Judge: David B. Gelfound, Case: 23CHCV03144, Date: 2024-04-04 Tentative Ruling

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Case Number: 23CHCV03144    Hearing Date: April 4, 2024    Dept: F49

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

APPLICATION FOR WRIT OF POSSESSION

Motion filed: 10/23/23

MOVING PARTY: Plaintiff BMO Bank N.A. (“BMO Bank” or “Plaintiff”)

RESPONDING PARTY: None

NOTICE: ok 

RELIEF REQUESTED: An order granting Plaintiff’s application for writ of possession.

TENTATIVE RULING: The motion is CONTINUED.

BACKGROUND

This action arises from an alleged breach of contract. Plaintiff BMO Bank seeks a writ of possession against Defendants Medina Truck & Transportation, Inc. (“MT&T”) and personal guarantor Salvador Medina (“Medina”) (collectively, “Defendants”) for one 2023 Peterbilt tractor.

On October 18, 2023, Plaintiff initiated the action against Defendants, and Does 1-20. The Complaint alleges: (1) Breach of Written Agreement; (2) Breach of Continuing Guaranty; (3) Claim and Delivery; and (4) Conversion.

On October 23, 2023, Plaintiff filed the instant Application for Writ of Possession against Defendant Medina (the “Application”).

            On November 20, 2023, Plaintiff filed two separate documents of Proof of Service, demonstrating substitute service of the summons, complaint, Application, and supporting documents on Defendants by leaving the papers with Christina Medina, co-occupant, on October 30, 2023, and mailing papers to Defendants on November 3, 2023. On December 20, 2023, Plaintiff filed an Amended Proof of Service in response to Defendant’s Motion to Quash Service to MT&T, filed on December 13, 2023.

            On December 26, 2023, Defendants filed their Demur to the Complaint.

No Oppositions to the Application for Writ of Possession have been received by the Court.

ANALYSIS

“Upon the filing of the complaint or at any time thereafter, the plaintiff may apply pursuant to this chapter for a writ of possession by filing a written application for the writ with the court in which the action is brought.”  (Code Civ. Proc., § 512.010, subd. (a).) 

Pursuant to Code of Civil Procedure section 512.010(b), the application must be submitted under oath and include: 

(1) A showing of the basis of the plaintiff's claim and that the plaintiff is entitled to possession of the property claimed. If the basis of the plaintiff's claim is a written instrument, a copy of the instrument shall be attached. 

(2) A showing that the property is wrongfully detained by the defendant, of the manner in which the defendant came into possession of the property, and, according to the best knowledge, information, and belief of the plaintiff, of the reason for the detention. 

(3) A particular description of the property and a statement of its value. 

(4) A statement, according to the best knowledge, information, and belief of the plaintiff, of the location of the property and, if the property, or some part of it, is within a private place which may have to be entered to take possession, a showing that there is probable cause to believe that such property is located there. 

(5) A statement that the property has not been taken for a tax, assessment, or fine, pursuant to a statute; or seized under an execution against the property of the plaintiff; or, if so seized, that it is by statute exempt from such seizure. 

Before the hearing on the Writ of Possession, the Defendant must be served with (1) a copy of the summons and complaint; (2) a Notice of Application and Hearing; and (3) a copy of the application and any affidavit in support thereof.  (Code Civ. Proc., § 512.030.) If the defendant has not appeared in the action, the writ and other papers must be served in the same manner as is acceptable for a service of summons. (Id., § 512.030, subd. (b).)

“The writ will be issued if the court finds that the plaintiff's claim is probably valid and the other requirements for issuing the writ are established.”  (Code Civ. Proc., § 512.040, subd. (b).)  “A claim has ‘probable validity’ where it is more likely than not that the plaintiff will obtain a judgment against the defendant on that claim.”  (Code Civ. Proc., § 511.090.)   

Prior to the issuance of a writ of possession, the Plaintiff must file an undertaking “in an amount not less than twice the value of the defendant's interest in the property or in a greater amount.”  (Code Civ. Proc., § 515.010, subd. (a).)   

A.    Notice

Notice upon Defendant Medina is proper as stated above.

B.     Basis of Plaintiff’s Claim

Plaintiff submits evidence that on January 24, 2023, Defendant MT&T and BMO Bank entered into a loan and security agreement to obtain a loan for one 2023 Peterbilt tractor at issue. (Schrepel Decl., ¶ 6, Ex. “1”) and repayment of the loan is guaranteed by Defendant Medina. (Ibid.) Schrepel demonstrates sufficient personal knowledge of BMO Bank’s records as a custodian of these records. (Id., ¶ 1.) Here, Plaintiff presents copies of Loan and Security Agreement and the Continuing Guaranty, as exhibits to the declaration. (Id., Ex. “1.”)

            Schrepel asserts that Defendants have defaulted under the terms of the agreements, with the accelerated balances now including a principal of $222,511.88 (Schrepel Decl., ¶ 12), unpaid interest of $4,693.92 based on non-default rate of 8.63% per annum through the date of acceleration on June 29, 2023 (Id., ¶ 14), and interest continue to accrue at the default rate of 18% per annum until the date of judgment. (Id., ¶ 15.) Pursuant to the terms of the Loan and Security Agreement, Plaintiff is entitled to immediate possession of the equipment described therein. (Id., ¶ 18.)

            Despite Defendant’s lack of opposition to the Application for Writ of Possession, they have, through a Demurrer filed on December 26, 2023, invoked the choice of law provision in the Continuing Guaranty, which stipulates that “This Guaranty is subject to and governed by the laws of the State of Illinois ... regardless of location of Guarantor or the Company.” (Dem., at 4, Schrepel Decl., Ex. “1.”) Defendants argue that California’s Claim and Delivery Law, constituting the Third Cause of Action of the Complaint, is inapplicable. (Dem., at 6.)

            As Defendants’ Demurrer has not been opposed by Plaintiff or decided by the Court, the Court concludes that based on the evidence currently presented, the validity of Plaintiff’s claim against Defendant Medina has not been sufficiently established.

            Consequently, the Court CONTINUES the hearing for the Application for Writ of Possession against Defendant Medina to be held concurrently with the hearing for the Demurrer.

C.    Wrongful Detention

In accordance with Code of Civil Procedure section 512.010(b)(2), the Application must include “a showing that the property is wrongfully detained by the defendant, of the manner in which the defendant came into possession of the property, and, according to the best knowledge, information, and belief of the plaintiff, of the reason for the detention.”

Plaintiff presents that MT&T breached the terms of the Loan and Security Agreement on April 1, 2023, by failing to make monthly loan payment. (Schrepel Decl., ¶ 10.) Additionally, MT&T has failed and continues to fail to make any subsequent payments. (Ibid.) Under the terms of the Loan and Security Agreement and Continuing Guaranty, Plaintiff has the right to repossess the equipment in the event of default. (Schrepel Decl., ¶ 19, Ex. “1.”) Plaintiff asserts that Defendant MT&T wrongfully detained the equipment after defaulting on the agreement. (Id., ¶ 20.)

The evidence reflects that Defendant Medina is the president of MT&T (Schrepel Decl., Ex. “1”), personally guaranteed the loan payment as an “individual” (Ibid.) Despite the equipment being delivered to MT&T, Plaintiff’s demands for its return by Defendants have not been fulfilled. (Id., ¶ 24.)

D.    Description and Value of Property

Pursuant to Code of Civil Procedure section 512.010(b)(3), the Application must include a particular description of the property and a statement of its value.

Plaintiff has fulfilled this requirement by providing an explicit description of the equipment, including its make, model, model year, and VIN number, as well as stating its value. (Schrepel Decl., ¶¶ 6, 29).

Consequently, Plaintiff adheres to the mandates of Code of Civil Procedure section 512.010 subdivision (b)(3).

E.     Statutory Statements

Pursuant to Code of Civil Procedure section 512.010 subdivisions (b)(4) and (5), the application must include:

(4) A statement, according to the best knowledge, information, and belief of the plaintiff, of the location of the property and, if the property, or some part of it, is within a private place which may have to be entered to take possession, a showing that there is probable cause to believe that such property is located there.

(5) A statement that the property has not been taken for a tax, assessment, or fine, pursuant to a statute; or seized under an execution against the property of the plaintiff; or, if so seized, that it is by statute exempt from such seizure.

Here, Plaintiff has provided a statement that the equipment has not been taken for a tax, assessment, or fine, pursuant to statute and has not been seized under an execution against the Plaintiff’s property. (Schrepel Decl., ¶ 25.)

Furthermore, Plaintiff states that “Plaintiff is informed and believes that the COLLATERAL is currently located at: a. 12000 Paxton St., Sylmar, CA 91342; b. 14661 Chatsworth Dr., Mission Hills, CA 91345; or Such other location known to Defendants.” (Id., ¶ 22.)

Notably, records indicates that the address at 14661 Chatsworth Dr. serves dual purposes: it is identified as residential address of Defendant Medina (2023/12/20 Proof of Service, ¶ 5(b)(2) “home”), and it is also the principal business address of MT&T. (2023/12/20 Proof of Service, at 4, Schrepel Decl., Ex. “1.”) Consequently, the Court finds that this information, being the registered business address, is sufficient to establish probable cause of the current location of the equipment.

F.     Undertaking

According to Code of Civil Procedure section 515.010, an undertaking must be filed before the writ issues in the amount of “not less than twice the value of the defendant’s interest in the property.”  However, if “the court finds that the defendant has no interest in the property, the court “shall waive the requirement of ... undertaking[.]” (Code Civ. Proc., § 515.010, subd. (b).)

Here, Plaintiff provides evidence showing that the amount owing on the equipment surpasses its market value, implying that Defendants possess no equity in the equipment. (Schrepel Decl. ¶¶ 29, 30.)

Accordingly, based on this specific circumstance, the requirement for undertaking should be waived pursuant to Code of Civil Procedure section 515.010 subdivision (b).

G.    Turn Over Order

Plaintiff also seeks an order directing the Defendants to turn over the equipment to Plaintiff, pursuant to Code of Civil Procedure section 512.070. (Mot., at 7.) Additionally, Plaintiff’s Notice of Application on Form CD-110 gave notice that the court may issue a turnover order.

            However, as previously discussed, Plaintiff has not sufficiently established the probable validity of its claims against Defendant Medina, as required by Code of Civil Procedure section 512.010 subdivision (a); therefore, the turnover order against Defendant Medina is also CONTINUED.

CONCLUSION

The Application for Writ of Possession and a turnover order are CONTINUED as to Defendant Salvador Medina.

Moving party to give notice.