Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00325/USCOURTS-caed-2_05-cv-00325-2/pdf.json

Nature of Suit Code: 130
Nature of Suit: Miller Act
Cause of Action: 28:1352 Miller Act

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1 Formerly 40 U.S.C. §§ 270a-270e, revised and renumbered on

August 21, 2002, at Pub. L. 107-217.

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

THE UNITED STATES OF AMERICA FOR No. CIV.S-05-00325 DFL DAD

THE USE AND BENEFIT OF PETER A.

FULLER, individually and doing

business as PETER FULLER 

CONSTRUCTION,

Plaintiff,

v. FINDINGS AND RECOMMENDATIONS

JAMES E. ZOUCHA, an individual,

Defendant.

 /

Plaintiff, The United States of America for the Use and

Benefit of Peter A. Fuller, individually and doing business as Peter

Fuller Construction (hereafter "Fuller" or “plaintiff”), brings this

action against James E. Zoucha (hereafter "Zoucha" or “defendant”),

an individual, pursuant to the Miller Act, 40 U.S.C. §§ 3131-34,1 for

monies allegedly owed in relation to a public works job. Fuller is a

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2 As the Ninth Circuit Court of Appeals has explained:

The Miller Act requires a general contractor on a

federal project to post a bond to protect those

who supply labor or materials for the project. 

The act allows a subcontractor's materials

supplier to bring suit on the bond for any unpaid

amounts owing for labor or materials, even if no

contractual relationship exists between the

general contractor and the supplier. The purpose

of the Act is to protect persons supplying

materials and labor for federal projects, and it

is to be construed liberally in their favor to

effectuate this purpose.

Martin Steel Constructors, Inc. v. Avanti Constructors, Inc., 750

F.2d 759, 760-61 (9th Cir. 1984)(citations omitted).

2

construction subcontractor that provided labor and materials on two

public works construction projects that the contractor, EAI

International (“EAI”), was performing for the United States Air

Force. Zoucha is an individual surety on the two payment bonds for

all labor, materials and services provided by Fuller on the

projects.2 Plaintiff claims that defendant Zoucha’s indebtedness to

Fuller is in the amount of $384,227.94. In the application presently

pending before the court plaintiff Fuller seeks a prejudgement right

to attach order in order to secure recovery on its claim against

defendant Zoucha. 

Having been referred to the undersigned pursuant to 28

U.S.C. § 636(b)(1), this matter came before the court on June 17,

2005, for hearing on plaintiff’s application for a prejudgment right

to attach order. Mary E. Olden appeared on behalf of plaintiff. 

James C. Keowen appeared on behalf of defendant. After considering

all written materials submitted in connection with the motion, and

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after hearing oral argument, the undersigned will recommend that

plaintiff’s application be granted.

LEGAL STANDARDS

Under Rule 64 of the Federal Rules of Civil Procedure, a

federal court applies the attachment law of the state in which it

sits. Fed. R. Civ. P. 64. California's "Attachment Law" therefore

applies to plaintiff’s application. See Cal. Code Civ. Proc. §

482.010.

Section 483.010(a) of the California Code of Civil

Procedure states that an attachment may be issued on "a claim or

claims for money, each of which is based on a contract, express or

implied, where the total amount of the claim or claims is a fixed or

readily ascertainable amount not less than five-hundred dollars

($500) exclusive of costs, interest and attorney's fees." 

California Code of Civil Procedure § 484.090 provides that

before an attachment order is issued, the court must find that: (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. In order to establish “the probable validity" of the claim,

the applicant must show that it is more likely than not it will

obtain a judgment against the defendant on its claim. Cal. Code Civ.

Proc. § 481.190.

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"Attachment is a prejudgment remedy which requires a court

to make a preliminary determination of the merits of a dispute. It

allows a creditor who has applied for an attachment following the

statutory guidelines and established a prima facie claim to have a

debtor's assets seized and held until final adjudication at trial." 

Lorber Industries v. Turbulence, Inc., 175 Cal. App. 3d 532, 535, 221

Cal. Rptr. 233 (1985). The burden is on the moving party to

establish grounds for an order of attachment. Loeb and Loeb v.

Beverly Glen Music, Inc., 166 Cal. App. 3d 1110, 1116, 212 Cal. Rptr.

830 (1985). Attachment is a purely statutory remedy, which is

subject to strict construction. Jordan-Lyon Productions, Ltd. v.

Cineplex Odeon Corp., 29 Cal. App. 4th 1459, 1466, 35 Cal. Rptr. 2d

200 (1994).

ANALYSIS

Here, there is no dispute that the requirements of §

483.010(a) have been satisfied. Nor is there any dispute regarding

the first, third and fourth required elements for the issuance of an

attachment order under § 484.090. Rather, the sole issue presented

by the instant motion is whether plaintiff has established "the

probable validity" of the claim upon which the attachment is based as

required by § 484.090.

The undersigned finds that Fuller has provided sufficient

evidence showing that it is more likely than not it will prevail on

its claim against Zoucha. Specifically, the detailed affidavits and

documents filed with the court demonstrate that it is more likely

than not Fuller will be able to prove the four elements necessary to

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prevail on its Miller Act claim, i.e., that (1) the materials were

supplied in prosecution of the work provided for in the contract; (2)

Fuller has not been paid; (3) Fuller had a good faith belief that the

materials were intended for the specified work; and (4) the

jurisdictional requisites have been met. See Hawaiian Rock Prods.

Corp. v. A.E. Lopez Enters., Ltd., 74 F.3d 972, 975 (9th Cir.

1996)(affirming district court’s granting of summary judgment in

favor of plaintiffs on Miller Act claim); Martin Steel Constructors,

Inc., 750 F.2d at 761 (same).

In attacking the validity of the claim upon which the

attachment is based, defendant Zoucha merely asserts that plaintiff

cannot prevail on its claim because not all of the money claimed by

plaintiff is currently due and owing. In this regard, counsel for

defendant Zoucha briefly argues that of the $384,227.94 claimed by

Fuller, $173,335.21 is not yet owed because either the amount, or the

repair work itself, had not been approved by the United States at the

time of the hearing. Plaintiff’s counsel has presented the court

with much more complete documentation in support of its contention

that, but for a disputed item in the amount of $13,147.00, the entire

amount claimed by Fuller is, and has been, past due. (See Supp.

Decl. of Peter A. Fuller.) In this regard, plaintiff has established

that all worked called for on the projects has long ago been

completed, that EAI has received contract payments on the projects

from the government and that payment has been due and owing plaintiff

since at least October of 2004. In any event, defendant Zoucha has

cited no authority for the proposition that plaintiff’s entire claim

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under the Miller Act is invalid if an amount less than the full

subcontract amount remained unpaid at the time this suit was filed. 

Moreover, the plain language of the Miller Act undermines defendant’s

contention. Specifically, the Miller Act provides that "every person

that has furnished labor or material in carrying out work provided

for" in a contract subject to the Act, when not paid in full for work

within 90 days, "may bring a civil action on the payment bond for the

amount unpaid at the time the civil action is brought and may

prosecute the action to final execution and judgment for the amount

due." 40 U.S.C. § 3133(b)(1)(emphasis added). Thus, even if as

Zoucha claims the entire amount sought by plaintiff was not yet due,

the application for a prejudgement right to attach order would still

be properly granted. 

Defendant Zoucha also argues that it is impermissible for

plaintiff to attach any asset other than the alleged asset pledged in

the bonds executed by Zoucha, which is the “Power of Attorney to

write any Individual Surety up to $1,500,000.00 as Attorney in Fact

for Polaris International, LTD.” (Decl. of Peter Fuller filed April

8, 2005, Exs. B & D.) Again, Zoucha cites no authority in support of

this contention. In this regard, the court notes that defendant

Zoucha signed the bonds as an individual surety and thereby assumed

the obligations to the United States in the amounts of $939,722.95

and $927,248.45, respectively, and by the terms of the bonds

obligated himself for payment of those sums. (See id., Exs. B and

D.) Moreover, a power of attorney itself is no asset at all. It is

simply a written instrument granting certain authority to an agent,

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often referred to as an attorney-in-fact, to act on behalf of a

principal. See, e.g., Cal. Prob. Code § 4022 (“‘Power of attorney’

means a written instrument, however denominated, that is executed by

a natural person having the capacity to contract and that grants

authority to an attorney-in-fact.”); Estate of Huston, 51 Cal. App.

4th 1721, 1727, 60 Cal. Rptr. 2d 217, 221 (1997)(“A power of attorney

is a written authorization to an agent to perform specified acts on

behalf of the principal. The rights and liabilities created by the

exercise of such authority are centered in the law of agency."); see

also Black’s Law Dictionary 1171 (6th ed. 1990)(“An instrument in

writing whereby one person, as principal, appoints another as his

agent and confers authority to perform certain specified acts or

kinds of acts on behalf of principal.”). Accordingly, the

undersigned rejects Zoucha’s argument that only the allegedly pledged

power of attorney is subject to attachment.

Finally, defendant Zoucha raises an issue as to whether the

assets to be attached are excessive to secure the debt owed. In this

regard, at the hearing counsel for plaintiff Fuller withdrew the

application to attach various accounts, equipment, monies and other

assets initially identified in the moving papers. Rather, counsel

for Fuller made clear that plaintiff seeks only to attach the San

Diego County real property identified in its application, i.e., those

parcels located at 131 Monroe Street, Oceanside, California and 535

S. Highway 101, Solana Beach, California. There is no evidence

before the court showing that the equity in those assets exceeds the

alleged liability of Zoucha to Fuller in the amount of $384,227.94.

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3 Because plaintiff now seeks an order of prejudgment

attachment with respect only to defendant Zoucha’s real property,

plaintiff is directed to submit an amended proposed order.

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Further, as noted at the hearing on the application, attachment of

those pieces of real property will not interfere with defendant

Zoucha’s occupancy or quiet enjoyment of that property. Therefore,

the undersigned finds that the attachment of the real property

located in San Diego County is not excessive.

CONCLUSION

Accordingly, IT IS HEREBY RECOMMENDED that:

1. Plaintiff’s application for a prejudgment right to

attach order be granted; and

2. The district judge assigned to this action sign the

amended proposed right to attach order and order for issuance of writ

of attachment to be submitted by plaintiff within ten (10) days.3

These findings and recommendations are submitted to the

United States District Judge assigned to the case, pursuant to the

provisions of 28 U.S.C. § 636(b)(1). Within ten (10) days after

being served with these findings and recommendations, any party may

file written objections with the court and serve a copy on all

parties. Such a document should be captioned "Objections to

Magistrate Judge’s Findings and Recommendations." Any reply to the

objections shall be served and filed within five (5) days after

service of the objections. The parties are advised that failure to

file objections within the specified time may waive the right to

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appeal the District Court’s order. See Martinez v. Ylst, 951 F.2d

1153 (9th Cir. 1991). 

DATED: October 12, 2005.

DAD:th

DDAD1\orders.civil\fuller.writ.f&r

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