attorney fees of $7,500.00.

Evidentiary Objections

The court rules on Plaintiff’s evidentiary objections to Lau’s Declaration as follows: SUSTAINED as to Nos. 1, 2, 4 and 5 and OVERRULED as to Nos. 3, 6 and 7.

Analysis

“Attachment is a prejudgment remedy which requires a court to make a preliminary determination of the merits of a dispute. It allows a creditor who has applied for an attachment following the statutory guidelines and established a prima facie claim to have a debtor’s assets seized and held until final adjudication at trial.” (Lorber Industries, Inc. v. Turbulence, Inc. (1985) 175 Cal.App.3d 532, 535.) “A purpose of the attachment statutes is to confine attachments to commercial situations and to prohibit them in consumer transactions. The language, ‘trade, business or profession,’ in section 483.010, subdivision (c) fulfills that purpose by limiting the use of attachments to ‘commercial transactions’ and precluding them in ‘consumer transactions.’” (Kadison, Phaelzer, Woodard, Quinn & Rossi v. Wilson (1987) 197 Cal.App.3d 1, 4 [citation omitted].)

Attachment is governed by Attachment Law, Title 6.5 of the Code of Civil Procedure, CCP §§ 481.010-493.060. “[A]ttachment procedures are solely creatures of statute and. . . such statutes must be strictly construed.” (Arcata Publications Group v. Beverly Hills Publishing Co. (1984) 154 Cal.App.3d 276, 279.)

Procedural Considerations: “Upon the filing of the complaint or at any time thereafter, the plaintiff may apply…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.” (CCP §§ 484.010, 485.210(a).) “No order or writ shall be issued. . . except after a hearing. At the times prescribed by subdivision (b) of Section 1005, the defendant shall be served with all of the following: (a) A copy of the summons and complaint. (b) A notice of application and hearing. (c) A copy of the application and of any affidavit in support of the application.” (CCP § 484.040.)

On September 11, 2019, Plaintiff filed a proof of service, which reflected that Lau had been personally served on September 5, 2019 with, inter alia, the summons, complaint, notice of application and hearing for right to attach order and application for right to attach order.

The court, then, determines that adequate notice has been provided.

Substantive Considerations: “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.” (CCP § 484.090(a).)

The amount to be secured by an attachment is based on the amount of the defendant’s

indebtedness claimed by the plaintiff. (CCP § 483.015(a)(1).) That claim must be reduced by the

amount of any indebtedness of the plaintiff that the defendant has claimed in a cross-complaint

or has raised as a defense. CCP § 483.015(b)(2)&(3).

“The following property of the defendant is subject to attachment: (a) Where the defendant is a corporation, all corporate property for which a method of levy is provided by Article 2 (commencing with Section 488.300) of Chapter 8. (b) Where the defendant is a partnership or other unincorporated association, all partnership or association property for which a method of levy is provided by Article 2 (commencing with Section 488.300) of Chapter 8. (c) Where the defendant is a natural person, all of the following property: (1) Interests in real property except leasehold estates with unexpired terms of less than one year. (2) (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 then 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) om 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. (d) In the case of a defendant described in subdivision (c), community property of a type described in subdivision (c) is subject to attachment if the community property would be subject to enforcement of the judgment obtained in the action in which the attachment is sought. . .” (CCP § 487.010.)

“Item “9c” must be checked if the action is against a natural person. In addition, the property to be attached. . . must be described. [CCP § 484.020(e)].”See Ahart, CAL. PRAC. GUIDE: ENFORCING JUDGMENTS & DEBTS (The Rutter Group 2018) ¶ 4:189. Plaintiff’s Attachment 9(c) to the application complies with this requirement.

“The court has the power to determine disputed facts on the basis of a preponderance of the evidence as disclosed in the affidavits and declarations… [Hobbs v. Weiss (1999) Cal.App.4th 76, 80…].” (Weil & Brown, et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2019) ¶ 9:948 (emphasis theirs).)

“The court’s determinations shall be made upon the basis of the pleadings and other papers in the record; but, upon good cause shown, the court may receive and consider at the hearing additional evidence, oral or documentary, and additional points and authorities, or it may continue the hearing for the production of the additional evidence or points and authorities.” (CCP § 484.090(d).)

CLAIM:

“[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.” (CCP § 483.010(a) [emphasis added].)

The claim is for money, and based upon an express or implied contract, whose total sum is more than $500. (See Declaration of Scott Felix)

The claim, then, is proper.

Probable Validity:

“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.” (CCP § 481.190.)

Plaintiff submits the following evidence: On or about June 5, 2018, Plaintiff, as landlord, and Towinbyed, as tenant, entered into a written lease agreement (“Lease”), wherein Towinyed leased the premises located at 2855 Foothill Boulevard, Building A, Suite 101, La Verne, California, 91750 (“Premises”) for an original term of 10 years., commencing on July 25, 2018 and terminating on July 24, 2028 (Felix Decl., ¶3, Exh. A.) Concurrently with execution of the Lease, Lau executed the Guaranty of Lease as attached to the Lease as Exhibit F. (Id.) Towinyed entered into possession of the Premises on or about July 25, 2018. (Id., ¶4.) On or about August 2, 2019, Towinyed ceased operations at the Premises. (Id.) On or about August 9, 2019, Towinyed abandoned the Premises after Plaintiff served Towinyed with a notice to pay or quit arising from Towinyed’s default under the Lease. (Id.) Towinyed’s abandonment of the Premises was in violation of the Lease, including without limitation Sections 6.1(b) and 13.1(a). (Id.) Plaintiff has been unable to re-lease the Premises in mitigation of Plaintiff’s damages arising from Towinyed’s abandonment of the Premises; with that said, Plaintiff seeks a writ of attachment only for the past due portions of its claim for rent. (Id.)

Towinyed failed and refused to pay Base Rent to Plaintiff for the months of August and September 2019, as per Sections 1.5, 4.1 and 4.3 of the Lease and Addendum to Lease Section 1.5, for a total of past due Base Rent of $17,443.80. (Id., ¶6.) Towinyed also failed to pay Common Area Operating Expenses for the months August and September 2019, as per Sections 1.7, 4.2 and 4.3 of the Lease and Addendum to Lease Section 1.7, for a total of past due Common Area Operating Expenses of $2,938.00. (Id., ¶8.) Towinyed owes late fees to Plaintiff for the months of August and September 2019, as per Section 13.4 of the Lease, in the total amount of $2,038.18. (Id., ¶9.) Towinyed owes Plaintiff $1,255.10 to reimburse Plaintiff, per Section 7.1 of the Lease, for Plaintiff’s expenses in servicing the grease trap on the Premises after Towinyed’s abandonment. (Id., ¶10.) Towinyed also owes Plaintiff charges, per Section 6.1(b) of the Lease, for Towinyed’s failure to continually operate in the Premises. (Id.) Through September 30, 2019, the total amount of these charges is $34,887.60. (Id.) Plaintiff has unilaterally capped these charges at 30 days for each month’s Base Rent that is not paid. (Id.) Plaintiff has been further damages by Towinyed’s breach of the Lease due to the fact that Plaintiff paid a leasing commission of $25,163.99 to brokers for the subject Lease. (Id., ¶11.) Plaintiff seeks recovery of the amortized commission of $209.79 per month for each month that Towinyed was in breach of the Lease (August and September 2019 for purposes of this Application). (Id.) Section 31 of the Lease provides that any party who brings an action or proceeding involving the Premises who is found to be the Prevailing Party shall be entitled to reasonable attorneys’ fees. (Id., ¶12.)

On September 1, 2019, Plaintiff sent to Towinyed a Statement of Account indicating a sum due of $58,982.08. (Id., ¶14, Exh. C.) Towinyed has never objected to this or any prior statements sent by Plaintiff. (Id.)

Lau, in opposition, claims that Felix made a series of misrepresentations to her to induce her to sign the Lease and guaranty, including regarding the status of an alcohol license. The Lease, however, contains an Addendum which provides as follows:

“58. Liquor License. Following the mutual execution of the Lease by Lessor and Lessee, Lessor shall use commercially reasonable efforts to cause the type 41 liquor license under liquor license number 582066 (the ‘Liquor License’) to be assigned to Lessee; provided, however, that (i) Lessee shall be responsible, at its sole cost and expense, for obtaining the approval of such assignment from the appropriate government authority or other regulatory body having jurisdiction, (ii) such assignment shall be at Lessee’s sole cost and expense, and Lessee shall reimburse Lessor for all costs and expenses incurred by Lessor in connection therewith within five (5) days of Lessor’s written demand, (iii) Lessor makes no representations or warranties as to the assignability of the Liquor License and Lessor shall have no liability or obligations to Lessee in the event the Liquor License is not assigned to Lessee, (iv) Lessee hereby expressly acknowledges and agrees that the assignment of the Liquor License is not a condition to the effectiveness of the Lease, and (v) in the event the Liquor License is assigned to Lessee, Lessee covenants and agrees to comply with all Application Requirements governing the Liquor License. . .” (Felix Decl., ¶3, Exh. A.)

Additionally, the Lease contains an integration clause in Paragraph 22. (Id.) The parol evidence rule is codified in Civil Code § 1625 (i.e., “[t]he execution of a contract inn writing, whether the law requires it to be written or not, supercedes all the negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument”) and CCP § 1856 (i.e., “(a) Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to the terms therein may not be contradicted by evidence of a prior agreement or of a contemporaneous oral agreement. (b) The terms set forth in a writing described in subdivision (a) may be explained or supplemented by evidence of consistent additional terms unless the writing is intended also as a complete and exclusive statement of the terms of the agreement. . .”). The parol evidence rule “generally prohibits the introduction of any extrinsic evidence, whether oral or written, to vary, alter or add to the terms of an integrated written instrument.” (Alling v. Universal Manufacturing Corp. (1992) 5 Cal.App.4th 1412, 1433.)

Moreover, Towinbyed’s default has been entered in this case. The guaranty executed by Lau provides that Lau waived, inter alia, any right to require Lessor to apply to any default any security deposit or other security it may hold under the Lease, any right to require Lessor to proceed under any other remedy Lessor may have before proceeding against Guarantor(s) and any right of subrogation that Guarantors may have against Lessee. (Felix Decl., ¶3, Exh. A.) The above waivers are valid and enforceable under Civil Code § 2856.

Although Plaintiff acknowledges holding onto a $20,298.24 security deposit, the writ of attachment sought here should nevertheless not be reduced by this amount because, as Plaintiff stated in its application, the application was only for the past due portions of its claim for rent existing at that time. As Plaintiff points out, four more months of additional charges/damages have since accrued, which equates to an additional $40,763.60 in damages (i.e., base rent of $8,721.90 and CAM of at least $1,469.00/month).

With respect to the Continuous Operation Charges, “a provision in a contract liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the contract was made.” (Civil Code § 1671(b).) “A liquidated damages clause will generally be considered unreasonable, and hence unenforceable under section 1671(b), if it bears no reasonable relationship to the range of actual damages that the parties could have anticipated would flow from a breach.” (Ridgley v. Topa Thrift & Loan Ass’n (1998) 17 Cal.4th 970, 977.) Felix, however, explains that the Continuous Operation Charges are aimed at addressing the additional expenses beyond lost rent and CAM expense reimbursement that Plaintiff has/will incur. (Felix Supp. Decl., ¶5.) Plaintiff will incur additional costs of future tenant improvements for a new tenant and marketing costs, as well as an additional leasing commission. (Id.) The abandonment of the Property negatively impacts Plaintiff’s financing with its lender, as well as all retail and residential tenants, as the public appearance of the asset suffers. (Id., ¶¶5-6.) Additionally, as stated, Towinbyed cannot invalidate the subject Lease provision and Lau has waived her right in the guaranty to do so.

Felix has sufficiently identified estimated attorney fees and costs of litigation in his Supplemental Declaration. As to the amortized leasing commission Plaintiff paid for the brokerage services that led to Towinbyed signing the Lease and Lau signing the Guaranty, these are hard, out of pocket damages suffered.

The court finds that Plaintiff’s claim has probable validity.

UNDERTAKING:

“Before issuance of a writ of attachment, . . . the plaintiff shall file an undertaking to pay the defendant any amount the defendant may recover for any wrongful attachment by the plaintiff in the action.” (CCP § 489.210.)

If a writ is ultimately issued by the court, a plaintiff must file an undertaking, or bond, in the amount of $10,000.00 in a case of unlimited jurisdiction. (CCP § 489.220(a).)

RULING:

All the requirements have been satisfied.

Accordingly, the application is GRANTED. The court will issue a writ for $67,482.08, which includes $8,500.00 for Plaintiff’s costs and attorneys’ fees, and order an undertaking of $10,000.00.