Construction Laborers Trust Funds for Southern California Administrative Company v. George Andrew Dominguez et al

Filing 38

MEMORANDUM DECISION AND ORDER GRANTING PLAINTIFFS APPLICATION FOR RIGHT TO ATTACH ORDER AND WRIT OF ATTACHMENT [Dkt. No. 13 ] by Magistrate Judge Suzanne H. Segal. Plaintiff has satisfied the criteria for the issuance of a writ of attachment. Def endant's attempted defenses are unpersuasive. Accordingly, Plaintiff's Application for a Right to Attach Order and Writ of Attachment, as amended by the reduction in the amount to be attached to $75,000, is GRANTED. Because the Court has not found any authority allowing it to exercise discretion regarding the posting of a bond, a bond is necessary here. If Plaintiff is aware of any contrary authority, Plaintiff may file a Notice of Authority within 7 days of the date of this Orde r, with a brief explanation in support of its contention that no bond is required. Defendant may file a response within 7 days of service of the Notice. If the Court is persuaded that a bond is not required, the Court may amend this Order. Plaintiff shall submit a proposed Right to Attach Order and Writ of Attachment reflecting the amended sum to be attached within seven days of the date of this Order. (See document for further details). (mr)

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8

UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA

10
CONSTRUCTION LABORERS TRUST
FUNDS FOR SOUTHERN CALIFORNIA
ADMINISTRATIVE COMPANY,

11
12

CASE NO. CV 17-7164 AB (SSx)
MEMORANDUM DECISION AND ORDER
GRANTING PLAINTIFF’S

Plaintiff,

13

APPLICATION FOR RIGHT TO

v.

14

ATTACH ORDER AND WRIT OF

GEORGE ANDREW DOMINGUEZ, et
al.,

15
16

ATTACHMENT

Defendants.

[Dkt. No. 13]

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18
19

I.

20

INTRODUCTION

21
22

On September 28, 2017, Plaintiff Construction Laborers Trust

23

Funds for Southern California Administrative Company (“CLTF” or

24

“Plaintiff”) filed a civil complaint against Defendants George

25

Andrew

26

(“Hudson”),

27

1

28

Dominguez
and

(“Dominguez”),
Suretec

Hudson

Insurance

Insurance

Company

Company

(“Suretec”).1

“Defendant” in the singular shall refer to Dominguez only.
“Defendants” in the plural shall refer to Dominguez, Hudson and
Suretec collectively.

1

(“Complaint,” Dkt. No. 1).

The Complaint asserts claims for

2

contributions to employee benefit plans, specific performance,

3

preliminary and permanent injunctive relief, breach of settlement

4

agreement, recovery against license bond, and recovery against

5

labor and material payment bonds.

(Id. at 4-16).

6
7

Two

weeks

later

after

Plaintiff

filed

the

Complaint,

on

8

October 12, 2017, Plaintiff filed an Ex Parte Application for a

9

Right to Attach Order and Writ of Attachment, and for a Temporary

10

Protective Order.2

11

Application was supported by a Memorandum of Points and Authorities

12

(“Memo.”) and the declarations of Marsha M. Hamasaki (“Hamasaki

13

Decl.”) and Yvonne Higa (“Higa Decl.”).

14

an

15

declaration of George Andrew Dominguez (“Dominguez Decl.”).

16

No. 17).

17

issued an Order denying the Ex Parte Application without prejudice

18

on the procedural ground that Plaintiff had not shown that it would

19

suffer irreparable harm if the matter were heard as a regularly

20

noticed motion.

21

filed a Notice of Hearing setting the hearing on the merits of its

22

Application for November 7, 2017, (Dkt. No. 20), which the Court

23

continued to November 21, 2017.

24

\\

25

\\

26
27
28

Opposition

on

(“Application” or “Appl.,” Dkt. No. 13).

October

16,

2017,

(Id.).
(“Opp.”),

The

Defendant filed
including

the

(Dkt.

That same day, the Court held a telephonic hearing and

(Dkt. No. 19).

On October 17, 2017, Plaintiff

(Dkt. No. 33).

This Order addresses only the request for a right to attach order
and writ of attachment.
Plaintiff’s request for a “temporary
protective order” is not within the scope of the Magistrate Judge’s
authority.
2

2

1

On

October

27,

2017,

Defendant

filed

a

Supplemental

2

Opposition, (“Supp. Opp.”), including another declaration of George

3

Andrew

4

Plaintiff filed a Reply on November 3, 2017, (“Reply,” Dkt. No.

5

29), including additional declarations by Marsha M. Hamasaki,

6

(“Hamasaki Supp. Decl.,” Dkt. No. 30), and Yvonne Higa.

7

Suppl. Decl.,” Dkt. No. 31).

8

21, 2017.

9

Plaintiff’s Application for a Right to Attach Order and Writ of

10

Dominguez

(“Dominguez

Supp.

Decl.”).

(Dkt.

No.

26).

(“Higa

The Court held a hearing on November

For the reasons discussed below and at the hearing,

Attachment is GRANTED.

11
12

II.

13

ALLEGATIONS OF THE COMPLAINT

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15

Plaintiff is an administrator and agent for collection of

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several employee benefit plans, and a fiduciary as to those plans.

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(Complaint ¶ 3).

18

and qualify as “employee benefit plans” and “multi-employer plans”

19

within the meaning of the relevant provisions of the Employee

20

Retirement Income Security Act of 1974 (“ERISA”).

The plans were created by written agreements,

(Id.).

21
22

Defendant is an individual doing business as G.A. Dominguez.

23

(Id. at ¶ 4). Defendant is a party to written collective bargaining

24

agreements with Plaintiff and its affiliated local unions.

25

¶ 11).

26

fringe benefit contributions for each hour worked by his employees

27

performing services covered by the agreements, and to deliver to

28

Plaintiff monthly contribution reports that identify the employees,

(Id.

Pursuant to these agreements, Defendant is required to pay

3

1

the

hours

worked

2

contributions due.

3

monthly.

4

contributions timely, he is liable for interest on the unpaid

5

amounts, plus liquidated damages in a sum equal to the greater of

6

$25.00 or 20% of the unpaid contributions.

7

agreements empower Plaintiff to audit Defendant’s payroll and

8

business records, with resulting costs charged to Defendant.

9

¶ 18).

(Id.).

by

each

employee,

(Id. ¶ 13).

and

the

amount

of

the

The contributions are to be paid

In the event that Defendant fails to pay the

(Id. ¶¶ 16-17).

The

(Id.

10
11

Plaintiff alleges that Defendant employed workers covered by

12

the agreements but failed to pay benefits for certain periods from

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January 2014 through July 2017.

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previously entered into a settlement agreement concerning amounts

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owed for the period from March 2016 to September 2016, (id. ¶¶ 41-

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42), but failed to make all the payments.

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has also failed to permit Plaintiff to conduct a complete audit of

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his payroll and business records.

(Id. ¶¶ 19 & 23).

(Id. ¶ 44).

Defendant

Defendant

(Id. ¶¶ 20-21).

19
20

III.

21

THE ATTACHMENT APPLICATION AND THE PARTIES’ CONTENTIONS

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23

By the instant Application, Plaintiff “seeks to attach funds

24

owed to [Defendant] by his prime contractor and by the public

25

agencies pending final judgment[,] which may partially secure

26

recovery of the funds owed by [Defendant,] and to record the writ

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of attachment against [Defendant’s] business property prior to its

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sale.”

(Memo. at 2).

Plaintiff calculated in its opening brief
4

1

that as of September 27, 2017, Defendant owed Plaintiff at least

2

$158,832.85.

3

only $130,000.00 of Defendant’s assets in light of the possibility

4

that it might prevail on its Sixth Claim for Relief against Suretec

5

for unpaid compensation guaranteed by a payment bond.

6

also

7

calculations in its Reply to reflect adjustments made after the

8

Application was filed.

9

amount

(Id. at 10).

Complaint

owed

by

at

20-21).

However, Plaintiff sought to attach

Plaintiff

further

(Id.; see

revised

its

Plaintiff determined that the revised total

Defendant,

including

unpaid

fringe

benefits,

10

liquidated damages, audit fees, and interest as of October 27,

11

2017, was $139,576.26.

12

Plaintiff further conceded that the amount it is now seeking from

13

Suretec could reduce Defendant’s liability to $102,185.95.

14

at 11).

15

that amount in order to “free some $27,000.00 to [Defendant] for

16

the expenses and legal fees pending final judgment” of this matter.

17

(Id.).

(Id.; see also Higa Supp. Decl. ¶ 9).

(Reply

Plaintiff presently seeks to attach only $75,000.00 of

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19
20

The specific assets owned by Defendant which Plaintiff seeks
to attach are:

21
22

A)

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Lien against real property commonly known as 535
537 W. Grand Avenue, Escondido, CA 92025;

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25

B)

Proceeds of the sale of real property commonly

26

known as 535-537 W. Grand Avenue, Escondido, CA

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92085 [sic];

28
5

1

C)

All

contract

earnings,

right

to

payments,

2

retention, for work performed by Defendant for the

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San Diego Unified School District;

4
5

D)

All contract earnings, right to payments, retention

6

for work performed for the Whittier Union High

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School District;

8
9

E)

All

Defendant’s

accounts

receivables,

payments,

10

right to payments, owed by JTS Modular Inc., and

11

all funds payable thereto up to [$75,000.00] in JTS

12

Modular Inc.’s

13

including subcontract earnings for work performed

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for JTS Modular Inc., for the Pomona Unified School

15

District

16

Defendant for JTS Modular, Inc.

possession, custody and/or control,

and/or

any

other

subcontract

work

by

17
18

F)

19

Funds held in bank accounts with City National
Bank.

20
21

(Appl., Exh. A at 6).

22
23

Plaintiff argues that it is entitled to attach Defendant’s

24

assets for at least three reasons.

25

Defendant evidently does not have the funds on hand to pay the

26

amounts owed, as demonstrated by his failure to pay monies due

27

under

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“unpaid false reports as confirmed by the audit of payroll records,

the

settlement

agreement

First, Plaintiff contends that

and

6

his

alleged

submission

of

1

and certified payroll records on public works projects.”

(Memo.

2

at 10).

3

not only to Plaintiff, but also to the IRS, as evidenced by tax

4

liens levied by the IRS.

5

3).

6

down his business because his commercial property is for sale by

7

owner.

8

Defendant’s potential imminent departure from the business is

9

suggested by Defendant’s failure to submit monthly contribution

10

reports since May 2017, even though other records confirm that he

11

has had employees on his payroll since that time, and by his failure

12

to pay the contributions due.

13

that

14

Plaintiff will recover nothing unless it obtains contributions from

15

Defendant’s

16

payment, or from the proceeds of the sale of his commercial

17

property.

Plaintiff believes that Defendant owes “substantial debt”

(Reply at 3; Hamasaki Decl. ¶ 8 & Exh.

Second, Plaintiff is concerned that Defendant may be shutting

(Memo. at 10).

Defendant’s

known

Plaintiff argues that further evidence of

(Id.).

unwillingness

projects

to

for

Third, Plaintiff maintains
communicate

which

indicates

Defendant

will

that

receive

(Id. at 11).

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19

Defendant does not challenge Plaintiff’s allegations that he

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is delinquent in making required contributions, or even the amounts

21

that Plaintiff alleges that he owes.3

22

that the “scope” of the proposed attachment is “problematic” and

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that there is no danger that funds will not be available if

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Plaintiff prevails in this action.

25

asserts four challenges to the “scope” of the proposed attachment,

26
27
28

Instead, Defendant argues

(Supp. Opp. at 1).

Defendant

Defendant does summarily assert, however, without citation to
statutory or case law or further discussion, that Plaintiff’s
liquidated damages claim is “arguably impermissible given the
punitive nature of the damages.” (Supp. Opp. at 2, 8).
3

7

1

which

he

contends

2

Defendant notes first that “it could be argued” that Plaintiff is

3

seeking to attach assets held “in trust” by Defendant in which he

4

has no ownership interest.

5

rights of his bond issuers (and co-Defendants), Hudson and Suretec,

6

create a “trust relationship” in which payments by third parties

7

to Defendant for work covered by the bonds should be construed as

8

monies held “in trust” by Defendant for the benefit of Hudson and

9

Suretec.

(Id.).

impermissibly

encompasses

(Id.).

exempt

property.

According to Defendant, the

Second, Defendant claims that his assets are

10

community property, and that attachment would infringe the property

11

rights

12

maintains that as an individual, he is “entitled to assert certain

13

exemptions” under California Code of Civil Procedure §§ 703.010-

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704.995, although he does not identify the specific exemptions that

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he believes may apply.4

16

Plaintiff is not permitted under California Code of Civil Procedure

17

§ 487.020(b)

18

Defendant

19

attorney’s fees so that Defendant may meaningfully defend the

20

instant action on the merits.

21

Dep’t, 5 Cal. 3d 536, 562 (1971)).

of

his

non-debtor

to

and

attach

his

spouse.

(Id.).

Third,

Defendant

Fourth, Defendant asserts that

property

family,

(Id.).

that

including

is

necessary

funds

needed

to
to

support
pay

for

(Id.) (citing Randone v. Appellate

22
23

As to the contention that there is no risk that funds will

24

not be available to make Plaintiff whole should Plaintiff prevail

25
26
27
28

The Sections cited by Defendant in connection with this argument
specifically concern exemptions that may be claimed in postjudgment proceedings. However, California Code of Civil Procedure
Section 487.020 specifically provides that “[a]ll property exempt
from enforcement of a money judgment” is also “exempt from [prejudgment] attachment.” Cal. Code Civ. Proc. § 487.020(a).
4

8

1

in this action, Defendant argues that “[t]he issuance of payment

2

and

3

[Plaintiff] has filed its lawsuit, as well as all other public

4

works projects, ensures that, should [Plaintiff] prevail, funds

5

will be available to satisfy [Plaintiff’s] claim.”

6

2).

7

of such bonds already secure[s] [Plaintiff’s] claim,” thereby

8

satisfying the purpose of prejudgment attachments.

9

Finally, Defendant states in his declaration that although he

10

listed real property for sale by owner with an asking price of

11

$585,000.00, he has received no reasonable offer in the year that

12

the property has been on the market, and he does not anticipate

13

that a sale will be finalized “in the near future.”

14

Supp. Decl. ¶ 10).

performance

bonds

on

each

of

the

projects

upon

which

(Supp. Opp. at

According to Defendant, “[p]ractically speaking, the presence

(Id. at 6).

(Dominguez

15
16

Plaintiff refutes each of the defenses raised by Defendant.

17

With respect to Defendant’s challenges to the “scope” of the

18

proposed attachment, Plaintiff argues that sums owed by third

19

parties to Defendant are Defendant’s “accounts receivable” and are

20

not held “in trust” for the benefit of Defendant’s bond issuers.

21

(Reply at 5).

22

are subject to attachment.

23

Surety Co. v. Polisso, 139 Cal. App. 4th 922, 942 (2006), and

24

California Family Code § 910(a)).

25

entitled to any statutory exemptions from attachment, which he does

26

not identify, Plaintiff notes that the California Code of Civil

27

Procedure sets out procedures for claiming exemptions after levy.

28

(Reply at 7) (citing Cal. Code Civ. Proc. §§ 703.510 et seq.).

Plaintiff further contends that community assets
(Id.) (citing, inter alia, Century

9

To the extent that Defendant is

1

With respect to Defendant’s claim that the assets Plaintiff seeks

2

to attach are needed to support his family and his defense in this

3

litigation, Plaintiff states that such a claim requires a full

4

disclosure of Defendant’s assets.

5

contention that funds will be available through bond issuers Hudson

6

and Suretec, Plaintiff argues that it is not clear that the bond

7

amounts will be sufficient as “[p]ayment bonds on projects only

8

cover the contributions owed to the employees for their work on

9

the bonded project, and do not cover [Plaintiff’s] claim for

(Reply at 7).

As to Defendant’s

10

liquidated damages[] and audit fees.”

11

respect to Defendant’s claim that liquidated damages are “arguably

12

impermissible” given their punitive nature, Plaintiff emphasizes

13

that both the written agreements and ERISA, 29 U.S.C. § 1132(g)(2),

14

provide

15

“repeatedly held . . . are mandatory elements of any court award.”

16

(Reply at 2) (citing cases; emphasis in original).

for

liquidated

damages,

(Id. at 4).

which

the

Ninth

Finally, with

Circuit

has

17
18

IV.

19

DISCUSSION

20
21
22

A.

California Law Applies To Plaintiff’s Application For Right
To Attach Order And Writ Of Attachment

23
24

Plaintiffs in federal court may invoke whatever remedies are

25

provided under the law of the state in which the federal court is

26

located for “seizing a person or property to secure satisfaction

27

of the potential judgment.”

28

v. Marnatech Enters., Inc., 970 F.2d 552, 558 (9th Cir. 1992)

Fed. R. Civ. P. 64; Reebok Int’l, Ltd.

10

1

(discussing Rule 64); NML Capital, Ltd. v. Spaceport Sys. Int’l,

2

L.P., 788 F. Supp. 2d 1111, 1116 (C.D. Cal. 2011).

3

may include a writ of attachment.

4

VFS Fin., Inc. v. CHF Express, LLC, 620 F. Supp. 2d 1092, 1094-95

5

(C.D. Cal. 2009) (Rule 64 “provides for prejudgment attachment[]

6

and other prejudgment remedies . . .” authorized under state law).

7

Because attachment is sought against Defendant in the state of

8

California,

9

conditions a writ of attachment may issue.

California

law

These remedies

Fed. R. Civ. P. 64; see also

determines

whether

and

under

what

In California, the

10

procedures and grounds for obtaining orders for prejudgment writs

11

of attachment are codified at California Code of Civil Procedure

12

§§ 481.010-493.060.

13
14

B.

Overview Of California Law Governing Attachment

15
16

Attachment

“is

a

remedy

by

which

a

Plaintiff

with

a

17

contractual claim to money (not a claim to a specific item of

18

property) may have various items of a defendant’s property seized

19

before judgment and held by a levying officer for execution after

20

judgment.”

21

1271 (1999) (emphasis omitted).

22

attachments under limited circumstances as “a provisional remedy

23

to aid in the collection of a money demand.”

24

Inc. v. Titan Elec. Corp., 146 Cal. App. 4th 1474, 1476 (2007).

25

It is “a harsh remedy because it causes the defendant to lose

26

control

27

adjudicated.”

28

Therefore,

Waffer Int’l Corp. v. Khorsandi, 69 Cal. App. 4th 1261,

of

his

property

before

California allows prejudgment

the

Kemp Bros. Constr.

plaintiff’s

claim

is

Martin v. Aboyan, 148 Cal. App. 3d 826, 831 (1983).

the

requirements

for
11

the

issuance

of

a

writ

of

1

attachment are strictly construed against the applicant.

Pos-A-

2

Traction, Inc. v. Kelly-Springfield Tire Co., 112 F. Supp. 2d 1178,

3

1181 (C.D. Cal. 2000) (“Attachment is a purely statutory remedy,

4

which is subject to strict construction.”).

5

applicant to establish each element necessary for an attachment

6

order by a preponderance of the evidence.

7

Glen Music, Inc., 166 Cal. App. 3d 1110, 1116 (1985).

The burden is on the

Loeb & Loeb v. Beverly

8
9

A writ of attachment may be issued “only in an action on a

10

claim or claims for money, each of which is based upon a contract,

11

express or implied, where the total amount of the claim or claims

12

is a fixed or readily ascertainable amount not less than five

13

hundred dollars.”

14

added).

15

“must furnish a standard by which the amount due may be clearly

16

ascertained and there must exist a basis upon which the damages

17

can be determined by proof.”

18

v. Super DVD, Inc., 115 Cal. App. 4th 537, 540 (2004) (internal

19

quotation marks omitted); see also Pet Food Express, Ltd. v. Royal

20

Canin USA Inc., 2009 WL 2252108, at *5 (N.D. Cal. July 28, 2009)

21

(“lost profits” that plaintiff sought to attach were not “certain,

22

fixed, or even readily ascertainable” and thereby failed to “meet

23

the threshold requirement for this court to even consider issuing

24

a writ of attachment”).

25

claims or claims secured by personal property, but not on claims

26

secured by real property.

27

Attachment lies on any claim against a partnership or corporation

28

or on claims against individuals that arise out of the conduct by

Cal. Code Civ. Proc. § 483.010(a) (emphasis

For damages to be “readily ascertainable,” the contract

CIT Group/Equipment Financing, Inc.

Attachment is permitted on unsecured

Cal. Code Civ. Proc. § 483.010(b).

12

1

the

individual

2

of

a

trade,

business,

or

profession.

Id.

§ 483.010(c).

3
4

A court must find all of the following before an attachment

5

order may issue: (1) the claim upon which the attachment is based

6

is one upon which an attachment may be issued; (2) the plaintiff

7

has established the probable validity of the claim upon which the

8

attachment is based; (3) the attachment is not sought for a purpose

9

other than recovery of the claim upon which the attachment is

10

based; and (4) the amount to be secured by the attachment is greater

11

than zero.

12

component, the plaintiff must show that it is more likely than not

13

that

14

§ 481.190; see also Pos-A-Traction, 112 F. Supp. 2d at 1182.

15

determining the probable validity of a claim where the defendant

16

makes an appearance, the court must consider the relative merits

17

of the positions of the respective parties and make a determination

18

of the probable outcome of the litigation.”

19

App. 3d at 1120.

it

Id. § 484.090(a).

will

obtain

a

To establish the “probable validity”

judgment

against

the

defendant.

Id.
“In

Loeb & Loeb, 166 Cal.

20
21

California law restricts the availability of pre-judgment

22

attachments in part by providing the defendant with an opportunity,

23

prior to a ruling on an attachment application, to establish that

24

the property sought to be attached is exempt.

25

one California practice guide,

As summarized in

26
27

The state cannot properly withdraw the essentials a

28

defendant needs to live, to work, to support a family,
13

1

or to litigate a pending action before an impartial

2

confirmation of the actual validity of the creditor’s

3

claim after a hearing on that issue.

4

Appellate Department, 5 Cal. 3d 536, 96 Cal. Rptr. 709,

5

488 P.2d 13 (1971)]

[Randone v.

Therefore, the Attachment Law:

6
7

(1)

requires before levy either an opportunity for the

8

defendant to claim exemptions or a showing by the

9

plaintiff that the property sought to be attached

10

is

not

exempt

11

[Code

Civ.

Proc.,

§

484.070

(exemptions)];

12
13

(2)

generally, subjects only business property to levy

14

[Code Civ. Proc., § 487.010, subds. (a) and (b)

15

(corporate or partnership or association property

16

otherwise subject to levy)];

17
18

(3)

requires, when the defendant is a natural person,

19

that

the

plaintiff’s

20

defendant’s

21

profession, and not run to money or property used

22

primarily

23

[Nakasone v. Randall, 129 Cal. App. 3d 757, 181

24

Cal. Rptr. 324 (2d Dist. 1982)];

conduct

for

claim

of

family

a

arise

trade,

or

out

of

business,

household

the
or

purposes

25
26
27

(4)

provides

a

circumstances

nonseizure
[Code

form
Civ.

28
14

of

levy

Proc.,

§

in

many

488.315

1

(attachment

2

of real property by recordation of

writ)];

3
4

(5)

authorizes

the

court

5

protective

order

6

exceptional circumstances where a writ might be

7

issued ex parte [Code Civ. Proc., § 486.030];

in

to

issue

lieu

of

a

a

temporary

writ

in

the

8
9

(6)

authorizes the court to review issuance of an ex

10

parte

writ,

if

based

on

defendant’s

alleged

11

insolvency, within 5 court days after plaintiff is

12

served with defendant’s request to do so [Code Civ.

13

Proc., § 485.010, subd. (c)];

14
15

(7)

permits defendant to apply to set aside a right to

16

attach order and quash a writ of attachment [Code

17

Civ. Proc., § 485.240];

18
19

(8)

permits defendant to substitute an undertaking for

20

the property seized [Code Civ. Proc., § 489.310];

21

and

22
23

(9)

requires that property of an individual sought to

24

be

attached

25

property

26

§ 484.020, subd. (e)].

can

be
be

described

so

identified

that
[Code

the
Civ.

specific
Proc.,

27
28

Moore & Thomas, Cal. Civ. Prac. Procedure § 16:4 (2017).
15

1

C.

Plaintiff Is Entitled To A Writ Of Attachment

2
3

1.

The Criteria For An Attachment Order Are Satisfied

4
5

a.

The Claim Upon Which The Attachment Is Based Is One

6

Upon Which An Attachment May Issue And The Amount

7

To Be Attached Is Greater Than Zero

8
9

Defendant does not challenge that he is bound by contract to

10

submit fringe benefit contributions to Plaintiff for each hour

11

worked by his employees who perform work covered by the agreements.

12

(See Higa Decl. ¶¶ 7, 9, 11, 16 & Exh. 5 (Short Form Agreement

13

incorporating by reference Construction Master Labor Agreements)).

14

Accordingly, the claim is one upon which an attachment may be

15

issued -- it arises from a claim for money, based on contract,

16

arising “out of the conduct by [Defendant] of a trade, business,

17

or profession,” Cal. Code Civ. Proc. § 483.010(c), in an amount

18

that is fixed or ascertainable that is over five hundred dollars.

19

Id. § 483.010(a).

20

recovery of the claim is greater than zero.

Furthermore, the amount to be attached to secure
Id. § 484.090(a)(4).

21
22

b.

Probable Validity Of The Claim Favors Plaintiff

23
24

To establish the “probable validity” component, Plaintiff must

25

show it is more likely than not that it will obtain a judgment

26

against the defendant.

27

Pos-A-Traction, 112 F. Supp. 2d at 1182.

“In determining the

28

probable

defendant

validity

of

Cal. Code Civ. Proc. § 481.190; see also

a

claim

where

16

the

makes

an

1

appearance, the court must consider the relative merits of the

2

positions of the respective parties and make a determination of

3

the probable outcome of the litigation.”

4

App. 3d at 1120.

5

out a prima facie case for breach of contract; rather, the plaintiff

6

must also show that the defenses raised are “less than fifty percent

7

likely to succeed.”

8

Inc., 2009 WL 2252108, at *5 (N.D. Cal. 2009).

9

fails to rebut a factually-supported defense that would defeat its

Loeb & Loeb, 166 Cal.

Thus, it is not enough for the plaintiff to make

Pet Food Express, Ltd. v. Royal Canin USA
If an applicant

10

claims, the applicant has not established probable validity.

11

Intervest Mortgage Inv. Co. v. Skidmore, 2008 WL 5385880, at *7

12

(E.D. Cal. Dec. 19, 2008) (“[Plaintiff] argues that it may not be

13

required to refute [defendant’s] defenses, i.e. that probable

14

validity on the prima facie case may be sufficient.

15

disagrees.

Section 484.090 requires prediction of the probable

16

outcome

the

17

counterclaims will potentially influence this outcome.”); Plata v.

18

Darbun Enters., Inc., 2009 WL 3153747, at *7 (S.D. Cal. Sept. 23,

19

2009) (denying right to attach order because an asserted defense

20

prevented the plaintiffs from establishing the probable validity

21

of their claim).

of

litigation,

and

the

affirmative

See

The court

defenses

and

22
23

Here, Defendant does not even attempt to contest that he owes

24

benefit contributions under the contract to Plaintiff, or seriously

25

challenge

26

Application is based on documentary evidence, including written

27

contracts, monthly reports, and data strongly suggesting that

28

Defendant has underreported or entirely failed to report hours

the

validity

of

Plaintiff’s

17

claim.

Plaintiff’s

1

worked.

In contrast, the Supplemental Opposition is devoid of

2

evidence

or

3

prevail on the merits at trial, either due to Plaintiff’s failure

4

of proof or to Defendant’s affirmative defenses.5

5

Court concludes that it is more likely than not that Plaintiff will

6

obtain a judgment against Defendant.

7

§ 481.190.

argument

suggesting

that

Defendant

might

somehow

Accordingly, the

See Cal. Code Civ. Proc.

8
9

c.

10

Attachment Is Not Sought For A Purpose Other Than
Recovery Of The Claim

11
12

There is no suggestion in the record before the Court that

13

Plaintiff is seeking attachment for any purpose other than securing

14

recovery of the claim.

15

agreement, demonstrating an unwillingness or inability to pay, and

16

Plaintiff persuasively contends that it has good reason to believe

17
18
19
20
21
22
23
24
25
26
27
28

Defendant has already breached a settlement

Indeed, many of Defendant’s so-called “affirmative defenses” in
his Answer to the Complaint are not affirmative defenses at all.
(See Dkt. No. 28 at 8-13). An affirmative defense “plead[s] matters
extraneous to the plaintiff’s prima facie case, which deny
plaintiff’s right to recover, even if the allegations are true.”
Federal Deposit Ins. Corp. v. Main Hurdman, 655 F. Supp. 259, 262
(E.D. Cal. 1987); see also In re Rawson Food Service, Inc., 846
F.2d 1343, 1349 (11th Cir. 1988) (“An affirmative defense raises
matters extraneous to the plaintiff’s prima facie case; as such,
they are derived from the common law plea of ‘confession and
avoidance.’”) (internal quotation marks omitted). However, “[a]
defense which demonstrates that plaintiff has not met its burden
of proof is not an affirmative defense.”
Zivkovic v. Southern
California Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002); see
also In re Rawson Food Service, 846 F.2d at 349 (defenses which
merely “negate an element of the plaintiff’s prima facie case . . .
are excluded from the definition of affirmative defense in Fed. R.
Civ. P. 8(c)”) (internal quotation marks omitted).
Regardless,
Defendant’s Supplemental Opposition does not argue that Defendant
is likely to prevail at trial under any theory.
5

18

1

that Defendant has underreported, or entirely failed to report,

2

employee work hours for which he would be required to make benefit

3

payments.

4

documenting his employees’ hours suggests that Defendant may be

5

trying to evade his obligations to Plaintiff.

6

and in the absence of any other countervailing evidence, it does

7

not

8

impermissible purpose.

9

attachment are met.

Defendant’s

appear

that

failure

Plaintiff

is

to

produce

seeking

an

monthly

reports

In this context,

attachment

for

an

As such, all of the criteria for a writ of

10
11

2.

Defendant’s Challenges To The Proposed Attachment Fail

12
13

Defendant raises numerous challenges to the Application on

14

the

grounds

that

the

15

alternatively,

16

contentions

17

briefly address each one.

that

are

not

property

to

attachment
persuasive.

is

be

attached

is

unnecessary.
Nonetheless,

exempt

or,

Defendant’s

the

Court

will

18
19

a.

20

Defendant’s Accounts Receivable Are Not Held “In
Trust” For His Bond Issuers

21
22

Defendant vaguely contends that “it could be argued” that the

23

funds Plaintiff seeks to attach are actually the property of

24

Defendant’s bond issuers, and that Defendant is holding or will

25

hold the funds only “in trust” for the benefit of the rightful

26

owners, Hudson and Suretec.

27

v. Mahoney, 62 Cal. App. 3d 604, 609 (1976)).

28

Defendant,

(Supp. Opp. at 1, 6) (citing Richion

19

According to

1

[I]t is possible that a Court may find that the funds

2

held by Defendant are funds in which Defendant only holds

3

a partial, if any, equitable interest.

4

to

5

Defendant satisfies his obligations, any funds that

6

Defendant receives or has in his possession are funds

7

that would, effectively, be held in trust by Defendant

8

for the benefit of the bonding company or claimants.

such

a

conclusion,

it

would

If a Court came

follow

that

until

9
10

(Supp. Opp. at 6).

11

San Diego and Whittier School Districts for Defendant’s work on

12

those

13

promised funds are simply accounts receivable.

projects

Plaintiff counters that the funds owed by the

are

owed

directly

to

Defendant,

for

whom

the

(Reply at 5).

14
15

California law provides that “[a]n attaching creditor seeking

16

to subject the property of a debtor to payment of his debt obtains

17

a lien only upon the title or interest the debtor has and where no

18

actual

19

nothing. . . . [P]roperty held by the debtor in trust is not

20

subject to attachment for his debts.”

21

609 (internal citations omitted).

22

failed to show that under California law, a party owed money

23

pursuant to a contract with a third party for work insured by a

24

bond issuer holds the funds “in trust” for his bond

25

Defendant’s repeated use of phrases such as “it could be argued,”

26

“it is possible” and “if the Court came to such a conclusion,”

27

coupled with the complete lack of citations to relevant case law,

28

only

interest

confirm

is

that

shown[,]

the

Defendant’s
20

attaching

creditor

gets

Richion, 62 Cal. App. 3d at

However, Defendant has utterly

position

is

issuer.

speculative

and

1

unsupported.

Defendant has not shown that his contract earnings

2

and accounts receivable are not subject to attachment.

3

defense fails.

This

4
5

b.

Community Property Is Attachable

6
7

Defendant also argues that the property Plaintiff seeks to

8

attach is community property subject to the rights of his non-

9

debtor spouse, who is not a party to this action.

(Supp. Opp. at

10

2, 7) (citing Cal. Code Civ. Proc. § 487.020(b)).

Plaintiff

11

counters that a community estate may be held liable for any debt

12

incurred by either spouse prior to or during the course of the

13

marriage.

14

Cal. App. 4th 922, 942 (2006)).

(Reply at 5) (citing Century Surety Co. v. Polisso, 139

15
16

The gravamen of Defendant’s argument is unclear.

However, to

17

the extent that Defendant is attempting to argue that community

18

property is exempt from attachment, in whole or in part, simply

19

because it is community property in which a non-debtor spouse holds

20

an interest, he is plainly wrong.

21

910(a) provides that “the community estate is liable for a debt

22

incurred by either spouse before or during marriage, regardless of

23

which spouse has the management and control of the property and

24

regardless of whether one or both spouses are parties to the debt

25

or to a judgment for the debt.”

26

United States v. McGrew, 2014 WL 7877053, at *5 (C.D. Cal. Dec.

27

19,

28

California law, the entire community is liable for the debts

2014),

aff’d,

669

F.

California Family Code Section

Cal. Fam. Code § 910(a); see also

App’x

21

831

(9th

Cir.

2016)

(“Under

1

incurred by one of the spouses during the marriage, if the debts

2

were incurred prior to separation.”) (citing Section 910(a)).6

3

California Supreme Court has further explained that “the liability

4

of community property is not limited to debts incurred for the

5

benefit of the community, but extends to debts incurred by one

6

spouse alone exclusively for his or her own personal benefit.”

7

Lezine v. Sec. Pac. Fin., 14 Cal. 4th 56, 64 (1996).

8

property

9

community property.

is

not

exempt

from

attachment

simply

The

Community

because

it

is

See, e.g., McKnight v. Superior Court, 170

10

Cal. App. 3d 291, 295 (1985) (noting without comment that plaintiff

11

had obtained a writ of attachment against real property owned by

12

defendant and his non-debtor spouse as community property).

13

defense fails.

This

14
15

c.

16

Defendant

Fails

To

Identify

Any

Applicable

Statutory Exemptions

17
18

Defendant states that as an individual, he is entitled to the

19

protections against attachment provided by Cal. Code Civ. Proc.

20

§§ 703.010-704.995. (Supp. Opp. at 2; see also id. at 7 (“Defendant

21

would be entitled to carve out certain assets from a writ that were

22

part

23

Defendant, as an individual, would not be afforded to assert if a

24

corporation.”)). However, Defendant does not identify any specific

25

provision

26
27
28

of

California’s

or

individual

exemption

to

exemption

which

he

is

schemes

allegedly

. . .

that

entitled.

Furthermore,
California
Code
of
Civil
Procedure
Section 695.020(a) explicitly provides that “[c]ommunity property
is subject to enforcement of a money judgment as provided in the
Family Code.”
6

22

1

Plaintiff contends that whatever the exemptions Defendant may

2

believe

3

Procedure sets forth procedures to claim exemptions after levy.

4

(Reply at 7) (citing, inter alia, Cal. Code Civ. Proc. § 703.520

5

(claim of exemption by judgment debtor is filed with the levying

6

officer), id. § 703.530 (judgment debtor may be required to submit

7

financial statement), id. § 703.570 (hearing is held to determine

8

judgment debtor’s right to claimed exemption)). However, Plaintiff

9

ignores California procedures expressly allowing a defendant to

10

he

is

entitled

to

assert,

California

Code

of

Civil

claim an exemption before a pre-judgment attachment issues.

11
12

California Code of Civil Procedure section 484.020 requires

13

an application for a writ of attachment to include, among other

14

things, “[a] description of the property to be attached under the

15

writ of attachment and a statement that the plaintiff is informed

16

and believes that such property is subject to attachment.

17

Code Civ. Proc. § 484.020(e).

18

person, the description of property shall be reasonably adequate

19

to permit the defendant to identify the specific property to be

20

attached.” Id.

21

individual defendant to determine whether to claim an exemption

22

before the attachment order issues.

23

Nissan, Inc., 207 Cal. App. 3d 260, 268 (1989).

24

sets forth the procedure for claiming an exemption to pre-judgment

25

attachment.

26

\\

27

\\

28

\\

Cal.

“Where the defendant is a natural

The purpose of this requirement is to enable an

See Bank of America v. Salinas

It provides in relevant part:

23

Section 484.070

1

(a)

If the defendant claims that the personal property

2

described in the plaintiff’s application, or a

3

portion

4

attachment, the defendant shall claim the exemption

5

as provided in this section. If the defendant fails

6

to make the claim or makes the claim but fails to

7

prove that the personal property is exempt, the

8

defendant may not later claim the exemption except

9

as provided in Section 482.100.

of

such

property,

is

exempt

from

10
11

. . .

12
13

(c)

The claim of exemption shall:

14

(1)

Describe the property claimed to be exempt.

15

(2)

Specify the statute section supporting the

16

claim.

17
18

(d)

The claim of exemption shall be accompanied by an

19

affidavit supporting any factual issues raised by

20

the claim and points and authorities supporting any

21

legal issues raised.

22
23

(e)

The

claim

of

exemption,

together

with

any

24

supporting affidavit and points and authorities,

25

shall be filed and served on the plaintiff not less

26

than five court days before the date set for the

27

hearing.

28
24

1

(f)

If the plaintiff desires to oppose the claim of

2

exemption, the plaintiff shall file and serve on

3

the defendant, not less than two days before the

4

date set for the hearing, a notice of opposition to

5

the claim of exemption, accompanied by an affidavit

6

supporting any factual issues raised and points and

7

authorities

8

raised. . . .

supporting

any

legal

issues

9
10

(g)

If the plaintiff files and serves a notice of

11

opposition

to

the

claim

as

provided

in

this

12

section, the defendant has the burden of proving

13

that the property is exempt from attachment.

14
15

Cal. Code Civ. Proc. § 484.070; see also Bank of Am., 207 Cal. App.

16

3d at 270 (“It could hardly be clearer that, just as the defendant

17

is required to make exemption claims before a noticed hearing on

18

an attachment application, so the plaintiff is required to oppose

19

any such claims.

20

claim of exemption for personal property.

21

lack of opposition concedes the propriety of timely exemption

22

claims.”).

A defendant is deemed to have waived any untimely
Similarly, a plaintiff’s

23
24

Here, Defendant’s attempt to assert a right to exemptions

25

under Sections 703.010-704.955 fails because Defendant does not

26

identify the specific property he claims to be exempt, or the

27

specific statute supporting the claim, as required by Section

28

484.070(c).

Nor does Defendant’s Supplemental Declaration explain
25

1

why any of the property at issue is exempt under these statutes.

2

Because Defendant has failed to show an entitlement to exemptions

3

under Sections 703.010-704.955, such claims are waived for purposes

4

of the instant Application.

This defense fails.

5
6

d.

Defendant

7

Has

Not

Shown

That

The

Funds

To

Be

Attached Are Necessary To Support Him Or His Family

8
9

Defendant maintains that funds necessary to support him and

10

his family, including funds needed for legal fees incurred in his

11

defense in the instant action, are exempt from attachment.

12

Opp.

13

§ 487.020(b); Randone v. Appellate Dep’t, 5 Cal. 3d 536, 562

14

(1971)).

15

exemption, Defendant must disclose all of his assets and sources

16

of income.

at

2,

7)

(citing,

Plaintiff

inter

contends

alia,

that

in

Cal.

Code

order

to

(Supp.

Civ.

assert

Proc.

this

(Reply at 7).

17
18

Defendant is correct as a general proposition that funds

19

necessary to support a defendant or his family are exempt from

20

prejudgment attachment.

21

that property is exempt “which is necessary for the support of a

22

defendant who is a natural person or the family of such defendant

23

supported in whole or in part by the defendant.”

24

Proc. § 487.020(b); see also Doyka v. Superior Court, 233 Cal. App.

25

3d 1134, 1137 (1991) (“[P]roperty necessary for the support of the

26

defendant or the defendant’s family is exempt from attachment.”).

27

\\

28

\\

Section 487.020(b) explicitly provides

26

Cal. Code Civ.

1

However, “[a] claim that property is exempt because it is

2

necessary for the support of the defendant or his or her family

3

must include a financial statement detailing the earnings of all

4

family members and listing their assets and obligations.”

5

Judges Benchbook, Civ. Proc. Before Trial § 14.80.

6

not disclose in his declaration any evidence showing his, or his

7

family’s, income, assets and debts.

8

show that the assets Plaintiff is seeking to attach are necessary

9

for the support of him and his family.7

Cal.

Defendant did

Defendant therefore failed to

This defense fails.

10
11

e.

Defendant Has Not Shown That Payment And Performance

12

Bonds Will Adequately Protect Plaintiff

13
14

Defendant

argues

that

“it

is

likely

that

[Plaintiff]

is

15

adequately protected by the performance bonds” on certain projects,

16

whereas if a writ of attachment were to issue, it would “ground

17

all activity on all projects for Defendant and bring Defendant’s

18

business to a complete stop.”

19

argues

20

contributions owed to the employees for their work on the bonded

21

project,

22

damages and audit fees.”

23

notes

24

declaration

that

and

that

“[p]ayment

do

the
“only

not

(Supp. Opp. at 2, 8).

bonds

cover

on

projects

[Plaintiff’s]

(Reply at 4).

performance
guarantees

bond

only

claim

for

Plaintiff
cover

the

liquidated

Furthermore, Plaintiff

attached

[Defendant’s]

to

the

Dominguez

performance

of

its

25
26
27
28

Despite the lack of evidence from Defendant, Plaintiff voluntarily
reduced the amount of the requested attachment to $75,000 -- some
$27,000 less than the amount Plaintiff claims it is owed, at a
minimum, under the contracts -- specifically in order to
accommodate Defendant’s potential financial needs.
7

27

1

contract with the Whittier School District and [Plaintiff is] not

2

a beneficiary of the bond and cannot recover under the bond.”

3

at 4 n.4) (citing Dominguez Supp. Decl., Exh. B at 16).

(Id.

4
5

The Court is not persuaded that Defendant’s bonds on will

6

necessarily fully protect Plaintiff should it eventually prevail

7

at

8

cooperated in the audit of his records, even if Plaintiff could

9

assert claims on the bonds, it is unclear whether Plaintiff would

10

be able to do so within the applicable statutes of limitation.

11

Similarly, it is not clear that the amounts of the bonds will be

12

sufficient to cover any additional claims Plaintiff may discover,

13

or

14

currently known projects.

15

has not cited to any case precluding a creditor from obtaining a

16

writ of attachment against a debtor’s property simply because

17

payment may be available indirectly from another source at the

18

conclusion of the action.

trial.

even

As

the

Plaintiff

liquidated

contends,

damages,

because

interest,

(Reply at 4).

Defendant

and

audit

has

fees

not

on

Furthermore, Defendant

This defense fails.

19
20

f.

The

21

Attachment

Amount

Is

Not

Inflated

Due

To

Plaintiff’s Entitlement To Liquidated Damages

22
23

Defendant

summarily

asserts,

without

citation

to

law

or

24

further elaboration, that Plaintiff’s liquidated damages claim is

25

“arguably impermissible given the punitive nature of the damages.”

26

(Supp. Opp. at 2, 8).

27

agreements

28

liquidated damages, which the Ninth Circuit has “repeatedly held

and

Plaintiff emphasizes that both the written

ERISA,

29

U.S.C.

28

§ 1132(g)(2),

provide

for

1

. . . are mandatory elements of any court award.”

2

(Reply at 2)

(citing cases; emphasis in original).

3
4

Section 1132(g)(2) provides:

5
6

In any action under this subchapter by a fiduciary for

7

or on behalf of a plan to enforce section 1145 of this

8

title in which a judgment in favor of the plan is

9

awarded, the court shall award the plan--

10
11

(A)

the unpaid contributions,

12

(B)

interest on the unpaid contributions,

13

(C)

an amount equal to the greater of--

14

(i)

interest on the unpaid contributions, or

15

(ii) liquidated damages provided for under the

16

plan

17

percent (or such higher percentage as may

18

be permitted under Federal or State law) of

19

the amount determined by the court under

20

subparagraph (A),

21

(D)

22
23
24

reasonable

in

an

amount

attorney’s

not

fees

in

and

excess

costs

of

of

20

the

action, to be paid by the defendant, and
(E)

such other legal or equitable relief as the court
deems appropriate.

25
26

29 U.S.C. § 1132(g)(2) (emphasis added); see also Nw. Adm’rs, Inc.

27

v. Albertson’s, Inc., 104 F.3d 253, 257 (9th Cir. 1996) (“Section

28

1132(g)(2) is ‘mandatory and not discretionary.’
29

To be entitled

1

to a mandatory award under § 1132(g)(2), the following three

2

requirements must be satisfied: (1) the employer must be delinquent

3

at the time the action is filed; (2) the district court must enter

4

a judgment against the employer; and (3) the plan must provide for

5

such an award.”) (internal citation omitted).

6
7

It

is

undisputed

that

the

agreements

here

provide

(See, e.g., Higa Decl. ¶ 11.2).

for

8

liquidated damages.

Defendant’s

9

cursory and unsupported argument alleging that liquidated damages

10

are impermissible is flatly contradicted by the ERISA statute

11

specifically requiring the court (“the court shall award the plan”)

12

to assess such damages.

This defense fails.

13
14

V.

15

CONCLUSION

16
17

Plaintiff has satisfied the criteria for the issuance of a

18

writ

of

attachment.

Defendant’s

attempted

defenses

are

19

unpersuasive.

20

Attach Order and Writ of Attachment, as amended by the reduction

21

in the amount to be attached to $75,000, is GRANTED.

Accordingly, Plaintiff’s Application for a Right to

22
23

At the hearing, Plaintiff argued against the posting of a bond

24

as a condition of levying the writ of attachment on the ground that

25

Defendant was unlikely to prevail in this matter, rendering the

26

purpose of the bond -- to protect a defendant against a wrongful

27

attachment -- moot.

28

statutory requirement.

However, this argument does not address the
See Cal. Code Civ. Proc. §§ 489.21030

1

489.220.

Because the Court has not found any authority allowing

2

it to exercise discretion regarding the posting of a bond, a bond

3

is necessary here.

4

883 (1991) (“Absent the prerequisite undertaking, the writ of

5

attachment issued by the clerk of the court was void ab initio

6

. . . .”).

7

Plaintiff may file a Notice of Authority within 7 days of the date

8

of this Order, with a brief explanation in support of its contention

9

that no bond is required.

See Vershbow v. Reiner, 231 Cal. App. 3d 879,

If Plaintiff is aware of any contrary authority,

Defendant may file a response within 7

10

days of service of the Notice.

If the Court is persuaded that a

11

bond is not required, the Court may amend this Order.

12

shall submit a proposed Right to Attach Order and Writ of Attachment

13

reflecting the amended sum to be attached within seven days of the

14

date of this Order.

Plaintiff

15
16

DATED:

November 21, 2017
/S/
__________
SUZANNE H. SEGAL
UNITED STATES MAGISTRATE JUDGE

17
18
19
20
21
22
23
24
25
26
27
28
31