Judge James C. Chalfant, Case 23STCV02333 2023-04-11 Tentative Ruling

Daimler Trust v. Elgrid Ovasapyan, et al., 23STCV02333

Tentative decision on application for writ of possession: granted

Plaintiff Daimler Trust, as serviced by its attorney-in-fact, Mercedes-Benz Financial Services USA LLC (“Daimler”) seeks a writ of possession against Defendant Eduardo Salazar (“Salazar”), individually and doing business as Defendant E & L Auto Body and Tow (“E&L”) to recover a 2020 Mercedes-Benz C300, Serial No. WIKWF8DB8LR599416 (the “Vehicle”).

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

Plaintiff Daimler commenced this proceeding on January 24, 2023 against Defendants Salazar, E&L, and Elgrid Ovasapyan (“Ovasapyan”) alleging a cause of action for (1) breach of contract, (2) common count, (3) claim & delivery, and (4) conversion. The verified Complaint alleges in pertinent part as follows.

On December 11, 2020, Ovasapyan and Keyes European (“Dealer”) executed a written Motor Vehicle Lease Agreement (“Agreement”) for Ovasapyan to lease the Vehicle. Pursuant to the Agreement, Ovasapyan was required to pay 36 monthly installments of $503.42. Dealer assigned its rights under the Agreement to Daimler, which perfected its interest through a Certificate of Title filed with the DMV.

On February 11, 2022 and thereafter, Ovasapyan defaulted for failure to pay the required monthly installment. Daimler chose to accelerate the amount owed.

Ovasapyan informed Daimler that he had transferred the Vehicle to Defendants Salazar and E&L. E&L did not seek prior approval from Daimler to take possession of and store the Vehicle. Daimler has attempted to negotiate the release of the Vehicle and offered $2,750 for storage and repairs, but E&L refused the offer. Per Civil Code section 3068(c)(1), E&L’s lien is extinguished.

Daimler seeks from Defendant Ovasapyan $41,276.22, plus taxes and late charges from and after October 3, 2022. From all Defendants, Daimler also seeks return and possession of the Vehicle or the actual value of the Vehicle. Daimler also seeks conversion, exemplary, and punitive damages according to proof, with attorney’s fees and costs.

On February 16, 2023, Daimler personally served Defendant Salazar with the Complaint, Summons, and moving papers.

On February 19, 2023, Daimler served Defendant Ovasapyan with the Complaint, Summons and moving papers by substitute service, which became effective on March 1, 2023.

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.

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.[1] 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).

On December 11, 2020, Defendant Ovasapyan and Dealer entered into the Agreement for Ovasapyan to lease the Vehicle and make 36 monthly installments of $503.42. Azubogu Decl., ¶¶ 11-12, Ex. 1. In the event of default, the Agreement gave Dealer the right to accelerate the amount owed and repossess the Vehicle without prior warning except required by law. Azubogu Decl., ¶¶ 11, 17, Ex. 1.

Dealer assigned the Agreement to Daimler. Lawter Decl., ¶13, Ex. 1. Daimler perfected its interest in the Vehicle by listing itself as the lienholder on the Certificate of Title. Azubogu Decl., ¶13, Ex. 2.

On February 11, 2022 and thereafter, Ovasapyan defaulted on the Agreement by failing to pay the required monthly installment. Azubogu Decl., ¶15. Daimler accelerated the amount owed. Azubogu Decl., ¶15. Ovasapyan has not complied with demands for payment. Azubogu Decl., ¶16. As of October 3, 2022, the pay-off quote lists the amount owed as $41,276.22. Azubogu Decl., ¶16, Ex. 3.

After Daimler made its demand for payment, Ovasapyan informed it that he had transferred the Vehicle to E&L. Azubogu Decl., ¶18. E&L’s Preliminary Estimate Summary, dated April 20, 2022, shows total repair fees of $19,357.01. Caley Decl., ¶4, Ex. 1. The Preliminary Estimate Summary lists E&L’s address as 715 Wittmer St., Los Angeles, CA 90017. Caley Decl., ¶4, Ex. 1. Daimler believes the Vehicle is at that address. Azubogu Decl., ¶24.

On both October 4 and 24, 2022, counsel for Daimler offered the statutory maximum amount of $2,750 for storage and repairs pursuant to Civil Code section 3068(c)(1). Caley Decl., ¶¶ 5, 7. E&L refused the offer and has failed to release the Vehicle. Caley Decl., ¶¶ 5, 7-8. On October 3, 2022, the DMV confirmed that E&L has not filed for authorization to conduct a lien sale. Caley Decl., ¶6.

As of November 5, 2022, the Kelley Blue Book lists the average purchase and listing prices of the Vehicle as $33,822 and $34,822, respectively. Azubogu Decl., ¶25, Ex. 4. Daimler estimates $1,000 in attorneys’ fees and court costs for this action. Azubogu Decl., ¶26.

Plaintiff Daimler applies for a writ of possession for the Vehicle against Defendants E&L and Salazar.

Daimler presents evidence that Ovasapyan entered into the Agreement to lease the Vehicle, and the Agreement entitled Dealer to accelerate the outstanding balance and repossess the Vehicle in the event of default. Azubogu Decl., ¶¶ 11, 13, 17, Ex. 1.

Daimler claims that Dealer assigned the Agreement to Daimler (Azubogu Decl., ¶13) but fails to provide any written assignment. This defect would be fatal had Defendant objected. Daimler perfected its interest in the Vehicle by listing itself as the lienholder on the Certificate of Title. Azubogu Decl., ¶13, Ex. 2.

Daimler provides evidence that Ovasapyan defaulted and owes $41,276.22. Azubogu Decl., ¶¶ 15-16, Ex. 3. As this exceeds the current value of $34,822, Ovasapyan does not have a legal interest in the Vehicle. Azubogu Decl., ¶25, Ex. 4.

Daimler presents evidence that the body shop E&L, and it owner Salazar, possess the Vehicle. Azubogu Decl., ¶18. As of April 20, 2022, E&L asserts total repair fees of $19,357.01. Caley Decl., ¶4, Ex. 1.

A person performing repairs has a lien on a vehicle for the services and for storage subject to limitations. Civil Code §3068(a). The lien arises after a written statement for charges is given to the vehicle’s registered owner or 15 days after the work or services are completed. Ibid.

A lien in excess of $1500 for work performed, and in excess of $1025 for any storage of the vehicle, is invalid unless written consent of the vehicle’s legal owner or lessor was obtained before the work was performed or the storage occurred. Civil Code §3068(c)(1). The term “legal owner” is defined as including a person holding a security interest in a vehicle which is subject to UCC. Civil Code §3067; Vehicle Code §370.

The lien is extinguished unless the lienholder either applies to the DMV for an authorization to conduct the sale or files a court action within 30 days after the lien arises. Civil Code §3068(b)(1)(A). The lienholder shall apply to the DMV for authorization to conduct a liens sale for any vehicle with a value more than $4000. Civil Code §3071(a). For a vehicle valued at $4000 or less, the lienholder shall apply to the DMV for the names and addresses of the registered and legal owners and notify them of a pending lien sale. Civil Code §3071(a), (b). If the DMV receives a timely Declaration of Opposition form, it shall notify the lienholder within 16 days of receipt of the form that a lien sale shall not be conducted unless the lienholder files an action in court within 30 days of the DMV’s notice. Civil Code §3071(d). Any lien sale shall be void if the lienholder does not comply with these requirements. Civil Code §3071(l).

Daimler offered E&L the statutory maximum repair and storage charges of $2750, but Defendants have not accepted. Caley Decl., ¶¶ 5-8. Arguably, this offer does not void Defendants’ lien, because Daimler did not tender the statutory amount.

Daimler also asserts that as of October 3, 2022, E&L has not filed with the DMV for authorization to conduct a lien sale. Caley Decl., ¶6. E&L came into possession of the Vehicle on April 7, 2022 and should have provided its Preliminary Estimate Summary when a written statement of charges for completed work is presented to the owner or within 15 days of the work’s completion. Civil Code §3068(a). Daimler contends that this date is April 22, 2022 because that is 15 days after E&L came into possession. Mem. at 6; Caley Decl., ¶4, Ex. 1. However, the date of completion, not the date of possession, starts the clock on the lien and Daimler does not show when E&L completed the repair work. Nonetheless, the lien arose sometime before October 4, 2022 because E&L confirmed by telephone on that date that it was seeking $19,35701 in repairs. Caley Decl., ¶4. The lien is extinguished because as of October 3, 2022 E&L had not applied to the DMV for authorization to conduct a lien sale. Civil Code §3068(b)(1)(A). See Caley Decl., ¶6.

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). Daimler presents evidence that the Vehicle is loated at 715 Wittmer St., Los Angeles, CA 90017 as this address is on the Preliminary Estimate Summary. Caley Decl., ¶4, Ex. 1. This location does not appear to be a private address, but if it is the levying officer may enter the address to recover the Vehicle.

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. CCP §515.010(a).

Daimler says it will file an undertaking of $40,000, more than double the $19,357.01 listed on the Preliminary Estimate Summary. Mem. at 7; Caley Decl., ¶4, Ex. 1. Daimler does not need to do so. The lien is extinguished and E&L and Salazar have no legal interest in the Vehicle. Therefore, no undertaking is required. CCP §515.010(b).

Daimler asserts that the redelivery bond should be $42,000 should Defendants seek to prevent Daimler from taking possession of the Vehicle. Mem. at 7. Daimler cites CCP section 515.020(a), which sets a defendant’s redelivery undertaking at an amount equal to the amount of the plaintiff’s undertaking. CCP §515.020(a). Because Daimler owes no undertaking, this provision does not apply.

Daimler asserts that the redelivery bond should also be $42,000 under CCP section 515.020(b). If the court finds that the defendant has no interest in the property, a defendant’s redelivery undertaking shall state that if the plaintiff recovers judgment on the action, the defendant shall pay all costs awarded to the plaintiff and all damages that the plaintiff may sustain by reason of the loss of possession of the property. CCP §§ 515.010(b), 515.020(b). Daimler cites to its account balance of $41,276.22, plus an estimated $1,000 in attorney’s fees. Azubogu Decl., ¶26.

Daimler conflates its damages from loss of possession of the Vehicle with its total damages in the action. Damiler’s damages from loss of possession of the Vehicle cannot exceed the Vehicle’s value, which is $34,822. Azubogu Decl., ¶25, Ex. 4. Although Daimler asserts that its attorney’s fees and costs will total $1,000, its counsel does not provide this estimate and such fees are disallowed for purposes of calculating the redelivery bond. See Azubogu Decl., ¶26. The redelivery bond shall be the $34,822 value of the Vehicle.

The application for writ of possession is granted. The levying officer may enter 715 Wittmer St., Los Angeles, CA 90017 and any public or commercial address.

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