Judge James C. Chalfant, Case Number: 23STCV10831, Date: 2023-08-08 Tentative Ruling

Transport Funding, LLC v. J4ME LLC et al, 23STCV10831

Tentative decision on application for writ of possession and turnover order: granted

Plaintiff Transport Funding, LLC (“Transport”) seeks a writ of possession against Defendants J4ME LLC (“J4ME”) and Marcus Damond Sowell (“Guarantor”) to recover a 2017 FL Cascadia Day Can, Vehicle Identification Number 3AKJGBDV7HSHR2689 (“Vehicle”).

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

Plaintiff Transport filed the Complaint against Defendants J4ME and Guarantor on May 15, 2023, alleging causes of action for (1) breach of written agreement, (2) claim and delivery, (3) conversion, (4) goods sold and delivered, and (5) breach of guaranty. The Complaint alleges as follows.

On April 26, 2022, J4ME and Arrow Truck Sales, Inc. (“Assignor”) executed a written Security Agreement (“Agreement”) to finance the purchase of the Vehicle, which was collateral. Pursuant to the Agreement, J4ME was required to make 53 monthly payments of $2,192.45 beginning June 11, 2022. To induce Assignor’s entry into the Agreement, Guarantor executed a Continuing Guaranty (“Guaranty”) for the full amount owed thereunder.

Assignor immediately assigned to Transport its rights under the Agreement via an Assignment Agreement (“Assignment”). Transport obtained a Certificate of Title from the State of California to perfect its ownership interest in the Vehicle.

J4ME breached the Agreement on December 11, 2022 by failing to make the monthly installment due. Transport has exercised its right under the Agreement to accelerate the balance owed. As of filing the Complaint, Defendants owe a principal balance of $85,311.72, miscellaneous charges of $15.00, and late charges of $871.11. The principal balance accrues interest at an 18% annual rate.

Transport seeks damages of $85,311.72 plus 18% annual interest, miscellaneous charges of $15.00, late charges of $871.11, and attorney’s fees and costs. Alternatively, under the cause of action for goods sold and delivered, Transport seeks $85,311.72 plus 10% annual interest and costs of suit. Transport also seeks recovery of the Vehicle or its market value.

On June 4, 2023, Transport served J4ME and Guarantor with the Complaint, Summons, and moving papers by substitute service, effective June 14, 2023.

On July 10, 2023, Department 69 (Hon. William Fahey) rejected requests for entry of default against J4ME and Guarantor. On July 17, 2023, upon a second request, the court entered default against both J4ME and Guarantor. A request for default judgment remains pending.

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, (“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 April 26, 2022, J4ME and Assignor executed the Agreement to finance the purchase of the Vehicle, which was collateral. Newton Decl., ¶3, Ex. 1. Under the Agreement, J4ME was required to make 53 monthly payments of $2,192.45 from June 11, 2022 thereafter. Newton Decl., ¶3, Ex. 1.

Upon J4ME’s default for failure to pay amounts due, Assignor had the right to accelerate the amount owed and demand assembly and return of the Vehicle. Newton Decl., ¶3, Ex. 1. The accelerated amount would also accrue interest at 1.5% per month. Newton Decl., ¶3, Ex. 1. J4ME also agreed to reimburse Assignor for all attorney’s fees and legal expenses incurred to enforce the Agreement. Newton Decl., ¶9, Ex. 1.

To induce Assignor’s entry into the Agreement, Guarantor signed the Guaranty for the full amount owed thereunder. Newton Decl., ¶10, Ex. 4.

Also on April 26, 2022, Assignor executed the Assignment to Transport that assigned its rights under the Agreement. Newton Decl., ¶4, Ex. 2. Transport applied for a Certificate of Title from the State of California to perfect its ownership interest in the Vehicle. Newton Decl., ¶5, Ex. 3.[2]

J4ME breached the Agreement on December 11, 2022 by failing to make the monthly installment due. Newton Decl., ¶6. Transport has exercised its right under the Agreement to accelerate the balance owed. Newton Decl., ¶7. Defendants owe a principal balance of $85,311.72, miscellaneous charges of $15.00, and late charges of $871.11. Newton Decl., ¶7. The principal balance will also accrue interest at an 18% annual rate. Newton Decl., ¶7.

The Agreement lists J4ME’s address as 6910 Haas Avenue, Los Angeles, CA 90047. Newton Decl., ¶13, Ex. 1. Transport believes the Vehicle is at this location. Newton Decl., ¶13. Demands for the Vehicle have failed. Newton Decl., ¶15.

The JD Power guide lists the Vehicle’s wholesale value as $30,250 and retail value as $40,950. Newton Decl., ¶19, Ex. 5.

Plaintiff Transport seeks a writ of possession and turnover order against Defendants for the Vehicle.

The Agreement provides that J4ME was required to make 53 monthly payments of $2,192.45 beginning June 11, 2022. Newton Decl., ¶3, Ex. 1. Upon default for J4ME’s failure to pay amounts due, the Assignor had the right to accelerate the amount owed and demand assembly and return of the Vehicle. Newton Decl., ¶3, Ex. 1. The accelerated amount would also accrue interest at 1.5% per month. Newton Decl., ¶3, Ex. 1. To induce Assignor’s entry into the Agreement, Guarantor signed a Guaranty for the full amount owed thereunder. Newton Decl., ¶10, Ex. 4.

Assignor assigned its rights under the Agreement to Transport. Newton Decl., ¶4, Ex. 2. Transport applied for a Certificate of Title from the State of California to perfect its ownership interest in the Vehicle. Newton Decl., ¶5, Ex. 3.

Transport asserts that J4ME breached the Agreement on December 11, 2022 for failure to make the monthly installment due. Newton Decl., ¶6. Transport has exercised its right under the Agreement to accelerate the balance owed. Newton Decl., ¶7. Defendants owe a principal balance of $85,311.72, miscellaneous charges of $15.00, and late charges of $871.11. Newton Decl., ¶7.

Transport does not provide any payment history or calculation as evidence of when J4ME and Guarantor defaulted and how much they owe. As Defendants are in default and have not opposed, this defect is waived.

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 JD Power guide lists the Vehicle’s retail value as $40,950. Newton Decl., ¶19, Ex. 5. The balance Defendants owe exceeds $85,000. Newton Decl., ¶7. Because this is greater than the value of the Vehicle, Defendants have no interest in the Vehicle. Transport does not need to post an undertaking.

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 Agreement shows that the probable location of the Vehicle is 6910 Haas Avenue, Los Angeles, CA 90047. Newton Decl., ¶13, Ex. 1. Transport can obtain a writ that gives the levying officer permission to enter this address.

Transport also requests a turnover order compelling Defendants to transfer possession of the Vehicle. Mem. at 2. 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. The turnover order is granted.

The application for a writ of possession and turnover order for the Vehicle is granted. No proposed writ of possession is on file and Transport is ordered to file one within two court days of the hearing on this application or it will be deemed as waived.

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

[2] Although Transport’s supporting declaration states that it obtained the Certificate of Title, it is not provided. See Newton Decl., ¶5.