1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 EASTERN FUNDING LLC, A Case No. 25-cv-02228-HSG SUBSIDIARY OF BROOKLINE BANK, A 8 DELAWARE LIMITED LIABILITY ORDER GRANTING IN PART AND COMPANY,, DENYING IN PART PLAINTIFF’S 9 MOTION FOR SUMMARY Plaintiff, JUDGMENT 10 v. Re: Dkt. No. 41 11 TRIPLE J INDUSTRIES, A CALIFORNIA 12 LIMITED LIABILITY COMPANY, et al., 13 Defendants.
14 15 Pending before the Court is Plaintiff’s motion for summary judgment. Dkt. No. 41 16 (“Mot.”); Dkt. No. 48 (“Opp.”); Dkt. No. 49 (“Reply”). The Court held a hearing on the motion. 17 Dkt No. 62.1 For the reasons detailed below, the Court GRANTS IN PART and DENIES IN 18 PART the motion. 19 I. BACKGROUND2 20 Plaintiff Eastern Funding LLC brought this action against Defendants Triple J Industries 21 1 Defendants’ counsel did not attend the hearing. The Court issued an order to show cause as to 22 why Defendants’ counsel should not be sanctioned. Dkt. No. 61. The Court DISCHARGES the order to show cause in light of counsel’s explanation that he mistakenly joined the wrong Zoom 23 call and “has implemented a practice of confirming connection details with the courtroom deputy in advance whenever remote appearance instructions refer to prior docket entries or recurring 24 Zoom sessions.” Dkt. No. 63. That said, counsel did not attempt to contact the Court or Plaintiff’s counsel at any point while waiting in the Zoom room for approximately an hour and a 25 half after the scheduled hearing time. The Court trusts and expects that counsel will act with greater diligence in the future, to include the basic step of reading and following the directions in 26 the relevant docket entry.
27 2 At this stage, the Court views the record in the light most favorable to Defendants, and makes all 1 LLC, Triple J Laundromat LLC, Sparkle Clean Laundromat LLC, Daniel Lee, and Chou Yi Chao 2 for amounts due under four loan agreements. See Dkt. No. 1 (“Compl.”) ¶¶ 10–29. For each loan, 3 Plaintiff brings a claim for breach of secured promissory notes and agreements and a claim for 4 breach of guaranties. See id. ¶¶ 30–54. Plaintiff also brings claims for conversion and claim and 5 delivery against all Defendants. Id. ¶¶ 55–63. 6 In December 2025, Plaintiff moved for summary judgment. After the hearing, Plaintiff 7 filed a notice of automatic stay as to Defendants Chao and Lee, who filed for bankruptcy in March 8 2026. See Dkt. No. 64. 9 II. LEGAL STANDARD 10 Summary judgment is proper when a “movant shows that there is no genuine dispute as to 11 any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. Proc. 12 56(a). A fact is “material” if it “might affect the outcome of the suit under the governing law.” 13 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). And a dispute is “genuine” if there is 14 evidence in the record sufficient for a reasonable trier of fact to decide in favor of the nonmoving 15 party. Id. But in deciding if a dispute is genuine, the court must view the inferences reasonably 16 drawn from the materials in the record in the light most favorable to the nonmoving party, 17 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587–88 (1986), and “may not 18 weigh the evidence or make credibility determinations,” Freeman v. Arpaio, 125 F.3d 732, 735 19 (9th Cir. 1997), overruled on other grounds by Shakur v. Schriro, 514 F.3d 878, 884–85 (9th Cir. 20 2008). 21 “If, however, a moving party carries its burden of production, the nonmoving party must 22 produce evidence to support its claim or defense.” Nissan Fire & Marine Ins. Co. v. Fritz Cos., 23 210 F.3d 1099, 1103 (9th Cir. 2000). In doing so, the nonmoving party “must do more than 24 simply show that there is some metaphysical doubt as to the material facts.” Matsushita, 475 U.S. 25 at 586. A nonmoving party must also “identify with reasonable particularity the evidence that 26 precludes summary judgment.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (quotation 27 omitted). If a nonmoving party fails to produce evidence that supports its claim or defense, courts 1 (1986). 2 III. DISCUSSION3 3 Plaintiff seeks summary judgment on its claims for breach of loan, breach of guaranty, and 4 claim and delivery. Mot. at 16–17. Plaintiff seeks dismissal of its claim for conversion. Id. at 17. 5 a. Breach of Loan and Breach of Guaranty Claims (Claims One to Eight) 6 The elements of a breach of contract claim under California law are: “(1) [a] contract, (2) 7 plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to 8 plaintiff therefrom.” Wall St. Network, Ltd. v. New York Times Co., 164 Cal. App. 4th 1171, 1178 9 (2008) (quotation omitted). The elements of a breach of guaranty claim are: “(1) there is a valid 10 guaranty, (2) the borrower has defaulted, and (3) the guarantor failed to perform under the 11 guaranty.” Gray1 CPB, LLC v. Kolokotronis, 202 Cal. App. 4th 480, 486 (2011).4 12 The Court finds that Plaintiff has adequately introduced evidence establishing each 13 element of its breach of contract and breach of guaranty claims for Loans One, Two, and Four: 14 • Loan One: Plaintiff introduces evidence showing it loaned $321,733.20 to Triple J 15 Industries on August 7, 2020. Dkt. No. 41-2 (“Tennant Decl.”) ¶ 6, Ex. 1.5 On that 16 3 Plaintiff asks the Court to take judicial notice of Plaintiff’s complaint and Defendants’ answer. 17 Dkt. No. 41-3 (request). The Court does not need to take judicial notice of entries on its own docket. See Colodney v. Orr, No. EDCV 14-01973-VAP, 2015 WL 1636818, at *1 n.4 (C.D. Cal. 18 Apr. 9, 2015), aff’d, 651 F. App’x 630 (9th Cir. 2016); Pugh v. Metro. Life Ins. Co., No. 18-CV- 01506-YGR, 2019 WL 484279, at *1 n.5 (N.D. Cal. Feb. 7, 2019). Given this, the Court DENIES 19 this request.
20 4 As Plaintiff observes, there is a New York choice-of-law provision in each of the loan contracts (the authenticity and existence of which are not in dispute). See Dkt. No. 41-2, Ex. 1 at 18, Ex. 4 21 at 29, Ex. 8 at 45, Ex. 11 at 56. Neither party appears to be invoking the choice-of-law provisions here: Plaintiff specifically invokes its rights under California law, and Defendants raise defenses 22 under California law. See Mot. at 19–20; Opp. at 3. Nor have the parties invoked New York law at any other point in the litigation. As a result, the Court will apply California state law. Cf. 23 Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1267 (9th Cir. 2006) (applying California law despite Massachusetts choice-of-law provision because “the parties through their course of 24 conduct have waived the provision of the agreement that specifies the application of Massachusetts law”). 25
5 Plaintiff introduces testimony and documents from its Vice President, Karen Tennant. Tennant 26 Decl. ¶ 1. She testifies that she is “one of the persons at Eastern Funding charged with responsibility for the administration, supervision, and monitoring and collection of the 27 obligations” due by the Defendants. Id. ¶ 2. She also testifies that she is a custodian for Plaintiff’s 1 same day, Triple J Industries signed a secured promissory note and agreement to pay 2 back the loan with interest in 117 consecutive monthly installments beginning on 3 September 1, 2020. Id. ¶¶ 6–7, Ex. 1. In that agreement, Triple J Industries also 4 granted Plaintiff a “purchase money security interest” in equipment and goods listed in 5 the Schedule A form as collateral. Id. ¶ 9, Ex. 1 at 20; see also id., Ex. 2 (UCC 6 Financing Statements for collateral). That agreement also contained an irrevocable 7 guaranty, signed by Defendants Lee and Chao. Id. ¶ 12, Ex. 1 at 19. Triple J 8 Industries began failing to make monthly payments in October 2024, id. ¶ 36, and 9 Plaintiff sent letters to all Defendants demanding payment and delivery of collateral 10 shortly thereafter, id., Ex. 13 at 73. $278,548.25 is now outstanding on the loan. Id. 11 ¶ 38(a); see also id., Ex. 17 (payment history). 12 • Loan Two: Plaintiff introduces evidence showing it loaned $947,699.66 to Sparkle 13 Clean on September 3, 2019. Id. ¶ 17, Ex. 4. On that same day, Sparkle Clean signed 14 a secured promissory note and agreement to pay back the loan with interest in 108 15 consecutive monthly installments beginning on October 10, 2019. Id. ¶¶ 17–18, Ex. 4. 16 In that agreement, Sparkle Clean also granted Plaintiff a security interest in various 17 physical collateral and $12,460.99 in cash collateral. Id. ¶ 19, Ex. 4 at 27; see also id., 18 Ex. 6 (UCC Financing Statements for collateral). That agreement also contained an 19 irrevocable guaranty, signed by Defendant Lee. Id. ¶ 21, Ex. 4 at 30. The parties 20 entered into a modification agreement on March 11, 2020, further identifying the 21 remaining balance and interest rates. Id. ¶¶ 22–23, Ex. 7. Sparkle Clean began failing 22 to make monthly payments in October 2024, id. ¶ 36, and Plaintiff sent letters to 23 Sparkle Clean and Defendant Lee demanding payment and delivery of collateral 24 shortly thereafter, id., Ex. 13 at 69. $676,802.49 is now outstanding on the loan. Id. 25 ¶ 38(b); see also id., Ex. 16 (payment history).6 26 6 Of this total, $165 comes from an “inspection fee.” Tennant Decl. ¶ 38(b). The Court could not 27 find any other reference to this fee in the record. The Court twice asked Plaintiff to explain what 1 • Loan Four: Plaintiff introduces evidence showing it loaned $311,386.00 to Triple J 2 Industries on November 13, 2018. Id. ¶ 30, Ex. 11. On that same day, Triple J 3 Industries signed a secured promissory note and agreement to pay back the loan with 4 interest in 72 consecutive monthly installments beginning on March 1, 2019. Id. 5 ¶¶ 30–31, Ex. 11. In that agreement, Triple J Industries also granted Plaintiff a 6 “purchase money security interest” in equipment and goods listed in the Schedule A 7 and B forms as collateral. Id. ¶ 32, Ex. 11 at 58–62. That agreement also contained an 8 irrevocable guaranty, signed by Defendants Lee and Chao. Id. ¶ 33, Ex. 11 at 57. The 9 parties entered into a modification agreement effective as of April 1, 2020, further 10 identifying the remaining balance and interest rates. Id. ¶¶ 34–35, Ex. 12. Triple J 11 Industries began failing to make monthly payments in September 2024, id. ¶ 36, and 12 Plaintiff sent letters to Triple J Industries, Sparkle Clean, and individual Defendants 13 demanding payment and delivery of collateral shortly thereafter, id., Ex. 13 at 67. 14 $69,343.65 is now outstanding on the loan. Id. ¶ 38(d); see also id., Ex. 14 (payment 15 history). 16 • Finally, Plaintiff introduces evidence that all five Defendants signed an Agreement of 17 Cross Default, Collateral Security, and Guaranty on August 13, 2020, where each 18 primary obligor agreed to “absolutely, unconditionally, irrevocably, jointly and 19 severally guarantee[] ALL of the Obligations of ALL of the other Primary Obligors,” 20 and agreed that “[a]ny default by any Primary Obligor in the performance of its/his/her 21 Obligations shall be deemed to be a default by ALL of the Primary Obligors in All of 22 their respective Obligations.” Id. ¶¶ 13–16, Ex. 3 at 24. 23 From this evidence, the Court concludes that Plaintiff has shown (1) the existence of each 24 of these loan and guaranty agreements; (2) that it performed its obligations under each agreement; 25 (3) that the corporate Defendant borrowers defaulted on each of the loan agreements and breached 26 their obligations; and (4) there are outstanding loan repayments caused by the breach which 27 1 neither the borrowers nor any of the guarantor Defendants have repaid. 2 As a result, the burden shifts to Defendants to show a genuine dispute of material fact. But 3 Defendants do not introduce their own evidence or contest any of Plaintiff’s evidence. In fact, 4 Defendants’ answer admits the existence of the loans, the details of the loan agreements, the 5 existence of the collateral for each of the loans, the existence of the cross-collateral agreement, 6 and the personal guaranties for each loan. See Dkt. No. 27 at 2 (admitting Compl. ¶¶ 10–13, 15– 7 18, 20–28)7; cf. Jade Fashion & Co. v. Harkham Indus., Inc., 229 Cal. App. 4th 635, 645 (2014) 8 (affirming grant of summary judgment on similarly undisputed facts for breach of contract claim); 9 Indymac Bank, F.S.B v. Aryana/Olive Grove Land Dev., LLC, No. EDCV 12-01494-VAP 10 (DTBX), 2013 WL 12129624, at *7 (C.D. Cal. Sept. 4, 2013), aff’d, 636 F. App’x 704 (9th Cir. 11 2016) (granting summary judgment where defendant did “not dispute that the Guaranty was valid, 12 nor [did] he present admissible evidence to challenge the validity of the Guaranty”). 13 Instead, Defendants argue that “[u]nder California law, a lender’s failure to mitigate 14 damages precludes recovery of avoidable losses,” and “[w]hether Plaintiff made reasonable efforts 15 to mitigate damages is a factual issue that cannot be resolved on summary judgment.” Opp. at 2– 16 3. While Defendants’ exact theory is somewhat unclear, it appears that they are claiming that 17 Plaintiff could have sold or otherwise disposed of Defendants’ laundromats to mitigate its 18 damages. Opp. at 2. “[A] plaintiff who suffers damage as a result of either a breach of contract or 19 a tort has a duty to take reasonable steps to mitigate those damages and will not be able to recover 20 for any losses which could have been thus avoided.” Valle de Oro Bank v. Gamboa, 26 Cal. App. 21 4th 1686, 1691 (1994) (quotation omitted). But Defendants have not put forward any evidence 22 that Plaintiff failed to mitigate its damages (or any evidence at all), and they rely only on 23 unsupported and vague attorney argument in their opposition.8 This does not create a genuine 24 7 Defendants also admit that “Plaintiff has performed all conditions, covenants and promises on its 25 part required to be performed in accordance with the terms of Note 3, the Guarantees, the Cross- Collateral Agreement and the Modification Agreement.” See Dkt. No. 27 at 2 (admitting Compl. 26 ¶ 24). This may have been a mistake, as Defendants did not admit the same allegation for the other three loans, though they do not dispute the related evidence here. 27 1 dispute of material fact as to damages. 2 Next, Defendants claim that “Plaintiff’s damages calculations depend on unresolved 3 questions of mitigation, interest accrual, collateral value and commercial reasonableness.” Opp. at 4 3. But Defendants have not introduced any evidence disputing any of the damages calculations, 5 nor have they explained why the collateral value or commercial reasonableness is relevant. 6 Similarly, Defendants claim that “Plaintiff seeks summary judgment for specific dollar amounts 7 while admitting it does not know the full extent of its damages” under its conversion claim and 8 thus cannot obtain summary judgment. Opp. at 3. But the damages for the conversion claim 9 relate to the value of the collateral, which has no relationship to the damages sought under 10 Plaintiff’s breach of loan claims.9 11 However, Plaintiff’s own evidence creates a genuine issue of material fact as to the 12 damages due under Loan Three. Plaintiff introduces evidence showing it loaned $170,798.16 to 13 Triple J Laundromat on April 2, 2019. Tennant Decl. ¶ 24, Ex. 8. On that same day, Triple J 14 Laundromat signed a secured promissory note and agreement to pay back the loan with interest in 15 84 consecutive monthly installments beginning on April 15, 2019. Id. ¶¶ 24–25, Ex. 8. In that 16 agreement, Triple J Laundromat also granted Plaintiff a “purchase money security interest” in 17 equipment and goods listed in the Schedule A form as collateral, along with $2,726.32 in cash 18 collateral. Id. ¶ 26, Ex. 8 at 43, 47; see also id., Ex. 9 (UCC Financing Statements for collateral). 19 That agreement also contained an irrevocable guaranty, signed by Defendants Lee and Chao. Id. 20 admissible evidence. See Emelianenko v. Affliction Clothing, No. 09-07865 MMM (MLGX), 21 2011 WL 13176755, at *18–*19 (C.D. Cal. July 28, 2011) (addressing this apparently unresolved question). 22
9 Defendants also argue that summary judgment is premature because some discovery has not yet 23 been completed, and they ask the Court to deny or continue the motion pursuant to Federal Rule of Civil Procedure 56(d). Opp. at 3–4. A party requesting a continuance for additional discovery 24 must show that “(1) it has set forth in affidavit form the specific facts it hopes to elicit from further discovery; (2) the facts sought exist; and (3) the sought-after facts are essential to oppose summary 25 judgment.” Fam. Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th Cir. 2008). Defendants state that they generally seek discovery relating to “Plaintiff’s 26 mitigation efforts,” “[c]ommercial reasonableness of disposition,” and “[a]ccuracy of damages calculations.” Opp. at 4. They did not submit an affidavit or declaration, they have not identified 27 specific facts sought, and they have not explained how these general topics are essential to 1 ¶ 28, Ex. 8 at 46. The parties entered into a modification agreement effective as of March 15, 2 2020, further identifying the remaining balance and interest rates. Id. ¶¶ 28–29, Ex. 10. Triple J 3 Laundromat began failing to make monthly payments in December 2024, id. ¶ 36, and Plaintiff 4 sent letters to Triple J Laundromat, Sparkle Clean, and the individual Defendants demanding 5 payment and delivery of collateral shortly thereafter, id., Ex. 13 at 71. 6 Plaintiff claims that $59,191.95 is now outstanding on the loan. Id. ¶ 38(c). However, it 7 calculates that figure using a principal balance of $49,885.04, id., even though the payment history 8 suggests the outstanding principal balance is only $47,448.20, id., Ex. 15 (payment history). The 9 Court ordered Plaintiff to explain the discrepancy and identify the correct principal balance and 10 accrued unpaid interest amount. Dkt. No. 65. In response, Plaintiff’s counsel states that the 11 principal balance due when Ms. Tennant executed her declaration on December 18, 2025, was 12 $49,885.04, as stated in the original declaration. Dkt. No. 68 ¶ 8. Counsel claims that the 13 discrepancy arose because a final payment was subsequently applied to the outstanding balance on 14 January 15, 2026, which reduced the principal balance to $47,448.20. Id. As a result, counsel 15 represents that the correct accrued unpaid interest amount is $3,535.00, not $9,126.91. Id. ¶ 9. 16 These claims contradict the already-unclear record, creating a genuine issue as to the 17 principal balance and accrued unpaid interest amount for Loan Three. First, counsel’s claim that 18 the final payment was applied on January 15, 2026, contradicts the payment history, which shows 19 that the final payment reduced the principal balance to $47,448.20 on January 15, 2025. Ex. 15 at 20 81. It also doesn’t make sense, since Plaintiff’s motion for summary judgment—which included 21 both the contradictory payment history and the declaration—was filed on December 23, 2025. 22 Second, counsel’s significantly revised interest amount relies on this contradicted fact and 23 apparently uses a calculation method different from the one used by Ms. Tennant in the original 24 declaration. To arrive at the revised interest figure, Plaintiff’s counsel took “the remaining 18 25 payments . . . due on the loan” and “discount[ed] the payments to present value.” Dkt. No. 68 ¶ 9. 26 This present-value approach is not described anywhere elsewhere in the record and appears to be 27 at odds with the precise interest rate calculations described in Ms. Tennant’s prior declaration. See 1 Tennant Decl. ¶¶ 24–29, 37.10 This apparent change in calculation methods is reflected in the 2 significant 61% decrease in the interest amount, despite the fact that the principal amount was 3 decreased by only about 5%, and (according to Plaintiff) only for the period of time after January 4 15, 2026. 5 Accordingly, the Court GRANTS Plaintiff’s motion as to Claims One, Two, Three, Four, 6 Seven, and Eight against Defendants Triple J Industries, Triple J Laundromat, and Sparkle Clean. 7 The Court DENIES Plaintiff’s motion as to Claims Five and Six against these corporate 8 Defendants. The Court further STAYS the case against Defendants Lee and Chou and DENIES 9 the motion as to the Claims Two, Four, Six, and Eight against these individual Defendants in light 10 of the automatic stay triggered when they filed for bankruptcy. See Burton v. Infinity Cap. Mgmt., 11 862 F.3d 740, 746 (9th Cir. 2017); 11 U.S.C. § 362(a). 12 b. Claim and Delivery (Claim Nine) 13 Plaintiff seeks “Judgment for Claim and Delivery with respect to the Collateral and a 14 Judgment for possession of the Collateral.” Compl. ¶ 57. Under California law, “[c]laim and 15 delivery is a remedy by which a party with a superior right to a specific item of personal property 16 (created, most commonly, by a contractual lien) may recover possession of that specific property 17 before judgment.” Santa Clara Valley Water Dist. v. Eisenberg, 117 Cal. App. 5th 714, 726 18 (2025), as modified (Jan. 30, 2026) (quotation omitted). “To obtain possession of tangible 19 personal property through a writ of possession, the plaintiff must establish, inter alia, the basis for 20 its claim, that it is entitled to possession of the property, and the defendant is wrongfully detaining 21 the property.” Id. (citing Cal. Civ. Proc. Code § 512.010(b)). 22 However, claim and delivery is a “a provisional remedy which affords the plaintiff the 23 right of immediate possession of the property involved in the action for specific recovery of the 24 property without waiting for trial and judgment.” Am. Mach. & Foundry Co. v. Pitchess, 262 Cal. 25 App. 2d 490, 493 (1968). “Thus, an action for claim and delivery is ‘not an independent cause of 26 action.’” Balboa Cap. Corp. v. Wall St. Physician, PLLC, No. 8:22-CV-00009-JVS-DFMX, 2023 27 1 WL 5503083, at *4 (C.D. Cal. Mar. 2, 2023) (quoting Teed v. Chen, No. 22-CV-02862-CRB, 2 2022 WL 16839496, at *10 (N.D. Cal. Nov. 9, 2022)); see also 6 Witkin, California Procedure 3 § 238 (6th ed. 2026) (“The provisional remedy [of claim and delivery] cannot be employed 4 independently, but only in the action [for specific recovery].”). 5 California courts are not clear about what the correct cause of action should be for this type 6 of claim. Some courts “use the term ‘claim and delivery’ indiscriminately to refer to both the 7 action and the provisional remedy,” Borges v. Farrar, No. F040810, 2003 WL 22725357, at *5 8 (Cal. Ct. App. Nov. 20, 2003) (quoting Witkin § 238), which might explain Plaintiff’s confusion 9 here.11 And “the underlying action incorporates to some degree the three common law forms of 10 action available against a defendant who has committed the tort of conversion of personal 11 property”: replevin, detinue, and trover and conversion. Id. In some cases, “the action itself is 12 termed . . . simply one for conversion.” Id. 13 Some courts have suggested that plaintiffs can bring a statutory cause of action for specific 14 recovery under California Code of Civil Procedure § 667, which states that “[i]n an action to 15 recover the possession of personal property, judgment for the plaintiff may be for the possession 16 or the value thereof, in case a delivery cannot be had, and damages for the detention.” See Irving 17 Nelkin & Co. v. S. Beverly Hills Wilshire Jewelry & Loan, 129 Cal. App. 4th 692, 698 n.4 (2005) 18 (taking this position); Borges, 2003 WL 22725357, at *5 (same); see also Cal. Civ. Proc. Code 19 § 627 (assessing the measure of damages in “an action for the recovery of specific personal 20 property”). But the statute seemingly defines the remedy available for actions to recover 21 possession, not the action itself. 22 Another court has suggested that the “common law writ of replevin is the equivalent of the 23 ‘action for the recovery of specific personal property’ referred to in Code of Civil Procedure 24 section 667,” and states that “the common law forms of action named replevin, detinue and trover 25 are addressed by the tort of conversion of tangible personal property.” Foster v. Sexton, 61 Cal. 26 App. 5th 998, 1020 (2021); see also Borges, 2003 WL 22725357, at *5 (noting this view). 27 1 Witkin’s guide to California Procedure seems to adopt this approach as well, suggesting that this 2 action is a form of conversion, but one that is independently known as “specific recovery”:
3 The wrongful exercise of dominion over the personal property of another, whether it involves wrongful taking, or lawful taking and 4 wrongful withholding, constitutes the tort of conversion. The injured party may elect either of two main types of actions: (a) specific 5 recovery of the property, with damages, in a proper case, for its detention . . . or (b) damages for conversion based on the value of the 6 property taken . . . . The first action, insofar as it needs a label or designation, might be termed “specific recovery of personal 7 property.”
8 9 5 Witkin, California Procedure § 689 (6th ed. 2026)12; cf. Christofferson v. All Pure Pool Serv. of 10 Cent. Cal., Inc., No. 1:18-CV-01370-AWI-SAB, 2020 WL 3249323, at *14 & n.21 (E.D. Cal. 11 June 16, 2020), report and recommendation adopted, 2020 WL 3819413 (E.D. Cal. July 8, 2020) 12 (grappling with these issues). 13 While the exact contours of this label are somewhat hazy, the Court will construe 14 Plaintiff’s claim as a cause of action for “specific recovery,” even though it is not formally 15 pleaded as such. See Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d 777, 782 (9th Cir. 2012) 16 (instructing courts to “focus on the substance of the plaintiffs’ claims, not the plaintiffs’ labels”). 17 Whether this is a variant of conversion, a product of California statutory law, or something else, 18 it’s clear that California courts permit recovery under this label separate and apart from a 19 traditional conversion claim for damages. See Washington v. Neloms, No. B294088, 2020 WL 20 614816, at *1 (Cal. Ct. App. Feb. 10, 2020) (unpublished decision noting without issue that “[t]he 21 operative complaint asserted claims for recovery of specific personal property (often referred to as 22 ‘claim and delivery’), and conversion”); Eleanor Licensing LLC v. Classic Recreations LLC, 21 23 Cal. App. 5th 599, 612 (2018) (“[Plaintiffs] did not plead or attempt to prove a cause of action for 24 conversion. However, they did plead, and the trial court ruled they had proved, a cause of action 25 for recovery of specific personal property, a code-based cause of action (see Code Civ. Proc., 26 § 627), often incorrectly referred to as a ‘claim and delivery action.’”). 27 1 The “essential elements of an action for recovery of specific personal property are (1) the 2 plaintiff’s right to possession of tangible property at the time of commencement of the action and 3 (2) the defendant’s actual and wrongful possession of the property.” Brown v. Stroud, No. CV 08- 4 2348 VRW, 2011 WL 13312050, at *7 (N.D. Cal. Jan. 28, 2011); see also Rathbun v. Hill, 129 5 Cal. App. 601, 606 (1933) (“In an action in replevin or claim and delivery, being an action for the 6 recovery of specific personal property, in order to sustain a judgment for the plaintiff, it must be 7 shown that possession was in the defendant at the time of the beginning of the action, or that he 8 had the power to make delivery of the personal property for the recovery of which the action is 9 prosecuted.” (quotation omitted)). Some courts also suggest that a plaintiff must first demand 10 possession before bringing this kind of cause of action. See Foster, 61 Cal. App. 5th at 1021. 11 The California Commercial Code also states that “[a]fter default, a secured party . . . 12 may . . . [r]educe a claim to judgment, foreclose, or otherwise enforce the claim, security interest, 13 or agricultural lien by any available judicial procedure.” Id. § 9601(a)(1). A security interest is 14 enforceable against a debtor if: “(1) [v]alue has been given; (2) [t]he debtor has rights in the 15 collateral or the power to transfer rights in the collateral to a secured party; and (3) . . . [t]he debtor 16 has signed a security agreement that provides a description of the collateral.” Id. § 9203(b). 17 Plaintiff has introduced undisputed evidence establishing that it has an enforceable security 18 interest in the collateral and that it is entitled to specific recovery. Plaintiff has introduced 19 evidence that (1) Defendants pledged various physical and cash collateral to Plaintiff in exchange 20 for the four loans, as memorialized in each of the agreements and various UCC financing 21 statements, see Tennant Decl. ¶¶ 9, 19, 26, 32; Ex. 1 at 20; Ex. 2; Ex. 4 at 27; Ex. 6; Ex. 8 at 47; 22 Ex. 9; Ex. 11 at 58–62; and (2) Plaintiff demanded Defendants send the collateral upon default, 23 see Ex. 13. Defendants do not dispute that they have not yet provided the collateral, except to say 24 that they are trying to help Plaintiff sell or dispose of the laundromats. Opp. at 2. 25 Defendants assert that “Plaintiff has not established entitlement to immediate possession of 26 the collateral as a matter of law.” Opp. at 3. They offer no evidence to support that assertion and 27 do not explain what Plaintiff has failed to establish. Accordingly, the Court GRANTS the motion 1 as to Plaintiff’s Claim Nine.13 “[T]he law permits plaintiffs to simultaneously seek the cumulative 2 remedies of monetary judgment and judicial foreclosure to enforce a security interest,” SA 3 Acquisition Prop. XXV, LLC v. LaGrange, No. 8:18-CV-02203-JLS-ADS, 2019 WL 8163815, at 4 *6 (C.D. Cal. Apr. 22, 2019) (citing Cal. Com. Code. § 9601), though Plaintiff’s eventual 5 monetary recovery will be reduced “upon the recovery and disposition of the . . . collateral,” Bank 6 of the W. v. RMA Lumber Inc., No. C 07-06469 JSW, 2008 WL 2474650, at *8 (N.D. Cal. June 7 17, 2008) (quotation omitted). 8 IV. CONCLUSION 9 The Court GRANTS IN PART and DENIES IN PART Plaintiff’s motion for summary 10 judgment, Dkt. No. 41. The Court GRANTS summary judgment in Plaintiff’s favor against 11 Defendants Triple J Industries, Triple J Laundromat, and Sparkle Clean Laundromat for Claims 12 One through Four and Seven through Nine. The Court DENIES summary judgment against these 13 corporate Defendants for Claims Five and Six. The Court STAYS the action as to Defendants 14 Chao and Lee and DENIES the motion with respect to Claims Two, Four, Six, and Eight against 15 these two Defendants. The Court DISMISSES Plaintiff’s conversion claim without prejudice. 16 See Mot. at 20. 17 The Court further SETS a case management conference in this case on May 12, 2026, at 18 2:00 p.m. The hearing will be held by Public Zoom Webinar. All counsel, members of the public, 19 and media may access the webinar information at https://www.cand.uscourts.gov/hsg. All 20 attorneys and pro se litigants appearing for the case management conference are required to join at 21 least 15 minutes before the hearing to check in with the courtroom deputy and test internet, video, 22 and audio capabilities. The Court further DIRECTS the parties in the strongest terms possible to 23 meet and confer and figure out how to resolve Claims Five and Six against the corporate 24
25 13 The Court notes that there is no evidence that the automatic bankruptcy stay covers the collateral at issue here, which was put up by the corporate Defendants. While the bankruptcy 26 estate “extends even to property of the estate in which a creditor has a secured interest,” United States v. Whiting Pools, Inc., 462 U.S. 198, 203 (1983), “[a] membership interest in a limited 27 liability company is personal property and is not a direct interest in real property owned by the ] Defendants in light of this order. 2 3 IT IS SO ORDERED. 4 |} Dated: 5/7/2026 5 Abert § Mbt |) HAYWOOD S. GILLIAM, JR. 6 United States District Judge 7 8 9 10 1] a 12
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