Aisle 3 Concepts, LLC vs. BMS Scolop, Inc.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with

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a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING

The application for writ of attachment of property held by Defendants Brian Simmons, Mary Ann Simmons (collectively “Individual Defendants”) and BMS Scolcop, Inc. (“BMS”) (collectively “Defendants”) is ruled on as follows.

This action arises from a dispute concerning a lease of real property (the “Lease”) owned by Plaintiff. BMS entered into a long term lease agreement with Plaintiff for the subject property from April 15, 2022 until May 31, 2027. Individual Defendants guaranteed the lease. A dispute arose concerning the alleged presence of mold at the property. (Fong Decl., ¶¶ 5-10.) On August 31, 2022, Defendants sent a demand letter attempting to terminate the Lease. (Fong Decl., ¶ 10.) On September 22, 2022, BMS sent a letter confirming its intent to release possession of the property. (Fong Decl., ¶ 11.)

BMS subsequently vacated the property and returned the keys. (Fong Decl., ¶ 12.) Defendants have not paid the rent due since vacating the property. (Fong Decl., ¶ 13.) Plaintiff contends Defendants now owe $164,500 for breach of the lease. (Fong Decl., ¶ 14.) Plaintiff seeks a writ of attachment in order to ensure Plaintiff can collect on an anticipated money judgment.

Defendants oppose the application. Defendants argue they properly terminated the lease because Plaintiff failed to adequately address the mold issues and therefore, to deliver possession of the property within 120 days from the commencement of the lease.

Legal Standard & Analysis

“(a) 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.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

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(b) If, in addition to the findings required by subdivision (a), the court finds that the defendant has failed to prove that all the property sought to be attached is exempt from attachment, it shall order a writ of attachment to be issued upon the filing of an undertaking as provided by Sections 489.210 and 489.220.” (Code Civ. Proc. § 484.090.)

Property Sought to Be Attached May Be Attached

As to entity defendants, a plaintiff may generally seek to attach all property of the entity that is subject to attachment. (Code Civ. Proc. § 484.020(e).) However, “where the defendant is a natural person, the description of the property shall be reasonably adequate to permit the defendant to identify the specific property sought to be attached.” (Code Civ. Proc. § 482.020(e).) This requirement may be satisfied by general descriptions such as real property, personal property, or equipment and, as long as the descriptions are adequate, may seek to attach all property of the individual. (Bank of America v. Salinas Nissan, Inc. (1989) 207 Cal.App.3d 260.)

Plaintiff’s description of the Individual Defendants’ property sought to be attached is nothing more than a verbatim copy of the text of Code of Civil Procedure § 487.010 describing the types of property that may be attached. Permitting an applicant to do nothing more than copy the statutory language would render meaningless the additional requirement for identifying specific property where the defendant is natural person. Accordingly, as to Individual Defendants, the Court finds the description of the property to be attached is insufficient.

Claim Permits Attachment

Attachment is authorized in an action involving a claim for money, based on contract not secured by real property, in an amount not less than $500 that is fixed or readily ascertainable. As to natural persons, the claim must arise out of the conduct of a trade, business or profession. Here, Plaintiff’s claim for money damages is based on breach of an unsecure commercial lease for unpaid rent in a readily ascertainable amount in excess of $500.

As to Individual Defendants, Plaintiffs argue the conduct arises out of a trade or business because the lease was for the operation of a beauty salon. Individual Defendants argue their conduct was in the nature of an investment because the business salon never commenced operation. While the beauty salon did not open, it is clear Individual Defendants’ actions were taken in preparation for the operation of a business. The fact that the business failed to open does not change the nature of the conduct.

The Court finds the claim is the type that may support attachment.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

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Probable Validity

In a contested application, the Court must consider the relative merits of the parties’ respective positions and determine the probable outcome of trial. (Hobbs v. Weiss (1999) 73 Cal.App.4th 76, 80.) “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.)

The Lease commenced on April 15, 2022. (Lease, Exh. A to Fong Decl.) Plaintiff was required to use commercially reasonable efforts to deliver exclusive possession of the property by this date. (Lease, § 3.3.) In the event Plaintiff was unable to deliver exclusion within 120 days of the commencement of the Lease, absent written agreement, the Lease “shall terminate.” (Lease, § 3.3.)

Plaintiff submits evidence that Plaintiff delivered possession of the property in early April 2022. (Fong Decl., ¶ 4.) Defendants had no obligation to pay rent until Plaintiff delivered possession of the property. (Lease, § 3.3.) It is undisputed that on June 15, 2022, BMS timely paid the first month’s rent. (Simmons Decl., ¶ 3.) Accordingly, the evidence suggests that BMS had exclusive possession of the property by June 15, 2022.

Defendants nonetheless argue Plaintiffs actually failed to deliver possession within 120 days because, on July 9, 2022, a mold inspection report revealed elevated levels of mold spores. (Simmons Decl., ¶ 4.) Plaintiff undertook remediation of the mold and claims to have redelivered possession on or about August 15, 2022. (Fong Decl., ¶ 6.) On August 20, 2022, Defendants obtained a further mold inspection which revealed there were still elevated surface spore levels. (Simmons Decl., ¶ 5.) Defendants argue that Plaintiff’s failure to provide a premises free from elevated mold is a breach of the express guarantee in section 2.2 of the Lease and of an implied warranty of suitability. Defendants argue that as a result of this breach, Plaintiff failed to actually deliver exclusive possession within 120 days of the commencement and that the Lease was therefore terminated.

Even assuming Plaintiff failed to remediate the mold condition by August 31, 2022, and that such failure breached express and implied warranties, it is unclear why the presence of mold would constitute a failure to deliver possession of the property within 120 days. The Lease provides that Plaintiff “shall deliver that portion of the Premises contained within the Building (“Unit”) to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs (“Start Date”)[.]” (Lease, § 2.2 [underline added].)

Based on the evidence presented at this time, it appears that Plaintiff satisfied their obligation to deliver the property broom clean and free of debris by April 15, 2022. Nothing in the Lease indicates Plaintiff was required to deliver possession of the property free of mold. Rather, with respect to “hazardous levels of any mold or fungi defined as toxic” discovered within the first 12 months of the Start Date Plaintiff’s express and “sole obligation” was to remedy the condition at

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

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Plaintiff’s own expense. (Lease, § 2.2.)

Based on the foregoing, it is more likely than not that Plaintiff will be found to have delivered possession of the property and therefore, that the Lease did not terminate at the expiration of the 120 day period following the commencement date. It follows it is more likely than not that Plaintiff will prevail on the claim Defendants breached the contract. Plaintiff has therefore established the probable validity of the claim.

Attachment Not Sought for Purpose Other than Recovery Upon Claim

There is no evidence to support a finding Plaintiff is seeking attachment for an impermissible purpose.

Amount Secured

Plaintiff argues the amount due under the Lease is $164,500, calculated as the base rent of $2,937.50 times the four years and eight months from the date Defendants’ abandoned the property through the conclusion of the Lease on May 31, 2027. (Fong Decl., ¶ 13.) Defendants did not dispute this calculation.

Plaintiff’s estimate the legal fees through trial will be $120,000 and request the Court include $100,000 for the estimated costs and attorney’s fees. (Code Civ. Proc. § 482.110.) As this appears to be a relatively straightforward breach of contract action with only limited factual disputes, the Court finds the amount requested to be excessive. The Court will add $30,000 for estimated costs and attorney’s fees.

Conclusion

The application writ for attachment is denied as to Individual Defendants. The application is granted as to BMS in the amount of $194,500. Plaintiff shall post an undertaking of $10,000. (Code Civ. Proc. § 489.200(a).)

Once the undertaking has been posted, Plaintiff shall submit a revised proposed order for the Court’s signature consistent with this ruling.