Judge James C. Chalfant, Case Number: 23STCV02333, Date: 2023-10-31 Tentative Ruling

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

Tentative decision on applications for writs 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 Defendants Viktor Kachura (“Kachura”), Comfort Cars (“Comfort”), and VA Collision LLC (“VA”) 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 cause of actions for (1) breach of contract, (2) common count, (3) claim & delivery, and (4) conversion. The operative pleading is the First Amended Complaint (“FAC”) filed July 26, 2023, against Ovasapyan, Kachura, Comfort, and VA, alleging the same causes of action. The FAC 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 Department of Motor Vehicles (“DMV”).

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

Daimler received notice that Salazar and E&L had possession of the Vehicle. After filing the Complaint, Daimler learned that E&L was not in possession of the Vehicle, VA is. Daimler dismissed E&L from the action.

VA and Kachura have possession of the Vehicle. Kachura has confirmed his possession and allowed Daimler to inspect the Vehicle. Because the Agreement includes a Vehicle Location Consent, Daimler has used GPS data to track the Vehicle to storage with Comfort.

VA, Kachura, and Comfort did not seek approval to take possession and store the Vehicle or to incur storage and repair fees. Daimler has attempted to negotiate the release of the Vehicle and offered Kachura $2,750 for storage and repairs, but Kachura refused the offer. Per Civil Code section 3068, his lien is extinguished.

Daimler seeks from Defendant Ovasapyan $41,276.22, plus taxes and late charges from and after June 9, 2022. From all Defendants, Daimler also seeks return and possession of the Vehicle or the actual value of the Vehicle. Daimler further seeks conversion, exemplary, and punitive damages according to proof, with attorney’s fees and costs.

On February 16, 2023, Daimler 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, effective March 1, 2023.

On April 11, 2023, this court granted Daimler’s application for a writ of possession against Defendant Salazar for the Vehicle.

On April 24, 2023, Department 20 (Hon. Kevin Brazile) entered default against Defendant Ovasapyan and Salazar.

On July 17, 2023, pursuant to Daimler’s request, Department 20 dismissed the action against Salazar without prejudice.

On August 8, 2023, Daimler served Comfort with the FAC, Summons, and moving papers by substitute service, effective August 18, 2023.

On August 22, 2023, Daimler served VA and Kachura with the FAC, Summons, and moving papers by substitute service, effective September 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.

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.[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, 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. The Lease also included a clause for Vehicle Location Consent, which authorized Dealer in the event of default to use any data recorders on the Vehicle to find it. Azubogu Decl., ¶¶ 11, 21, Ex. 1.

Dealer assigned the Agreement to Daimler. Azubogu 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 a demand for payment, Ovasapyan informed it that he had transferred the Vehicle to E&L. Azubogu Decl., ¶18. On October 3, 2022, the DMV informed Daimler that E&L has not filed for authorization to conduct a lien sale. Caley Decl., ¶6. No active application for authorization to conduct a lien sale was pending. Caley Decl., ¶6.

On October 4, 2022, counsel for Daimler spoke with Kachura, who confirmed that E&L has been in possession of the Vehicle since April 7, 2022. Caley Decl., ¶4. He also presented an April 20, 2022 preliminary estimate showing $19,357.01 in repair fees for the Vehicle. Caley Decl., ¶4, Ex. 7. Counsel for Daimler offered the $2,750 maximum in repair and storage fees under Civil Code section 3068(c)(1). Caley Decl., ¶5. Kachura refused the offer. Caley Decl., ¶5. Daimler made the offer again on October 24, 2022, but Kachura refused it again and demanded $27,000. Caley Decl., ¶7.

After Daimler filed the Complaint, it learned that VA had the Vehicle. Azubogu Decl., ¶19. Daimler dismissed E&L from this action. Azubogu Decl., ¶19. On March 27, 2023, counsel for Daimler met with Kachura. Caley Decl., ¶9. He stated that the Vehicle had been moved three times and was now in VA’s possession at Monterrey Park. Caley Decl., ¶9.

On April 17, 2023, Daimler met with Kachura. Azubogu Decl., ¶20. Kachura had the Vehicle available for inspection but would not release it without payment for repairs. Azubogu Decl., ¶20, Ex. 5. Kachura gave Daimler his business card, which confirms he works for VA. Azubogu Decl., ¶20, Ex. 4. The business card lists VA’s address as 401 Monterey Pass Road, Unit H, Monterey Park, CA 91754 (“Monterey Address”). Azubogu Decl., ¶20, Ex. 4; Caley Decl., ¶8. The Secretary of State lists Kachura’s address as 616 Saint Paul Avenue, Apt. 319A, Los Angeles, CA 90017 (“Saint Address”). Azubogu Decl., ¶27.

Pursuant to the Vehicle Location Consent, Daimler has used the Vehicle’s GPS tracking data to confirm Comfort has stored the Vehicle at 10985 Penrose St., Unit B, Sun Valley, CA 91352 (“Penrose Address”) as of June 10, 2023. Azubogu Decl., ¶¶ 21, 27.

VA, Kachura, and Comfort did not seek approval to take possession and store the Vehicle or to incur storage and repair fees. Azubogu Decl., ¶22. Kachura has failed to provide a repair order for the repairs completed on the Vehicle. Caley Decl., ¶9. He has refused the statutory offer under Civil Code section 3068(c)(1). Caley Decl., ¶9; Azubogu Decl., ¶23. VA also failed to apply to the DMV for authorization to conduct a lien sale within 30 days of the lien’s commencement. Azubogu Decl., ¶24. Per Civil Code section 3068(c)(1), VA’s lien is extinguished. Azubogu Decl., ¶24. Demands for VA and Kachura to release the Vehicle have failed. Azubogu Decl., ¶¶ 25-26.

The Vehicle is at either the Saint, Monterey, or Penrose Addresses. Azubogu Decl., ¶27. Daimler requests that the writs of possession authorize the levying officer to demand entry, break locks, and charge in to these properties if Defendants refuse entry. Azubogu Decl., ¶27.

As of July 12, 2023, the Kelley Blue Book lists the average purchase and listing prices of the Vehicle as $33,805 and $35,305, respectively. Azubogu Decl., ¶28, Ex. 6.[2] Ovasapyan owes more and has no equity interest in the Vehicle. Azubogu Decl., ¶¶ 16, 29. Daimler requests the court require a $42,000 redelivery bond from Ovasapyan, which includes both the account balance and an estimated $1,000 in attorney’s fees and costs. Azubogu Decl., ¶29.

Because VA alleges a $19,357.01 interest in the Vehicle, Daimler is prepared to post a $40,000 undertaking. Azubogu Decl., ¶30. Daimler requests the court require a $42,000 redelivery bond from VA to reflect Daimler’s undertaking under CCP section 515.010(a). Azubogu Decl., ¶30.

Plaintiff Daimler applies for a writ of possession for the Vehicle against Defendants VA, Kachura, and Comfort.

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 provides evidence that Ovasapyan defaulted and owes $41,276.22. Azubogu Decl., ¶¶ 15-16, Ex. 3. This evidence is presented only as a summary with a supporting payoff quote (Azuboga Decl., Ex. 3), which is inadequate. The declaration must be set forth with particularity. CCP §516.030. This means that the plaintiff must show evidentiary facts rather than the ultimate facts commonly found in pleadings. A recitation of conclusions without a foundation of evidentiary facts is insufficient. See Rodes v. Shannon, (1961) 194 Cal.App.2d 743, 749 (declaration containing conclusions inadequate for summary judgment); Schessler v. Keck, (1956) 138 Cal.App.2d 663, 669 (same).

Despite this failure, the debt of $41,276.22 pertains only to Ovasapyan, who is in default. As the debt exceeds the current value of $35,305, Ovasapyan does not have a legal interest in the Vehicle. Azubogu Decl., ¶28, Ex. 6.

Daimler presents evidence that the body shop E&L, and its owner Salazar, at one point possessed the Vehicle. Caley Decl., ¶4. An E&L repair estimate asserts total repair fees of $19,357.01. Caley Decl., ¶4, Ex. 7. Kachura later told Daimler that VA holds the Vehicle. Caley Decl., ¶9. Kachura allowed Daimler to inspect the Vehicle in April 2023 but would not release it without payment for repairs. Azubogu Decl., ¶20, Ex. 5.

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 a 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 maximum lien for storage of the vehicle increases to $1,250 if an application for an authorization to conduct a lien sale has been filed within 30 days after the commencement of the storage or safekeeping. Id. The term “legal owner” is defined as a person holding a security interest in a vehicle which is subject to UCC. Civil Code §3067; Vehicle Code §370. The lien shall be extinguished if the body shop rejects an offer by the vehicle’s legal owner or lessor of the statutory amount for payment of the mechanic’s lien for repair and/or storage of the vehicle. Universal CIT Credit Corp. v. Rater, (1963) 214 Cal.App.2d 493, 495.

Daimler learned VA had possession of the Vehicle in March 2023. Caley Decl., ¶9. VA, Kachura, and Comfort did not seek approval to take possession and store the Vehicle or to incur storage and repair fees. Azubogu Decl., ¶22. Daimler offered Kachura and VA the statutory maximum repair and storage charges of $2,750, which was refused. Mem. at 3; Caley Decl., ¶9; Azubogu Decl., ¶23. VA’s lien is extinguished.

A lien also 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 this requirement. Civil Code §3071(l).

Neither E&L nor VA has applied to the DMV for authorization to conduct a lien sale. Mem. at 5-6; Azubogu Decl., ¶24; Caley Decl., ¶6. Kachura, a VA employee, refused to release the Vehicle based on outstanding repair fees in April 2023. Azubogu Decl., ¶20, Exs. 4-5. By July 2023, the 30-day period to apply to conduct a lien sale had expired. VA’s lien also is extinguished under Civil Code section 3068(b)(1)(A).

Daimler used the Vehicle’s GPS tracking data to confirm that Comfort has stored the Vehicle at the Penrose Address as of June 10, 2023. Azubogu Decl., ¶¶ 21, 27. No evidence suggests that Comfort assessed storage or repair fees against the Vehicle. Why Comfort came to possess the Vehicle is unclear, it has no right to do so.

Daimler asserts that it used the Vehicle’s GPS tracking data to confirm Comfort has stored the Vehicle at the Penrose Address as of June 10, 2023. Azubogu Decl., ¶¶ 21, 27.

Daimler also suggests the Vehicle could also be at the Saint Address, Kachura’s address according to the Secretary of State. Azubogu Decl., ¶27. Daimler fails to provide documents from the Secretary of State to support this argument. Because no opposition is on file, this defect is waived.

Daimler further suggests the Vehicle could be at the Monterey Address. Azubogu Decl., ¶27. Kachura’s business card for VA lists this address. Azubogu Decl., ¶20, Ex. 4; Caley Decl., ¶8. Kachura gave this card to Daimler the same day he brought the Vehicle for inspection, only to demand payment on VA’s behalf before he would release it. Azubogu Decl., ¶20, Ex. 4.

None of these locations appears 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 lien VA asserts for repair and storage fees. Mem. at 7; Azubogu Decl., ¶30. Daimler does not need to do so. The lien is extinguished and VA, Kachura, and Comfort have no legal interest in the Vehicle. Therefore, no undertaking is required. CCP §515.010(b).

A defendant may prevent the plaintiff from taking possession of property pursuant to a writ of possession or regain possession of property so taken by filing the appropriate redelivery bond with the court. CCP §515.020(a). This redelivery bond is equal to a plaintiff’s undertaking, if one is required. Id. If not, 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 asserts that Ovasapyan should be required to post a $42,000 redelivery bond to reflect both his account balance and an estimated $1,000 in attorney’s fees and costs. Azubogu Decl., ¶29; Mem. at 8. A redelivery bond is only necessary to prevent taking pursuant to a writ of possession. Because Daimler does not apply for a writ of possession against Ovasapyan, Ovasapyan does not need to post a redelivery bond.

Daimler asserts that the redelivery bond for VA and Kachura should be $42,000 should it seek to prevent Daimler from taking possession of the Vehicle. Mem. at 8. 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. Mem. at 8; CCP §515.020(a). Because Daimler owes no undertaking, this provision does not apply.

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 does not discuss what VA’s redelivery bond should be under this standard. However, Daimler’s damages from loss of possession of the Vehicle cannot exceed the Vehicle’s value, which is $36,769. Azubogu Decl., ¶28, Ex. 6. 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., ¶29. VA’s and Kachura’s redelivery bond shall be the $36,769 value of the Vehicle.[3]

The application for writ of possession is granted. No undertaking is required. The redelivery bond shall be $36,769. The levying officer may enter the Penrose, Saint, and Monterey Addresses as well as 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).

[2] The declarant requests judicial notice of this fact. Azubogu Decl., ¶28. Daimler failed to file a separate document with the request for judicial notice. See CRC 3.1113(l). The request is denied.

[3] 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. Daimler does not ask for a turnover order but has checked the turnover order box on the proposed order. As it was not requested, no turnover order shall issue.