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1 Because oral argument will not be of material

assistance, the court orders this matter submitted on the briefs. 

E.D. Cal. Local Rule 78-230.

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

QUESTECH FINANCIAL CALIFORNIA,

LLC,

NO. CIV. S-04-2553 FCD GGH

Plaintiff,

v. ORDER

JYM CORPORATION,

Defendant.

_____________________________/

----oo0oo----

This matter is before the court on motion by plaintiff,

QuesTech Financial California, LLC (“QuesTech”), for a writ of

possession of personal property allegedly in the possession of

defendant JYM Corporation (“JYM”).1 JYM opposes the motion.

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2

BACKGROUND

Following are the facts as set forth in the complaint and

supplemented by Questech’s papers filed in support of the present

motion. QuesTech is a limited liability company with its

principal place of business in Danbury, Connecticut. On or about

February 20, 2002, QuesTech entered into a Note and Security

Agreement (“the Agreement”) with Radhe Investments, Inc., Jay

Mohan, Sheila Mohan, and Nitnin Mohan (collectively “coborrowers”), none of whom are named defendants in the present

action. Under the terms of the Agreement, QuesTech loaned monies

to the co-borrowers to facilitate their opening of a Togo’s

restaurant (“the restaurant”) at 1441 Meadowview Road,

Sacramento, California, and the co-borrowers agreed to make

certain scheduled payments to QuesTech. The Agreement granted

QuesTech a continuing first priority security interest in, and

lien on, the property contained within the Togo’s restaurant (the

“collateral”). QuesTech perfected its continuing first priority

security interest in the collateral by filing UCC Financing

Statements with the Office of the Secretary of State of

California. Pursuant to the terms of the Agreement, if the coborrowers defaulted, QuesTech was entitled to enter upon the

premises where any or all of the collateral is located, take

possession, remove, and sell, lease or otherwise dispose of the

collateral. 

On September 1, 2003, the co-borrowers defaulted on the loan

by failing to make the required payment to QuesTech. Thereafter,

pursuant to the terms of the Agreement, QuesTech declared the

entire unpaid balance of the loan immediately due and payable. 

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3

Apparently, sometime after QuesTech accelerated payment of the

loan, the co-borrowers abandoned the restaurant and the

collateral. Allied Domecq, Togo’s parent company, took over the

restaurant, later selling the rights to operate the restaurant to

JYM. QuesTech believes that JYM assumed possession of the

collateral when it took over operation of the restaurant. 

On or about October 20, 2004, QuesTech made a written demand

upon JYM to turn over the collateral to QuesTech. JYM did not

comply with QuesTech’s demand. On December 1, 2004, QuesTech

filed suit against JYM alleging conversion, unjust enrichment,

and claim and delivery of the collateral. On January 5, 2005,

QuesTech filed a notice of application for writ of possession. 

JYM opposes the application on the grounds that Questech has

failed to make the requisite showing that the property in the

Togo’s restaurant is in fact the same property used as collateral

for the Agreement. In addition, JYM contends that it is a good

faith purchaser who relied upon Allied Domecq’s representation

that the property was not encumbered. (See Def.’s Mem. Opp’n to

App. Writ of Possession at 3.)

ANALYSIS

I. Choice of law governing the current action.

QuesTech appears to contend that the court should apply

Connecticut law pursuant to a choice of law provision in the

Agreement between QuesTech and the co-borrowers. The Agreement

states in pertinent part, 

This note shall be construed under the laws of the

state of Connecticut, without regard to principles of

conflicts of law or choice of law. The Borrower hereby

agrees that all actions or proceedings arising directly

or indirectly from or in connection with this Note or

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2 Fed. R. Civ. P. 64 provides in pertinent part,

“ . . .all remedies providing for seizure of . . . property for

the purpose of securing satisfaction of the judgment ultimately

to be entered in the action are available . . . in the manner

provided by the law of the state in which the district court is

held . . ..”

4

any of the Collateral shall, at the Lender’s sole

option, be litigated only in a Court located in

Fairfield County, Connecticut to the exclusion of the

courts of any other state or country. 

(Note and Security Agreement (“Agreement”) § 27, Ex. A to Decl.

of Sean P. Dunn in Supp. App. Writ of Possession.) Parties are

free to choose the law applicable to the attachment and

enforcement of the security interest, unless doing so would

violate a fundamental public policy of the state whose law would

apply in the absence of a choice of law clause. U.C.C. § 1-301

(revised). However, the choice of law and venue provisions only

bind the parties to the Agreement. The provisions cannot bind

third parties, such as defendant, who were not parties to the

Agreement, and therefore did not specifically agree to the terms

therein. U.C.C. § 9-301 cmt. 2; ALI-ABA, Special Report of the

Tribar Opinion Committee: U.C.C. Security Interest Opinions -

Revised Article 9 at n. 55 (November 6-8, 2003). Therefore, the

choice of law and venue provisions at issue do not apply to JYM. 

Pursuant to federal law, this court will apply the law of the

forum state of California in the instant action. Fed. R. Civ. P.

642; Washington Mutual Bank v. Superior Court, 24 Cal. 4th 906, 

919-20 (2001). 

II. Merits

Cal. Civ. Proc. Code § 512.010 provides for the filing of an

application for writ of possession, which is a provisional remedy

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3 Cal. Civ. Proc. Code § 512.110 provides: “The

determinations of the court under this chapter shall have no

effect on the determination of any issues in the action other

than the issues relevant to proceedings under this chapter, nor

shall they affect the rights of any party in any other action

arising out of the same claim. The determinations of the court

under this chapter shall not be given in evidence nor referred to

in the trial of any such action.”

4 The value of the property must be stated with

particularity to allow the court to properly assess the amount of

the required undertaking. 

5

that enables a plaintiff to seize specific personal property in

the defendant’s possession prior to judgment. Waffer Int’l Corp.

v. Khorsandi, 69 Cal. App. 4th 1261, 1271 (1999). Obtaining

possession prevents a defendant from devaluing, consuming, or

otherwise harming the property while the action is pending. See

generally id. at 1271 n. 11. The granting or denial of the writ

has no determinative effect on the underlying case or the rights

of any party in actions arising out of the same claim. Cal. Civ.

Proc. Code § 512.110.3

 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 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

(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

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5 Statutory damages include any damages resulting from;

(1) the levy of the writ of possession, (2) the loss of

possession of property resulting from the levy, and (3)

conversion if the property has been sold by plaintiff and cannot

be redelivered to the defendant. Cal. Civ. Proc. Code §

512.020(a). 

6

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.

Cal. Civ. Proc. Code § 512.010. If the plaintiff fails to make

the required showing entitling it to a writ of possession, then

the property remains with the defendant until the underlying

action is resolved. If the application is granted, but the

plaintiff subsequently loses the underlying case, then the

property will be returned to defendant and statutory damages may

be awarded.5 Cal. Civ. Proc. Code § 512.020(a). 

Here, QuesTech has failed to satisfy the statutory

prerequisites for a writ of possession. Most importantly,

QuesTech has not made a prima facie showing that it is entitled

to possession of the property claimed. While it does not appear

disputed that QuesTech has a security interest in the collateral,

there is substantial doubt regarding whether some or all of the

collateral was removed and replaced with new property not subject

to QuesTech’s security interest. QuesTech filed its complaint

and application for writ of possession over a year after the coborrowers defaulted on the Agreement, and after the restaurant

had passed into the possession of Allied Domecq, and then JYM. 

JYM contends that the collateral was removed by Allied Domecq and

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replaced with new equipment and supplies prior to the time it

began operating the restaurant. While QuesTech believes the

collateral remains in the restaurant, it concedes that an agent

of Allied Domecq has made representations to JYM and to QuesTech

that he removed all of the property from the restaurant in

December of 2003. (See Supplemental Dec. of Stephen Lerner Supp.

App. Writ Poss’n (“Lerner Dec.”) ¶¶ 14-18.) Under these

circumstances, QuesTech has not made a prima facie showing that

it is entitled to the property claimed. 

QuesTech’s inability to demonstrate that the property

currently in the restaurant is the collateral for the Agreement

also presents practical obstacles to granting the writ of

possession. Cal. Civ. Proc. Code § 512.010(b)(3) requires the

applicant to provide a “particular description of the property.” 

The purpose of this requirement is to enable the levying officer

to identify the property subject to seizure. See Alan M. Ahart,

Cal. Practice Guide: Enforcing Judgments and Debts § 4:687

(Rutter Group 2005). Questech’s description of the property is

contained in Paragraph 4 of the Proposed Order, which states in

full: 

4. QuesTech has established the probable validity of

its claim to possession of the Subject Collateral (as

that term is defined below) located at 1441 Meadowview

Road, Suite 114, Sacramento, California 95816. 

“Subject Collateral” shall mean “all personal property,

including (without limitation) all (i) equipment,

inventory, goods, accounts receivable, contract rights,

chattel paper, documents, fixtures, furniture,

investment property, general intangibles, instruments,

cash, deposit accounts, reserves, credits and any other

funds owned or formerly owned by Radhe Investments,

Inc., Jay Mohan, Sheila Mohan, or Nitin Mohan which is

the possession, custody or control of JYM; (ii) present

and future attachments, accessories and accessions,

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spare parts, replacements, substitutions and exchanges

or trade-ins with respect to, in connection with or

generated by any of the foregoing; and (iii) the

products, proceeds, offspring, rents and profits of all

of the foregoing, including insurance proceeds payable

in respect of loss or damage to any of the foregoing

and all other proceeds in whatever form, whether now or

hereafter in the possession, custody and control of

JYM,” some or all of which may be located at 1441

Meadowview Road, Suite 114, Sacramento, California

95816. “Subject Collateral” shall also include, but

not be limited to, those items inventoried on or about

November 10, 2003 and set forth in Exhibit “A” attached

hereto.

(Proposed Order Re: Pl.’s Application for Writ of Possession ¶ 4

(emphasis added).) This “description,” which encompasses

anything in the store that belonged to the co-borrowers, provides

no guidance whatsoever to a levying officer in determining what

items to seize. How is the levying officer to determine what

objects were “owned or formerly owned by” the co-borrowers? 

There is no indication from the evidence proffered that the items

“owned or formerly owned by” the co-borrowers are labeled or

readily identifiable as such. QuesTech has not provided a list

of property with adequate descriptions and/or serial numbers. As

JYM has been operating the store for many months now, presumably

some or all of, inter alia, the inventory, goods, accounts

receivable, documents, and cash at the store were never owned by

the co-borrowers. However, from the description provided, the

levying officer could not distinguish property owned by the coborrowers from that brought to the restaurant after they

relinquished it. 

Essentially, QuesTech asks this court to seize the entire

contents of JYM’s restaurant when it offers little in the way of

evidence that it is entitled to much of the property therein. 

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This is particularly troubling when one considers that a grant of

this application almost assuredly would put the restaurant out of

business until the resolution of this matter. QuesTech’s

application for writ of possession is DENIED. 

IT IS SO ORDERED.

DATED: May 23, 2005.

/s/ Frank C. Damrell Jr. 

FRANK C. DAMRELL, Jr.

UNITED STATES DISTRICT JUDGE

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