Judge James C. Chalfant, Case Number: 24STCV06083, Date: 2024-05-02 Tentative Ruling

North Mill Equipment Finance LLC v. Lat Long Infrastructure, 24STCV06083

Tentative decision on application for a writ of possession: granted

Plaintiff North Mill Equipment Finance, LLC (“North”) seeks a writ of possession against Defendant Lat Long Infrastructure, a limited liability company (“Long”) to recover four 2022 Ford trucks, (1) VIN 1FT8W3DT6NED42876, (2) VIN 1FT8W3DT8NED42877, (3) VIN 1FT8W3DTXNED42878, and (4) VIN 1FT8W3DTXNED42881 (collectively, “Trucks”).

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

Plaintiff North filed the Complaint against Defendant Long on March 12, 2024, alleging (1) breach of written agreement; (2) account stated; (3) indebtedness; (4) conversion; and (5) claim and delivery. The Complaint alleges in pertinent as follows.

Long entered into a written Contract in which North Mill Credit Trust to finance the lease of the Trucks, which were collateral. At all relevant times, North has been the holder of a first priority security interest in the Trucks. The Certificates of Title from the California Department of Motor Vehicles (“DMV”) reflects Ford Motor Credit Company’s interest and the Plaintiff North maintains a security interest. The Contract gives North the right to take and have immediate possession of the Trucks after default.

Long breached the Contract on November 30, 2022 by failing to make the $4,870.07 monthly installment due. Long has since failed to make the regular monthly payments of $4,870.07 due thereafter. The balance due and owing is $324,580.04. Demands to turn over the Trucks have failed.

North seeks recovery and a pretrial writ of possession for the Trucks, and $324,580.04 in damages less proceeds from being able to re-lease the four Trucks.

On March 21, 2024, Plaintiff North served Defendant Long with the Complaint, Summons, and moving papers by personal service, effective March 21, 2024.

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).

Plaintiff North is the successor-in-interest to Equilease Financial Services, Inc., the servicing agent for North Mill Credit Trust (“Credit Trust”). Miller Decl., ¶1. On May 17, 2022, Credit Trust and Defendant Long entered into a Commercial Lease Agreement (“Lease”), along with other related agreements for the acquisition of four Trucks. Miller Decl., ¶¶ 3-4, Ex. 1.

Pursuant to the Lease, Long was required pay a Document and Administration Fee of $600 and make 60 monthly installment payments of $4,870.07, beginning on June 30, 2022 and continuing on the 30th day of each month thereafter. Miller Decl., ¶5, Ex 1. Credit Trust agreed to finance the purchase of the Trucks and was granted a security interest in the them. Miller Decl., ¶ 18, Ex. 1. In the event of Long’s default for failure to pay, Credit Trust had the right to immediately repossess the Trucks. Miller Decl., ¶18, Ex. 1.

On November 30, 2022, Long breached the Lease by failing to make the required monthly payment of $4,870.07 and any required payment of $4,870.07 thereafter. Miller Decl., ¶9. On January 5, 2023, Plaintiff North issued a Notice of Default to Defendant Long and demanded that it cure the breach. Miller Decl., ¶10, Ex. 3. Defendant Long subsequently failed to cure its breach and Plaintiff North accelerated the sums due under the Lease. Miller Decl., ¶12, Ex. 1. As of February 23, 2024, the balance due and owing is $324,580.04. Miller Decl., ¶ 14, Ex 4. Demands to turn over the Trucks have failed. Miller Decl., ¶ 22.

North is informed and believes that the Trucks have a total value of $196,000. Miller Decl., ¶ 26. This opinion is based on the Trucks’ original price, their age and forecast of current market values, conversations with various equipment vendors, and its Vice-President’s experience in equipment leasing. Miller Decl., ¶ 26.

As of the date of March 5, 2024, Defendant North has an unpaid balance on the agreement of $324,580.04 which is secured in the amount of $196,000, leaving an unsecured balance of $128,580.04. Miller Decl., ¶ 26, Ex. 4.

Plaintiff North has Defendant Long’s address on file as 3200 Cochran Street, Simi Valley, CA 93065. Miller Decl., ¶¶ 14-15, 20, Ex. 3.

Plaintiff North seeks a writ of possession and turnover order against Defendant Long for the four Trucks.

The Lease required Long to make 60 monthly installments of $4.870.07 for the Trucks. Miller Decl., ¶5, Ex. 1. Any late payment would entitle the assignor to accelerate the amount owed and repossess the Trucks. Miller Decl., ¶ 1, Ex. 1. The Certificates of Origin from the DMV reflect Olathe Ford’s interest in the Trucks as the distributor and dealer. Miller Decl., ¶2. They do not show Credit Trust as owner. However, the Lease declares Credit Trust as the Lessor and provides that it has a security interest in the Trucks. Miller Decl., ¶¶ 3, 18, Ex. 1. Plaintiff North is the servicing agent for Credit Trust. Miller Decl., ¶1.

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).

Plaintiff North presents evidence of Defendant Long’s “Statement of Account” which provides the relevant break down. The Statement provides that Defendant North owes $38,393.23 as the Total Amount Past Due plus $286,187.01 as the Total Future Payments Remaining which equals $324,580.04 as the Total Amount Owing. Miller Decl., ¶6, Ex. 4. Long owes $324,580.04.

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 Trucks’ collective value is estimated to be $196,000.[2] Miller Decl., ¶ 26. The balance Defendant Long owes is $324,580.04. Miller Decl., ¶26, Ex 4. The difference is $196,000 - $324,580.04= -$128,580.04. Long has no legal interest in the Trucks.

When an undertaking is required, the defendant may prevent the plaintiff from taking possession by filing an undertaking in an amount equal to either the amount of the plaintiff’s undertaking (CCP §515.020(a)) or the amount determined by the court under CCP section 515.010(b). The redelivery bond will be the vehicle value of $196,000.

Plaintiff North has Defendant Long’s address as 3200 Cochran Street, Simi Valley, CA 93065 and Declarant Miller believes the Trucks are currently at this location. Miller Decl., ¶ 20, Ex 3. This appears to be a commercial address, but if it is a private address Plaintiff North may obtain a writ to enter it.

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.

North requests a turnover order compelling Defendant Long to transfer possession of the Trucks. Mem. at 2. The request for a turnover order is granted.

The application for a writ of possession and turnover order for the Trucks is granted. The redelivery bond shall be $196,000. The levying officer may enter a private residence at 3200 Cochran Street, Simi Valley, CA 93065., as well as any commercial or public address.

[2] Plaintiff North does not provide extrinsic evidence from Blue Book or other car/truck commercial evaluators of the Trucks’ retail and wholesale values.