arrow left
arrow right
  • East West Bank vs HERBL IncUnlimited Breach of Contract/Warranty (06) document preview
  • East West Bank vs HERBL IncUnlimited Breach of Contract/Warranty (06) document preview
  • East West Bank vs HERBL IncUnlimited Breach of Contract/Warranty (06) document preview
  • East West Bank vs HERBL IncUnlimited Breach of Contract/Warranty (06) document preview
  • East West Bank vs HERBL IncUnlimited Breach of Contract/Warranty (06) document preview
  • East West Bank vs HERBL IncUnlimited Breach of Contract/Warranty (06) document preview
  • East West Bank vs HERBL IncUnlimited Breach of Contract/Warranty (06) document preview
  • East West Bank vs HERBL IncUnlimited Breach of Contract/Warranty (06) document preview
						
                                

Preview

1 Christopher D. Nissen, Esq. (SBN 202034) Adam E. Wayne (SBN 332534) 2 WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP 3 555 S Flower St, Suite 2900 Los Angeles, CA 90071-2407 4 Telephone: (213) 443-5100 Facsimile: (213) 445-5101 5 Email: christopher.nissen@wilsonelser.com adam.wayne@wilsonelser.com 6 Attorneys for Claimant, CENTRAL COAST AGRICULTURE, INC. 7 dba RAW GARDEN 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF SANTA BARBARA – SOUTH COUNTY DIVISION 10 11 EAST WEST BANK, a California state Case No.: 23CV02629 banking corporation, [Assigned for all Purposes to the Honorable 12 Colleen K. Stern, Dept. 5] 13 Plaintiff, CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW 14 v. GARDEN’S OPPOSITION TO RECEIVER KEVIN SINGER’S MOTION FOR 15 ISSUANCE OF ORDER AUTHORIZING HERBL, INC., a California corporation dba RECEIVER TO DISTRIBUTE FUNDS TO 16 HERBL, HERBL DISTRIBUTION EAST WEST BANK; and PROOF OF SOLUTIONS, and HDS NATURALS, SERVICE 17 Defendant. Date: April 29, 2024 18 Time: 10:00 A.M. Dept. 5 19 Complaint Filed: June 20, 2023 20 Trial Date: None Set 21 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 1 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S OPPOSITION TO KEVIN SINGER’S MOTION FOR ISSUANCE OF ORDER AUTHORIZING RECEIVER TO DISTRIBUTE FUNDS TO EAST WEST BANK 295645542v.2 1 OPPOSITION TO MOTION TO DISTRIBUTE FUNDS TO EAST WEST BANK 2 I. INTRODUCTION 3 Claimant Central Coast Agriculture, Inc. (“Claimant” or “CCA”) opposes the motion to 4 distribute the funds to East West Bank in the receivership estate filed by State Court Receiver Kevin 5 Singer (“Receiver”). 6 Claimant has a pending motion before this court seeking a Right to Attach Order and Order 7 permitting creation of a lien, set for hearing concurrent with this motion. 8 As discussed in Claimant’s pending Motion, Defendant Herbl, Inc. (“Herbl”) owes Claimant 9 and Proposed Intervenor Central Coast Agriculture, Inc. dba Raw Garden (“CCA”) $6,624,481.52 in 10 unpaid invoices, plus attorney’s fees under contract between the parties (i.e., Supplier Agreement for 11 Distribution of Products giving rise to CCA’s filing of its Verified Cross-Complaint (herein “Verified 12 CCA Cross-Complaint") 13 On October 1, 2019, CCA and Herbl entered into the Agreement. Not long after CCA and 14 Herbl began working together, it became clear that Herbl was unable and unwilling to meet its 15 obligations under the Agreement or make payments due to CCA. CCA repeatedly notified Herbl that 16 it was in breach of the Agreement and CCA continually tried to make its relationship with Herbl 17 work. However, Herbl remained in breach of the Agreement. By May 2021, the parties understood 18 that Herbl would not be able to fulfill the contract obligations, meet sales goals or timely pay invoices 19 and CCA informed Herb it was considering moving its distribution needs to Nabis and terminating 20 the Agreement with Herbl (which CCA eventually was forced to do). 21 Herbl’s Receiver is in the process of selling its assets, and counsel for the Receiver has 22 recently taken over representing Herbl in the CCA lawsuit. Although creditors are under an Order 23 form this Court limiting actions they may take against Herbl, Herbl is allowed to continue prosecuting 24 its claims against CCA in the other lawsuit. This creates the inequitable situation where Herbl may 25 vigorously prosecute its claims against CCA and recover is it prevails at trial; however, if CCA 26 prevails at trial, Herbl would be shielded from any CCA judgment under the Receivership order. If 27 this Court is inclined to allow Herbl to proceed with its litigation against CCA, the Court should grant 28 2 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S OPPOSITION TO KEVIN SINGER’S MOTION FOR ISSUANCE OF ORDER AUTHORIZING RECEIVER TO DISTRIBUTE FUNDS TO EAST WEST BANK 295645542v.2 1 CCA a right to attach order and lien, and/or require Herbl to post a bond, in order to protect equally 2 the rights of Herbl and CCA to any recovery in their litigation. Accordingly, CCA is entitled to, and 3 now seeks a Right to Attach Order and Writ of Attachment in the instant Action filed by East West 4 Bank to allow CCA to place an attachment lien on Herbl’s assets to secure funds to pay the final 5 judgment in the CCA v. Herbl Litigation. CCA’s Application is vital to protect CCA’s interests, 6 given the impending asset sale by Herbl’s Receiver or Court Order shielding Herbl from debt actions 7 by unsecured creditors. 8 Thus, Claimant’s primary objection to the Motion is the distribution of money to East West 9 Bank without any reserve for CCA’s significant monetary damages claims again Herbl, while Herbl 10 is free to pursue its own litigation against CCA, arising out of the same set of facts and seeking to 11 recover for breach of contract. 12 II. STATEMENT OF FACTS 13 To avoid duplication and lessen the burden on the Court in its review of this matter, CCA 14 incorporates the Statement of Facts filed in connection with its Motion for Writ of Attachment, filed 15 on March 8, 2024, and set for hearing on April 29, 2024. (See Request for Judicial Notice (“RJN”) 16 Exhibit A). As set forth in CCA’s moving papers in its Motion for Writ of Attachment, Herbl owes 17 CCA $6,624,481.52 in past due invoices. (Id). Herbl also breached its Agreement with CCA by 18 consistently failed to deliver within the agreed-upon 3-day window, provided false analysis of 19 delivery times, and failed to achieve agreed upon sales goals. While Herbl beat CCA in the race to 20 the courthouse steps and filed its Complaint against CCA first, it is CCA who is the aggrieved party 21 and is now left in the inequitable and costly position of defending Herbl’s specious claims for breach 22 of contract, while its remaining assets are depleted. 23 III. CCA’S PENDING MOTION FOR WRIT OF ATTACHMENT SETS FOR GOOD 24 CAUSE WHY THE RECEIVED SHOULD NOT BE PERMITTED TO 25 DISTRIBUTE HERBL’S REMAINING ASSETS TO EAST WEST BANK 26 CCA’s requested relief in its Motion for Writ of Attachment and Creation of Lien seeks to 27 preserve the status quo and preserve Herbl’s remaining assets until there has been a final judgment 28 3 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S OPPOSITION TO KEVIN SINGER’S MOTION FOR ISSUANCE OF ORDER AUTHORIZING RECEIVER TO DISTRIBUTE FUNDS TO EAST WEST BANK 295645542v.2 1 in the Herbl v. CCA matter. Herbl should not be allowed to simultaneously use the Receiver as a 2 sword to comfortably pursue its claims and attorney’s fees in its lawsuit against CCA and as a shield 3 from CCA’s cross claims and fees in this action because their assets have been depleted by the 4 Receiver. 5 CCA’s Motion Seeking Right to Attach Order and Writ of Attachment was necessary to 6 protect against the disbursement and dissipation of assets while judicial proceedings are pending. 7 (Loeb & Loeb v. Beverly Glen Music (1985) 166 Cal.App.3d 1110, 1118.) 8 A court “shall issue a right to attach order” if it finds all of the following: 9 (1) The claim upon which the attachment is based is one upon which an attachment may be issued; 10 (2) The plaintiff has established the probable validity of the claim upon which the attachment is based; 11 (3) The attachment is not sought for a purpose other than recovery on the claim upon which the attachment is based; and 12 (4) The amount to be secured by the attachment is greater than zero. 13 (Code Civ. Proc., § 484.090, subd. (a).) 14 CCA has satisfied these elements, as set forth below in its moving papers. CCA’s claim is 15 ascertainable, as under the Agreement, as Herbl owes CCA the amount of $6,624,481.52. CCA is 16 also likely to prevail on its claims against Herbl, as set forth in CCA’s Motion for Writ of Attachment. 17 CCA seeks attachment for the purpose of obtaining recovery on the claim upon which the attachment 18 is based. Without the enforcement of CCA’s right to attachment with respect to Herbl’s obligations 19 and past due payments under the contract, CCA bears the risk that assets may become unavailable to 20 satisfy the judgment in this case. CAA also satisfies the final requirement for issuance of a Right to 21 Attach Order as it seeks a monetary amount of $6,624,481.52. 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 4 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S OPPOSITION TO KEVIN SINGER’S MOTION FOR ISSUANCE OF ORDER AUTHORIZING RECEIVER TO DISTRIBUTE FUNDS TO EAST WEST BANK 295645542v.2 1 IV. CONCLUSION 2 Based on the foregoing, CCA respectfully requests the Court deny the Receiver’s Motion or 3 alternatively, grant CCA’s concurrently filed Motion for Writ of Attachment and Creation of Lien to 4 preserve funds in the interests of justice. 5 6 Dated: April 16, 2024 WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP 7 8 By: /s/ Christopher D. Nissen 9 Christopher D. Nissen Adam E. Wayne 10 Attorneys for Defendants/Cross-Complainants CENTRAL COAST AGRICULTURE, INC. 11 dba RAW GARDEN 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S OPPOSITION TO KEVIN SINGER’S MOTION FOR ISSUANCE OF ORDER AUTHORIZING RECEIVER TO DISTRIBUTE FUNDS TO EAST WEST BANK 295645542v.2 1 PROOF OF SERVICE Code Civ. Proc., § 1013b 2 East West Bank. vs. Herbl, Inc. Santa Barbara Court Case No: 23CV02629 3 WEMED File No: 24879.00001 4 STATE OF CALIFORNIA, COUNTY OF LOS ANGELES 5 I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to this action. My business address is 555 South Flower Street, Suite 2900, Los Angeles, 6 California 90071. My electronic service address is Alethia.Whitehead@wilsonelser.com 7 On April 16, 2024, I caused the foregoing document, entitled “CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S OPPOSITION TO KEVIN 8 SINGER’S MOTION FOR ISSUANCE OF ORDER AUTHORIZING RECEIVER TO DISTRIBUTE FUNDS TO EAST WEST BANK” to be served on the person(s) identified in the 9 attached Service List, at their respective [residential / business / electronic service] address(es), by the below-indicated means: 10 [X] (BY ELECTRONIC SERVICE) I electronically served the foregoing document in PDF 11 format on behalf of CENTRAL COAST AGRICULTURE, INC. dba RAW GARDEN 12 I declare under penalty of perjury under the laws of the State of California that the above is true and correct. 13 Executed on April 16, 2024, at Los Angeles, California. 14 /s/ Alethia Whitehead 15 Alethia Whitehead 16 17 18 19 20 21 22 23 24 25 26 27 28 6 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S OPPOSITION TO KEVIN SINGER’S MOTION FOR ISSUANCE OF ORDER AUTHORIZING RECEIVER TO DISTRIBUTE FUNDS TO EAST WEST BANK 295645542v.2 1 SERVICE LIST East West Bank. vs. Herbl, Inc. 2 Santa Barbara Court Case No: 23CV02629 WEMED File No: 24879.00001 3 Marshall J. Hogan (SBN: 286147) Attorneys for Plaintiff, 4 mhogan@swlaw.com EAST WEST BANK 5 Andrew B Still (SBN: 312444) astill@swlaw.com 6 SNELL & WILMER L.L.P. 600 Anton Boulevard, Suite 1400 7 Costa Mesa, CA 92626-7689 Telephone: 714.427.7000 8 Facsimile: 714.427.7799 9 Bryce A. Suzuki (pro hac vice forthcoming) 10 bsuzuki@swlaw.com SNELL & WILMER L.L.P. 11 One East Washington Street, Suite 2700 Phoenix, AZ 85004 12 Telephone: 602.382.6000 13 Facsimile: 602.382.6070 14 Michael S. Fauver (SBN: 205829) Attorneys for Defendant, Marcus J. Kocmur (SBN: 208702) HERBL, INC. 15 Ian L.M. Durdle (SBN: 329187) 16 FAUVER, LARGE, ARCHBALD & SPRAY, LLP 820 State Street, 4th Floor 17 Santa Barbara, CA 93101 Tel: (805) 966-7000 Fax: (805) 966-7227 18 mfauver@flasllp.com mkocmur@flasllp.com 19 idurdle@flasllp.com 20 Marina Ratliff, paralegal mratliff@flasllp.com 21 Lawrence J. Conlan (SBN: 221350) Attorneys for Defendant, 22 David L. Cousineau (SBN: 298801) HERBL, INC. CAPPELLO & NOËL LLP 23 831 State Street 24 Santa Barbara, CA 93101 Tel: (805) 564-2444 Fax: (805) 965-5950 25 lconlan@cappellonoel.com dcousineau@cappellonoel.com 26 rlloyd@cappellonoel.com adickerson@cappellonoel.com 27 mduong@cappellonoel.com 28 jwarson@cappellonoel.com 7 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S OPPOSITION TO KEVIN SINGER’S MOTION FOR ISSUANCE OF ORDER AUTHORIZING RECEIVER TO DISTRIBUTE FUNDS TO EAST WEST BANK 295645542v.2 1 Blake C. Alsbrook (SBN: 262603) Attorneys for Receiver, 2 ERVIN COHEN & JESSUP LLP KEVIN SINGER 3 9401 Wilshire Boulevard, Twelfth Floor Beverly Hills, CA 90212-2974 4 Tel.: (310) 273-6333 Fax (310) 859-2325 balsbrook@ecjlaw.com 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S OPPOSITION TO KEVIN SINGER’S MOTION FOR ISSUANCE OF ORDER AUTHORIZING RECEIVER TO DISTRIBUTE FUNDS TO EAST WEST BANK 295645542v.2