Judge James C. Chalfant, Case Number: 24STLC02513, Date: 2024-08-01 Tentative Ruling

Santander Consumer USA Inc. v. Movsesyan et al.;

24STLC02513

Tentative decision on application for writ of possession: denied unless proof of assignment by hearing

Plaintiff Santander Consumer USA Inc., dba Chrysler Capital (“Santander”), seeks a writ of possession Defendant Khachatur Khachatryan (“Khachatryan”), dba K2K Body Shop (“K2K”), to recover a 2021 Dodge Ram 1500, Serial No. 1C6RREJT0MN501473 (“Vehicle”).

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

On April 5, 2024, Plaintiff Santander filed the Complaint against Defendants Robert Movsesyan (“Movsesyan”), Khachatryan, and the California Department of Motor Vehicles (“DMV”) for (1) claim and delivery, (2) conversion, (3) quiet title, and (4) declaratory relief. The Complaint alleges in pertinent part as follows.

On or about December 30, 2020, Defendant Movsesyan with non-party Rydell Chrysler Dodge Jeep Ram (“Rydell Chrysler”) entered into a written Motor Vehicle Lease Agreement (“Lease”). Compl., Ex. A. Movsesyan agreed to pay Rydell Chrysler $556.87 monthly on or around the 29th day of each month until June 29, 2024. Ibid.

Rydell Chrysler assigned the lease to Santander. Compl., ¶9. As of January 21, 2021, Santander appears as owner, lessor, and lienholder on the Vehicle’s title. Compl., Ex. B.

On or about November 29, 2021, Movsesyan defaulted under the terms of the Lease by failing to make the required monthly payments. Compl., ¶11. When Santander filed its Complaint, Movsesyan still owed it $44,250.18 on the Lease. Ibid.

Movsesyan also defaulted on the Lease by abandoning the Vehicle on private property, whereupon it was transferred to K2K for repair and/or storage. Compl., ¶13, Ex. C. Santander confirmed before filing that K2K has possession of the Vehicle. Compl., ¶15. Movsesyan has accrued repair and storage fees in excess of $29,200, owed to K2K. Compl., ¶13.

K2K applied to the DMV for a lien sale. Compl., ¶14, Ex. C. Santander opposes the sale. Compl., ¶ 14. The Lien Sale Notice stated that K2K intended to conduct a lien sale for the following charges: repairs ($7,560), accrued storage costs ($1,800), and storage costs of $200 daily beginning January 23, 2024. Compl., Ex. C.

Santander attempted to negotiate the release of the Vehicle by K2K before filing its Complaint, but was unsuccessful. Compl., ¶16.

Santander seeks, inter alia, return and possession of the Vehicle, the sum of at least $24,300.00 in compensatory damages, a declaration that Santander is the legal owner of the Vehicle, interest, fees, costs, and other just and proper relief. Compl., Prayer.

On April 25, 2024, Santander filed proof of service of the Complaint and related documents on the DMV.

On May 22, 2024, the court approved a stipulation by Santander and the DMV excusing the DMV from further proceedings in this case.

On May 23, 2024, Santander filed proof of service of the Complaint, Application, and supporting documents, by personal service, on Khachatryan, individually and dba K2K.

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 or about December 30, 2020, non-party Rydell Chrysler and Defendant Movsesyan entered into a Lease for the Vehicle. Vargas Decl., Ex. A. Movsesyan agreed to pay Rydell Chrylser $556.87 monthly on or around the 29th day of each month until June 29, 2024. Ibid. Rydell Chrysler later assigned the lease to Plaintiff Santander. Vargas Decl., ¶7.

On or about November 29, 2021, Movsesyan defaulted under the terms of the Lease by failing to make the required monthly payments. Vargas Decl., ¶ 8. Subsequently, Movsesyan abandoned the Vehicle on private property. Vargas Decl., ¶ 10, Ex. C. Defendant K2K took possession of the Vehicle after Movsesyan abandoned it. Ibid.

K2K applied to the DMV for a lien sale. Vargas Decl., ¶ 11, Ex. C. K2K’s Notice of Lien Sale indicates K2K claims a lien against the Vehicle for the following charges: repairs ($7,560), accrued storage costs ($1,800), and daily storage costs of $200 beginning January 23, 2024. Vargas Decl., Ex. C.

Prior to filing this action, Santander and its counsel attempted to negotiate K2K’s release of the Vehicle by offering the maximum statutory obligation under Civil Code section 3068. Vargas Decl., ¶13, Ex. D. K2K refused Santander’s offer and has failed to release the Vehicle. Vargas Decl., ¶¶ 13, 15.

K2K is located at 9859 San Fernando Rd. #1, Pacoima, CA, 91331, and Santander is informed and believes the Vehicle is at that location. Vargas Decl., ¶18.

The N.A.D.A. Auto Market Report for April 2024 values the Vehicle at $24,300 wholesale or $30,800 retail. Vargas Decl., ¶ 14, Ex. E.

Defendant K2K asserts an interest in the vehicle of $9,360, plus $200.00 daily beginning January 23, 2024. Vargas Decl., Ex. C.

Plaintiff Santander applies for a writ of possession for the Vehicle against Defendant Khachatryan, dba KWK.

Santander claims that it holds the legal interest to the Vehicle by assignment. It fails to show such an assignment. The Lease for the Vehicle was between non-party Rydell Chrysler and Defendant Movsesyan. Vargas Decl., Ex. A. The Lease shows that Rydell Chrysler assigned the Lease to CCAP Auto Lease Ltd. Ex. A. The Certificate of Title also shows CCAP Auto Lease Ltd as the lessor. Ex. B. While Sandander’s declaration claims assignment to it (Vargas Decl., ¶7), there is no supporting documentation.

The supporting declaration for a writ of possession 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).

Santander has not shown a legal interest in the Vehicle and the application must be denied. If, arguendo, Santander shows its standing to be plaintiff before the hearing, the following analysis applies.

Santander presents evidence that non-party Rydell Chrysler and Defendant Movsesyan entered into a Lease for the Vehicle. Vargas Decl., Ex. A. On or about November 29, 2021, Movsesyan defaulted under the terms of the Lease by failing to make the required monthly payments. Vargas Decl., ¶ 8. Subsequently, Movsesyan abandoned the Vehicle on private property. Vargas Decl., ¶ 10, Ex. C. Defendant K2K took possession of the Vehicle after Movsesyan abandoned it. Ibid.

A person performing repairs has a lien on a vehicle for the services and for storage subject to limitations. Civil Code §3068(a). The lien arises after a written statement for charges is given to the vehicle’s registered owner or 15 days after the work or services are completed. Ibid.

A lien in excess of $1500 for work performed, and in excess of $1025 for any storage of the vehicle, is invalid unless written consent of the vehicle’s legal owner or lessor was obtained before the work was performed or the storage occurred. Civil Code §3068(c)(1). The term “legal owner” is defined as a person holding a security interest in a vehicle which is subject to the Uniform Commercial Code. Civil Code §3067; Vehicle Code §370. The lien shall be extinguished if the vehicle’s legal owner or lessor tenders, by cashier’s check or cash, the amount for storage, safekeeping, or parking space rental to which the lienholder is entitled under Civil Code section 3068(c).

The lien is extinguished unless the lienholder either applies to the DMV for an authorization to conduct the sale or files a court action within 30 days after the lien arises. Civil Code §3068(b)(1)(A). The lienholder shall apply to the DMV for authorization to conduct a liens sale for any vehicle with a value more than $4000. Civil Code §3071(a). For a vehicle valued at $4000 or less, the lienholder shall apply to the DMV for the names and addresses of the registered and legal owners and notify them of a pending lien sale. Civil Code §3071(a), (b). If the DMV receives a timely Declaration of Opposition form, it shall notify the lienholder within 16 days of receipt of the form that a lien sale shall not be conducted unless the lienholder files an action in court within 30 days of the DMV’s notice. Civil Code §3071(d). Any lien sale shall be void if the lienholder does not comply with this requirement. Civil Code §3071(l).

Khachatryan and K2K have the Vehicle. K2K applied to the DMV for a lien sale. Vargas Decl., ¶ 11, Ex. C. K2K’s Notice of Lien Sale claims a lien against the Vehicle for the following charges: repairs ($7,560), accrued storage costs ($1,800), and daily storage costs of $200 beginning January 23, 2024. Vargas Decl., Ex. C.

If Santander holds a security interest in the Vehicle as demonstrated by assignment, it would be a legal owner of the Vehicle. Santander never authorized or consented to these charges before they were incurred as required by Civil Code section 3068(c)(1). Santander has offered the statutory maximum repair and storage charges totaling $2750 but Defendants have not accepted. Lawter Decl., ¶13, Ex. D. Defendants’ lien is therefore void. Civil Code §3068(c); Universal CIT Credit Corp. v. Rater, (1963) 214 Cal.App.2d 493, 495.

Defendants Khachatryan and K2K have no legal interest in the Vehicle and no undertaking is required. CCP §515.010(b).

K2K is located at 9859 San Fernando Rd. #1, Pacoima, CA, 91331, and Santander is informed and believes the Vehicle is at that location. Vargas Decl., ¶18.

The application for a writ of possession is denied unless Santander demonstrates an assignment through documentation presented by the hearing. If so, a writ of possession will issue and a levying officer may enter K2K’s commercial address at 9859 San Fernando Rd. #1, Pacoima, CA, 91331, to seek possession of the Vehicle. Santander has not submitted an order for writ of possession and must do so in two court days or it will be waived.

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