Judge James C. Chalfant, Case Number: 23STCV17631, Date: 2023-10-24 Tentative Ruling

Allegiant Partners Inc. v. Johnathan Magallanes et al, 23STCV17631

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

Plaintiff Allegiant Partners Inc. (“Allegiant”) seeks a writ of possession against Defendant Johnathan Magallanes (“Magallanes”), individually and doing business as Johnathan Magallanes Trucking, to recover a 2015 Freightliner Cascadia, Vehicle Identification Number 1FUJGEBG8FLGT7809 (“Vehicle”).

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

Plaintiff Allegiant filed the Complaint against Defendant Magallanes on July 23, 2023, alleging causes of action for (1) breach of written finance agreement, (2) breach of personal guaranty, (3) foreclosure of security and possession of collateral, (4) open book account, (5) account stated, (6) unjust enrichment, (7) claim and delivery, and (8) conversion. The Complaint alleges in pertinent part as follows.

On March 25, 2022, Allegiant and Magallanes executed a written Equipment Finance Agreement (“Agreement”) to finance the purchase of the Vehicle, which was collateral. Magallanes was required to make monthly payments as outlined in the Agreement. To induce Allegiant’s entry into the Agreement, Magallanes executed a Continuing Guaranty (“Guaranty”) for the full amount owed thereunder.

Magallanes breached the Agreement on February 26, 2023 by failing to make the monthly installment due. Allegiant has exercised its right under the Agreement to accelerate the balance owed. As of filing the Complaint, Magallanes owes a principal balance of $44,315.54, late charges of $943.15, accruing taxes and fees, and attorney’s fees incurred through this action. The principal balance accrues interest at an 18% annual rate.

Allegiant seeks damages of $44,315.54 plus 18% annual interest, late charges of $943.15, recoverable fees or taxes, and attorney’s fees and costs. Alternatively, under the cause of action for open book account, Allegiant seeks $44,315.54 plus 10% annual interest and costs of suit. Allegiant also seeks recovery of the Vehicle or its market value.

On August 4, 2023, Allegiant served Magallanes with the Complaint, Summons, and moving papers by substitute service, effective August 14, 2023.

On September 26, 2023, Department 14 (Hon. Cherol Nellon) entered default against Magallanes.

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 March 25, 2022, Allegiant and Magallanes executed the Agreement to finance the purchase of the Vehicle, which is collateral securing the Agreement. Jueschke Decl., ¶4, Ex. 1. Under the Agreement, Magallanes was required to make one $4,400 payment on March 25, 2022, and 35 monthly payments of $1,886.27 thereafter. Jueschke Decl., ¶4, Ex. 1.

Upon Magallanes’s default for failure to pay amounts due, Allegiant has the right to assess a 10% late charge, accelerate the amount owed, and demand assembly and return of the Vehicle. Jueschke Decl., ¶4, Ex. 1. The accelerated principal would accrue interest at 18% per year. Jueschke Decl., ¶4, Ex. 1. Magallanes also agreed to reimburse Allegiant for all attorney’s fees and legal expenses incurred to enforce the Agreement. Jueschke Decl., ¶12, Ex. 1.

To induce Allegiant’s entry into the Agreement, Magallanes signed the Guaranty for the full amount owed thereunder. Jueschke Decl., ¶13, Ex. 2. Allegiant perfected its interest in the Vehicle via a Certificate of Title identifying it as lienholder. Jueschke Decl., ¶18, Ex. 3.

Magallanes breached the Agreement on February 26, 2023 by failing to make the monthly installment due. Jueschke Decl., ¶6. Allegiant has exercised its right to accelerate the balance owed. Jueschke Decl., ¶6. Based on a Statement of Account dated July 17, 2023, Magallanes owes a principal balance of $44,315.54, late charges of $943.15, accruing taxes and fees, and attorney’s fees incurred through this action. Jueschke Decl., ¶¶ 8-12, 24, Ex. 5. The principal balance will accrue interest at an 18% annual rate. Jueschke Decl., ¶8.

The Agreement lists Magallanes’s address as 1106 N. Ditman Ave., Los Angeles, CA 90063. Jueschke Decl., ¶21, Ex. 1. Allegiant believes the Vehicle is at this location. Jueschke Decl., ¶21. Demands for the Vehicle have failed. Jueschke Decl., ¶19.

The PriceDigests Guide lists the Vehicle’s wholesale value as $33,983, average trade-in value as $34,802, and retail value as $40,943. Jueschke Decl., ¶22, Ex. 4.

Plaintiff Allegiant seeks a writ of possession and turnover order against Magallanes, both individually and doing business as Johnathan Magallanes Trucking, for the Vehicle.

The Agreement provides that Magallanes was required to make one $4,400 payment on March 25, 2022, and 35 monthly payments of $1,886.27 thereafter. Jueschke Decl., ¶4, Ex. 1. Upon Magallanes’s default for failure to pay amounts due, Allegiant had the right to assess a 10% late charge, accelerate the amount owed, and demand assembly and return of the Vehicle. Jueschke Decl., ¶4, Ex. 1. Allegiant perfected its security interest in the Vehicle via a Certificate of Title identifying Allegiant as lienholder. Jueschke Decl., ¶18, Ex. 3.

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.

Allegiant alleges that Magallanes breached the Agreement on February 26, 2023 by failing to make the monthly installment due. Jueschke Decl., ¶6. It presents a Statement of Account that lists a principal balance of $44,315.54 and late charges of $943.15. Jueschke Decl., ¶¶ 8-12, 24, Ex. 5. Allegiant does not explain how it generated this Statement of Account, and it does not provide details beyond the date of default. Jueschke Decl., Ex. 5. As Magallanes is in default and has 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 PriceDigests Guide lists the Vehicle’s wholesale value as $33,983, average trade-in value as $34,802, and retail value as $40,943. Jueschke Decl., ¶22, Ex. 4. The $44,315.54 outstanding principal alone exceeds all three amounts. Jueschke Decl., ¶8, Ex. 5. Magallanes and Magallanes have no interest in the Vehicle. Allegiant does not need to post an undertaking.

To prevent a plaintiff from taking possession of property pursuant to a writ of possession when no undertaking is required, or to regain possession of property so taken, a defendant may file an amount equal to 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).

Allegiant asserts that the redelivery bond should be $45,258.69, the amount needed to satisfy its claim under the Complaint. Mem. at 3. This conflates its damages from loss of possession of the Vehicle with its total damages in the action. Damages from loss of possession of the Vehicle cannot exceed the Vehicle’s value, which is $40,943. Jueschke Decl., ¶22, Ex. 4. Although the Agreement also allows for recovery of attorney’s fees incurred to recover the Vehicle, Allegiant does not provide an estimate of those fees. Jueschke Decl., ¶12, Ex. 1.

The Agreement shows that the probable location of the Vehicle is 1106 N. Ditman Ave., Los Angeles, CA 90063. Jueschke Decl., ¶21, Ex. 1. Allegiant can obtain a writ that gives the levying officer permission to enter this address. The application also asks for permission to enter any such other location known to the Defendant. Mem. at 3. Without a specific address, this request is denied.

Allegiant also requests a turnover order compelling Magallanes 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, with the redelivery bond set at $40,943. The levying officer may enter 1106 N. Ditman Ave., Los Angeles, CA 90063 and any public or commercial address.

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