Judge James C. Chalfant, Case 23STCV05314 2023-05-23 Tentative Ruling

Financial Pacific Leasing, Inc. v. State to State Transportation LLC and Carl Daniel Jr., 23STCV05314

Tentative decision on application for writs of possession and turnover orders: granted

Plaintiff Financial Pacific Leasing, Inc. (“Financial”) seeks writs of possession against Defendants State to State Transportation LLC (“State to State”) and Carl Daniel Jr., (“Daniel”) to recover a 2014 Peterbilt 386, VIN 1XPHD49X2ED225792 (“Vehicle”). Financial also seeks a turnover order compelling Defendants to transfer possession of the Vehicle.

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

Plaintiff Financial filed the Complaint against Defendants on December 20, 2022, alleging causes of action for (1) breach of written agreement, (2) claim and delivery, (3) conversion, (4) account stated, (5) unjust enrichment, and (6) breach of personal guaranty. The Complaint alleges as follows.

On June 23, 2022, Financial and State to State entered into a written Equipment Finance Agreement (“Agreement”) in which Financial would finance the purchase of the Vehicle, which was collateral. To induce entry into this Agreement, Daniel executed a Guaranty of all of State to State’s obligations under the Agreement (“Guaranty”).

Financial perfected its interest in the Vehicle with a Certificate of Title from the California Department of Motor Vehicles.

State to State breached the Agreement on November 1, 2022, by failing to make the monthly installment due. It has since failed to become current on payments and Financial has exercised its right under the Agreement to accelerate the balance due. The principal balance due and owing is $78,928.44, plus interest at an 18% annual rate. State to State also owes $2,333.91 in late charges, a returned check fees of $35.00, and administrative fees of $51.25.

Financial seeks (1) the principal balance of $78,928.44, (2) recovery of late charges in the amount of $2,333.91, (3) recovery of returned check fees of $35.00, (4) recovery of administrative fees of $51.25, (5) interest on the principal at the annual rate of 18%, (6) an order requiring Defendants to release the Vehicle, and (7) attorney’s fees and costs.

On March 18, 2023, Financial served Daniel and State to State with the Complaint, Summons, and moving papers by substitute service, effective March 28, 2023.

On May 1, 2023, Department 26 (Hon. Elaine Lu) entered the default of State to State.

On May 8, 2023, Department 26 rejected the request to enter the default of Daniel because his name did not match the name on the Summons and Complaint.

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, (“Edwards”) (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 June 23, 2022, Financial and State to State entered into a written Agreement for Financial to finance State to State’s purchase of the Vehicle. Gonzales Decl., ¶3, Ex. 1. Under the Agreement, State to State was required to make 60 monthly payments of $1,410.24. Gonzales Decl., ¶3, Ex. 1. Any late payment would incur a 10% late charge and accrue interest at 1.5% per month, or 18% per year. Gonzales Decl., ¶3, Ex. 1.

The Agreement granted Financial a security interest in the Vehicle. Gonzales Decl., ¶4. Financial perfected its interest in the Vehicle with a Certificate of Title from the Department of Motor Vehicles. Gonzales Decl., ¶4, Ex. 2.

The Agreement provided that, if State to State failed to make a payment when due, Financial was entitled to accelerate all debts owed and require prompt return of the Vehicle. Gonzales Decl., ¶3, Ex. 1. State to State would also be responsible for all attorney’s fees incurred via enforcement of the Agreement. Gonzales Decl., ¶3, Ex. 1.

Daniel also signed a Guaranty for all of State to State’s obligations under the Agreement. Gonzales Decl., ¶¶ 3, 10, Ex. 1.

State to State breached the Agreement on November 1, 2022 by failing to make the monthly installment due. Gonzales Decl., ¶5. It has since failed to become current in the payments due, and Financial has exercised its right under the Agreement to accelerate the balance due. Gonzales Decl., ¶5.

The principal now due and owing is $78,928.44, plus interest at an 18% annual rate. Gonzales Decl., ¶6. State to State also owes $2,333.91 in late charges, a returned check fees of $35.00, and administrative fees of $51.25. Gonzales Decl., ¶7. The amount owed before any future interest is $81,348.60. Gonzales Decl., ¶8. Due to his Guaranty, Daniel also owes this amount. Gonzales Decl., ¶11.

Per the Agreement, Financial is entitled to immediate repossession of the Vehicle. Gonzales Decl., ¶15, Ex. A. Financial believes the Vehicle is at either 4859 W. Slauson Ave., Suite 532, Los Angeles, CA 90056 (“Slauson”), or 10214 S. Wilton Place, Los Angeles, CA 90047 (“Wilton”). Gonzales Decl., ¶14. The Agreement lists the Wilton address as the Vehicle’s location. Gonzales Decl., ¶3, Ex. 1. The Certificate of Title lists the Slauson address as State to State’s address. Gonzales Decl., ¶4, Ex. 2. Demands for the Vehicle have failed. Gonzales Decl., ¶16.

Based on the expertise of Financial’s Vice President of Portfolio Services and factors like the Vehicle’s age and original price, the Vehicle’s value is between $36,000 and $40,000. Gonzales Decl., ¶20.

Plaintiff Financial seeks a writ of possession and turnover order for the Vehicle against State to State and Daniel.

The Agreement provides that State to State agreed to make 60 monthly installments of $1,410.24 for the Vehicle. Gonzales Decl., ¶3, Ex. 1. Any late payment would incur a 10% late charge and accrue interest at 1.5% per month, or 18% per year. Gonzales Decl., ¶3, Ex. 1.

If State to State failed to make a payment when due, the Agreement entitled Financial to accelerate all debts owed and require prompt return of the Vehicle. Gonzales Decl., ¶3, Ex. 1. State to State would also be responsible for all attorney’s fees incurred via enforcement of the Agreement. Gonzales Decl., ¶3, Ex. 1. Daniel also signed a Guaranty for all of State to State’s obligations under the Agreement. Gonzales Decl., ¶¶ 3, 10, Ex. 1. Financial perfected its interest in the Vehicle with a Certificate of Title. Gonzales Decl., ¶4, Ex. 2.

In seeking a writ of possession, the supporting 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). All documentary evidence, including contracts and canceled checks, must be presented in admissible form, and admissibility as non-hearsay evidence or exception to the hearsay rule, such as the business records exception. Lydig Construction, Inc. v. Martinez Steel Corp., (2015) 234 Cal.App.4^th 937, 944; Pos-A-Traction, Inc., v. Kepplly-Springfield Tire Co., (C.D. Cal. 2000) 112 F.Supp.2d, 1178, 1182.

Financial presents conclusory evidence that State to State defaulted on November 1, 2022 for failure to make the monthly installment due and failed to make any payment due thereafter. Gonzales Decl., ¶5. The principal due is $78,928.44, plus interest at an 18% annual rate. Gonzales Decl., ¶6. Financial fails to support this conclusion with a payment history or calculation that these are the amounts owed. As Defendants have not opposed, the court will not require additional evidence.

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). The Vehicle’s value is estimated to be at most $40,000. Gonzales Decl., ¶20. The principal balance is $78,928.44. Gonzales Decl., ¶6. Because Defendants owe more than the market value, they have no legal interest in the Vehicle and no undertaking is required.

The Agreement provides evidence that the probable location of the Vehicle is the Wilton address. Gonzales Decl., ¶3, Ex. 1. The Certificate of Title for the Vehicle lists Slauson as State to State’s address. Gonzales Decl., ¶4, Ex. 2. Financial can obtain a writ to enter a private residence at the Slauson or Wilton address.

The court may 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, supra, 230 Cal.App.3d at 178.

Financial requests a turnover order compelling Defendants to transfer possession of the Vehicle. Mem. at 2. The request for a turnover order is granted.

The applications for writs of possession and turnover orders for the Vehicle are granted. Financial has not filed proposed writ of possessions and must do so within two court days of this hearing on the proper Judicial Council form or its right thereto will be waived. The levying officer may enter the Slauson or Wilton address if it is a private residence, as well as any commercial or public address.

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