Filed 2/26/15
                            CERTIFIED FOR PUBLICATION


                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                      DIVISION ONE

                                STATE OF CALIFORNIA



LYDIG CONSTRUCTION, INC.,                          D066854

        Plaintiff and Respondent,

        v.                                         (Super. Ct. No. CIVVS1301232)

MARTINEZ STEEL CORPORATION,

        Defendant and Appellant.



        APPEAL from orders of the Superior Court of San Bernardino County, Michael

A. Sachs, Judge. Affirmed.



        Cohen & Lord, Karen D. Maher, James F. Boyle and Nairi S. Gruzenski for

Defendant and Appellant.

        Gibbs Giden Locher Turner Senet & Wittbrodt, Richard J. Wittbrodt and Sara H.

Kornblatt for Plaintiff and Respondent.

        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 declarations 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

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with the county to complete 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.

       Although the terms of the subcontract required that Martinez provide Lydig with

payment and performance bonds that would protect Lydig in the event Martinez was

unable to meet the requirements of the subcontract, Martinez was unable to do so. In lieu

of the required bonds, Lydig agreed to take a personal guaranty from Martinez's owner.

       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 steel 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 expansion 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 also 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:

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"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-contract. [¶] . . . [¶] 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 contract 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 documents

was a verified copy of the county hearing officer's finding permitting Lydig to terminate

Martinez's subcontract and obtain needed rebar from another supplier.

       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

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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 two 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 reply 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 obtained 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

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declaration.

       By way of stipulation, on May 20, 2013, Martinez was permitted to 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 its cross-complaint, the trial court

conducted a hearing on Lydig's attachment application. After the arguments of the

parties, including in particular Martinez's contention that its claims offset Lydig's claims,

the trial court took the application for an attachment under submission. Thereafter, the

trial court granted the application with respect to Martinez only and in the amount of

$203, 315. Lydig then obtained writs of attachment for Riverside, Los Angeles and San

Bernardino counties.

       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

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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 Code of Civil Procedure1 section 481.010 et seq. Generally,

an order of attachment may be issued only in an action for a claim of money that is based

upon an express or implied contract where the total amount of such claim is a fixed or

"readily ascertainable" amount not less than $500. (§ 483.010, subd. (a).)

       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 attachment 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 attachment is greater than zero. (§ 484.090.) In order to establish

the probable validity of its claim, the applicant must show that it is more likely than not it

will obtain a judgment against the defendant (or counter-defendant) on its claim.

(§ 481.190.)

       An application for a right to attach order must be supported by an affidavit or



1      All further statutory references are to the Code of Civil Procedure.
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declaration showing that the applicant, on the facts presented, would be entitled to a

judgment on the claim upon which the attachment is based. (§ 484.030.) The affidavit or

declaration must state the facts "with particularity." (§ 482.040.) Except where matters

are specifically permitted to be shown upon information and belief, each affidavit or

declaration must show that the affiant or declarant, if sworn as a witness, can testify

competently to the facts stated therein. (Ibid.) This means that the affiant or declarant

must show actual, personal knowledge of the relevant facts, rather than the ultimate facts

commonly found in pleadings, and such evidence must be admissible and not

objectionable.

       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. 4-35–4-38 (rev. #1, 2010).)

       A prejudgment attachment may secure the amount of the claimed indebtedness as

well as estimated costs and allowable attorney fees. (§ 482.110, subd. (b).) Importantly,

however, the amount to be secured by an attachment shall be reduced or offset by the

"amount of any indebtedness of the plaintiff [or counterclaimant] that the defendant [or

counter-defendant] has claimed in a cross-complaint [or the original complaint] filed in

the action if the defendant's [or counter-defendant's] claim is one upon which an

attachment could be issued." (§ 483.015, subd. (b)(2), italics added.)

       "[Section] 483.015 does not explicitly require more than a filed cross-complaint or

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contract defense in an answer that would itself support an attachment. However, to

sustain reduction in a writ amount, most courts require that defendant [or counter-

defendant] provide enough evidence about its counterclaims [or claims] and/or defenses

to prove a prima facie case." (Ahart, Cal. Practice Guide: Enforcing Judgments and

Debts, supra, ¶ 4:64 at p. 4-18 (rev. #1, 2010).) "Courts are generally suspicious of

vague, unsupported counterclaims and defenses." (Ibid.; see Pos-A-Traction v. Kelly-

Springfield Tire Co. (C.D.Cal. 1999) 112 F.Supp.2d 1178, 1183.)

       C. Analysis

       Contrary to Martinez's contention on appeal, in order to obtain the offset permitted

by section 483.015, Martinez was required to establish the probable validity of its

offsetting claims against Lydig. (See Ahart, Cal. Practice Guide: Enforcing Judgments

and Debts, supra, ¶ 4:64 at p. 4-18; see also Pos-A-Traction v. Kelly-Springfield Tire Co.,

supra, 112 F.Supp.at p. 1183.) This is the clear implication of the phrase "claim is one

upon which an attachment could be issued" as set forth in section 483.015; it 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 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 procedures the Legislature intended to effectively deprive litigants of the right

to such prejudgment relief.

       The trial court implicitly found that Martinez did not establish the probable

validity 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

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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 particular, 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, which, in turn, was rebutted both by Lydig's

accounting records and contemporaneous logs provided by Lydig. In short, Lydig's

documents entirely undermine the validity of Martinez's claims.

                                               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.




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                                   DISPOSITION

     The orders appealed from are affirmed. Lydig to recover its costs of appeal.



                                                                  BENKE, Acting P. J.

WE CONCUR:


HALLER, J.


McDONALD, J.




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