Pending - Other Pending
Contract - Other Contract
US BANK NATIONAL ASSOCIATION
LEE SEUNG KWAN
LAKHA AMIN S.
LAKHA PROPERTIES-CHINO HILLS LLC
CHRONIS PAUL E
LEARY MEAGEN EILEEN
BROOK MICHAEL C.
SELMONT RUSSELL MATTHEW ESQ.
KELLER JENNIFER LYNN
3/29/2018: CROSS-COMPLAINT FOR FRAUD, EQUITABLE INDEMNIFICATION AND DECLARATORY RELIEF
3/29/2018: SUMMONS CROSS COMPLAINT
5/14/2018: Minute Order
5/15/2018: NOTICE OF CONTINUANCE OF CASE MANAGEMENT CONFERENCE
6/1/2018: PROOF OF SERVICE OF SUMMONS
6/1/2018: PROOF OF SERVICE OF SUMMONS
6/19/2018: PROOF OF SERVICE SUMMONS
7/12/2018: FIRST AMENDED CROSS-COMPLAINT
8/14/2018: DECLARATION OF DEMURRING PARTY IN SUPPORT OF AUTOMATIC EXTENSION
8/15/2018: AMENDED DECLARATION OF DEMURRING PARTY IN SUPPORT OF AUTOMATIC EXTENSION
8/15/2018: Minute Order
9/14/2018: SUBSTITUTION OF ATTORNEY
9/17/2018: CROSS-DEFENDANTS LAKHA PROPERTIES-CHINO HILLS, LLC, AND AMIN S. LAKHA'S ANSWER AND AFFTRMATIVE DEFENSES
9/18/2018: NOTICE OF HEARING ON VERIFIED APPLICATION OF PAUL E. CHRONIS TO APPEAR AS COUNSEL PRO HAC VICE; ETC.
9/18/2018: VERIFIED APPLICATION OF PAUL E. CHRONIS TO APPEAR AS COUNSEL PRO HAC VICE; ETC.
9/18/2018: Proof of Service
9/21/2018: PROOF OF SERVICE
DocketStipulation - No Order (Stipulation Referring Action to Hon. Rex Heeseman (Ret.) as Judicial Referee); Filed by US BANK NATIONAL ASSOCIATION (Plaintiff)[+] Read More [-] Read Less
DocketRequest for Refund / Order; Filed by US BANK NATIONAL ASSOCIATION (Plaintiff)[+] Read More [-] Read Less
Docketat 09:00 AM in Department 19; Status Conference (ReJudicial Reference Proceedings) - Not Held - Advanced and Vacated[+] Read More [-] Read Less
DocketNotice ( of Entry of Order); Filed by US BANK NATIONAL ASSOCIATION (Plaintiff)[+] Read More [-] Read Less
Docketat 1:45 PM in Department 19; Court Order[+] Read More [-] Read Less
DocketMinute Order ( (Court Order)); Filed by Clerk[+] Read More [-] Read Less
DocketStipulation and Order (Stipulation and [Proposed] Order Referring Action to Judicial Reference Proceeding); Filed by US BANK NATIONAL ASSOCIATION (Plaintiff)[+] Read More [-] Read Less
DocketCertificate of Mailing for (Minute Order (Court Order) of 03/13/2019); Filed by Clerk[+] Read More [-] Read Less
DocketProof of Service by Mail; Filed by US BANK NATIONAL ASSOCIATION (Plaintiff)[+] Read More [-] Read Less
DocketNotice (Notice of Entry of Order on Verified Application of Michael C. Brook to Appear Pro Hac Vice); Filed by US BANK NATIONAL ASSOCIATION (Plaintiff)[+] Read More [-] Read Less
DocketCIVIL DEPOSIT[+] Read More [-] Read Less
DocketAnswer; Filed by SEUNG KWAN LEE (Defendant)[+] Read More [-] Read Less
DocketDEFENDANT'S ANSWER TO COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF[+] Read More [-] Read Less
DocketNOTICE OF ACKNOWLEDGEMENT OF RECEIPT - CIVIL[+] Read More [-] Read Less
DocketNotice and Acknowledgment of Receipt; Filed by US BANK NATIONAL ASSOCIATION (Plaintiff)[+] Read More [-] Read Less
DocketNotice of Case Management Conference; Filed by Clerk[+] Read More [-] Read Less
DocketNOTICE OF CASE MANAGEMENT CONFERENCE[+] Read More [-] Read Less
DocketComplaint; Filed by US BANK NATIONAL ASSOCIATION (Plaintiff)[+] Read More [-] Read Less
DocketSUMMONS[+] Read More [-] Read Less
DocketCOMPLAINT.FOR: (1) BREACH OF CONTRACT; AND (2) DECLARATORY RELIEF[+] Read More [-] Read Less
Case Number: ****4566 Hearing Date: May 3, 2022 Dept: 19
After consideration of the Application of Christopher I. Brain to Appear as Counsel Pro Hac Vice filed March 17, 2022, the Court finds that the requirements of California Rules of Court, rule 9.40 have been satisfied and GRANTS the application.
The Court signs the [Proposed] Order filed March 17, 2022.
Counsel for Cross-Defendants Lakha Properties-Chino Hills, LLC and Amin S. Lakha to give notice.
Case Number: ****4566 Hearing Date: January 25, 2021 Dept: 19
The Hearing on the Application to be Admitted Pro Hac Vice scheduled for 01/25/2021 at 8:30AM is CONTINUED TO February 24, 2021, 8:30 a.m., in Department 19 of the Stanley Mosk Courthouse. After consideration the Application for Elinor H. Murarova to Appear as Counsel Pro Hac Vice, the Court requests additional information concerning compliance with California Rules of Court, rule 9.40, as explained further below.
First, the Court is not satisfied that the Applicant has satisfied all the requirements of California Rules of Court, rule 9.40. The Application does not establish that the Applicant served a copy of the Application and the notice of hearing on the State Bar of California at its San Francisco office, or that the mandatory fee to the State Bar of California was paid. (See Cal. Rules Ct., rule 9.40(c)(1) & (e).) The Application merely states that “Applicant will serve a copy of this Application to the State Bar of California, and to remit payment of the required $50.00 application fee pursuant to CRC Rule 9.40(e).” (Application, ¶ 10.) Thus, the Court needs evidence of compliance with these requirements before it may grant the Application.
Second, the Applicant attests to having been admitted to appear as counsel pro hac vice in a California court six times during the preceding two years. (Application at ¶ 4.) The Court requests supplemental information on this issue, as it may be cause for denial of the Application. However, the Court may consider whether special circumstances exist. (See Cal. Rules Ct., rule 9.40(b).) The applicant is to explain further.
Supplemental briefing/declaration must be submitted by February 16, 2021.
Moving party to give notice.
Case Number: ****4566 Hearing Date: October 28, 2020 Dept: 86
U.S. BANK NATIONAL ASSOCIATION v. SEUNG KWAN LEE
Case No. ****4566
Hearing Date: October 28, 2020
[TENTATIVE] ORDER DENYING APPLICATION FOR WRIT OF ATTACHMENT
Plaintiff, U.S. Bank National Association, seeks a writ of attachment over certain assets purportedly held by Defendant, Seung Kwan Lee, based on certain guaranties signed by Defendant. The amount sought to be secured by attached is $33,029,894.54.
Defendant opposes the application.
Plaintiff’s request for judicial notice (RJN) is granted.
The application is denied. The court finds it has no competent persuasive evidence supporting the amount of Defendant’s obligation in this matter.
Declaration of Joseph A. Polcari, Jr:
The general objections are overruled as the entirety of the declaration is not inadmissible. Further, the objections do not specifically object to paragraphs in which Polcari purports to authenticate documents. With the exception of objection 7, Defendant has not specifically objected to the exhibits proffered by Plaintiff. Finally, based on Defendant’s responses to certain requests for admission, he has admitted certain exhibits—Exhibits I, J, K and L—are authentic.
The court has considered Plaintiff’s response to the objections.
Objections 1, 4, 5, 6, 7 (see Herrera v. Deutsche Bank Nat’l Trust Co. (2011) 196 Cal.App.4th 1366, 1375 [hearsay]), 8 and 9 are sustained. Objections 2 (based on grounds stated), 3 (based on grounds stated), 10 and 11 are overruled.
Declaration of Daniel B. Heidtke:
Objections 2 and 3 are sustained. Objection 1 is overruled.
“Upon the filing of the complaint or at any time thereafter, the plaintiff may apply pursuant to this chapter for a writ of possession by filing a written application for the writ with the court in which the action is brought.” (Code Civ. Proc. ; 512.010, subd. (a).)
Pursuant to Code of Civil Procedure section 512.010, subdivision (b), the application must be submitted under oath and include:
(1) A showing of the basis of the plaintiff's claim and that the plaintiff is entitled to possession of the property claimed. If the basis of the plaintiff's claim is a written instrument, a copy of the instrument shall be attached.
(2) A showing that the property is wrongfully detained by the defendant, of the manner in which the defendant came into possession of the property, and, according to the best knowledge, information, and belief of the plaintiff, of the reason for the detention.
(3) A particular description of the property and a statement of its value.
(4) A statement, according to the best knowledge, information, and belief of the plaintiff, of the location of the property and, if the property, or some part of it, is within a private place which may have to be entered to take possession, a showing that there is probable cause to believe that such property is located there.
(5) A statement that the property has not been taken for a tax, assessment, or fine, pursuant to a statute; or seized under an execution against the property of the plaintiff; or, if so seized, that it is by statute exempt from such seizure.
Before the hearing on the application for writ of possession, the Defendant must be served with (1) a copy of the summons and complaint; (2) a Notice of Application and Hearing; and (3) a copy of the application and any affidavit in support thereof. (Code Civ. Proc. ; 512.030.)
“The writ will be issued if the court finds that the plaintiff's claim is probably valid and the other requirements for issuing the writ are established.” (Code Civ. Proc. ; 512.040, subd. (b).) “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.” (Id. at ; 511.090.) “If the defendant desires to oppose the issuance of the writ, he shall file with the court either an affidavit providing evidence sufficient to defeat the plaintiff's right to issuance of the writ or an undertaking to stay the delivery of the property in accordance with Section 515.020.” (Id. at ; 512.040, subd. (c).)
Prior to the issuance of a writ of possession, the plaintiff must file an undertaking “in an amount not less than twice the value of the defendant's interest in the property or in a greater amount.” (Code Civ. Proc. ; 515.010, subd. (a).) “The value of the defendant's interest in the property is determined by the market value of the property less the amount due and owing on any conditional sales contract or security agreement and all liens and encumbrances on the property, and any other factors necessary to determine the defendant's interest in the property.” (Id.) “If the court finds that the defendant has no interest in the property, the court shall waive the requirement of the plaintiff's undertaking and shall include in the order for issuance of the writ the amount of the defendant's undertaking sufficient to satisfy the requirements of subdivision (b) of Section 515.020.” (Id. at ; 515.010, subd. (b).)
Basis of Attachment:
The court shall issue a right to attach order if the claim upon which the attachment is based is one upon which an attachment may be issued. (Code Civ. Proc. ; 484.090.) “[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.” (Code Civ. Proc. ; 483.010, subd. (a).) “If the action is against a defendant who is a natural person, an attachment may be issued only on a claim which arises out of the conduct by the defendant of a trade, business, or profession.” (Code Civ. Proc. ; 483.010, subd. (c).)
Plaintiff’s claim is based on a written contract and is in excess of five hundred dollars.
Is the admissible evidence sufficient to establish Defendant’s obligation “arises out of the conduct by the defendant of a trade, business, or profession”? (Code Civ. Proc. ; 483.010, subd. (c).)
By misquoting authority and omitting two words, Plaintiff has not set forth the proper measure for whether an obligation arises from a defendant’s trade, business or profession. Plaintiff suggests two alternatives exist—an either/or situation:
“Indeed, California law is clear that a plaintiff may obtain an attachment order
 ‘against an individual who guarantees corporate obligations or  if “the guarantee . . . sued upon is part and parcel of an activity which occupies the time, attention and effort of the guarantor for the purposes of livelihood or profit on a continuing basis.” ’ ” (Reply 3:5-9 [emphasis in original.)
“That is exactly the case here because, as detailed in the Application, the Guaranties at issue ‘guarantee[d] [CRCH’s] corporate obligations.” (Reply 3:12-13.)
Plaintiff created its claim of an either/or analysis by omitting two words from its authority, VFS Financing, Inc. v. CHF Express, LLC (C.D. Cal. 2009) 620 F.Supp.2d 1092, 1096.) Plaintiff’s omission altered the meaning of the statement from the case. In actuality, if Plaintiff had accurately quoted its authority in its argument, the single relevant standard on the issue would have been clear:
Indeed, California law is clear that a plaintiff may obtain an attachment order “against an individual who guarantees corporate obligations or business debts if  ‘the guarantee . . . sued upon is part and parcel of an activity which occupies the time, attention and effort of the guarantor for the purposes of livelihood or profit on a continuing basis.’ ” (Reply 3:5-9 [correctly quoting authority].)
There is no authority suggesting a plaintiff may demonstrate a defendant’s obligation arises from a defendant’s conduct of a trade, business or profession merely by demonstrating an individual has guaranteed a corporate debt as asserted by Plaintiff. In fact, the authority is to the contrary.
Advance Transformer Company v. Superior Court (1974) 44 Cal.App.3d 127 exhaustively discusses whether a plaintiff’s claim arises from a defendant’s conduct in a trade, business or profession. The court explained the analysis is often on a case-by-case basis:
“If the defendant is engaged generally in the business of guaranteeing for a consideration the debts of others, that is, lending credit, any liability incurred as a result is a debt arising out of the conduct of his business. At the opposite extreme, a retired person, with no financial stake in the success of the primary obligor, cannot properly be held engaged in business solely by virtue of an isolated instance in which he guarantees a commercial obligation out of friendship and without compensation.
Cases falling between these extremes will require the exercise of judgment on a case-to-case basis to determine whether the activity of the defendant with respect either (1) to the extension of credit generally, or (2) to the business of the primary obligor is such as to justify the conclusion that the guarantee of the primary obligor's debt sued upon is part and parcel of an activity which occupies the time, attention and effort of the guarantor for the purpose of livelihood or profit on a continuing basis.” (Id. at 144.)
Advance Transformer Company v. Superior Court, supra, 44 Cal.App.3d at 144 also describes the analysis in situations “involving guarantees by principal shareholders of closely held corporations.” The court instructs:
“In cases involving guarantees by principal shareholders of closely held corporations, consideration will necessarily be given to the degree and continuity of the guarantor's involvement in the affairs of the primary obligor out of which the indebtedness has arisen. For example, (1) if a corporation has habitually been provided with operating capital through the medium of such guarantees by the defendant, or (2) the obligation sued upon has resulted from an extension of credit in reliance upon defendant's continuing guarantee, or (3) the defendant has extensively occupied himself in the management of the primary obligor on a continuing basis and has a major stake in its success, the required “frequency and continuity” may be found to exist. In short, if the sum total of the circumstances justifies the conclusion that the guarantor occupied himself to a substantial degree and on a continuing basis in promoting his own profit through provision of credit or management to the primary obligor, a guarantee executed in the course of such activity may properly be considered an obligation arising out of the conduct of the guarantor's business.” (Ibid. [Emphasis added.])
The admissible evidence submitted by Plaintiff on this issue is as follows:
Defendant is the manager of CRCH, LLC, the borrower under the Consent and Assumption Agreement. (Polcari Decl., Ex. J, signature page [authenticity of which is admitted by Defendant].) Defendant agreed he was an affiliate of CRCH, LLC and would “receive direct or indirect benefit” from the lender’s consent to the assignment of the loan by the original borrower to CRCH, LLC. (Polcari Decl., Ex. J, p. 1, Ex. K, p. 1 [authenticity of which is admitted by Defendant].) As an express condition precedent to the lender’s agreement to the Consent and Assumption Agreement, the lender expressly required Defendant to execute and deliver to it the recourse guarantee and the payment guarantee. CRCH, LLC owns and operates a shopping center. (Lee Decl., ¶ 4.)
Under Advance Transformer Company v. Superior Court, supra, 44 Cal.App.3d at 144, these facts sufficiently support a finding Defendant’s obligation arises from conduct in a trade, business or profession. Defendant is the manager of CRCH, LLC. CRCH, LLC owns and operates a shopping center. Defendant incurred the obligation to facilitate its assumption of a loan made by the original borrower. Accordingly, Defendant’s obligation here resulted from Defendant’s guaranties relied upon by the lender to allow the assumption of a loan by a limited liability company for which Defendant acts as the manager.
Purpose and Amount of Attachment:
Code of Civil Procedure section 484.090 states that the Court shall issue a right to attach order if “the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based . . . [and] the amount to be secured by the attachment is greater than zero.”
Plaintiff argues it seeks a writ of attachment “solely to secure the recovery of any debt [Defendant] owes under the Guaranties.” (Memorandum 15:13-14.) There is no indication the application is sought for any other purpose. Accordingly, the court finds that Plaintiff has complied with Code of Civil Procedure sections 484.020 and 484.090.
Probable Validity of Plaintiff’s Claims:
“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.)
“A party’s obligation . . . under a guarantee . . . is contractual.” (Coles v. Glaser (2016) 2 Cal.App.5th 384, 391.) To prevail on its breach of contract claim, Plaintiff must show the contract, Plaintiff’s performance (or excuse for non-performance), Defendant’s breach and resulting damages to Plaintiff. (Ibid.)
Based on the admissible evidence, there are two contracts between Wells Fargo Bank and Defendant, the payment guaranty and the recourse guaranty. (Polcari Decl., Ex. K [recourse guaranty] and Ex. L [payment guaranty] [the authenticity of which are undisputed].) The guaranties provide for certain payments upon the event of default by CRCH, LLC. (Polcari Decl., Ex. K [recourse guaranty], ¶ 2 (b) and Ex. L [payment guaranty], ¶ 2 (b).) The guaranties specify an event of default occurs if CRCH, LLC initiates a proceeding for bankruptcy protection. (Ibid.)
It is undisputed the lender under the loan agreement fully performed—it loaned the money.
CRCH, LLC filed for Chapter 11 bankruptcy protection on August 21, 2017. (Polcari Decl., Ex. P.) The bankruptcy petition indicates CRCH, LLC then had estimated liabilities of up to $100 million. The filing constituted an event of default by CRCH, LLC triggering Defendant’s payment obligations under the guaranties were “immediately due and payable at the election of the lender . . . .” (Polcari Decl., Ex. K [recourse guaranty], ¶ 2 (b) and Ex. L [payment guaranty], ¶ 2 (b).)
On June 30, 2009, Wells Fargo assigned its interest in the underlying loan to Plaintiff. (Polcari Decl., Ex. O.)
The problem, however, with Plaintiff’s showing is the court cannot determine with competent admissible evidence the amount of the obligation purportedly owed by Defendant to Plaintiff.
Through the Declaration of Joseph A. Polcari, Jr., Plaintiff attempts to establish the obligation. The court sustained Defendant’s evidentiary objection to paragraph 43. While the court recognizes Polcari might be able to attest to the amount due from Defendant on the guaranties by reviewing the loan file (as argued by Plaintiff), there is no indication Polcari did so to attest to the court the amount due and owing on the obligation. In fact, it appears from paragraph 43 and the manner in which it is drafted, Polcari solely relies on a calculation based on the trustee’s deed upon sale to attempt to provide evidence to the court—he specifically references the trustee’s deed upon sale as the foundation for his statement and attests “this amount is calculated as follows.” Polcari then proceeds to cite—that is, report—information purportedly from the trustee’s deed upon sale.
The amount of the unpaid debt (purportedly $67,229,894.54) in the trustee’s deed upon sale is hearsay—it is specifically disputed by Defendant. That the deed itself may be admissible does not inform on the admissibility of the hearsay within the document. Defendant specifically objected to the document on hearsay grounds.
Plaintiff is seeking an attachment in an amount exceeding $33 million. A conclusion by a loan servicing agent based on trustee’s deed upon sale is insufficient to establish Plaintiff’s burden of a readily ascertainable amount of the obligation. (Evid. Code ; 412.) Presumably, it was within Plaintiff’s power to provide testimony based on an accounting or review of the loan file. The court finds a loan serving agent’s perfunctory and generalized testimony concerning the amount of any obligation purportedly owed by Defendant insufficient to meet Plaintiff’s burden on the application. The court has no confidence in Polcari’s statement.
The court need not address Defendant’s contract defenses based on the court’s finding Plaintiff has failed to meet its initial burden on this application.
Nonetheless, the court finds the defenses unpersuasive. As to fraud, Plaintiff (as admitted by Defendant) did not participate in any fraud. The court rejects the notion that the original lender is in privity with a fraudulent borrower. Defendant has cited no authority otherwise. As to unilateral mistake, there is no evidence Plaintiff knew at the time of the Consent and Assumption Agreement Defendant of Defendant’s mistake and exploited it. Finally, the notion of equitable exoneration is unsupported by California law and, even if applicable, does not undermine Plaintiff’s entitlement to attachment.
Code Civil Procedure section 487.010, subdivision (a) provides that “[w]here the defendant is a natural person,” “general intangibles arising out of the conduct of the defendant of a trade, business, or profession” (as well as other enumerated property) is subject to attachment. Additionally, “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. ; 484.020, subd. (e).)
Plaintiff requests attachment of all of Defendant’s causes of action against CRCH, LLC and Cross-Defendants Lakha Properties-Chino Hills LLC and Amin S. Lakha, including for indemnity but not any business torts. The court finds such property is subject to attachment as a general intangible. That the court may fashion some appropriate remedy at the end of this litigation does not undermine Plaintiff’s entitlement to attachment of that specific property where an attachment is granted.
Plaintiff also requests attachment of Defendant’s “direct and indirect interest in various specific corporate entities and all of Defendant’s “evidence of ownership of the same.” (Memorandum 6:16-17.) Like the causes of action, the interests in corporate entities are subject to attachment. That said, Plaintiff has identified certain specific entities in which it asserts Defendant has an ownership interest. As Plaintiff has provided no evidence of Defendant’s ownership, and Defendant provides evidence disputing his ownership interest in the specifically identified interests or evidence demonstrating the interest is not attachable because it is located in South Korea (e.g., SNE Holdings Co., Ltd.) Additionally, nothing subjects Defendant’s “evidence of ownership” to an attachment, and Plaintiff has not provided authority demonstrating otherwise. Accordingly, the court finds attachment of this property is unwarranted if an attachment is granted.
Finally, Plaintiff requests attachment of “the judgment and any proceeds paid in satisfaction of the judgment that CRCH held and holds against Lakha Properties and Mr. Lakha” from litigation in CRCH, LLC v. Lakha Properties-Chino Hills, Los Angeles Superior Court case number BC478341. As argued by Defendant, this property does not belong to Defendant. It is not subject to attachment on this application even assuming Plaintiff otherwise met its burden.
Based on the foregoing, Plaintiff’s application is denied.
IT IS SO ORDERED.
October 28, 2020 ________________________________
Hon. Mitchell Beckloff
Judge of the Superior Court
 Curiously, Plaintiff submits only argument to support this point and attempts to shift the burden to Defendant to prove otherwise.
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