California Writ Of Attachment
If you are faced with litigation based on an alleged breach of contract, you may be subject to a procedure known as the dreaded “writ of attachment.” Under this motion, a moving party can seek Court intervention to attach to assets held by the defendant (non-moving party), pending the outcome of litigation. This can be a challenging circumstance for any business owner. The following is a broad stroke review of how a writ of attachment application works, and what you can expect, and possibly assert as defenses, if you are on the receiving end of such a writ of attachment.
At the outset, it should be noted that California law views attachment as “a harsh remedy because it causes the defendant to lose control of his property before the plaintiff’s claim is adjudicated.” Thus, the requirements for the issuance of a writ of attachment must be strictly construed against the moving party. Additionally, attachment to any property is limited to property located within California.
The statutory scheme for prejudgment attachments is set forth in California Code of Civil Procedure §§ 481.010 to 493.060. Under that scheme, attachment “is a remedy by which a plaintiff with a contractual claim to money may have various items of a defendant’s property seized before judgment and held by a levying officer for execution after judgment.” A writ of attachment may be issued under California law only if each of the following four requirements is met: (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. In addition, a writ of attachment may issue only where the total amount of the breach of contract claim “is a fixed or readily ascertainable amount” exceeding $500.00, and the basis for the plaintiff’s computation of damages is “reasonable and definite.”
A plaintiff seeking a writ of attachment under California law must adequately meet both a burden of proof and a burden of production. Specifically, the writ application must be supported by affidavits or declarations showing that the plaintiff, on the facts presented, would be entitled to a judgment on the underlying claim upon which the attachment is based. The affidavits or declarations must state facts “with particularity.” Further, the evidence presented in support of the application must be admissible and non-objectionable, and all affiants or declarants must be able to show that they have actual and personal knowledge of the relevant facts about which they testify.
As noted above, a plaintiff seeking the issuance of an attachment must produce competent and admissible evidence sufficient to establish, by a preponderance of the evidence, that the plaintiff will prevail at trial — i.e., that it will obtain a judgment against the defendant. “In determining the probable validity of a claim . . . , the court must consider the relative merits of the positions of the respective parties and make a determination of the probable outcome of the litigation.” In a breach of contract claim, for example, the Plaintiff must prove the following elements: (1) the existence of a contract; (2) plaintiff's performance of the contract or excusal for non-performance; (3) defendant's breach; and (4) resulting damage to plaintiff.
One way to defeat the writ of attachment proceeding in a breach of contract action is to demonstrate to the Court that the terms of the contract themselves are ambiguous, and can only be determined through discovery in a case, and possibly through a factual determination by a jury. In the writ of attachment hearing, the Court will first determine whether the contract is ambiguous, i.e., whether, on its face, the language of the contract is capable of different, yet reasonable interpretations. In its analysis, if the Court finds negotiations that were not well organized, the importance of a term that the parties left open may very well be a decisive measure of whether the parties intended to enter into a contract at all. Under such a finding, the Court will not grant the writ of attachment, because the contract is too ambiguous.
In addition, to prevail on the writ of attachment, the plaintiff must proffer admissible evidence sufficient to carry its burden of proving with particularity the probably validity of its breach of contract claims. If the evidence proffered by the Plaintiff cannot establish the purported material facts to support its writ application with admissible evidence (i.e. testimonial and documentary evidence with sufficient foundation, authentication, relevance, and certainty), the writ application will fail. Finally, in addition to asserting as a defense to the writ application that the contract is ambiguous, the party opposing the attachment can also assert that the moving party’s statement of damages is insufficiently stated, or otherwise ambiguous. If there is a lack of evidence supporting the actual amount demanded by the writ, the Court may deny the writ on those grounds.
If the non-moving party does not prevail in defeating the writ of attachment, it can still ask the Court to order the moving party to post an undertaking (“bond”), to at least put some pressure on the moving party. Under California Code of Civil Procedure § 489.210, a writ of attachment may not issue unless the plaintiff has filed “an undertaking to pay the defendant any amount the defendant may recover for any wrongful attachment by the plaintiff in the action.” The amount of an undertaking is ordinarily $10,000.00 — unless “upon objection to the undertaking, the court determines that the probable recovery for wrongful attachment exceeds the amount of the undertaking,” in which case the court “shall order the amount of the undertaking increased to the amount it determines to be the probable recovery for wrongful attachment if it is ultimately determined that the attachment was wrongful.” It is always advantageous to ask the Court to issue an undertaking as large as reasonably possible, to put pressure on the moving party.
In closing, please always remain mindful that while litigation can be painful, unpleasant, and mind-numbingly slow, sometimes a good defensive strategy is delay, delay, delay. However, if a defendant is faced with a writ of attachment, it needs to be prepared with good litigation counsel to protect its assets pending the outcome of the lengthy litigation.