Judge James C. Chalfant, Case 22STCV26252 2022-10-20 Tentative Ruling

PNC Equipment Finance, LLC v. A&R Trading Co., Inc., et al., 22STCV26252

Tentative decision on applications for writs of possession: denied

Plaintiffs PNC Equipment Finance, LLC (“PNC”) seeks writs of possession against Defendants A&R Trading Co., Inc., (“A&R”) and Bong Soo Kim (“Kim”) to recover a Doosan GC205S-9 Lift Truck bearing serial number FGA1E-1290-01161 (“Truck”).

The court has read and considered the moving papers (no opposition was filed) and renders the following tentative decision.

Plaintiff commenced this proceeding against Defendants and Does 1 to 20 on August 15, 2022. The Complaint alleges causes of action for (1) breach of contract; (2) claim and delivery; (3) conversion and (4) breach of guaranty.

The Complaint alleges in pertinent part as follows. On June 28, 2021, Plaintiff PNC entered into a lease agreement (the “Agreement”) with A&R whereby it leased the Truck to A&R for its use in its business. Complaint, ¶¶ 7-8, Exs. 1-2. Kim signed a personal guaranty for A&R’s payments under the Agreement (the “Guaranty”). Complaint, p. 4[1] ¶2, Ex. 3.

A&R defaulted under the terms of the Agreement by not making payments due beginning on April 1, 2022. The resulting principal balance due is $30,007.99, together with interest, late charges, and fees. Complaint, ¶¶ 10-11. Plaintiff also seeks return of the Truck. Complaint, ¶16.

There are no proofs of service on file for the Summons and Complaint. On August 23, 2022, Plaintiff filed two applications for writ of possession of the Truck. There are no proofs of service on file for the applications.

A writ of possession is issued as a provisional remedy in a cause of action for claim and delivery, also known as replevin. See Pillsbury, Madison & Sutro v. Schectman, (1997) 55 Cal.App.4th 1279, 1288. As a provisional remedy, the right to possession is only temporary, and title and the right to possess are determined in the final judgment.

A writ of possession is available in any pending action. It also is available where an action has been stayed pending arbitration, so long as the arbitration award may be ineffectual without provisional relief. See CCP §1281.7.

Upon the filing of the complaint or at any time thereafter, a plaintiff may apply for an order for a writ of possession. Unlike attachment, where Judicial Council forms are optional, the parties must use the mandatory approved Judicial Council forms in a claim and delivery proceeding. (Judicial Council Forms CD-100 et seq.).

A plaintiff must make a written application for a writ of possession. CCP §512.010(a), (b); (Mandatory Form CD-100); CCP §512.010(a). A verified complaint alone is insufficient. 6 Witkin, California Procedure, (5th ed. 2008) §255, p.203. The application may be supported by declarations and/or a verified complaint. CCP §516.030. The declarations or complaint must set forth admissible evidence except where expressly permitted to be shown on information and belief. Id.

The application must be executed 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 plaintiff's claim is based on a written instrument, a copy of it must be attached; (2) A showing that the property is wrongfully detained by the defendant, how the defendant came into possession of it, and, the reasons for the detention based on the plaintiff’s best knowledge, information, and belief; (3) A specific description of the property and statement of its value; (4) The location of the property according to the plaintiff’s best knowledge, information, and belief. If the property, or some part of it, is within a private place which may have to be entered to take possession, a showing of probable cause to believe that the property is located there; and (5) A statement that the property has not been taken for (a) a tax, assessment, or fine, pursuant to a statute, or (b) an execution against the plaintiff’s property. Alternatively, a statement that if the property was seized for one of these purposes, it is by statute exempt from such seizure. CCP §512.010(b).

Before noticing a hearing, the plaintiff must serve the defendant with all of the following: (1) A copy of the summons and complaint; (2) A Notice of Application and Hearing; and (3) A copy of the application and any supporting declaration. CCP §512.030(a). If the defendant has not appeared in the action, service must be made in the same manner as service of summons and complaint. CCP §512.030(b).

Each party shall file with the court and serve upon the other party any declarations and points and authorities intended to be relied upon at the hearing. CCP §512.050. At the hearing, the court decides the merits of the application based on the pleadings and declarations. Id. Upon a showing of good cause, the court may receive and consider additional evidence and authority presented at the hearing, or may continue the hearing for the production of such additional evidence, oral or documentary, or the filing of other affidavits or points and authorities. Id.

The court may order issuance of a writ of possession if both of the following are found: (1) The plaintiff has established the probable validity of the plaintiff’s claim to possession of the property; and (2) The undertaking requirements of CCP section 515.010 are satisfied. CCP §512.060(a). “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.” CCP §511.090. This requires that the plaintiff establish a prima facie case; the writ shall not issue if the defendant shows a reasonable probability of a successful defense to the claim and delivery cause of action. Witkin, California Procedure, (5th ed. 2008) §261, p.208. A defendant’s claim of defect in the property is not a defense to the plaintiff’s right to possess it. RCA Service Co. v. Superior Court, (1982) 137 Cal.App.3d 1, 3.

No writ directing the levying officer to enter a private place to take possession of any property may be issued unless the plaintiff has established that there is probable cause to believe that the property is located there. CCP §512.060(b).

The successful plaintiff may obtain a preliminary injunction containing the same provisions as a TRO that remains in effect until the property is seized by the levying officer.[2] CCP §513.010(c).

The court may also issue a “turnover order” directing the defendant to transfer possession of the property to the plaintiff (See Mandatory Form CD-120). The order must notify the defendant that failure to comply may subject him or her to contempt of court. CCP §512.070. The turnover remedy is not issued in lieu of a writ, but in conjunction with it to provide the plaintiff with a less expensive means of obtaining possession. See Edwards v Superior Court, (1991) 230 Cal.App.3d 173, 178.

Generally, the court cannot issue an order for a writ of possession until the plaintiff has filed an undertaking with the court (Mandatory Form CD-140 for personal sureties). CCP §515.010(a). The undertaking shall provide that the sureties are bound to the defendant for the return of the property to the defendant, if return of the property is ordered, and for the payment to the defendant of any sum recovered against the plaintiff. Id. The undertaking shall be in an amount not less than twice the value of the defendant's interest in the property or in a greater amount. Id. The value of the defendant's interest in the property is determined by the market value of the property less the amount due and owing on any conditional sales contract or security agreement and all liens and encumbrances on the property, and any other factors necessary to determine the defendant’s interest in the property. Id.

However, where the defendant has no interest in the property, the court must waive the requirement of the plaintiff’s undertaking and include in the order for issuance of the writ the amount of the defendant’s undertaking sufficient to satisfy the requirements of CCP section 515.020(b). CCP §515.010(b).

Plaintiff seeks writs of possession against both Defendants to recover the Truck. Plaintiff did not file proofs of service of the Summons, Complaint, and moving papers on either Defendant. As a result, the court lacks personal jurisdiction for the writs of possession.

Even if Plaintiff provides the required proofs of service, the current applications would be denied in part. Plaintiff complied with its contractual obligations by tendering the Truck to A&R. McGinley, Decl. ¶¶ 6, 9. A&R defaulted under the Agreement by failing to make all rental payments and Kim[3] has otherwise failed to pay the owed principal sum of $30,007.99, together with interest, late charges, and fees. McGinley, Decl. p. 3[4] ¶¶ 6-8, 18, Ex. 3.

Pursuant to the Agreement, Plaintiff has a security interest in the Truck and can seek to recover the Truck upon Defendants’ default. McGinley, Decl. ¶10, Ex. 1 ¶14. Plaintiff has demanded return of the Truck, but Defendants have refused to return it. McGinley, Decl. ¶14. The current fair market value of the Truck is $18,000 (McGinley, Decl. ¶17), which is less than the $30,007.99 owed. Therefore, no bond is required. See CCP §515.010(b). Any redelivery bond would be $30,007.

Plaintiff suspects the Truck is located at: (1) 14747 Artesia Boulevard, Suite 5R, La Mirada, California 90638; (2) 1201 South Hope Street, #2827, Los Angeles, California 90015; (3) 13426 Rosecrans Avenue, Unit A, Norwalk, California 90660; and (4) “[s]uch other location known to Defendants.” McGinley, Decl. ¶12.

Plaintiff’s applications do not establish the necessary “probable cause” to believe that the Truck is located at all three identified locations. The McGinley declaration is silent on why Plaintiff has probable cause for these locations. See McGinley, Decl. ¶¶ 11-12.

The court has examined the evidence and finds that there is probable cause for two addresses: (a) the 14747 Artesia Boulevard address listed on the Agreement and (b) the 13426 Rosecrans Avenue address listed on the Guaranty. McGinley, Decl. Exs. 1-2. There is no probable cause for the 1201 South Hope Street address.

The applications for writ of possession are denied without prejudice. If Plaintiff re-files after serving Defendants, it must include an attorney declaration for a renewed application under CCP section 1008(b).

[1] The court identifies the page number because the paragraphs are not in sequential order starting at the Fourth Cause of Action beginning on page 4.

[2] If the court denies the plaintiff’s application for a writ of possession, any TRO must be dissolved. CCP §513.010(c).

[3] The court notes that the signature is by “Bongsoo Kim”, not “Bong Soo Kim” as named in the Complaint.

[4] The court identifies the page number because the paragraphs are not in sequential order starting at the Default section on page 3.