Judge James C. Chalfant, Case Number: 23STCV13881, Date: 2023-10-19 Tentative Ruling

Nexus Fulfillment Services, LLC v. Jupiter Warehouse and Distribution Inc., 23STCV13881

Tentative decision on application for writ of possession: granted

Plaintiff Nexus Fulfillment Services, LLC (“Nexus”) applies for a writ of possession against Defendant Jupiter Warehouse and Distribution Inc. (“JWD”) to recover 51,487 consumer goods (collectively, “Goods”) with a total retail value of $71,723,602.24.

The court has read and considered the moving papers, opposition, and reply,[1] and renders the following tentative decision.

Plaintiff Nexus filed this action on June 14, 2023, alleging (1) conversion, (2) trespass to personal property, and (3) intentional interference with contractual relations. The Complaint alleges in pertinent part as follows.

Nexus provided logistics and fulfillment services to retailers and other merchants. JWD provides storage and distribution services for goods to customers like Nexus. Nexus entrusted at least $10,000,000 of Goods to JWD to hold and store until Nexus needed to retrieve them for delivery to Nexus customers. Nexus owns and has the legal right to possess these goods, and Jupiter has no such ownership interest. Multiple demands for the release of the Goods have failed.

JWD holds no warehouseman’s lien or other security interest in the Goods. JWD has never issued a warehouse receipt for the Goods or entered into any storage agreement for them within the meaning of California Commercial Code (“Comm. Code”) section 7209. JWD has falsely claimed that Nexus owes amounts for the storage of those goods.

Nexus seeks damages necessary to make it whole, exemplary damages, pre-judgment and post-judgment interest, preliminary and permanent injunctive relief, and any other relief the court finds appropriate.

On June 16, 2023, Department 54 (Hon. Maurice Leiter) vacated Nexus’s ex parte application for writ of possession for failure to file in the correct department.

On June 22, 2023, Department 86 (Hon. Mitchell Beckloff) denied Nexus’s ex parte application for writ of possession for failure to file a memorandum of points and authorities or demonstrate irreparable harm or immediate danger.

On August 16, 2023, this court denied Nexus’s renewed ex parte application for writ of possession. Aside from failure to comply with CCP section 1008(b), the delay between this application and the prior one demonstrated that there was no emergency meriting ex parte relief. Nexus was ordered to comply with CCP section 1008(b) upon filing a noticed motion, but no showing of due diligence was required.

On August 22, 2023, Department 82 (Hon. Curtis Kin) denied Nexus’s renewed ex parte application for writ of possession.

On September 19, 2023, JWD filed an Answer. JWD amended its Answer on September 25, 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).

A TRO may issue ex parte if a plaintiff (1) establishes the probable validity of his claim to possession of the property, (2) provides the requires undertaking, and (3) establishes the probability that there is an immediate danger that the property claimed may become unavailable to levy by reason of being transferred, concealed, or removed or may become substantially impaired in value. CCP §513.010(b). Upon success in obtaining a writ of possession, a 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).

Nexus provides logistics and fulfillment services to retailers and merchants. Palma Decl., ¶2. Its largest client is Global Retail Brands (“GRB”), a housewares retailer with “CUSTOM CHEF™” retail boutiques throughout the continent. Palma Decl., ¶2. GRB sells various pieces of “Cuisine::pro®”-marked kitchenware. Palma Decl., ¶2. Nexus delivers those products to new and existing GRB retail locations, often within large department stores like Macy’s. Palma Decl., ¶3, Ex. A. GRB knife sets range from $99.99 to $1299.99, and individual knives retail between $39.99 and $179.99. Palma Decl., ¶4, Ex. B.

GRB products take 5-6 months to manufacture and ship into the United States from overseas. Palma Decl., ¶5. Between August and September 2022, GRB manufactured and shipped 55 containers of Goods to Nexus. Palma Decl., ¶5. Nexus planned to ultimately store and distribute the Goods from its own warehouse, but it lacked the capacity at the time. Palma Decl., ¶6. It therefore entrusted the Goods to JWD for storage while Nexus made room in its own warehouse. Palma Decl., ¶6.

JWD has no ownership interest in the remaining Goods, and Nexus has not granted JWD a security interest in them. Palma Decl., ¶8. JWD has never issued a warehouse receipt or other document that asserts a right to receive, control, hold, and dispose of the Goods. Palma Decl., ¶9. It has also never issued a document stating the rate of storage and handling charges or that the goods were subject to a field warehousing arrangement. Palma Decl., ¶9. In lieu of a storage agreement, JWD has billed Nexus in arrears at a monthly rate of up to $20 per pallet. Palma Decl., ¶10. Nexus relied on JWD’s obligations as bailee and depositary to release and deliver the Goods on demand. Palma Decl., ¶10. Between September 22, 2022 and March 27, 2023, Nexus paid JWD $212,929. Palma Decl., ¶18, Ex. F.

In April 2023, JWD’s customer service representative warned Nexus that Harvey Hou (“Hou”) had replaced Billy Lai (“Lai”) as JWD’s owner. Palma Decl., ¶19. JWD then began to make inconsistent and incorrect representations and demands to Nexus about storage charges for the Goods and payment thereof. Palma Decl., ¶19. The only consistency was JWD’s failure to credit Nexus for the payments it had already made. Palma Decl., ¶20.

In mid-April 2023, Nexus gave notice that it had made room in its own warehouse for the Goods and would retrieve them. Palma Decl., ¶13. By the beginning of May, JWD had only returned 200 pallets. Palma Decl., ¶14. Subsequent demands for the remaining Goods have failed. Palma Decl., ¶15.

A JWD inventory list dated May 1, 2023 shows that it still had 1,335 pallets with 51,487 Goods. Palma Decl., ¶¶ 7, 14, Ex. C. JWD holds most of them at 300 W. Artesia Blvd. Compton, CA 90220, the address on the inventory list. Palma Decl., ¶7, Ex. C. The current wholesale and retail value of the Goods is $35,860,724.24 and $71,723,602.24, respectively. Palma Decl., ¶¶ 7, 30, Ex. J.

On May 19, 2023, JWD issued an invoice for storage charges of $8 per pallet per month for 1,380 pallets from January through April 2023, a total of $44,160. Palma Decl., ¶21, Ex. G. Before Nexus could process the invoice, Hou withdrew and cancelled it. Palma Decl., ¶22. On May 24, 2023, he emailed JWD that the accrued storage charges from January 1 to May 24, 2023 were instead $538,760. Palma Decl., ¶23, Ex. H. The rate varied over time between $46.50 and $91 per pallet per month. Palma Decl., ¶23, Ex. H. This email also charged for 1,580 pallets through May 18, which was 200 more than JWD held. Palma Decl., ¶23, Ex. H.

JWD later recanted the rates in the May 19, 2023 email but refused to identify the rate it would charge until Nexus provided proof of its prior payments. Palma Decl., ¶24. Nexus refused to provide this proof for two reasons. Palma Decl., ¶25. First, Hou might reverse-engineer the storage rate and total fees based on the amount Hou wanted Nexus to pay after subtracting amounts already paid. Palma Decl., ¶25(a). Second, Nexus knew about litigation between Hou and Lai over JWD’s ownership from April 13, 2023. Palma Decl., ¶25(b); RJN Ex. 1. Nexus thought Hou might be using the stored Goods as leverage to compel Nexus to produce documents outside the normal third-party discovery process. Palma Decl., ¶25(b).

Nexus has attempted to arrange for reasonable payment in exchange for the Goods’ release and delivery. Palma Decl., ¶26. Until August 2, 2023, JWD refused to respond to these efforts except to demand that Nexus obtain a court order compelling such release. Palma Decl., ¶26.

On August 2, 2023, JWD sent invoices claiming storage charges of $273,760 from September 1, 2022 through April 30, 2023, plus $103,500 from May 1 to July 31, 2023. Palma Decl., ¶27, Ex. I. This invoice does not reflect the $212,929 Nexus paid between September 22, 2022 and March 27, 2023. Palma Decl., ¶28(a), Ex. F. The decision to bill $103,500 for storage from May 1, 2023 to July 31, 2023 also ignores the fact that JWD would not have been storing the Goods during that period if it had allowed Nexus to take possession at the end of April 2023. Palma Decl., ¶28(b). Finally, the invoices billed a storage price of $30 per pallet per month from January 2023 thereafter, 1.5 times higher than any past price and almost four times higher than the $8 price in the May 19 invoice. Palma Decl., ¶28(c).

Based on a $20 per pallet per month price, charging only for the period JWD stored the goods at Nexus’ request through April 2023 and subtracting the $212,929 Nexus had already paid, the total amount due is at most $377,260 - $55,200 - $103,500 - $212,929 = $5,631. Palma Decl., ¶29.

On August 15, 2023, Hou asserted that he had asked Nexus for payment records and previous invoices since May. Palma Decl., ¶17, Ex. E. Hou stated that he had no way to check the JWD bank account records, so Nexus would also need to provide proof of payment. Palma Decl., ¶17, Ex. E. Hou asked Nexus why it asserted the price was $8 per pallet per month from January to May 2023 when it was $20 per pallet per month before that. Palma Decl., ¶17, Ex. E.

On August 16, 2023, JWD notified Nexus that JWD would either auction or liquidate the Goods after September 15, 2023 unless Nexus paid an overdue amount. Palma Decl., ¶12, Ex. D. Nexus has in fact paid all invoices for storage of the Goods. Palma Decl., ¶16.

JWD refuses to release or deliver the remaining Goods despite demands to do so. Palma Decl., ¶11. Nexus is obligated to deliver those goods to GRB both for initial stock at its various stores and to weekly replenish those stores based on need. Palma Decl., ¶31. This delivery is already late because the first delivery was due in May 2023, and several locations are already out of stock. Palma Decl., ¶¶ 32-33.

On August 21, 2023, GRB notified Nexus that it would be responsible for lost sales due to its failure to timely deliver goods to GRB stores and customers. Palma Decl., ¶34, Ex. K. It has already issued a debit for $50,000, and failure to deliver a shipment in the first week of September would lead to another $1 million lost in revenue. Palma Decl., ¶34, Ex. K. Nexus does not have the resources to pay millions in damages and will close if GRB compels it to do so. Palma Decl., ¶35. In any case, failure to satisfy GRB will also severely damage Nexus’ reputation and goodwill among other potential clients. Palma Decl., ¶36.

JWD has stored between 9,000 and 10,000 pallets of Goods for some time. Hou Decl., ¶2. It issued “Warehouse Dock” receipts for those goods between August and September 2022. Hou Decl., ¶5, Ex. A. These receipts list the quantity, weight, and condition of each pallet but not the price for storage thereof. Hou Decl., ¶5, Ex. A.

In the spring of 2023, JWD released 200 pallets of the Goods as a showing of good faith. Hou Decl., ¶2. The parties agreed that JWD would send invoices and Nexus would pay them, but Nexus never did. Hou Decl., ¶2. Although it has made some errors in previous invoices, JWD issued correct invoices on August 2, 2023. Hou Decl., ¶3. Nexus still has not paid, and JWD is willing to release the pallets once it does. Hou Decl., ¶¶ 3-4.

A Standard Logistics and Operating Services Agreement (“Logistics Agreement”) governs the relationship between GRB and Nexus. Lew Reply Decl., ¶3. The Logistics Agreement authorized and required Nexus to possess the Goods identified in the May 1, 2023 JWD inventory list. Lew Reply Decl., ¶4, Ex. C. GRB has therefore authorized and directed Nexus to possess the Goods so it can ship them to GRB and GRB customers when needed. Lew Reply Decl., ¶6.

JWD received payment from Nexus for storage of the Goods while Lai was JWD’s Chief Financial Officer until April 2023. Lai Decl., ¶¶ 2-4.

A party who originally made an application for an order which was refused in whole or part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law. CCP §1008(b). The moving party must present an attorney declaration stating when the party previously appeared, who the judge was, how the judge ruled, and what new or different facts, circumstances, or law are claimed to be shown. CCP §1008(b). The party must also provide a satisfactory explanation for failing to produce such evidence in the first application. Kalivas v. Barry Controls Corp., (1996), 49 Cal.App.4th at 1160-61. The requirement of satisfactory explanation for failing to provide the evidence earlier can only be described as a strict requirement of diligence. Garcia v. Hejmadi, (1997), 58 Cal.App.4th at 690.

Various departments have denied multiple ex parte applications from Nexus for writs of possession. On August 16, 2023, Nexus was ordered to comply with CCP section 1008(b), with the exception of proof of due diligence, if it filed a noticed motion for a writ of possession. Nexus fails to file an attorney declaration that qualifies. The court exercises its discretion not to deny Nexus’s application for failure to comply with CCP section 1008(b).

The court can only issue a writ of possession if it finds that the plaintiff has established the probable validity of the plaintiff’s claim to possession of the property. CCP §512.060(a)(1).

JWD notes that the Complaint alleges conversion, trespass to personal property, and intentional interference with contractual relations, but not claim and delivery (replevin). Opp. at 3. The Complaint also fails to request return of the Goods as a form of remedy. Opp. at 3-4.

A complaint must contain a statement of the facts constituting the cause of action, but it need not name the cause of action. CCP §425.10(1). It does need to contain a demand for judgment for the relief to which the pleader claims to be entitled. CCP §425.10(2).

Nexus’s failure to allege a cause of action for claim and delivery is not fatal to this application because the alleged facts underlying the conversion claim suffice. As for the relief, the appropriate relief for conversion and trespass to personal property is the return of the property at issue. Foster v. Sexton, (2021) 61 Cal. App. 5th 998, 1020. The complaint asks for injunctive relief and for any other remedy the court may issue, both of which could include return of the property. In any event, a party is entitled to any and all relief appropriate under the scope of the pleadings and facts alleged and proved, irrespective of what relief is sought by the complaint’s prayer. Potrero Homes v. W. Orbis Co., (1972), 28 Cal. App. 3d 450, 456. Reply at 4-5.

The complaint is not defective for failure to state claim and delivery as a cause of action or to request return of the Goods.[4]

JWD asserts that Nexus does not have the special interest in the Goods necessary to recover possession. Opp. at 4-5. JWD cites Commercial Discount Co. v. Cowen, (“Commercial”) (1941) 18 Cal.2d 610, 613, which states that a plaintiff which is not the absolute owner of the property in question must have some right to immediate and exclusive possession. Opp. at 4. As an example, Commercial cited to chattel mortgages which provide that on default a mortgagee may immediately take possession of the mortgaged property and sell it to pay the debt. 18 Cal.2d at 613. The operative question is whether such a contract provision constitutes a covenant to deliver possession or a promise to do some other act which only gives the right of possession once that act is complete. Id. at 614. The court concluded that the plaintiff had only the latter and did not have the right to immediate possession. Id. at 615-16.

Nexus is not the owner of the Goods and only stored them with JWD on GRB’s behalf. Palma Decl., ¶¶ 5-6. JWD asserts that this is not akin to a chattel mortgagee’s right to possession and Nexus is therefore not entitled to possession of the Goods. Opp. at 5.

Although Commercial discussed chattel mortgagees, that is not the only circumstance in which a party has the right to possess property. JWD admits that it held the Goods in its capacity as a warehouse, and that Nexus would be entitled to possession upon payment. Hou Decl., ¶¶ 2-4. That is all that is necessary. Nexus confirms that its Logistics Agreement with GRB gave Nexus a right to possess the Goods until they were needed for shipment to GRB locations in large retail stores. Palma Decl., ¶¶ 3, 5, Ex. A; Lew Reply Decl., ¶¶ 3-4, 6, Ex. C. Holding property in trust for another creates a limited interest in possession sufficient to sustain an action for its recovery. Perlick v. Pac. Disc. Corp., (1942), 53 Cal. App. 2d 136, 141. Reply at 4-5. Nexus had the right to possess the Goods.

A voluntary deposit is made by one giving to another, with his consent, the possession of personal property to keep for the benefit of the former, or of a third party. Civil Code §1814. The person giving possession of property is called the depositor, and the person receiving the property is called the depositary. Id. A depositary must deliver the thing to the person for whose benefit it was deposited on demand, whether the deposit was made for a specific time or not, unless he has a lien upon the thing deposited. Civil Code §1822.

A warehouseman is defined as a person engaged in the business of storing goods for hire. Comm. Code §7102(a)(13). Nexus does not dispute that JWD is a warehouseman insofar as it held the Goods for a price, even if the parties dispute the amount owed. Palma Decl., ¶¶ 6, 10. Mem. at 7.

A warehouse receipt need not be in any particular form, but the failure to include each of the following leaves the warehouse liable for damages caused to a person injured by the omission: (1) a statement of the location of the warehouse facility where the goods are stored; (2) the date of issue of the receipt; (4) a statement whether the goods received will be delivered to the bearer, to a named person, or to a named person or its order; (5) the rate of storage and handling charges, unless goods are stored under a field warehousing arrangement, in which case a statement of that fact is sufficient on a nonnegotiable receipt; (6) a description of the goods or the packages containing them; (7) the signature of the warehouse or its agent; and (8) a statement of the amount of advances made and of liabilities incurred for which the warehouse claims a lien or security interest, unless the precise amount of advances made or liabilities incurred, at the time of the issue of the receipt, is unknown to the warehouse or to its agent that issued the receipt, in which case a statement of the fact that advances have been made or liabilities incurred and the purpose of the advances or liabilities is sufficient. Comm. Code §§ 7202(a)-(b).

A warehouseman has a lien against the bailor on the goods covered by a warehouse receipt or storage agreement or on the proceeds thereof in its possession for charges for storage or transportation, including demurrage and terminal charges, insurance, labor, or other charges, present or future, in relation to the goods, and for expenses necessary for preservation of the goods or reasonably incurred in their sale pursuant to law. Comm. Code §7209(a). If the person on whose account the goods are held is liable for similar charges or expenses in relation to other goods whenever deposited and it is stated in the warehouse receipt or storage agreement that a lien is claimed for charges and expenses in relation to other goods, the warehouseman also has a lien against the goods covered by the warehouse receipt or storage agreement or on the proceeds thereof in its possession for those charges and expenses, whether or not the other goods have been delivered by the warehouse. Comm. Code §7209(a).

Nexus asserts that JWD has no warehouse lien on the Goods. JWD never issued a document stating the rate of storage and handling charges or that the goods were subject to a field warehousing arrangement. Palma Decl., ¶9. In lieu of a storage agreement, JWD has billed Nexus in arrears at a monthly rate of up to $20 per pallet. Palma Decl., ¶10. Nexus in turn relied on JWD’s obligations as bailee and depositary to release and deliver the Goods on demand. Palma Decl., ¶10. Without a lien, JWD must deliver the goods on demand as a depositary under Civil Code section 1822. Mem. at 7-8.

In opposition, JWD provides receipts issued in August and September 2022 as evidence that it has a warehouse lien. Opp. at 5; Hou Decl., ¶5, Ex. A. Nexus replies that the Hou fails to provide evidence that JWD gave these receipts to Nexus. JWD fails to identify any Nexus signature or other evidence that Nexus ever saw the submitted documents. Hou Decl., ¶5, Ex. A. Reply at 7.

The court agrees. JWD has not shown a warehouse lien because it has not shown that the warehouse receipts were delivered to Nexus.

b. Even if the Warehouse Receipts Were Delivered, Nexus Is Entitled to Possession

Assuming arguendo that it did receive the receipts, Nexus argues that the receipts are titled “Warehouse Dock” receipts, not warehouse receipts. Comm. Code section 1201(b)(16) refers to warehouse dock receipts and warehouse receipts as two separate documents. Because the documents are titled warehouse dock receipts, the title is too ambiguous to qualify as warehouse receipts. Hou Decl., ¶5, Ex. A. Reply at 7.

Nexus also argues that the receipts cannot qualify as a warehouse receipt because they must qualify as documents of title under Comm. Code section 1201(b)(16). A document of title is any bill of lading, dock warrant, dock receipt, warehouse receipt, or order for the delivery of goods, and any other document which in the regular course of business or financing is treated as adequately evidencing that the person in possession of it is entitled to receive, hold, and dispose of the document and the goods it covers. Comm. Code §1201(b)(16). JWD’s warehouse dock receipts do not indicate any right to receive, control, or hold the Goods in JWD’s possession. Reply at 7.

Nexus is correct that these receipts do not qualify as documents of title. However, a warehouse receipt does not need to do so. A warehouse receipt is any receipt issued by a person engaged in the business of storing goods for hire. Comm. Code §1201(b)(43). The warehouse receipt need not be in any particular form. Comm. Code §7202(a). JWD’s receipts list the quantity, weight, and condition of each pallet, but not the price for storage. Hou Decl., ¶5, Ex. A. While this is not all the information set forth in Comm. Code section 7202(b), JWD correctly argues that this fact does not extinguish the warehouse lien because a warehouse receipt merely “should” have such information. Opp. at 6. Under Comm. Code section 7202(b), JWD is responsible for any damages incurred as a result of its failure to list the price for storage on the warehouse receipt, but it does not invalidate the warehouse lien.

JWD asserts that a writ of possession is not a proper method to resolve a dispute as to the amount owed and that its possession of the Goods is not wrongful where there is such a dispute. Opp. at 6.

As noted ante, none of the warehouse receipts list the fee JWD would charge for storage of the Goods. Hou Decl., ¶5, Ex. A. Aside from Nexus’s checks to JWD, there are no documents that pre-date Nexus’s demand for return of the Goods in mid-April 2023. Palma Decl., ¶¶ 13, 18, Ex. F. Because JWD is responsible for Nexus’s damages incurred as a result of the absence of a storage rate on the receipts under Comm. Code section 7202(b)(5), it cannot retroactively increase the storage rate beyond that previously paid by Nexus, which was $20 per pallet.

On August 2, 2023, JWD sent invoices claiming storage charges of $273,760 from September 1, 2022 through April 30, 2023, plus $103,500 from May 1 to July 31, 2023. Palma Decl., ¶27, Ex. I. Nexus presents evidence that it paid $212,929 to JWD. Palma Decl., ¶18, Ex. F. JWD’s former CFO confirms receipt of such payment. Lai Decl., ¶¶ 2-4. Nexus also argues that JWD cannot claim storage charges from May 1 through July 31, 2023 because Nexus demanded release of the Goods beforehand. Palma Decl., ¶28(b). Based on a $20 per pallet per month price, charging only for the period JWD stored the goods at Nexus’ request through April 2023, and subtracting the $212,929 Nexus had already paid, Nexus calculates the total amount due as no more than $377,260 - $55,200 - $103,500 - $212,929 = $5,631. Palma Decl., ¶29.

JWD asserts that Nexus’ calculation is an admission that it owes JWD some amount and this fact demonstrates that Nexus is not entitled to possession of the Goods. Opp. at 6. Nexus did not admit that it owes any particular amount; it stated that $5,631 is the most it could owe. Palma Decl., ¶29. Nexus disputes the monthly price of $20 per pallet that is in its calculation of the maximum owed.

JWD charged a maximum price of $20 per pallet before August 2, 2023 (Palma Decl., ¶10), yet it invoiced Nexus based on an $8 charge per pallet from January through April 2023. Palma Decl., ¶21, Ex. G. Hou recanted the $8 per pallet charge and issued new invoices which varied from $46.50 to $91 per pallet. Palma Decl., ¶¶ 22-23, Ex. H. Based on this history, Nexus disputes any invoice issued after the May 19, 2023 invoice charging $8 per pallet per month. Palma Decl., ¶¶ 21, 28(c), Ex. G.

In deciding which party is correct, it is not clear what the proper rate is. Nexus paid $20 per pallet through December 2022 and then was given an invoice by JWD’s previous owner of only $8 per pallet from January through April 2023. Hou may be correctly dubious about the reasoning for this lower rate. Palma Decl., Ex. E. Nonetheless, absent proof of collusion, Hou has no basis to deny his company’s May 19, 2023 invoice issued at $8 per pallet from January through April 2023, a total of $44,160. See Palma Decl., ¶21, Ex. G.

It also is not entirely clear how many pallets JWD stored. Hou says it was between 9000 and 10,000 pallets. Hou Decl., ¶2. Nexus states that JWD currently is storing 1335 pallets and that 200 pallets were released by the start of May 2023. Palma Decl., ¶14. Hou agrees that JWD released 200 pallets. Hou Decl., ¶2. Nexus inconsistently states that JWD stored 1380 pallets between January and April 2023. Palma Decl., ¶21. The court will use Nexus’s more specific and larger figure, meaning that there were 1535 pallets stored until May 2023.

Based on the September 1, 2022 start date, the storage fees owed from September through December 31, 2022 at $20 per pallet were $122,800 (4 months x $20 per month x 1535 pallets = $122,800). Added to the January through April 2023 fees of $44,160, the total fees were $166,960. This is less than the $212,929 Nexus paid, and no additional amount is owed. Because JWD therefore had no right to retain the Goods, for present purposes at least Nexus is correct that any subsequent storage charges were improper. Palma Decl., ¶28(b).

If JWD had a valid commercial warehouse lien, it has not demonstrated that the value of the lien exceeds the amount paid. Based on the current evidence, JWD has no right to retain the Goods.

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). As discussed above, JWD’s has no legal interest in the Goods, and no undertaking from Nexus is required. Mem. at 9.

To prevent a plaintiff from taking possession of property pursuant to a writ of possession, or to regain possession of property so taken, a defendant may file an amount equal to the plaintiff’s undertaking under CCP section 515.010(a) or an amount determined under CCP section 515.010(b). CCP §515.020(a). The second amount should reflect all costs awarded to the plaintiff and all damages that the plaintiff may sustain by reason of the loss of possession of the property. The damages recoverable by the plaintiff pursuant to this section shall include all damages proximately caused by the plaintiff’s failure to gain or retain possession. CCP §§ 515.010(b), 515.020(b).

Because the required undertaking is $0, JWD’s undertaking must reflect the damages Nexus would face if JWD kept the goods. JWD does not dispute that because the Goods carry GRB’s unique trademark, Nexus cannot resell them if it fails to deliver them to GRB on time. Palma Decl., ¶¶ 37, 38, Ex. B. GRB has also threatened to hold Nexus liable for the full value of lost sales from its inability to deliver the goods. Palma Decl., ¶34, Ex. K. Both factors suggest that damages would equal the full retail value of the Goods, which Nexus calculates as $71,723,602.24. Palma Decl., ¶¶ 7, 30, Ex. J. The redelivery bond is $71,000.000.

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 probable cause to believe that the property is located there. CCP §512.060(b).

The address printed on JWD’s inventory list is 300 W. Artesia Blvd. Compton, CA 90220, the address on the inventory list. Palma Decl., ¶7, Ex. C. JWD does not dispute that this is the current location of the Goods. Mem. at 9. This address is not a private property, and a levying officer may enter it.

The application for a writ of possession is granted. No undertaking is required, and the redelivery bond is set at $71,000,000. The levying officer has permission to enter 300 W. Artesia Blvd. Compton, CA 90220 and any public or commercial address to recover the Goods.

[1] JWD failed to lodge a courtesy copy of its oppositionin violation of the Presiding Judge’s First Amended General Order Re: Mandatory Electronic Filing. Its counsel is admonished to provide courtesy copies of all relevant documents in future filings in this case.

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

[3]Nexus requests judicial notice of the complaint in Jupiter Warehouse and Distribution, Inc., and Yizhao Hou v. Billy Lai, Xuemei Hu, and Jupiter Warehouse and Distribution LAX, 23STCV08242 (RJN Ex. 1). The request is granted. Evid. Code §452(d).

[4] Nexus asks the court to strike and not consider the Declaration of Yizhao Hou because it was not timely signed. Reply at 1. The court declines to do so.