Judge James C. Chalfant, Case Number: 24STCV18551, Date: 2024-10-08 Tentative Ruling

The Huntington National Bank v. Renovo Stone and Eduardo Guerrero, 24STCV18551

Tentative decision on application for writ of possession: denied

Plaintiff The Huntington National Bank (“Bank”) seeks a writ of possession against Defendant Renovo Stone, Inc. (“Renovo”) and Eduardo Guerrero (“Guerrero”).

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

Plaintiff Bank filed the Complaint against Defendants Renovo and Guerrero on July 25, 2024, alleging claims for breach of contract, common counts, and claim and delivery (replevin). The Complaint alleges in pertinent part as follows.

On or about October 22, 2019, Defendant Renovo and non-party Engs Commercial Finance Co. (“Engs”) entered into a loan agreement (the “Loan”). Compl., ¶5. The Loan was for the finance of, and provides for a security interest in, one Poseidon TRex S Single Table, serial number TRSST19-12-726, with all accessories, attachments, and components (the “Equipment”). Compl., ¶7. The Loan is a business loan and not for any personal, family, or household use. Compl., ¶5. The Loan was amended by written amendments dated May 26 and August 19, 2020. Compl., ¶5.

Guerrero entered into a personal guaranty agreement for the Loan on or about October 22, 2019 (the “Guaranty”). Compl., ¶6.

Engs perfected its security interest in the Equipment by filing a UCC-1 Financing Statement with the California Secretary of State on October 23, 2019. Compl., ¶8.

Bank is the assignee of the Loan and security interest. Compl., ¶9. Bank declared a default on the Loan due to Renovo’s breach of the Loan and made demand for repayment pursuant to the Loan terms. Compl., ¶10. Bank gave notice to Guerrero of Renovo’s default and Guerrero’s obligations under the Guaranty. Compl., ¶11.

Renovo and Guerrero owe $174,142.75 as of July 24, 2024, due to the breach of the Loan and Guaranty, plus interest, attorney fees, and costs. Compl., ¶12.

Defendants were served by substitute service on August 11, 2024, with service effective on August 22, 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).

Bank is the assignee of the Loan entered into between Renovo and Engs on or about October 22, 2019. The Loan is a business loan and not for any personal, family, or household use. Punzel Decl., ¶2, Ex.1. The Loan is for the finance of, and provides for a security interest in, the Equipment, with all accessories, attachments, and components. Punzel Decl., ¶5. The Loan was amended twice, on May 26, 2020, and on August 19, 2020. Punzel Decl., ¶3, Exs. 2-3.

Guerrero is the president and owner of Renovo. Guerrero entered into a personal guaranty agreement for the Loan on or about October 22, 2019. Punzel Decl., ¶4, Ex. 4.

Engs perfected its security interest in the Equipment by filing a UCC-1 Financing Statement with the California Secretary of State, File No. 197742283093 on October 23, 2019. Punzel Decl., ¶6, Ex. 5.

Renovo and Guerrero repeatedly missed payments on the Loan. Eventually, Bank declared a default on the Loan due to Renovo’s breach of the Loan and made demand for repayment by Renovo pursuant to the Loan terms. Punzel Decl., ¶8.

As the assignee of the Loan, Bank is also the assignee of the security interest. Punzel Decl., ¶7. Bank gave notice to Guerrero of Renovo’s default on the Loan and Guerrero’s obligations under the Guaranty. Punzel Decl., ¶9. On January 9, 2024, Bank sent Guerrero a letter informing him of such default and demanding payment on the Loan. Punzel Decl., ¶9, Ex. .6.

On June 24, 2024, Bank sent Guerrero another letter demanding payment on the defaulted Loan, and also demanding that the Equipment be returned to Bank. Punzel Decl., ¶10, Ex. 7. To date, neither Renovo nor Guerrero has responded to either letter or engaged in any communications with Bank. Punzel Decl., ¶11.

Bryan Punzel (“Punzel”) is a Bank Senior Financial Recovery Representative. Punzel Decl., ¶1. Punzel believes that the Equipment is currently located at 1401 South Alameda Street, Compton, California 90220. Punzel Decl., ¶12. Prior to the execution of the Second Amendment to the Loan, Guerrero filled out an online request form seeking a deferment of Loan payments. Punzel Decl., ¶12. In this form, Guerrero stated that the “Current Business Address” was 1401 South Alameda Street, Compton, California 90220. Punzel Decl., ¶12, Ex. 1.

Additionally, a Google search of 1401 South Alameda Street, Compton, California 90220 reveals that a building with a logo that reads “RS Renovo Stone” as well as the word “Countertops” exists at this address. Punzel Decl., ¶12, Ex. 8. This building appears big enough to hold the Equipment, which is large, bulky, and difficult to move. Punzel Decl., ¶12.

Alternatively, Punzel believes the Equipment could be located at 2749 South Orange Drive, Los Angeles, California 90016. Punzel Decl., ¶13. This is Renovo’s registered business address as stated in its most recently filed Statement of Information on the California Secretary of State website. Punzel Decl., ¶13, Ex. 9.

Finally, Punzel states that it is possible that the Equipment could be located at 5313 South Manhattan Pl., Los Angeles, California 90062. Punzel Decl., ¶14. This is Guerrero’s current personal address, according to a People Search report. Punzel Decl., ¶14, Ex. 10.

Plaintiff Bank seeks a writ of possession the Equipment against Defendants Renovo and Guerrero. No opposition is on file.

An application for a writ of possession is a law and motion matter. CRC 3.1103(a)(2). All law and motion matters require a memorandum of points and authorities detailing the basis for the motion. CRC 3.1113(a). The absence of a memorandum may be construed as an admission tha the motion is not meritorious. CRC 3.1113(a).

Plaintiff Bank failed to file a supporting memorandum of points and authorities with its application. It has merely filed a supporting declaration and exhibits. The application is denied without prejudice.

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