Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-01783/USCOURTS-cand-3_07-cv-01783-5/pdf.json

Parties Involved:
Ford Motor Credit Company
Plaintiff
Sebastopol Ford, Inc.
Defendant

Document Text:

United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

FORD MOTOR CREDIT COMPANY,

Plaintiff,

v.

SEBASTOPOL FORD, INC.,

Defendant.

___________________________________/

No. C-07-1783 JSW (EMC)

REPORT AND RECOMMENDATION

RE PLAINTIFF’S APPLICATION FOR

WRIT OF POSSESSION

Plaintiff Ford Motor Credit Company (“Ford Credit”) has filed suit against Sebastopol Ford,

Inc. for breach of contract, replevin, specific performance, and injunctive relief. For the foregoing

reasons, the Court hereby recommends that Ford Credit’s application for a writ of possession be

GRANTED.

I. FACTUAL & PROCEDURAL BACKGROUND

On March 29, 2007, Ford Credit filed this lawsuit against Sebastopol Ford, asserting claims

for breach of contract, replevin, specific performance, and injunctive relief. On April 2, 2007,

counsel for Ford Credit, David E. Pinch, spoke to the president of Sebastopol Ford, Greg Carter. 

See Pinch Decl. ¶ 2. Mr. Pinch informed Mr. Carter that the lawsuit had been filed and further told

Mr. Carter that Ford Credit would be filing an ex parte application to seek a writ of possession and a

temporary restraining order (“TRO”). See id. ¶ 3. Mr. Carter asked Mr. Pinch to e-mail the

complaint and moving papers, and Mr. Pinch did so. See id. ¶ 3 & Ex. A. Later that same day, Mr.

Pinch had the ex parte application filed. See id. ¶ 3.

The next day, April 3, 2007, the presiding judge referred the matter to a magistrate judge for

a report and recommendation. Judge White also directed Ford Credit to serve on Sebastopol Ford a

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United States District Court

For the Northern District of California

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copy of the referral order. See Docket No. 19. A proof of service filed by Ford Credit reflects that

the referral order -- as well as Ford Credit’s ex parte application -- was served on Sebastopol Ford

on April 3, 2007. See Docket No. 20.

On April 9, 2007, the ex parte application was referred to the undersigned. On April 13,

2007, this Court denied the request for issuance of a writ of possession ex parte (because it is a

drastic remedy appropriate only when less intrusive remedies, such as a TRO, would be ineffective)

and set an expedited hearing date for Ford Credit’s request for a TRO. See Docket No. 23. The

Court also set an expedited hearing for Ford Credit’s request for claim and delivery and instructed

Ford Credit to file a copy of the proof of service for the summons and complaint. The proof of

service filed by Ford Credit reflected that the summons and complaint were formally served on

Sebastopol Ford on April 13, 2007. See Docket No. 26.

On April 16, 2007, Ford Credit filed a supplemental declaration (from Steve Boldvich) in

support of its request for a TRO and claim and delivery. The supplemental declaration was served

on Sebastopol Ford on April 16, 2007. See Docket No. 28.

On April 18, 2007, the Court held a hearing on Ford Credit’s request for a TRO. Sebastopol

Ford did not appear at the hearing nor did it submit any papers in opposition to the request for a

TRO. The Court subsequently recommended that a TRO be issued, see Docket No. 29, and, on

April 19, 2007, the presiding judge in the case issued a TRO de novo. See Docket No. 30. On April

27, 2007, this Court held the hearing on Ford Credit’s application for a writ of possession.

II. DISCUSSION

Under Federal Rule of Civil Procedure 64, “[a]t the commencement of and during the course

of an action, all remedies providing for seizure of person or property for the purpose of securing

satisfaction of the judgment ultimately to be entered in the action are available under the

circumstances and in the manner provided by the law of the state in which the district court is held,

existing at the time the remedy is sought.” Fed. R. Civ. P. 64.

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United States District Court

For the Northern District of California

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28 1 As noted above, a TRO has already been issued to protect Ford Credit in the meantime.

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In the instant case, Ford Credit seeks the state provisional remedy of a writ of possession.1 

Under California Code of Civil Procedure § 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 filed with the application.

Cal. Code Civ. Proc. § 512.010.

Section 512.060 provides that a writ of possession shall issue if (1) the plaintiff has

established the probable validity of the plaintiff’s claim to possession of the property and (2) the

undertaking requirements of § 515.010 are satisfied. See id. § 512.060(a). The statute further

provides: “No writ directing the levying officer to enter a private place to take possession of any

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property shall be issued unless the plaintiff has established that there is probable cause to believe

that the property is located there.” Id. § 512.060(b). 

The Court has reviewed the papers submitted by Ford Credit. No papers have been

submitted by Sebastopol Ford. Sebastopol Ford has had ample opportunity to present a response to

Ford Credit’s request for provisional relief. Although Sebastopol Ford was not served with the

summons and complaint until April 13, 2007, it was aware of the lawsuit, not to mention Ford

Credit’s intention to seek a writ of possession and injunctive relief, as of April 2, 2007. Based on

the papers submitted by Ford Credit, the Court recommends that a writ of possession be issued in

accordance with §§ 512.010 and 512.060.

Ford Credit has established the probable validity of its claim to possession of the property at

issue. See Cal. Code Civ. Proc. § 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.”). In March

2006, Ford Credit and Sebastopol Ford entered into a Wholesale Financing and Security Agreement

pursuant to which Ford Credit established and maintained for Sebastopol Ford a wholesale line of

credit to finance new, used, and demonstrator motor vehicles. See Polley Decl., Ex. A (Wholesale

Financing and Security Agreement). Under the Agreement, any advance made by Ford Credit to

Sebastopol Ford with respect to an item of merchandise was to be paid, without demand, at or before

the date on which the merchandise was sold, leased, or placed in use by Sebastopol Ford. See id.

(Wholesale Financing and Security Agreement § 3). Upon demand, Sebastopol Ford had to pay all

advances plus interest and flat charges. See id. (Wholesale Financing and Security Agreement § 3).

As security for all advances, Sebastopol Ford granted to Ford Credit, inter alia, a security interest in

the merchandise owned or thereafter acquired by Sebastopol Ford as well as in the proceeds of any

sale or other disposition of such merchandise. See id. (Wholesale Financing and Security

Agreement § 4). If Sebastopol Ford defaulted on its obligations under the Agreement, then Ford

Credit could accelerate and declare immediately due and payable all advances made to Sebastopol

Ford, together with interest and flat charges. See id. (Wholesale Financing and Security Agreement

§ 9). Ford Credit could also take “immediate possession of all property in which it has a security

interest hereunder.” Id. (Wholesale Financing and Security Agreement § 9). 

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Under a separate Security Agreement, dated June 2006, Sebastopol Ford also granted to Ford

Credit a security interest in, inter alia, all equipment, fixtures, furniture, motor vehicles, and service

parts and accessories. See id., Ex. B (Security Agreement). If Sebastopol Ford failed to comply

with any agreement it had with Ford Credit or defaulted on any amount or obligation due to Ford

Credit, Ford Credit was entitled to the remedies of a secured party under the Uniform Commercial

Code, “including . . . the right to take possession of the Collateral.” Id. (Security Agreement).

In March 2007, Ford Credit conducted an audit of the inventory and accounts of Sebastopol

Ford. See id. ¶ 10. Based on the audit, Ford Credit determined that Sebastopol Ford had defaulted

on its obligations under the Wholesale Financing and Security Agreement because it had sold motor

vehicles but failed to repay Ford Credit. See id.; see also id., Ex. A (Wholesale Financing and

Security Agreement § 9). It appears that, since the filing of the ex parte application for writ of

possession, Sebastopol Ford has continued to sell cars without paying Ford Credit. See Boldvich

Decl. ¶ 6. Ford Credit has presented evidence that the total principal loan balance that Sebastopol

Ford owes under the Wholesale Agreement exceeds the value of the property at issue. See Polley

Decl. ¶¶ 13, 20. 

Finally, there is probable cause to believe that the property is located at Sebastopol Ford’s

dealership (i.e., at 6791 Sebastopol Ave., Sebastopol, California 95742), see Polley Decl. ¶¶ 10, 19,

and there is no evidence that the property has 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. See id. ¶ 23.

As for the terms of the writ of possession, § 512.080 provides that the writ shall meet all of

the following requirements:

(a) Be directed to the levying officer within whose jurisdiction the

property is located.

(b) Describe the specific property to be seized.

(c) Specify any private place that may be entered to take

possession of the property or some part of it.

(d) Direct the levying officer to levy on the property pursuant to

Section 514.010 if found and to retain it in custody until

released or sold pursuant to Section 514.030.

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(e) Inform the defendant of the right to object to the plaintiff’s

undertaking, a copy of which shall be attached to the writ, or to

obtain redelivery of the property by filing an undertaking as

prescribed by Section 515.020.

Cal. Code Civ. Proc. § 512.080. Under § 512.070, “[i]f a writ of possession is issued, the court may

also issue an order directing the defendant to transfer possession of the property to the plaintiff. 

Such order shall contain a notice to the defendant that failure to turn over possession of such

property to plaintiff may subject the defendant to being held in contempt of court.” Id. § 512.070. 

The 1973 law revision commission comment to § 512.070 notes that an order “is not issued in lieu

of a writ but rather in addition to or in aid of a writ, permitting the plaintiff to select a more informal

and less expensive means of securing possession.” Id., 1973 law revision commission comment; see

also Rutter Group, Cal. Prac. Guide: Enforcing Judgments & Debts § 4:790 (“If defendant delivers

the property to plaintiff pursuant to the turnover order, plaintiff will avoid the time and expense of

having the levying officer seize the property.”). 

The Court finds that no undertaking is required under Calif. Code of Civil Procedure §

515.010(a) and (b). As noted above, the market value of the property to be seized is less than the

amount due and owing under the Security Agreement. Defendant’s inventory has been substantially

diminished without payment made to Ford Credit. Sebastopol Ford has no net “interest in the

property” under § 515.010(a), and thus no undertaking is required under § 515.010(b). 

The Court recommends that the proposed writ of possession submitted by Ford Credit, as

edited by the Court to conform with the statutes cited above (see Attachment A [note that proposed

writ has Exhibits A and B]), be adopted.

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III. RECOMMENDATION

For the foregoing reasons, the Court recommends that Ford Credit’s request for a writ of

possession be granted.

Any party may file objections to this report and recommendation with the district judge

within ten days after being served with a copy. See 28 U.S.C. § 636(b)(1)(B); Fed. R. Civ. P. 72(b);

Civil L.R. 72-3.

Dated: May 7, 2007

 EDWARD M. CHEN

United States Magistrate Judge

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