TENTATIVE RULING

Calendar: 3

Date: 12/16/2022

Case No.: 22 GDCV00825 Trial Date: None Set 

Case Name: Mercedes-Benz Financial Services, USA LLC v. GAD Auto Body Shop, Inc, et al.   

MOTON FOR CLAIM AND DELIVERY (WRIT OF POSSESSION) AND TRO TO SHOW CAUSE RE: PRELIMINARY INJUNCTION

Moving Party: Plaintiff Mercedes-Benz Financial Services, USA LLC Ally 

Responding Party: Defendant GAD Auto Body Shop, Inc. (No Opposition) 

Defendant Department of Motor Vehicles (Stipulation for Waiver of Appearance) 

FACTUAL AND PROCEDURAL BACKGROUND:

Plaintiff Mercedes-Benz Financial Services, USA LLC (Mercedes) alleges that it is the lienholder and legal owner of a 2018 Mercedes-Benz vehicle, and that plaintiff is informed and believes that defendant GAD  Auto Body Shop, Inc. (GAD), an automotive repair shop, came into possession of the vehicle in January of 2021, and that in March of 2021, plaintiff received a Declaration of Opposition from defendant which sought to sell the vehicle via lien sale in accordance with Civil Code section 3071.  Plaintiff timely signed and submitted the Declaration of Opposition on March 24, 2021. 

On August 23, 2021, plaintiff, through counsel, demanded all documents to support the alleged repairs made to the vehicle, and an individual associated with defendant confirmed receipt of the letter, but demanded $15,000 despite failing to provide evidence of repairs.  The complaint alleges that in October of 2021, plaintiff made a good faith effort to secure the vehicle from defendant, but defendant ignored plaintiff’s offer, and in October of 2022, contacted counsel and again demanded $10,000 to release the vehicle.  

Plaintiff alleges that defendant violated Vehicle Code section 10652.5, and Civil Code sections 3068 and 3071 when it demanded excessive storage fees and rendered any lien void and unenforceable. 

Plaintiff alleges in its cause of action for claim and delivery that as the legal owner, it is entitled to immediate possession of the Vehicle, and that prior to the commencement of this action, plaintiff demanded that defendant return the vehicle, but defendant continues to refuse to return the vehicle. 

The complaint incudes a cause of action for injunctive relief, alleging that defendant Department of Motor Vehicles is the California state department responsible for vehicle registration and titling, and is named as a necessary party, with no wrongdoing alleged against it.  The complaint requests an injunction prohibiting the removal of the vehicle from its current business location and prohibiting the sale, transfer, leasing or renting of the vehicle until the court makes a final determination regarding the rights of the parties with respect to the vehicle. 

The file shows that on November 22, 2022, the court heard an ex parte application brought by plaintiff for claim and delivery (writ of possession) and temporary restraining order to show cause re preliminary injunction. 

The application was granted, the court finding in its minute order that notice had been given, and that required efforts had been made pursuant to CCP section 3068 and probable cause existed pursuant to CCP section 512.020 (b)(3)(i) through (iii).   No bond was required.  The minute order set the hearing for December 16, 2022 and ordered that the TRO would expire on that date at 5 pm.  The minute order orders that all moving papers “are to be served by personal service by by 11/30/2022,” with proof of service to be filed by 12/02/22.   The minute order further states, “All papers are to be personally served.”  

The order signed and filed that date ordered defendants to appear on December 16, 2022 and show cause when they should not be enjoined from transferring interest in the vehicle, or otherwise disposing of it or encumbering it, concealing the vehicle, or impairing its value by destruction or failure to care for it in a reasonable manner, and further ordered that the application for TRO was granted, and pending the hearing defendants were prohibited from transferring any interest in the vehicle, concealing it, or impairing its value.  That order also states that service was to be made, “Pursuant to CRC 3.1150, if Defendants have not appeared, the OSC must be served in the manner of a summons and complaint.”  

On December 1, 2022, plaintiff filed an Affidavit of Service showing service on defendant GAD by “Manner of Service” designated as “Business” on November 28, 2022 by service received “c/o ART DOE,” who was physically described.  The proof of service designated, “Relationship: PERSON IN CHARGE.”       

On December 6, 2022, the court received from an attorney on behalf of defendant the Department of Motor Vehicles (DMV) a Stipulation, Acceptance of Service, and [Proposed] Order Regarding Waiver of Appearance by and of Monetary Recovery Against Defendant Department of Motor Vehicles, indicating that plaintiff and defendant DMV have stipulated that plaintiff does not seek any monetary recovery of any kind against this defendant, defendant acknowledges receipt and service of summons and complaint in this case, and that defendant “shall abide by the determination of this Court, respecting transfer of registration or title to the vehicle in question herein so long as all parties having an interest are property given notice of this action.”  The stipulation also specifies that defendant “must receive the statutorily required documents and fees due in order to process said transfer,” and that the court may excuse defendant from any appearance and from attending any further proceedings in this action until further notice. 

ANALYSIS:

Procedural

Defendant Department of Motor Vehicles

As noted above, as to the DMV, the file shows that plaintiff and the DMV have filed with a court a Stipulation, Acceptance of Service, and [Proposed] Order Regarding Waiver of Appearance by and of Monetary Recovery Against Defendant Department of Motor Vehicles, indicating that plaintiff and defendant DMV have stipulated that plaintiff does not seek any monetary recovery of any kind against this defendant, defendant acknowledges receipt and service of summons and complaint in this case, and that defendant DMV shall abide by the determination of this court  respecting transfer of registration or title to the vehicle in question, and that the court excuse defendant from any appearance and from attending any further proceedings in this action until further notice.  The court will sign and file the stipulation excusing DMV from attending any further proceedings in this matter, and to the extent any relief is sought against DMV in this motion, it is denied based on the stipulation and resultant court order. 

Validity of Service on Defendant GAD 

This leaves defendant GAD.  It is not clear that this party has been properly served with either the summons and complaint or the moving papers. 

This situation may explain why there is no timely opposition to the motion and gives rise to concerns of constitutional due process. 

Specifically, the proof of service of the summons in this matter shows that the summons and complaint were served on GAD, and a “Person (other than the party in item 3a) served on behalf of an entity or as an authorized agent (and not a person under item 5b on whom substituted service was made).”  [POS, filed 11/18/22, para. 3b].  The proof of service then describes a JANE DOE and a JOHN DOE but does not specify the relationship of these persons to the party served, such as that they were agents for service of process.  [Id.]  The proof of service states that the party was served “by personal service.”   [POS, para. 5a].  It is not clear that this representation is accurate under the statutes governing service of summons and complaint. 

Under CCP section 415.10, “A summons may be served by personal delivery of the summons and complaint to the person to be served.”

CCP sec. 416.10 provides that service of process on a corporation may be made by delivering a copy of the summons and complaint 

“(a) To the person designated as agent for service of process as provided by any provision... of the Corporations Code...

(b) To the president or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a general manager, or a person authorized by the corporation to receive service of process.” 

There is no indication that the Does served were the agents for service, or held the required positions, or were authorized by the business to receive service of process.   

The service instead appears to be an attempt at substituted service at a place of business. 

Under CCP § 415.20(b):

“(b) If a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served,… a summons may be served by leaving a copy of the summons and complaint at the person's dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of a competent member of the household or a person apparently in charge of his or her office, place of business, or usual mailing address other than a United States Postal Service post office box, at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left. Service of a summons in this manner is deemed complete on the 10th day after the mailing.”

Here, to the extent the service is intended to be substituted service, it is not designated as such, it is not shown that service could not be made personally with reasonable diligence, and there was evidently no follow-up mailing.  

The court in its minute order granting the TRO noted that notice had been appropriately given, but this was evidently to the ex parte application, and did not concede the propriety of service of the summons and complaint.  It does not appear that appropriate service of the summons and complaint has been made on defendant GAD.  Unless proper service can be shown at the hearing, the court will not consider the motion.  

In addition, the file shows that the court ordered that service of the moving documents be made on defendant by the same means as service of a summons and complaint. 

Again, the Affidavit of Service filed with the court shows Manner of service, “Business,” and indicates the ex parte order, declaration, motion and proposed order were served on “ART DOE” with a description, and a designation of “PERSON IN CHARGE.”  [Affidavit of Service filed 12/01/22].  This method appears to be an attempt at substituted service, without a showing of diligence or a proof of service by follow up mailing.   Unless proper service by the same means as service of a summons and complaint can be shown at the hearing, the motion will not be considered. 

Sufficiency of Application

The motion refers repeatedly to the motion as an application for writ of possession, but plaintiff has not filed or served a document giving proper notice of an “application,” as required under statute. 

Under CCP § 512.030:

“(a) Prior to the hearing required by subdivision (a) of Section 512.020, the defendant shall be served with all of the following:

(1) A copy of the summons and complaint.

(2) A Notice of Application and Hearing.

(3) A copy of the application and any affidavit in support thereof.”

(emphasis added). 

CCP § 512.040 sets forth specific contents to be included in a Notice of Application:

“The “Notice of Application and Hearing” shall inform the defendant of all of the following:

(a) A hearing will be held at a place and at a time, to be specified in the notice, on plaintiff's application for a writ of possession.

(b) The writ will be issued if the court finds that the plaintiff's claim is probably valid and the other requirements for issuing the writ are established. The hearing is not for the purpose of determining whether the claim is actually valid. The determination of the actual validity of the claim will be made in subsequent proceedings in the action and will not be affected by the decision at the hearing on the application for the writ.

(c) If the defendant desires to oppose the issuance of the writ, he shall file with the court either an affidavit providing evidence sufficient to defeat the plaintiff's right to issuance of the writ or an undertaking to stay the delivery of the property in accordance with Section 515.020.

(d) The notice shall contain the following statement: “If you believe the plaintiff may not be entitled to possession of the property claimed, you may wish to seek the advice of an attorney. Such attorney should be consulted promptly so that he may assist you before the time set for the hearing.”

Here, plaintiff has filed and served a “Notice of Motion and Motion for Claim and Delivery (Writ of Possession),” but that notice does not include the required contents and warnings.  The statute requires this application content in mandatory terms and the extraordinary pre-trial statutory writ remedies are ordinarily subject to strict construction.  See Pacific Decision Sciences Corp. v. Superior Court (2004) 121 Cal.App.4th 1100, 1106. 

Unless proof of service of a notice and application complying with the statute is produced at the hearing, the court cannot consider the motion. 

Sufficiency of Declaration

As noted above, a writ application is supported by the application and any affidavits in support thereof.  

The declaration submitted here is from counsel for plaintiff, who does not appear to have the requisite personal knowledge of the foundational facts with respect to legal title of the vehicle being vested in moving party.  Ordinarily, a witness such as a custodian of records will provide the necessary information.   While counsel does have personal knowledge of certain efforts made to recover the vehicle pursuant to an offer of statutory damages, the title document is without authenticated support.  The motion accordingly is denied on this ground. 

Substantive

If the considerable procedural problems can be cleared up, this leaves the issue of whether a writ of possession may issue. 

Under CCP § 512.060:

“(a) At the hearing, a writ of possession shall issue 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.

(2) The undertaking requirements of Section 515.010 are satisfied.”

Under CCP § 511.090:

“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.”

The Official Comments to CCP § 512.060 note:

“The burden of proof rests on the plaintiff to establish the probable validity of his claim.”

Under CCP § 512.010

“(a) Upon the filing of the complaint or at any time thereafter, the plaintiff may apply pursuant to this chapter for a writ of possession by filing a written application for the writ with the court in which the action is brought.

(b) The application shall be executed under oath and shall include all of the following:

 (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 basis of the plaintiff's claim is a written instrument, a copy of the instrument shall be attached.

 (2) A showing that the property is wrongfully detained by the defendant, of the manner in which the defendant came into possession of the property, and, according to the best knowledge, information, and belief of the plaintiff, of the reason for the detention.

(3) A particular description of the property and a statement of its value.

(4) A statement, according to the best knowledge, information, and belief of the plaintiff, of the location of the property and, if the property, or some part of it, is within a private place which may have to be entered to take possession, a showing that there is probable cause to believe that such property is located there.

 (5) A statement that the property has not been taken for a tax, assessment, or fine, pursuant to a statute; or seized under an execution against the property of the plaintiff; or, If so seized, that it is by statute exempt from such seizure.

(c) The requirements of subdivision (b) may be satisfied by one or more affidavits.”

The moving papers are not submitted under oath, so the requirements must be satisfied by affidavits. As discussed above, the declaration submitted is not sufficient to make the required showing on some matters. 

Plaintiff argues that it has a claim and is entitled to possession because it is the lienholder on the subject vehicle, the 2018 Mercedes, and is expressly listed as the “LSR” on the certificate of title.  [Cuellar Decl., para. 12, Ex. 5].  Plaintiff also indicates that the lessee signed a lease agreement in which he agreed that lessee “did not have equity or other ownership rights in the vehicle unless [he] purchased it from [Mercedes].  [Ex. 6].  Plaintiff indicates that if the lessee is in default, plaintiff may take possession of the vehicle.   [Ex. 6, para. 23].  The showing is not as strong as it could be, as the declaration submitted is not from a representative of plaintiff or a custodian of records, but of counsel, who would have no personal knowledge or ability to authenticate these records.  It is also not clearly set forth in the moving papers how lessee is in default.  Presumably, plaintiff is arguing that because something has happened which plaintiff reasonably believes endangers the vehicle, by permitting it to be retained at an auto body shop where counsel has been told break-ins have increased in the neighborhood, the lessee has breached the agreement.  [See Cuellar Decl., para. 10].  

Plaintiff argues that it has superior right to possession of the vehicle over defendant GAD because defendant failed to comply with plaintiff’s written demand in accordance with Civil Code section 3068(b)(3) and continues to demand fees in excess of the statutory maximum outlined in Civil Code section 3068.  

Civil Code § 3068, which pertains to service liens on vehicles, provides, in pertinent part:

“(a) Every person has a lien dependent upon possession for the compensation to which the person is legally entitled for making repairs or performing labor upon, and furnishing supplies or materials for, and for the storage, repair, or safekeeping of, and for the rental of parking space for, any vehicle of a type subject to registration under the Vehicle Code, subject to the limitations set forth in this chapter. The lien shall be deemed to arise at the time a written statement of charges for completed work or services is presented to the registered owner or 15 days after the work or services are completed, whichever occurs first. Upon completion of the work or services, the lienholder shall not dismantle, disengage, remove, or strip from the vehicle the parts used to complete the work or services.”

This suggests that defendant is entitled to claim a lien in the subject vehicle.  

Under Civil Code section 3068, subdivision (b):

“(b)(1) Any lien under this section that arises because work or services have been performed on a vehicle with the consent of the registered owner shall be extinguished and no lien sale shall be conducted unless either of the following occurs:

(A) The lienholder applies for an authorization to conduct a lien sale within 30 days after the lien has arisen.

(B) An action in court is filed within 30 days after the lien has arisen.

(2) A person whose lien for work or services on a vehicle has been extinguished shall turn over possession of the vehicle, at the place where the work or services were performed, to the legal owner or the lessor upon demand of the legal owner or lessor, and upon tender by the legal owner or lessor, by cashier's check or in cash, of only the amount for storage, safekeeping, or parking space rental for the vehicle to which the person is entitled by subdivision (c).

(3) Any lien under this section that arises because work or services have been performed on a vehicle with the consent of the registered owner shall be extinguished, and no lien sale shall be conducted, if the lienholder, after written demand made by either personal service or certified mail with return receipt requested by the legal owner or the lessor to inspect the vehicle, fails to permit that inspection by the legal owner or lessor, or his or her agent, within a period of time not sooner than 24 hours nor later than 72 hours after the receipt of that written demand, during the normal business hours of the lienholder.

(4) Any lien under this section that arises because work or services have been performed on a vehicle with the consent of the registered owner shall be extinguished, and no lien sale shall be conducted, if the lienholder, after written demand made by either personal service or certified mail with return receipt requested by the legal owner or the lessor to receive a written copy of the work order or invoice reflecting the services or repairs performed on the vehicle and the authorization from the registered owner requesting the lienholder to perform the services or repairs, fails to provide that copy to the legal owner or lessor, or his or her agent, within 10 days after the receipt of that written demand.”

Plaintiff argues that any lien is extinguished here due to the fact that plaintiff made a written demand under subdivision (b)(3), by a letter which counsel wrote to defendant, and to which defendant has failed to respond.  [Cuellar Decl, paras. 9-11, Ex. 4].  

A review of that letter shows that it does not evidence a violation of subdivision (3), as there is no demand to inspect the vehicle.  [See Cuellar Decl., para. 6, Ex. 2].   The document appears to include a demand for documents under subdivision (4).  [Ex. 2].  However, it is not clear that the letter pertains to repairs “performed on a vehicle with the consent of the registered owner.”  It is also not clear that the letter was sent certified mail, return receipt requested, as there is no return receipt attached, or indication that the letter was sent out other than with tracking services.  [See Ex. 3].  

Plaintiff also argues that if the lien is not extinguished, defendant continues to demand in excess of the limits detailed in Civil Code section 3068 (c), which is a wrongful demand.

Plaintiff relies on subdivision (c), which provides:

“(c) The lienholder shall not charge the legal owner or lessor any amount for release of the vehicle in excess of the amounts authorized by this subdivision.

(1) That portion of the lien in excess of one thousand five hundred dollars ($1,500) for any work or services, or that amount, subject to the limitations contained in Section 10652.5 of the Vehicle Code, in excess of one thousand twenty-five dollars ($1,025) for any storage, safekeeping, or rental of parking space or, if an application for an authorization to conduct a lien sale has been filed pursuant to Section 3071 within 30 days after the commencement of the storage or safekeeping, in excess of one thousand two hundred fifty dollars ($1,250) for any storage or safekeeping, rendered or performed at the request of any person other than the legal owner or lessor, is invalid, unless prior to commencing any work, services, storage, safekeeping, or rental of parking space, the person claiming the lien gives actual notice in writing either by personal service or by registered letter addressed to the legal owner named in the registration certificate, and the written consent of that legal owner is obtained before any work, services, storage, safekeeping, or rental of parking space are performed.”

This argument appears to further muddy the waters with respect to this transaction, as the claim is evidently that there was no written consent obtained from the legal owner before the work was performed, thereby limiting the recoverable damages, but plaintiff has previously argued that it is entitled to complete extinguishment of the lien based on defendant’s failure to submit documents in connection with repairs made with plaintiff’s consent.   In any case, the declaration of counsel does not state under what circumstances the repairs were made, with or without plaintiff’s consent.  

The showing accordingly fails to establish the probable validity of the plaintiff’s claim to possession of the property, that is, that it is more likely than not that plaintiff will obtain a judgment against the defendant on the claim, when defendant on the showing made may well have a claim for a lien against the vehicle which exceeds the sum being offered by plaintiff, which defendant would be entitled to pursue through a lien sale. 

The motion accordingly is continued for further documentation supporting plaintiff’s claim for entitlement to possession of the subject property.  

To the extent the moving papers request in the alternative a temporary restraining order, presumably a preliminary injunction to extent the TRO already ordered, this request is not sufficiently briefed in the motion, which was filed for consideration this date, as plaintiff merely argues, without citation to evidence, that the vehicle could disappear forever, so a TRO is warranted.  A preliminary injunction legal or factual analysis is not provided with the moving papers to satisfy plaintiff’s burden to obtain such relief.  

RULING:

[No opposition].

Plaintiff’s Motion for Claim and Delivery (Writ of Possession) and TRO to Show Cause Re: Preliminary Injunction:

Motion is DENIED as to defendant California Department of Motor Vehicles, based on the Stipulation received on December 6, 2022, which stipulation will be signed and become the order of this Court, and pursuant to which defendant California Department of Motor Vehicles is excused from attending or participating in any further proceedings in this matter.  

Plaintiff’s Motion is CONTINUED to February 3, 2023 at 9:00 a.m.  Any supplemental pleadings filed by plaintiff are due January 4, 2023 with any opposition or reply due as per statute.

A writ of possession shall issue only if the plaintiff’s claim “is probably valid and the other requirements for issuing the writ are established. (CCP § 512.040(b).) Indeed, due to the extraordinary nature of pretrial statutory writ remedies, their requirements are ordinarily subject to strict construction. (See Pacific Design Decision Sciences Corp. v. Superior Court (2004) 121 Cal.App.4th 1100, 1106.) 

Here, plaintiff has failed to satisfy the service requirements of CCP § 512.030.

The Court cannot find that the summons and complaint, or the moving papers, have been properly served on defendant GAD Auto Body Shop, Inc., but the papers appear to not have been personally served on an appropriate authorized agent of the corporation, but served by substituted service at defendant’s business without declarations of diligence, or follow up mailing.   

The motion also does not include all material required of an application for a writ of possession as set forth in CCP § 512.040.

The motion/application is not made under oath, and the declaration submitted is by a witness with no personal knowledge of aspects of the transaction necessary to establish plaintiff’s claim to legal title, and consent or lack of consent to the claimed repairs.   

In addition, plaintiff has failed to establish to the satisfaction of the Court the probable validity of its claim to possession of the property, as the showing fails to establish extinguishment of the lien claimed by defendant under the statutory framework relied upon, or that statutory limitations have been satisfied to limit the right to possession pending the determination of the lien.   

The Court will hear argument concerning whether the TRO will remain in place pending further pursuit of preliminary relief by plaintiff.  

 GIVEN THE CORONAVIRUS CRISIS, AND TO ADHERE TO HEALTH GUIDANCE THAT DICTATES SAFETY MEASURES, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES

Please make arrangement in advance if you wish to appear via LACourtConnect/Microsoft Teams by visiting www.lacourt.org to schedule a remote appearance.  Please note that LACourtConnect/Microsoft Teams offers free audio and video appearance. Counsel and parties (including self-represented litigants) are encouraged not to personally appear.  With respect to the wearing of face masks, Department D recognizes that currently, the Los Angeles Department of Public Health strongly recommends masks indoors, especially when interacting with individuals whose vaccination status is unknown; for individuals who have a health condition that puts them at higher risk for severe illness; individuals who live with someone who is at higher risk; and for individuals who are around children who are not yet eligible for vaccines.  In accordance with this guidance, it is strongly recommended that anyone personally appearing in Department D wear a face mask.  The Department D Judge and court staff will continue to wear face masks.  If no appearance is set up through LACourtConnect/Microsoft Teams, or otherwise, then the Court will assume the parties are submitting on the tentative.