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 EAST WEST BANK, a California state Case No.: 23CV02629
banking corporation, [Assigned for all Purposes to the Honorable
11 Colleen K. Stern, Dept. 5]
12 Plaintiff, CLAIMANT CENTRAL COAST
AGRICULTURE, INC. DBA RAW
13 v. GARDEN’S REPLY IN SUPPORT
APPLICATION FOR WRIT OF
14 ATTACHMENT AND CREATION OF LIEN
HERBL, INC., a California corporation dba
15 HERBL, HERBL DISTRIBUTION Date: April 29, 2024
SOLUTIONS, and HDS NATURALS, Time: 10:00 A.M.
16 Dept. 5
Defendant.
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CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR
WRIT OF ATTACHMENT AND CREATION OF LIEN
295811939v.1
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REPLY IN SUPPORT OF WRIT OF ATTACHMENT AND CREATION OF LIEN
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I. INTRODUCTION
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Claimant Central Coast Agriculture, Inc. (“Claimant” or “CCA”) hereby submits the
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following Reply in support of its Application for Writ of Attachment and Creation of Lien.
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The Opposition filed by Receiver Kevin Singer (“Receiver”) is replete with red herrings
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regarding rulings on CCA’s prior two applications for Writs of Attachment, filed in the Herbl v. CCA
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litigation, SB Case No. 22CV00077 (“Herbl Litigation”), currently pending in Department 4 of this
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Court. However, each of those rulings denied CCA’s application without prejudice and for reasons
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that have zero bearing on the instant Application filed herein.
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The Receiver also concedes that this Court has authority to grant the relief CCA is requesting,
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and the Receiver fails to substantively oppose CCA’s evidence or good cause for the relief sought.
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Finally, the relief sought by CCA is for a proper purpose, as a denial of its Application would
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result in an extremely inequitable and unjust result.
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II. THE PRIOR RULINGS DENYING CCA’S PRIOR APPLICATIONS WERE
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WITOUT PREJUDICE AND HAVE NO BEARING ON THE INSTANT
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APPLICATOIN
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The first Application, filed on March 7, 2022, was denied by Hon. Donna Geck on August
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12, 2022 on grounds that CCA failed to proffer admissible evidence in support of its Application
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because it relied on its Verified Cross-Complaint, which Herbl objected to on grounds of lack of
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foundation, inadmissible hearsay, and without authentication (see 8-12-2022 Minute Order attached
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as Exhibit “C” to the Receiver’s Request for Judicial Notice (“RJN”)). CCA’s instant Application
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relies upon admissible evidence, including declarations and deposition transcripts. In fact, the
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Receiver has not submitted a single objection to the evidence proffered by CCA in support of its
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Application. Therefore, the Receiver’s reliance on the initial ruling denying CCA’s March 7, 2022
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Application has no relevance to CCA’s instant Application.
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Similarly, the Receiver’s reference to CCA’s Renewed Application, filed in Department 4 in
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the Herbl Litigation matter, has no precedential or probative value in connection with CCA’s instant
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CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR
WRIT OF ATTACHMENT AND CREATION OF LIEN
295811939v.1
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Application because the Judge Geck’s ruling denying the Renewed Application on December 15,
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2023, was without prejudice, and Judge Geck’s basis for denying the Renewed Application was
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because CCA did not first seek approval from this Court in the instant Receivership proceedings (see
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12-15-23 Minute Order attached as Exhibit F to the Receiver’s RJN). As CCA now seeks authority
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from this Court, as suggested by Judge Geck in her December 15, 2023 Order, the Receiver’s
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reference to the Order in its Opposition papers is confusing and does not advance his argument.
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III. THE RECEIVER CONCEDES THAT CCA CAN SEEK RELIEF FROM THIS
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COURT
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Next, the Receiver concedes that this Court has authority to grant the relief sought by CCA
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by at page 6, lines 3-4 [“Property in the hands of a receiver is not subject to be appropriated in
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attachment or garnishment proceedings except by leave of the court appointing the receiver” (citing
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Clark on Receivers (3rd Ed. 1993) §§276 & 624(b))] and page 6 lines 19-20 [“Property in the custody
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of a receiver is generally not subject to garnishment or attachment without the court’s consent” (citing
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Robins v. Bueno (1968) 262 Cal.App.2d 79, 84-85.)]. This is precisely why CCA has filed its
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Application in this Court, as suggested in Judge Geck’s December 15, 2022, ruling denying CCA’s
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Renewed Application.
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IV. CCA FAILS TO SUBSTANTIVELY OPPOSE THE UNDERLYING MERITS OF
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CCA’S CLAIMS AGAINST HERBL
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20 First, has failed to substantively object to, or oppose the evidence proffered by CCA in
21 support of the instant Application. Instead, the Receiver makes reference to the Opposition filed by
22 Herbl to CCA’s initial Writ of Application and attempts to incorporate those arguments by way of
23 judicial notice. However, the technical arguments Herbl made in Opposition to CCA’s first
24 Application have been cured by way of the mountain of evidence, supported by witness declarations,
25 that have been filed in the instant Application.
26 A. CCA SEEKS TO ATTACH AN ASCERTAINABLE SUM
27 Contrary to the Receiver’s position, the amount of $6,624,481.52 due and outstanding was
28 clearly stated in CCA’s Verified Cross-Complaint. (See CIT Group/Equip. Fin., Inc. v. Super DVD,
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CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR
WRIT OF ATTACHMENT AND CREATION OF LIEN
295811939v.1
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Inc. (2004) 115 Cal.App.4th 537, 540 (to be sufficiently ascertainable such that attachment will lie
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upon a cause of action for damages for a breach of contract, the amount owed does not need to appear
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on the face of the contract); Hayward Lumber & Inv. Co. v. Const. Prod. Corp. (1952) 110
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Cal.App.2d 386, 387 (“Attachment will lie in an action for breach of contract when it appears by
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reference to the contract, complaint, and affidavit for attachment that the computation of damages
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alleged is reasonable, definite, and readily ascertainable.”).)
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The $6,624,481.52 amount is supported by the Declarations of Thomas Martin and Ryan
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Keeley filed concurrently with CCA’s instant Application. (See e.g. (Declaration of Ryan Keely
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(“Keely Decl.”) ¶ 13).
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B. CCA IS LIKELY TO PREVAIL ON THE MERITS
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CCA demonstrated the probable validity of its breach of contract claim against Herbl by
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proving (a) the existence of a contract, (b) CCA’s performance and subsequent excuse for
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nonperformance of the contract, (c) Herbl’s breach, and (d) resulting damage to CCA. (See, e.g.,
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Tribeca Co., LLC v. First Am. Title Ins. Co. (2015) 239 Cal.App.4th 1088, 1109; Acoustics, Inc. v.
15
Trepte Constr. Co. (1971) 14 Cal.App.3d 887, 913.) While not denying that it failed to perform as
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agreed to under the Agreement, Herbl instead argued in its Opposition relied upon by the Receiver
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(Receiver’s RJN Exhibit “D” (“Herbl Opp.”)) that CCA’s alleged breach and Herbl’s excused
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performance “strongly tip the balance in favor of Herbl.” (Herbl Opp. at 12.) However, these
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defenses are not supported by the law and are, at best for Herbl, “less than fifty percent likely to
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succeed.” (See Code Civ. Proc., § 481.190; Addaday, Inc. v. Artist Int’l Co. (C.D. Cal. May 12,
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2022) No. CV 21-5525-AB (PLAX), 2022 WL 1837514, at *11 (analyzing Cal. Civ. Proc. Code §
22
481.190).)
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The evidence clearly establishes that Herbl breached the Agreement by failing to pay invoices
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on time and by failing to perform its obligations under the contract, including meeting the agreed-
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upon 2021 Sales Goal. These breaches were clear, and Herbl demonstrated by its course of conduct
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that it would be unable to cure them, thereby justifying CCA’s termination. CCA did not breach the
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Agreement by lining up Nabis as a replacement for Herbl, as Nabis did not start distributing CCA’s
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CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR
WRIT OF ATTACHMENT AND CREATION OF LIEN
295811939v.1
1
products until after the Agreement between CCA and Herbl was terminated. CCA not only
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establishes a prima facie case for breach, it also clearly overcomes Herbl’s defenses.
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C. HERBL IS NOT ENTITLED TO AN OFFSET
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The Receiver fails to demonstrate that Herbl is entitled to any reduction or offset of the
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amount CCA seeks to be attached. The Receiver’s reliance on Commercial Code section 2717 is
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misplaced, because in the context of determining the amount subject to a writ of attachment, any
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reduction authorized by law is limited to the following: (1) the amount of indebtedness Herbl has in
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a money judgment against CCA; (2) the amount claimed in Herbl’s complaint or affirmative defense
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and shown would be subject to attachment against CCA; and (3) the value of any security interest
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held by CCA in Herbl’s property, together with the amount by which the acts of CCA have decreased
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that security interest’s value. (Code Civ. Proc., § 483.015, subd. (b))
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Second, Herbl has not established the probable validity of its offsetting claims against CCA.
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As the Court of Appeal has explained:
14 Probable validity of the offsetting claims] is the clear implication of the phrase ‘claim is one
upon which an attachment could be issued’ as set forth in section 483.015, subdivision (b); it
15 is also required as a matter of simple practicality. If, by virtue of making claims that are not
probably valid, a defendant could obtain an offset against a plaintiff’s claim that is probably
16 valid, a defendant could always and quite easily defeat a plaintiff’s right to a prejudgment
attachment. We do not believe that in adopting our state’s prejudgment attachment
17 procedures the Legislature intended to effectively deprive litigants of the right to such
prejudgment relief.
18
19 (Lydig Construction, Inc. v. Martinez Steel Corp. (2015) 234 Cal.App.4th 937, 945 (emphasis in
20 original).)
21 Herbl makes no showing to establish the probable validity of its claims against CCA. Nor
22 does Herbl demonstrate that the amount of supposed offset is fixed or readily ascertainable. The
23 Receiver simply refers to Herbl’s prior arguments made in Opposition to CCA’s first Application
24 and claims that Herbl’s damanges “exceed[] the amount of the attachment by more than $6 million.”
25 However, the Opposition the Receiver cites merely offers unsupported conclusory statements of its
26 speculative lost profits. (Hartwell Decl. ¶¶ 11-12 in support of Herbl Opp (Receiver RNJ Exhibit D.)
27 Herbl cannot even commit to a method for calculating its damages—on the one hand, it suggests
28 basing lost profits on CCA’s estimated sales revenue, and yet it also suggests that lost profits could
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CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR
WRIT OF ATTACHMENT AND CREATION OF LIEN
295811939v.1
1
be based on Herbl’s estimated sales revenue. (Id.) In any event, neither number is based on any
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reasonable calculation of damages or substantiated evidence. Herbl utterly fails to meet its burden,
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and thus is not entitled to offset.
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V. CCA SEEKS A WRIT OF ATTACHMENT AND CREATION OF A LIEN FOR A
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PROPER PURPOSE
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Further, the relief sought by CCA is for a proper purpose, as the CCA is simply seeking to
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prevent the extremely inequitable circumstance wherein despite dueling claims for breach of contract
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in the Herbl Litigation, where each side seeks significant damages and claims a right to recover
9
attorneys fees, Herbl, through its receiver, is free to litigate its case against CCA while at the same,
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claiming to be judgment proof.
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VI. CONCLUSION
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Based on the foregoing, CCA respectfully requests the Court Grant its Motion for Writ of
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Attachment, or in the alternative, that the Court Order the Creation of Lien in the interests of justice.
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Dated: April 22, 2024 WILSON, ELSER, MOSKOWITZ,
15 EDELMAN & DICKER LLP
16
17 By: /s/ Christopher D. Nissen
Christopher D. Nissen
18 Adam E. Wayne
Attorneys for Defendants/Cross-Complainants
19 CENTRAL COAST AGRICULTURE, INC.
dba RAW GARDEN
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CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR
WRIT OF ATTACHMENT AND CREATION OF LIEN
295811939v.1
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
5 STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
6 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,
7 California 90071. My electronic service address is Alethia.Whitehead@wilsonelser.com
8 On April 22, 2024, I caused the foregoing document, entitled “CLAIMANT CENTRAL COAST
AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION
9 FOR WRIT OF ATTACHMENT AND CREATION OF LIEN
10 to be served on the person(s) identified in the attached Service List, at their respective [residential /
business / electronic service] address(es), by the below-indicated means:
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12 [X] (BY ELECTRONIC SERVICE) I electronically served the foregoing document in PDF
format on behalf of CENTRAL COAST AGRICULTURE, INC. dba RAW GARDEN
13
.
14
I declare under penalty of perjury under the laws of the State of California that the above is
15 true and correct.
16 Executed on April 22, 2024, at Los Angeles, California.
17 /s/ Jamie Cho
Jamie Cho
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CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR
WRIT OF ATTACHMENT AND CREATION OF LIEN
295811939v.1
1 SERVICE LIST
East West Bank v. Herbl, Inc.
2 Santa Barbara Court, Case No: 23CV02629
3 WEMED File No: 24879.00001
4 Marshall J. Hogan Attorneys for Plaintiff
mhogan@swlaw.com EAST WEST BANK
5 Andrew B Still (#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)
bsuzukigswlaw.corn
10 SNELL & WILMER L.L.P.
One East Washington Street, Suite 2700
11 Phoenix, AZ 85004
Telephone: 602.382.6000
12 Facsimile: 602.382.6070
13 Michael S. Fauver (SBN: 205829) Attorneys for HERBL, INC.
Marcus J. Kocmur (SBN: 208702)
14 FAUVER, LARGE, ARCHBALD & SPRAY,
LLP 820 State Street, 4th Floor
15 Santa Barbara, CA 93101
Tel: (805) 966-7000 Fax: (805) 966-7227
16
mfauver@flasllp.com
17 mkocmur@flasllp.com
Marina Ratliff, paralegal
18 mratliff@flasllp.com
19 Blake C. Alsbrook, Esq. Associated Attorneys for Plaintiff and Cross-
Russell M. Selmont (SBN 252522) Defendant HERBL, Inc. and its Court-Appointed
20 ERVIN COHEN & JESSUP LLP Receiver, Kevin Singe
9401 Wilshire Boulevard, Twelfth
21 Floor Beverly Hills, California 90212-
2974 Telephone: (310) 273-6333
22 Facsimile: (310) 859-2325
balsbrook@ecjlaw.com
23 rselmont@ecjlaw.com
Larry Russ Courtesy Copies
24 Nathan D. Meyer NA BIONE, INC. DBA NABIS, NABITWO,
Russ August & Kabat LLC
25 12424 Wilshire Boulevard, Suite 1200 LRuss@raklaw.com
Los Angeles, CA 90025 Tel: (310) 826-7474 NMeyer@raklaw.com
26
Fax: (310) 826-6991
27
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CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR
WRIT OF ATTACHMENT AND CREATION OF LIEN
295811939v.1
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 EAST WEST BANK, a California state Case No.: 23CV02629 banking corporation, [Assigned for all Purposes to the Honorable 11 Colleen K. Stern, Dept. 5] 12 Plaintiff, CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW 13 v. GARDEN’S REPLY IN SUPPORT APPLICATION FOR WRIT OF 14 ATTACHMENT AND CREATION OF LIEN HERBL, INC., a California corporation dba 15 HERBL, HERBL DISTRIBUTION Date: April 29, 2024 SOLUTIONS, and HDS NATURALS, Time: 10:00 A.M. 16 Dept. 5 Defendant. 17 18 19 /// 20 /// 21 /// 22 /// 23 /// 24 /// 25 /// 26 27 28 1 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR WRIT OF ATTACHMENT AND CREATION OF LIEN 295811939v.1 1 REPLY IN SUPPORT OF WRIT OF ATTACHMENT AND CREATION OF LIEN 2 I. INTRODUCTION 3 Claimant Central Coast Agriculture, Inc. (“Claimant” or “CCA”) hereby submits the 4 following Reply in support of its Application for Writ of Attachment and Creation of Lien. 5 The Opposition filed by Receiver Kevin Singer (“Receiver”) is replete with red herrings 6 regarding rulings on CCA’s prior two applications for Writs of Attachment, filed in the Herbl v. CCA 7 litigation, SB Case No. 22CV00077 (“Herbl Litigation”), currently pending in Department 4 of this 8 Court. However, each of those rulings denied CCA’s application without prejudice and for reasons 9 that have zero bearing on the instant Application filed herein. 10 The Receiver also concedes that this Court has authority to grant the relief CCA is requesting, 11 and the Receiver fails to substantively oppose CCA’s evidence or good cause for the relief sought. 12 Finally, the relief sought by CCA is for a proper purpose, as a denial of its Application would 13 result in an extremely inequitable and unjust result. 14 II. THE PRIOR RULINGS DENYING CCA’S PRIOR APPLICATIONS WERE 15 WITOUT PREJUDICE AND HAVE NO BEARING ON THE INSTANT 16 APPLICATOIN 17 The first Application, filed on March 7, 2022, was denied by Hon. Donna Geck on August 18 12, 2022 on grounds that CCA failed to proffer admissible evidence in support of its Application 19 because it relied on its Verified Cross-Complaint, which Herbl objected to on grounds of lack of 20 foundation, inadmissible hearsay, and without authentication (see 8-12-2022 Minute Order attached 21 as Exhibit “C” to the Receiver’s Request for Judicial Notice (“RJN”)). CCA’s instant Application 22 relies upon admissible evidence, including declarations and deposition transcripts. In fact, the 23 Receiver has not submitted a single objection to the evidence proffered by CCA in support of its 24 Application. Therefore, the Receiver’s reliance on the initial ruling denying CCA’s March 7, 2022 25 Application has no relevance to CCA’s instant Application. 26 Similarly, the Receiver’s reference to CCA’s Renewed Application, filed in Department 4 in 27 the Herbl Litigation matter, has no precedential or probative value in connection with CCA’s instant 28 2 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR WRIT OF ATTACHMENT AND CREATION OF LIEN 295811939v.1 1 Application because the Judge Geck’s ruling denying the Renewed Application on December 15, 2 2023, was without prejudice, and Judge Geck’s basis for denying the Renewed Application was 3 because CCA did not first seek approval from this Court in the instant Receivership proceedings (see 4 12-15-23 Minute Order attached as Exhibit F to the Receiver’s RJN). As CCA now seeks authority 5 from this Court, as suggested by Judge Geck in her December 15, 2023 Order, the Receiver’s 6 reference to the Order in its Opposition papers is confusing and does not advance his argument. 7 III. THE RECEIVER CONCEDES THAT CCA CAN SEEK RELIEF FROM THIS 8 COURT 9 Next, the Receiver concedes that this Court has authority to grant the relief sought by CCA 10 by at page 6, lines 3-4 [“Property in the hands of a receiver is not subject to be appropriated in 11 attachment or garnishment proceedings except by leave of the court appointing the receiver” (citing 12 Clark on Receivers (3rd Ed. 1993) §§276 & 624(b))] and page 6 lines 19-20 [“Property in the custody 13 of a receiver is generally not subject to garnishment or attachment without the court’s consent” (citing 14 Robins v. Bueno (1968) 262 Cal.App.2d 79, 84-85.)]. This is precisely why CCA has filed its 15 Application in this Court, as suggested in Judge Geck’s December 15, 2022, ruling denying CCA’s 16 Renewed Application. 17 IV. CCA FAILS TO SUBSTANTIVELY OPPOSE THE UNDERLYING MERITS OF 18 CCA’S CLAIMS AGAINST HERBL 19 20 First, has failed to substantively object to, or oppose the evidence proffered by CCA in 21 support of the instant Application. Instead, the Receiver makes reference to the Opposition filed by 22 Herbl to CCA’s initial Writ of Application and attempts to incorporate those arguments by way of 23 judicial notice. However, the technical arguments Herbl made in Opposition to CCA’s first 24 Application have been cured by way of the mountain of evidence, supported by witness declarations, 25 that have been filed in the instant Application. 26 A. CCA SEEKS TO ATTACH AN ASCERTAINABLE SUM 27 Contrary to the Receiver’s position, the amount of $6,624,481.52 due and outstanding was 28 clearly stated in CCA’s Verified Cross-Complaint. (See CIT Group/Equip. Fin., Inc. v. Super DVD, 3 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR WRIT OF ATTACHMENT AND CREATION OF LIEN 295811939v.1 1 Inc. (2004) 115 Cal.App.4th 537, 540 (to be sufficiently ascertainable such that attachment will lie 2 upon a cause of action for damages for a breach of contract, the amount owed does not need to appear 3 on the face of the contract); Hayward Lumber & Inv. Co. v. Const. Prod. Corp. (1952) 110 4 Cal.App.2d 386, 387 (“Attachment will lie in an action for breach of contract when it appears by 5 reference to the contract, complaint, and affidavit for attachment that the computation of damages 6 alleged is reasonable, definite, and readily ascertainable.”).) 7 The $6,624,481.52 amount is supported by the Declarations of Thomas Martin and Ryan 8 Keeley filed concurrently with CCA’s instant Application. (See e.g. (Declaration of Ryan Keely 9 (“Keely Decl.”) ¶ 13). 10 B. CCA IS LIKELY TO PREVAIL ON THE MERITS 11 CCA demonstrated the probable validity of its breach of contract claim against Herbl by 12 proving (a) the existence of a contract, (b) CCA’s performance and subsequent excuse for 13 nonperformance of the contract, (c) Herbl’s breach, and (d) resulting damage to CCA. (See, e.g., 14 Tribeca Co., LLC v. First Am. Title Ins. Co. (2015) 239 Cal.App.4th 1088, 1109; Acoustics, Inc. v. 15 Trepte Constr. Co. (1971) 14 Cal.App.3d 887, 913.) While not denying that it failed to perform as 16 agreed to under the Agreement, Herbl instead argued in its Opposition relied upon by the Receiver 17 (Receiver’s RJN Exhibit “D” (“Herbl Opp.”)) that CCA’s alleged breach and Herbl’s excused 18 performance “strongly tip the balance in favor of Herbl.” (Herbl Opp. at 12.) However, these 19 defenses are not supported by the law and are, at best for Herbl, “less than fifty percent likely to 20 succeed.” (See Code Civ. Proc., § 481.190; Addaday, Inc. v. Artist Int’l Co. (C.D. Cal. May 12, 21 2022) No. CV 21-5525-AB (PLAX), 2022 WL 1837514, at *11 (analyzing Cal. Civ. Proc. Code § 22 481.190).) 23 The evidence clearly establishes that Herbl breached the Agreement by failing to pay invoices 24 on time and by failing to perform its obligations under the contract, including meeting the agreed- 25 upon 2021 Sales Goal. These breaches were clear, and Herbl demonstrated by its course of conduct 26 that it would be unable to cure them, thereby justifying CCA’s termination. CCA did not breach the 27 Agreement by lining up Nabis as a replacement for Herbl, as Nabis did not start distributing CCA’s 28 4 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR WRIT OF ATTACHMENT AND CREATION OF LIEN 295811939v.1 1 products until after the Agreement between CCA and Herbl was terminated. CCA not only 2 establishes a prima facie case for breach, it also clearly overcomes Herbl’s defenses. 3 C. HERBL IS NOT ENTITLED TO AN OFFSET 4 The Receiver fails to demonstrate that Herbl is entitled to any reduction or offset of the 5 amount CCA seeks to be attached. The Receiver’s reliance on Commercial Code section 2717 is 6 misplaced, because in the context of determining the amount subject to a writ of attachment, any 7 reduction authorized by law is limited to the following: (1) the amount of indebtedness Herbl has in 8 a money judgment against CCA; (2) the amount claimed in Herbl’s complaint or affirmative defense 9 and shown would be subject to attachment against CCA; and (3) the value of any security interest 10 held by CCA in Herbl’s property, together with the amount by which the acts of CCA have decreased 11 that security interest’s value. (Code Civ. Proc., § 483.015, subd. (b)) 12 Second, Herbl has not established the probable validity of its offsetting claims against CCA. 13 As the Court of Appeal has explained: 14 Probable validity of the offsetting claims] is the clear implication of the phrase ‘claim is one upon which an attachment could be issued’ as set forth in section 483.015, subdivision (b); it 15 is also required as a matter of simple practicality. If, by virtue of making claims that are not probably valid, a defendant could obtain an offset against a plaintiff’s claim that is probably 16 valid, a defendant could always and quite easily defeat a plaintiff’s right to a prejudgment attachment. We do not believe that in adopting our state’s prejudgment attachment 17 procedures the Legislature intended to effectively deprive litigants of the right to such prejudgment relief. 18 19 (Lydig Construction, Inc. v. Martinez Steel Corp. (2015) 234 Cal.App.4th 937, 945 (emphasis in 20 original).) 21 Herbl makes no showing to establish the probable validity of its claims against CCA. Nor 22 does Herbl demonstrate that the amount of supposed offset is fixed or readily ascertainable. The 23 Receiver simply refers to Herbl’s prior arguments made in Opposition to CCA’s first Application 24 and claims that Herbl’s damanges “exceed[] the amount of the attachment by more than $6 million.” 25 However, the Opposition the Receiver cites merely offers unsupported conclusory statements of its 26 speculative lost profits. (Hartwell Decl. ¶¶ 11-12 in support of Herbl Opp (Receiver RNJ Exhibit D.) 27 Herbl cannot even commit to a method for calculating its damages—on the one hand, it suggests 28 basing lost profits on CCA’s estimated sales revenue, and yet it also suggests that lost profits could 5 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR WRIT OF ATTACHMENT AND CREATION OF LIEN 295811939v.1 1 be based on Herbl’s estimated sales revenue. (Id.) In any event, neither number is based on any 2 reasonable calculation of damages or substantiated evidence. Herbl utterly fails to meet its burden, 3 and thus is not entitled to offset. 4 V. CCA SEEKS A WRIT OF ATTACHMENT AND CREATION OF A LIEN FOR A 5 PROPER PURPOSE 6 Further, the relief sought by CCA is for a proper purpose, as the CCA is simply seeking to 7 prevent the extremely inequitable circumstance wherein despite dueling claims for breach of contract 8 in the Herbl Litigation, where each side seeks significant damages and claims a right to recover 9 attorneys fees, Herbl, through its receiver, is free to litigate its case against CCA while at the same, 10 claiming to be judgment proof. 11 VI. CONCLUSION 12 Based on the foregoing, CCA respectfully requests the Court Grant its Motion for Writ of 13 Attachment, or in the alternative, that the Court Order the Creation of Lien in the interests of justice. 14 Dated: April 22, 2024 WILSON, ELSER, MOSKOWITZ, 15 EDELMAN & DICKER LLP 16 17 By: /s/ Christopher D. Nissen Christopher D. Nissen 18 Adam E. Wayne Attorneys for Defendants/Cross-Complainants 19 CENTRAL COAST AGRICULTURE, INC. dba RAW GARDEN 20 21 22 23 24 25 26 27 28 6 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR WRIT OF ATTACHMENT AND CREATION OF LIEN 295811939v.1 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 5 STATE OF CALIFORNIA, COUNTY OF LOS ANGELES 6 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, 7 California 90071. My electronic service address is Alethia.Whitehead@wilsonelser.com 8 On April 22, 2024, I caused the foregoing document, entitled “CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION 9 FOR WRIT OF ATTACHMENT AND CREATION OF LIEN 10 to be served on the person(s) identified in the attached Service List, at their respective [residential / business / electronic service] address(es), by the below-indicated means: 11 12 [X] (BY ELECTRONIC SERVICE) I electronically served the foregoing document in PDF format on behalf of CENTRAL COAST AGRICULTURE, INC. dba RAW GARDEN 13 . 14 I declare under penalty of perjury under the laws of the State of California that the above is 15 true and correct. 16 Executed on April 22, 2024, at Los Angeles, California. 17 /s/ Jamie Cho Jamie Cho 18 19 20 21 22 23 24 25 26 27 28 7 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR WRIT OF ATTACHMENT AND CREATION OF LIEN 295811939v.1 1 SERVICE LIST East West Bank v. Herbl, Inc. 2 Santa Barbara Court, Case No: 23CV02629 3 WEMED File No: 24879.00001 4 Marshall J. Hogan Attorneys for Plaintiff mhogan@swlaw.com EAST WEST BANK 5 Andrew B Still (#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) bsuzukigswlaw.corn 10 SNELL & WILMER L.L.P. One East Washington Street, Suite 2700 11 Phoenix, AZ 85004 Telephone: 602.382.6000 12 Facsimile: 602.382.6070 13 Michael S. Fauver (SBN: 205829) Attorneys for HERBL, INC. Marcus J. Kocmur (SBN: 208702) 14 FAUVER, LARGE, ARCHBALD & SPRAY, LLP 820 State Street, 4th Floor 15 Santa Barbara, CA 93101 Tel: (805) 966-7000 Fax: (805) 966-7227 16 mfauver@flasllp.com 17 mkocmur@flasllp.com Marina Ratliff, paralegal 18 mratliff@flasllp.com 19 Blake C. Alsbrook, Esq. Associated Attorneys for Plaintiff and Cross- Russell M. Selmont (SBN 252522) Defendant HERBL, Inc. and its Court-Appointed 20 ERVIN COHEN & JESSUP LLP Receiver, Kevin Singe 9401 Wilshire Boulevard, Twelfth 21 Floor Beverly Hills, California 90212- 2974 Telephone: (310) 273-6333 22 Facsimile: (310) 859-2325 balsbrook@ecjlaw.com 23 rselmont@ecjlaw.com Larry Russ Courtesy Copies 24 Nathan D. Meyer NA BIONE, INC. DBA NABIS, NABITWO, Russ August & Kabat LLC 25 12424 Wilshire Boulevard, Suite 1200 LRuss@raklaw.com Los Angeles, CA 90025 Tel: (310) 826-7474 NMeyer@raklaw.com 26 Fax: (310) 826-6991 27 28 8 CLAIMANT CENTRAL COAST AGRICULTURE, INC. DBA RAW GARDEN’S REPLY IN SUPPORT APPLICATION FOR WRIT OF ATTACHMENT AND CREATION OF LIEN 295811939v.1