LYDIG CONSTRUCTION, INC., Plаintiff and Respondent, v. MARTINEZ STEEL CORPORATION, Defendant and Appellant.
No. D066854
Fourth Dist., Div. One.
Feb. 26, 2015.
234 Cal. App. 4th 937
Cohen & Lord, Karen D. Maher, James F. Boyle and Nairi S. Gruzenski for Defendant and Appellant.
OPINION
BENKE, Acting P. J.—The plaintiff and respondent in this construction contract dispute, Lydig Construction, Inc. (Lydig), was the general contractor on a large public works project. Defendant and appellant, Martinez Steel Corporation (Martinez), was the original steel supply subcontractor on the project. Lydig sued Martinez for additional costs Lydig incurred by virtue of the fact Martinez failed to supply steel for the project in a timely manner and Lydig, with the public agency‘s approval, had been required to replace Martinez as the steel supplier.
Shortly after Lydig filed its complaint against Martinez, Lydig moved for a right to attach order and a writ of attachment. In support of its motion, Lydig presented the trial court with its business records and dеclarations from its employees. The evidence Lydig presented set forth the circumstances that gave rise to Lydig‘s claims against Martinez and the amount of its claims. Martinez opposed Lydig‘s motion and presented the trial court with declarations from one of its employees that set forth its contention Lydig owed it for, among other items, steel Martinez had delivered to the project. In addition, shortly before the hearing on Lydig‘s motion, Martinez filed a cross-complaint in which it alleged claims that, if successful, would entirely offset Lydig‘s claims against it.
The trial court granted Lydig‘s motion for a right to attach order and issued writs of attachment in the amount of $203,315. Martinez filed a timely notice of appeal and, as we explain, we reject Martinez‘s contention on appeal that its cross-complaint, as a matter of law, prevented the trial court from issuing a writ of attachment against it. We also reject Martinez‘s contention that Lydig‘s application for a writ of attachment was not supported by substantial evidence.
FACTUAL AND PROCEDURAL BACKGROUND
In 2010, Lydig was the successful bidder on a project to expand San Bernardino County‘s (the county) Adelanto Detention Center (the project) and entered into a contract with the county to comрlete the project. Lydig‘s bid was based in part on a subcontractor‘s bid it had received from Martinez for reinforcing steel (rebar) needed to complete the project. After it was awarded the general contract on the project, Lydig entered into a subcontract with Martinez, which was effective on January 14, 2011.
In February 2012, Lydig became concerned about Martinez‘s ability to perform the terms of the contract. At that point, Martinez was unable to obtain raw steel from its steel supplier other than on a cash basis. In light of that circumstance, Lydig took it upon itself to purchase stеel from the supplier and arrange to ship the steel to Martinez for fabrication as rebar and installation at the project by Martinez employees. Lydig intervened in this manner from February 2012 until June 2012.
In June 2012, Lydig discovered that 100,000 pounds of steel it had purchased and delivered to Martinez for use on the expansiоn project had been diverted by Martinez to other projects where Martinez was obligated to provide rebar. In response to this discovery, Lydig began obtaining rebar from another supplier and, for 10 days in June 2012, Lydig used Martinez employees to install the substituted rebar at the expansion project.
In June 2012, Lydig аlso began a formal process to replace Martinez as its rebar subcontractor. In August 2012, the county conducted a hearing on the issue and approved termination of Martinez‘s subcontract. The county hearing officer found: “Martinez Steel has failed to perform its sub-contract in that it is unable to procure the steel to be fabricated into rebar and installed on the project, required by the sub-contract. [¶] . . . [¶] Martinez Steel has also failed to perform its sub-contract in that it has not been able to, and admits that it cannot, provided the payment and performance bonds required by the sub-cоntract. [¶] . . . [¶] Lydig has presented credible evidence, in significant respects unrefuted or admitted by Martinez Steel to be true, supporting its contention that the sub-contractor is untrustworthy and lacks the capacity to satisfactorily perform the scope of work.” Thereafter, Lydig entered into a contrаct with another rebar supplier.
In March 2013, Lydig filed a complaint against Martinez and its owner in which it alleged that Martinez had breached the terms of the subcontract and that, a result of the breach, Lydig had experienced more than $200,000 in damages. In April 2013, Lydig filed its application for a right to attach order and writs of attachment. As we have indicated, Lydig‘s application was supported by declarations from Lydig‘s employees and its business records, which set forth in some detail its intervention in paying for steel and its discovery of the diversion of steel by Martinez. Included in its supporting
On May 14, 2013, Martinez and its owner filed their answers to the complaint and opposition to Lydig‘s attachment application. Martinez‘s opposition was supported by a declaration from one of its employees, Harry Williams. Williams‘s declaration did not dispute the specific factual contentions set forth by Lydig in its application. With respect to Martinez‘s performance of the contract and Lydig‘s unhappiness with it, Williams‘s declaration stated that Lydig had kept a retention amount on payments due on the contract and that, “[r]ather than arranging to pay Martinez Steel, and in an effort to avoid paying the amount due and owing, [Lydig] asserted various pretexts to substitute another subcontractor for Martinez Steel. However, Martinez Steel had worked on the Project for nearly twо years[] and had never missed a single pour of concrete.” Williams‘s declaration also asserted that Lydig owed Martinez for work Martinez performed after Martinez‘s contract was terminated and only billed by Martinez on a September 30, 2012 invoice.
The Williams declaration also disputed the validity of change orders submitted by Lydig that documented deductions from amounts owed to Martinez because Lydig was required to purchase rebar from third parties following termination of Martinez‘s contract. Rather than setting forth any factual basis for his contention that the change orders were invalid, Williams‘s declaration simply stated: “These are unapproved Change Orders to which Martinez Steel will not agree and will vehemently dispute at trial.” Williams‘s declaration also asserted that Martinez delivered more than 200,000 pounds of steel that Lydig had not accounted for in its application for a right to attach order.
Lydig filed a reрly to Martinez‘s opposition. In its reply, Lydig submitted a further declaration from one of its employees, which stated that many concrete “pours” on the project had to be delayed because of Martinez‘s failure to timely deliver rebar, and records which showed that, by virtue of the rebar Lydig had obtainеd from third parties, Lydig did not owe Martinez any retained amounts. Lydig also submitted a contemporaneous log it kept of the steel delivered by Martinez. The log showed that in fact Martinez had not delivered the 200,000 pounds of steel Williams had alleged in his declaration.
By way of stipulation, on May 20, 2013, Martinez was permitted tо file a cross-complaint in which Martinez alleged that it was owed for rebar it had fabricated and installed at the project and that those amounts were greater than the amounts Lydig alleged in damages. On the same day Martinez filed
Martinez filed a timely notice of appeal from the order granting the right to attach.
DISCUSSION
I
In its principal argument on appeal, Martinez argues that because, as alleged, the claims set forth in its cross-complaint exceed the amount Lydig claims it is owed, the trial court had no power to grant Lydig‘s application for a right to attach order. We disagree.
A. Standard of Review
“It is well settled, of course, that a party challenging a judgment [or order] has the burden of showing reversible error by an adequate record.” (Ballard v. Uribe (1986) 41 Cal.3d 564, 574.) Importantly, “‘[a] judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent. . . .’ (Orig. italics.) [Citation.]” (Rossiter v. Benoit (1979) 88 Cal.App.3d 706, 712.) It is also well settled that where, as here, a trial court has ruled on an application for a writ of attachment, and its ruling is based on its resolution of factual conflicts in the affidavits submitted by the parties, its determination of the facts will not be disturbed on appeal. (Loeb & Loeb v. Beverly Glen Music, Inc. (1985) 166 Cal.App.3d 1110, 1120.)
B. Writs of Attachment
The procedures and grounds for obtaining orders permitting prejudgment writs of attachment are governed by
Before an attachment order is issued, the court must find all of the following: (1) the claim upon which the attachment is based is one upon which an attaсhment may be issued; (2) the applicant 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 request for attachment is based; and (4) the amount to be secured by the аttachment is greater than zero. (
An application for a right to attach order must be supported by an affidavit or declaration showing that the applicant, on the facts presented, would be entitled to a judgment on the claim upon which the attachment is based. (
All documentary evidence, including contracts and canceled checks, must be presented in admissible form, generally requiring proper identification and authentication, and admissibility as nonhearsay evidence or under one or more of the exceptions to the hearsay rule, such as the business records exception. (Ahart, Cal. Practice Guide: Enforcing Judgments and Debts (The Rutter Group 2014) ¶¶ 4:145–4:156, pp. 4-35 to 4-38 (rev. # 1, 2010).)
A prejudgment attachment may secure the amount of the claimed indebtedness as well as estimated costs and allowable attorney fees. (
“[Section] 483.015 does not explicitly require more than a filed cross-complaint or contract defense in an answer that would itself support an
C. Analysis
Contrary to Martinez‘s contention on appeal, in order to obtain the offset permitted by
The trial court implicitly found that Martinez did not establish the probable vаlidity of its offsetting claims. We note that the factual basis for Martinez‘s claims, though presented in a fairly conclusory manner in Williams‘s declaration, was set forth in Martinez‘s opposition to Lydig‘s attachment application. In granting Lydig‘s application, notwithstanding that opposition, the trial court plainly found Martinez‘s factual presentation unpersuasive. We also note that, on the record, the trial court took note of the offsetting claims, asked the parties to argue with respect to their impact on Lydig‘s motion and, at the close of the hearing, indicated it would be considering the documentation provided by the parties. Where, as here, the record is otherwise silent with respect to what the trial court considered, we must presume it considered all the pertinent matters presented to it and ruled in favor of the prevailing party. (Rossiter v. Benoit, supra, 88 Cal.App.3d at p. 712.)
Like the trial court, we find that Martinez failed to establish the probable validity of its claims. In рarticular, with respect to its claim that it was entitled to credit for retained amounts and for 200,000 pounds of steel, Martinez provided no proof other than Williams‘s conclusory declaration,
II
Martinez also argues that Lydig failed to establish the validity of its claims. As we have indicated, Lydig provided both declarations and documentation that fully support the validity and amount of its claims.
DISPOSITION
The orders appealed from are affirmed. Lydig to recover its costs of appeal.
Haller, J., and McDonald, J., concurred.
Appellant‘s petition for review by the Supreme Court was denied June 10, 2015, S225598.