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Borges v. Farrar

Court of Appeals of California, Fifth Appellate District, Placer.
Nov 20, 2003
No. F040810 (Cal. Ct. App. Nov. 20, 2003)




FRANK BORGES, Plaintiff and Respondent, v. GARY FARRAR, as Trustee in Bankruptcy, etc. et al., Defendants and Appellants.

Neumiller & Beardslee, Anthony L. Vignolo, Paul N. Balestracci and Clifford W. Stevens for Defendants and Appellants. Allen, Polgar, Proietti & Fagalde, Gary B. Polgar, Salvador V. Navarrete and Donald J. Proietti for Plaintiff and Respondent.

"Claim and delivery" is the name given to a provisional remedy that permits the plaintiff in an action for the recovery of personal property to take immediate possession of the property, through a writ of possession, pending a final judgment. (Code Civ. Proc., § 511.010 et seq.) Possession acquired through claim and delivery is only provisional; actual title to the property, and the permanent right of possession, are determined by the judgment in the underlying action. Thus, a plaintiff who fails to recover judgment must return the property to the defendant, and/or pay any damages caused by the defendants loss of possession. (§ 512.120.)

Except as noted, all further statutory citations refer to the Code of Civil Procedure.

The property at issue in this case was a herd of more than 100 dairy cows used to secure two loans totalling $175,000. The loans were made by Frank Borges in 1994 and 1995 to John and Shawna Teicheira, husband and wife, who were then doing business as Teicheira Farms (collectively the Teicheiras). The Teicheiras defaulted on the loans, and Borges sued them for conversion and breach of contract. While the action was pending, Borges took possession of the herd through claim and delivery. But he failed during the next several years to actively prosecute the action itself. In the meantime, the Teicheiras had gone into bankruptcy. In 2001, upon a motion by the bankruptcy trustee, and without any opposition from Borges, the action was dismissed for failure to bring the matter to trial within five years. (§ 583.310.) The trustee then moved the following year to quash the writ of possession, in light of the dismissal of the underlying action, and to recover damages totalling some $186,000. The trial court denied the motion, and the trustee has appealed. We will conclude the motion to quash was untimely, and therefore affirm the judgment.


In October of 1994, Borges sold the Teicheiras 50 "mature Holstein dairy cows" for $70,000. The Teicheiras gave Borges a promissory note for this amount, and agreed to repay the money, at 10 percent interest, over the next five years. Toward that end, they assigned to Borges a portion of the monthly payments they expected to receive from the creamery (the Central Valley Dairymens Association) that processed the milk from their dairy herd. The Teicheirass obligation was secured by a lien in favor of Borges against the Teicheirass entire herd "now owned or hereafter acquired."

In February of the following year, Borges sold the Teicheiras 50 more Holstein cows for $65,000, and loaned them an additional $ 40,000. The Teicheiras gave Borges a promissory note for $105,000, this time paying 12 percent interest, on terms very similar to those in the first sales agreement. Thus, the Teicheirass debt to Borges was $175,000 at that point, and their payments were just short of $3,825 per month.

On December 20, 1995, Borges brought an action against the Teicheiras for breach of contract, conversion, and injunctive relief. The complaint alleged the Teicheiras had failed to make the last two monthly payments, and had sold some of the cows that served as collateral under the two sales agreements, without turning over the proceeds to Borges. The complaint sought damages in the amount of $160,000, plus interest. (The injunction presumably would prevent further sales of the cows.) The Teicheiras never answered the complaint.

Borges also sought claim and delivery of the Teicheirass dairy herd (alleged to contain 180 mature Holsteins and eight heifers) by making an ex parte motion for a writ of possession. In support of the motion, Borges asserted the Teicheiras had recently suffered a "serious financial condition" that caused them not only to fall behind in their payments to him, and to sell some of his collateral, but that also left them without the means to properly feed and maintain what was left of the herd. Borges also asserted the value of the remaining herd was less than the amount the Teicheiras still owed him. The court issued the writ on the condition Borges file an undertaking for $7,500. Borges did so, but before he could execute on the writ, the Teicheiras filed a chapter 12 bankruptcy petition, thereby invoking the automatic stay provisions of the Bankruptcy Code. (The undertaking was later released.)

With few exceptions, a writ of possession may be issued only after a hearing on a noticed motion. (§ 512.020, subd. (a).) However, it may be issued ex parte if probable cause appears that:
"(3) The defendant acquired possession of the property in the ordinary course of his trade or business for commercial purposes and: [¶] (i) The property is not necessary for the support of the defendant or his family; and [¶] ( ii) There is an immediate danger that the property will become ... substantially impaired in value by ... failure to take care of the property in a reasonable manner; and [¶] (iii) The ex parte issuance of a writ of possession is necessary to protect the property." (Id ., subd. (b).)

The court may not issue a writ of possession until the plaintiff has filed a written undertaking with the court. (§ 515.010.) That section, as it read at all times pertinent to this appeal, provided in part:
"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 plaintiff. The undertaking shall be in an amount not less than twice the value of defendants interest in the property or in a greater amount. The value of the defendants 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 such other factors necessary to determine the defendants interest in the property."

On January 8, 1996, Borges filed a motion in the bankruptcy court for relief from the automatic stay. The court granted the motion on June 10th. It found that the value of the dairy herd (107 milking cows, 10 calves, and 20 to 22 dry cows) was $ 117,650; that the Teicheiras owed Borges approximately $147,000; that the Teicheiras therefore had no equity in the herd; that the average milk production per cow had fallen from nine to five gallons per day; and that the Teicheirass proposed chapter 12 reorganization plan failed to make adequate provision for the care and feeding of the herd. Therefore, in addition to granting Borges relief from the stay, the court denied confirmation of the reorganization plan. Soon after, the Teicheiras converted the bankruptcy from chapter 12 (voluntary reorganization for family farmers) to chapter 7 (liquidation). Gary Farrar was appointed the chapter 7 trustee.

In its written order, the bankruptcy court granted Borges relief from the automatic stay "to retrieve his collateral, and to institute and prosecute any proceeding necessary to obtain such collateral, which is all that livestock located at [the Teicheirass dairy farm in Merced]."

The following day, this time without filing an undertaking, Borges applied for and was granted a second ex parte order for a writ of possession, by which he then successfully took possession of the Teicheirass entire herd. The herd consisted at the time of "118 head of Holstein and Jersey livestock," which by Borgess estimate were worth somewhere between $76,000 and $86,000, based on their "deteriorated condition." These figures, both the number of cows in the herd and their total value, were less than the bankruptcy court had found to exist when it granted Borges relief from the automatic stay.

Thus it appears the court determined, in keeping with the bankruptcy courts finding that the Teicheiras had no equity interest in the dairy herd, that Borges was not required to file an undertaking. So far as appears, the Teicheiras did not object to this determination. (See § 995.910 et seq.)

Approximately a year later, in August of 1997, Borges filed a second motion in the bankruptcy court seeking relief from the automatic stay. Accepting the findings of the court in the prior proceeding — that Borges was owed about $147,000 and the herd was worth $117,650 — Borges requested relief from the stay in order to pursue a collection action for the difference against the Teicheirass accumulated milk payments (a total of about $7,500) held by the Central Valley Dairymens Association. Farrar (the chapter 7 bankruptcy trustee) opposed Borgess motion on the ground he had failed to perfect a claim against the milk payments. The court agreed and denied the motion.

So far as appears from the record, Borges made no further efforts to recover the rest of the money the Teicheiras owed him. Four more years passed, and on August 10, 2001, Farrar filed a motion to dismiss Borgess still-pending action for conversion and breach of contract (filed December 20, 1995) for failure to bring the case to trial within five years. (§ 583.310.) Borges did not oppose the motion, and the court issued an order dismissing the action on September 12, 2001. (See § 581d.) Borges did not appeal.

Five months later, on February 15, 2002, Farrar filed a motion to quash the writ of possession by which Borges had taken possession of the dairy herd from the Teicheirass farm. (See §§ 512.020, subd. (b)(3)(iii); 512.120.) On the premise Borges no longer had the cows, Farrar sought, on behalf of the bankruptcy estate, to recover their reasonable value on the date they were taken, plus interest. According to an attached declaration by John Teicheira, there had been 140 mature cows (Holsteins and Jerseys), 12 heifers, and seven calves in the herd, having a total estimated value of $171,200. This amount, plus accrued interest, came to $268,384.30. Farrar also sought to recover the attorney fees he had incurred to bring the motion to quash.

Borges opposed the motion on two grounds. He maintained the courts dismissal of the underlying action deprived it of jurisdiction to make any further orders in the case. And he argued the bankruptcy courts order granting him relief from the automatic stay to prosecute an action to "retrieve his collateral" was, in effect, a final determination of his right to possession of the cows, and so was binding on the state court under the doctrine of res judicata. Borges also raised assorted evidentiary objections to John Teicheiras declaration, and the accompanying exhibits, pertaining to the amount of his damages. And Borges asked the court to sanction Farrar for filing a frivolous motion.

Finally, Borges asked the court, in the event it was inclined to grant the motion, to permit him to conduct discovery, to plead various defenses (e.g., estoppel, laches, and a failure to mitigate damages), and to present evidence.

Farrar filed a reply disputing the two grounds stated in Borgess opposition. As for damages, he agreed to accept the value of the herd as determined by the bankruptcy court ($117,650), and on that basis reduced his claim for damages to this amount plus interest, for a total of $186,176.23. He also renewed his request for attorney fees.

A hearing followed on March 28, 2002. It appears the parties submitted the matter on their pleadings. The record merely contains a minute order indicating the court denied the motion to quash. There is no reporters transcript of the hearing, nor any additional statement explaining the courts decision.

The formal order denying the motion was filed on April 11, 2002, and served on Farrar four days later. Farrar filed a timely notice of appeal on June 11, 2002.

This, however, was not the end of activity in the trial court. Back in April, soon after the court had denied his motion to quash, Farrar filed a motion in the bankruptcy proceeding asking the court there to amend its 1996 order granting Borges relief from the automatic stay. Farrars proposed amendment sought to "clarify" an "ambiguity" in the order regarding its res judicata effect. This "ambiguity," he asserted, had been the basis for the state courts allegedly incorrect ruling on the motion to quash.

"On February 15, 2002, Farrar filed a Motion to Quash the Writ of Possession, pursuant to which ... Farrar sought recovery of the value of the livestock. This motion was heard on March 28, 2002, at which time the Honorable William Ivey ... denied the motion, relying solely upon the language of the Bankruptcy Courts Order Granting Motion for Relief from Automatic Stay. Specifically, Judge Ivey ruled that by its Order, which provides that ` Debtors have no equity in the livestock, and that Frank Borges has `relief from the automatic stay effective immediately to obtain [sic, "retrieve"] his collateral, the Bankruptcy Court intended to give Borges absolute and indefinite possession to [sic] [the Teicheirass] livestock, and that prosecution of the state court action, or a final judgment therein in Borges favor, was unnecessary."

A hearing in the bankruptcy court on the motion to amend the 1996 order was originally set for May 20, 2002, but was later continued to June 24th, beyond the 60-day period for appealing the state court order denying the motion to quash. Consequently, on June 11, 2002, the same day he filed a notice of appeal, Farrar filed a motion in the state court for reconsideration of its April 11th order denying the motion to quash. (§ 1008.) The motion for reconsideration anticipated that an amended order in the bankruptcy case would provide "new or different facts, circumstances, or law" justifying a more favorable ruling on the motion to quash. (§ 1008.) It was not to be.

Section 1008 provides in part:
"(a) When an application for an order has been made to a judge, or to a court, and refused in whole or in part, ... any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order....
"(b) A party who originally made an application for an order which was refused in whole or part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law ...." (Italics added.)
Farrar would later assert he had made his "Motion for Reconsideration" under subdivision (b), rather than subdivision (a), of the statute. In either case, Farrars filing of a notice of appeal divested the trial court of jurisdiction to hear the motion. (Michael v. Aetna Life & Casualty Ins. Co. (2001) 88 Cal.App.4th 925, 932.)

The bankruptcy court denied Farrars motion to amend in an order filed on July 2, 2002. But, in minutes of the hearing attached to the order, the court explained it had done so because its 1996 order had not been ambiguous. The court then went on to explain at some length that, by granting Borges relief from the automatic stay, it had not made any final determination as to Borgess title to, or right to possession of, the Teicheirass dairy herd. It concluded: "If the superior court has made an error of law in interpreting this courts order or in denying the Trustees motion to quash the writ of possession, the Trustees remedy is an appeal to the California Court of Appeal."

Despite this advice, Farrar continued to pursue his motion for reconsideration for a while longer, although it seems he eventually abandoned it; there is nothing in the record in any event to indicate what ever became of the motion. Nevertheless, both parties make reference in their briefs to the bankruptcy courts observations regarding the res judicata effect of its 1996 order.


On appeal, Farrar contends the claim and delivery statutes authorize, and indeed mandate, return of the dairy herd — or in this case, payment of the herds monetary value plus damages for its detention — to the Teicheirass bankruptcy estate. Farrar also seeks to rebut the two arguments made by Borges in the trial court in opposition to the motion to quash, which arguments presumably supplied the basis for the trial courts decision to deny the motion: that dismissal of the underlying action divested the court of jurisdiction to rule on the motion, and that the bankruptcy courts 1996 relief-from-stay order was res judicata as to Borgess right to possession of the herd.

In response, Borges appears to have conceded the res judicata issue. He continues, however, to maintain that the trial court lacked jurisdiction to decide the motion to quash. In a related argument, he claims the courts order denying the motion was not appealable. And he raises two additional contentions: he argues the Teicheirass (and later Farrars) failure to answer the original complaint to assert a right to recover possession foreclosed such recovery; and he raises assorted legal and equitable defenses to the motion to quash. We begin with the statutory scheme for claim and delivery.

1. Claim and Delivery

"Claim and delivery" is a provisional remedy, authorized by statute, by which the plaintiff in an action for the recovery of tangible personal property may take immediate, but conditional, possession of the property without having to wait for a trial and judgment in the underlying action. (§ 512.020 et seq.; 6 Witkin, Cal. Procedure (4th ed. 1997) Provisional Remedies, § 247, p. 195.)

"Thus, the action may be brought and possession recovered in the usual manner by judgment, or the action may be brought and possession recovered by the provisional remedy before judgment. The provisional remedy cannot be employed independently, but only in the action. Moreover, the provisional remedy gives only temporary possession; title and right to possession are determined by the final judgment.... These distinctions are fundamental, though sometimes obscured by the confusing tendency of courts and attorneys to use the term `claim and delivery indiscriminately to refer to both the action and the provisional remedy. [Citations.]" (6 Witkin, Cal. Procedure, supra, § 247, p. 195.)

To add to the confusion, the underlying action incorporates to some degree the three common law forms of action available against a defendant who has committed the tort of conversion of personal property: an action for specific recovery of the property when the original taking was unlawful ("replevin"); an action for specific recovery when the original taking was not unlawful ("detinue"); and an action only for damages for the value of the property taken ("trover and conversion"). (5 Witkin, Cal. Procedure, supra, Pleading, § 651, pp. 107-109.) However, a statutory action for the specific recovery of personal property, whether in the nature of replevin or detinue, permits the recovery of the propertys value if the property itself cannot be returned. (§ 667.) Thus, the only significant difference between specific recovery and conversion in such an action is the measure of damages, and the action itself is often termed simply one for conversion. (5 Witkin, Cal. Procedure, supra, Pleading, § 651, p. 109.)

Section 667 provides in its entirety:
"In an action to recover the possession of personal property, judgment for the plaintiff may be for the possession or the value thereof, in case a delivery cannot be had, and damages for the detention. If the property has been delivered to the plaintiff, and the defendant claim a return thereof judgment for the defendant may be for a return of the property or the value thereof, in case a return cannot be had, and damages for taking and withholding the same."

Once a judgment is reached in an action for the recovery of personal property, one of several outcomes is possible depending upon which party then has actual possession of the property. If the plaintiff prevails, but does not have possession, he or she is entitled to specific recovery of the property, or if delivery is not possible, to its value plus damages for its taking and detention. (§§ 627, 667; 6 Witkin, Cal. Procedure, supra, Provisional Remedies, § 275, p. 219.) A prevailing defendant who does not then have possession is likewise entitled to specific recovery, or damages, provided he or she has set up the right to possession in answer to the complaint. (6 Witkin, Cal. Procedure, supra, Provisional Remedies, § 275, p. 219.) It follows that a prevailing party who already has possession of the property may retain it on the same conditions. Claim and delivery, then, if the plaintiff has used it, merely determines which party has possession when a judgment is reached.

Section 627 states in its entirety:
"In an action for the recovery of specific personal property, if the property has not been delivered to the plaintiff, or the defendant, by his answer, claim a return thereof, the jury, if their verdict be in favor of the plaintiff, or, if being in favor of defendant, they also find that he is entitled to a return thereof, must find the value of the property, and, if so instructed, the value of specific portions thereof, and may at the same time assess the damages, if any are claimed in the complaint or answer, which the prevailing party has sustained by reason of the taking or detention of such property."

Thus, sections 667 and 627 appear to contemplate a situation where the right to possession of the disputed property has been finally adjudicated in favor of one party or the other, and they then mandate delivery of the property (or its value) to the prevailing party accordingly. If, for example, Borgess conversion complaint had gone to trial, and the Teicheiras had prevailed, they would have been entitled under sections 667 and 627 to regain possession of the dairy herd, or recover its value, assuming by then they had filed an answer to the complaint asserting a right to possession. (Of course, the matter did not go to trial, and the Teicheiras did not file an answer.)

On the other hand, section 512.120, which is part of the specific statutory scheme for claim and delivery, does much the same thing as sections 667 and 627, but it applies without regard to whether there has been a final adjudication of the parties rights to the property. The statute pertains once the plaintiff has taken possession of the disputed property through claim and delivery, and it states in part:

"If the plaintiff fails to recover judgment in the [underlying] action, he shall redeliver the property to the defendant and be liable for all damages sustained by the defendant which are proximately caused by operation of the ... levy of the writ of possession, and the loss of possession of the property pursuant to levy of the writ of possession .&# 8230;"

Farrar also moved to quash the writ of possession pursuant to section 512.020, which provides in subdivision (b)(3)(iii), in part:
"Any defendant whose property has been taken pursuant to a writ of possession issued under this subdivision [relating to writs issued ex parte] may apply for an order that the writ be quashed and any property levied on pursuant to the writ be released. Such application shall be made by noticed motion, and the provisions of Section 512.050 shall apply.... If the court determines that the plaintiff is not entitled to a writ of possession, the court shall quash the writ of possession and order the release and redelivery of any property previously levied upon, and shall award the defendant any damages sustained by him which were proximately caused by the levy of the writ of possession and the loss of possession of the property pursuant to such levy."
Inasmuch as a writ of possession is merely a provisional, prejudgment remedy, we understand the procedure in section 512.020, subdivision (b)(3)(iii) for quashing the writ likewise to apply only prior to the conclusion of the underlying action. Thereafter, the writ is subsumed in the judgment, and possession is determined in accordance with sections 667 and 627, and/or section 512.120. (Cf. Dowling v. Polack (1861) 18 Cal. 625, 627 [termination of underlying action discharged injunction bond by operation of law].)

Hence, section 512.120 applies if the plaintiff has failed to recover a judgment for any reason, and does not require a judgment on the merits in favor of the defendant. Nor does it require that the defendant has filed an answer asserting a right to possession of the property. Essentially, then, the statute seems to be intended to restore the status quo ante.

The principal dispute in this case is not whether the trial court should have ordered Borges to return the dairy herd (or its value) to the Teicheiras (or their bankruptcy estate), but when. That is, Borges appears to concede that section 512.120 applies in the abstract, but he maintains the court should have incorporated the return order into the judgment of dismissal, and no longer had jurisdiction to do so thereafter. We agree.

2. Did the Court Have Jurisdiction?

Borgess argument begins with the general proposition that, following the entry of a voluntary dismissal by the plaintiff under section 581, the court is without jurisdiction to act further in the action except for the limited purpose of awarding costs and statutory attorney fees. (Mossanen v. Monfared (2000) 77 Cal.App.4th 1402, 1409.) Borges then would extend this proposition to the present situation in reliance onAmerican M. S. Co. v. C. W. Cradick Co. (1929) 99 Cal.App. 589 (AMSC). The plaintiff in that case brought an action against the defendant for the recovery of personal property, and took possession of the property by claim and delivery pending judgment. After the trial court sustained the defendants demurrer to the complaint with leave to amend, the plaintiff, instead of amending, filed a voluntary dismissal of the action with the clerk. The court later entered a judgment of dismissal awarding the defendant his costs. Some three months after that, the court amended the judgment to provide that the plaintiff should redeliver the property to the defendant, or pay the propertys value plus damages. The plaintiff appealed from the amended judgment. The appellate court reversed, saying "it must be apparent" under the then-existing version of section 581 "that after the dismissal of the action[,] the court was without authority to render a judgment in favor of the defendant, for the reason that nothing was therein pending." (Id. at p. 591.)

Section 581 permits an action to be dismissed "[w]ith or without prejudice, upon written request of the plaintiff to the clerk, filed with papers in the case, or by oral or written request to the court at any time before the actual commencement of trial, upon payment of the costs, if any." (Id ., subd. (b)(1).) Similarly, it provides that "[a] plaintiff may dismiss his or her complaint, or any cause of action asserted in it, in its entirety, or as to any defendant or defendants, with or without prejudice prior to the actual commencement of trial." (Id., subd. (c).)

What was then subdivision 1 of section 581 provided that an action could be dismissed, inter alia:

"`By the plaintiff, by written request to the clerk, filed with the paper in the case, at any time before the trial, upon payment of his costs; provided a counterclaim has not been set up, or affirmative relief sought by the cross-complaint or answer of the defendant. If a provisional remedy has been allowed, the undertaking must thereupon be delivered by the clerk to the defendant, who may have his action thereon." (AMSC, supra, 99 Cal.App. at pp. 590-591, italics added.)

Thus, the court explained, the defendant was not without a remedy inasmuch as section 581 "provide[d] a manner and method whereby the defendant may obtain relief in such a case as this" (i.e., an action on the bond or undertaking), and the defendant also had an action against the plaintiff "for the wrongful taking and conversion of the property." (AMSC, supra, 99 Cal.App. at p. 591.)

The court reached a different conclusion in Kowalsky v. Nicholson (1913) 23 Cal.App. 160 (Kowalsky). That case too involved an action to recover personal property during which the plaintiff took provisional possession of the property through claim and delivery. Four years after the complaint was filed, the defendant moved for, and the court ordered, dismissal of the action for lack of prosecution. Sometime "promptly" thereafter, at the defendants request, the court amended the order of dismissal nunc pro tunc to provide that the defendant should recover the property taken from her, or its value. The plaintiff appealed, contending the court had no power to change the original order. The appellate court disagreed. It noted that the power of a court to amend its judgments extends to cases where the original order was inadvertently made and entered. It then continued:

"Here the defendant being entitled to a dismissal of the action, as the court correctly held, it followed under the circumstances disclosed by the record that the judgment should, as a matter of course, have directed the return to her of the property taken. Its failure to do so, it clearly appears, was merely an inadvertence or mistake, and not a judicial error." (Kowalsky, supra, 23 Cal.App. at p. 162.)

"Upon the dismissal of the action in the case at bar defendant was entitled to the return of the property involved in the action; and a failure to enter the requested correction of the judgment would be equivalent apparently to a judgment in favor of the plaintiffs on the merits of the case.This would be manifestly unjust ; and as the record shows that defendant was entitled to judgment as finally entered, and as the motion to correct the mistake was promptly made, the action of the court in the premises must be sustained." (Id. at pp. 163-164, italics added.)

The court reached the same result in Skaggs v. Taylor (1926) 77 Cal.App. 519 (Skaggs), based on the language of section 667. The plaintiff in Skaggs filed an action to recover an automobile, and took possession of the property during the pendency of the action though claim and delivery. The court later entered a judgment of nonsuit against the plaintiff, but failed to order him to return the automobile to the defendant although the defendant had asserted a right to possession in answer to the complaint. About 10 days later, the defendant moved the court to modify the judgment, the court refused, and the defendant appealed. The appellate court reversed. It held that a judgment of nonsuit, like the dismissal in Kowalsky, was a "judgment for the defendant" within the meaning of section 667, and so adopted Kowalskys reasoning. (Id. at pp. 524-525.) Thus, the decisions in Kowalsky and Skaggs were based at least in part on equitable principles; that it would be "manifestly unjust" to deny the defendant the recovery to which he or she clearly was entitled. (Kowalsky, supra, 23 Cal.App. at p. 163.) The same sort of considerations in the present case support just the opposite result.

The principle Borges would have us distill from these three decisions is that a courts jurisdiction to correct a judgment in claim and delivery cases runs out when the time to appeal does. This, in turn, is but a minor variation on his argument that the order correcting the judgment is not appealable. For this latter position, he relies on Simmons v. Santa Barbara Ice etc. Co. (1958) 162 Cal.App.2d 23 (Simmons). Simmons was not a claim and delivery case. The court sustained the defendants demurrer to the plaintiffs second amended complaint, with leave to amend. The plaintiff failed to amend, and the defendant moved to dismiss. A hearing followed after which the court took the matter under submission. The court granted the motion later the same day. An order dismissing the complaint was duly recorded in the minutes indicating that the court had granted the motion at the hearing (rather than afterward). The plaintiff did not appeal the dismissal. But seven months later, he filed two successive motions to correct the minutes, together with a motion to vacate the dismissal. All three motions were denied, and the plaintiff appealed.

The court held that the order denying the motion to vacate the dismissal was not an appealable order. "`[I]f the grounds upon which the parties seek to have a judgment vacated existed before the entry of the judgment and would have been available on an appeal from the judgment, an appeal will not lie from an order refusing the motion." (Simmons, supra, 162 Cal.App.2d at p. 26.) The court also held that the orders denying the plaintiffs motions to correct the minutes were not appealable. A postjudgment order is appealable, the court explained, only if it "`affect[s] the judgment in some manner or bear[s] some relation to it either by way of enforcing it or staying its execution." (Id. at p. 28.) Combining these two rules, Borges argues:

"If, arguendo, Farrar had, other than by Code of Civil Procedure § 996.440, a right to modify the dismissal judgment by a motion to quash when he moved to dismiss the [underlying] Action, he could have done so before dismissal was entered, and/or not later than [when] the time to appeal the Order of Dismissal became final. The alleged grounds Farrar relied on in the Motion to Quash existed when the dismissal was entered."

Of course, the appeals were permitted in AMSC, Kowalsky, and Skaggs in order to determine whether or not the trial court had possessed the authority to modify a judgment under circumstances similar to those in this case. We will follow the same course here.

This brings us to section 996.440, which Borges thus concedes is an exception to his argument, if the statute applies (a question we will discuss shortly). Section 996.440 provides in part:

"(a) If a bond is given in an action or proceeding, the liability on the bond may be enforced on motion made in the court without the necessity of an independent action.

A "bond" and an "undertaking" are essentially the same thing for purposes of the statute. (§§ 995.190, 995.210; see also § 995.710 [permitting deposit of money with the court in lieu of a bond].)

"(b) The motion shall not be made until after entry of the final judgment in the action or proceeding in which the bond is given and the time for appeal has expired or, if an appeal is taken, until the appeal is finally determined. The motion shall not be made or notice of motion served more than one year after the later of the preceding dates." (Italics added.)

Farrar maintains his "motion to quash" pursuant to sections 512.020 and 512.120 was, in actuality, a motion to recover against the bond pursuant to section 996.440, which motion, by the terms of this latter section, may be made only after the judgment in the underlying action has become final. Borges contends in response that section 996.440 does not apply in this case because he was not required to post a bond in connection with the second writ of possession.

Farrars motion to quash made no mention of section 996.440. He did, however, bring up the statute in his reply to Borgess opposition to the motion to quash in support of his contention that section 996.440 somehow establishes the time period within which to request a redelivery order pursuant to section 512.120.

It seems to us that neither of these positions is correct. Borges was not required to file an undertaking (which must be equal to twice the value of the defendants interest in the property subject to the writ of possession) because the court evidently determined the Teicheiras had no equitable interest in the dairy herd. Thus, what the court did here was equivalent to requiring Borges to file an undertaking of zero dollars. Therefore, Farrar is not foreclosed from bringing an action on the undertaking to enforce his rights against Borges. (See § 996.410 [beneficiary may enforce the liability on a bond against both the principal and the sureties].)

Section 515.010 was amended in 2002 to add a provision permitting the trial court to waive the requirement that the plaintiff file an undertaking if the court determines the defendant has no interest in the property. (Stats. 2002, ch. 68, § 3.)

On the other hand, neither a motion to quash a writ of possession (§ 512.020) nor for an order directing the plaintiff to redeliver property to the defendant (§ 512.120) is the same thing as an action on the undertaking (§ 996.440).

Thus, this case is much like the one in AMSC, supra, 99 Cal.App. 589, where the defendant, following a dismissal of the underlying action, was entitled under sections 667 and 627 to redelivery of the subject property taken by the plaintiff through claim and delivery, but where the judgment of dismissal failed to include an order to that effect. On appeal, the appellate court held the trial court had been without jurisdiction to amend the judgment, and the defendants remedy instead was to bring an action on the undertaking and/or an action against the plaintiff for conversion. Here too, although the Teicheirass bankruptcy estate presumably was entitled under section 512.120 to redelivery of the herd or its value, the judgment of dismissal failed to so provide. The estates remedy then was an action on the undertaking pursuant to section 996.440. This is what Farrar now claims was the basis for his motion to quash. That being the case, it is important to distinguish between what his remedy could have been under section 512.120, and what it might be under section 996.440.

An undertaking in a claim and delivery case secures the defendants right to return of the property that is the subject of the underlying action, "if return of the property is ordered," and/or to payment of "any sum recovered against [the] plaintiff," which may in appropriate cases include the value of the property if it cannot be returned, and damages for its taking and detention. (§ 515.010.)

Crosswhite v. American Insurance Co. (1964) 61 Cal.2d 300 (Crosswhite) was a separate action on an undertaking following the dismissal of claim for specific recovery of a logging truck. The truck was the subject of a chattel mortgage held by the DeBon Motor Company (DeBon) as security for a note that was in default when the mortgagor sold the truck to Crosswhite. DeBon, which was not aware the truck had been sold, sued the mortgagor to recover possession of it, and utilized claim and delivery to obtain a writ of possession. The American Insurance Company (American) provided the undertaking. The sheriff seized the truck pursuant to the writ, but only after Crosswhite had filed an answer to DeBons complaint. For this and other reasons, the seizure was ineffective and the court ordered the truck returned to Crosswhite two months later, whereupon DeBon dismissed the complaint. It then filed a new action, and obtained another writ by which it properly took possession of the truck.

Crosswhite sued American on the undertaking filed in the original action claiming damages for his loss of use of the truck for the two months DeBon had possession of it. There was no question Crosswhite was entitled to recover against the undertaking (since DeBons failure to prosecute the original action had breached a condition of the bond), so the only issue was the amount of Crosswhites damages. The trial court ruled Crosswhite had suffered no damages because he had not, in fact, been entitled to possession of the truck during those two months. Crosswhite appealed.

The appellate court agreed Crosswhite had not been legally entitled to possession of the truck.

"It is established by the admitted facts, and plaintiff does not deny, that DeBon was entitled to the possession of the truck when it was seized. The truck was subject to a mortgage securing an obligation that was in default. The mortgage expressly granted [DeBon] the right to possession after default, and under its terms the mortgagee could have repossessed the truck without legal process, at least if the repossession could have been accomplished peacefully. [Citations.] In withholding property subject to such a mortgage after demand, the mortgagor and his assigns became converters [citation], liable not only for the property or its value, but also for damages for the detention from the time of the demand. [Citations.] [ Crosswhite] was therefore not only not entitled to the use of the truck during the two-month period it was in DeBons possession, but could have been held liable for the value of its use had he retained it during that time. Unless [American] is precluded for some reason from showing its principals [DeBons] right to possession, the trial courts decision must be affirmed." (Crosswhite, supra, 61 Cal.2d at pp. 301-302.)

The court then concluded that American was not precluded from making such a showing.

"[Crosswhite] contends that the judgment of dismissal conclusively established his right to possession. This contention is clearly without merit. A voluntary dismissal without prejudice before trial is not a judgment on the merits. Nor did the trial courts order to return the truck to [Crosswhite] establish his right to possession. That order was based merely on the procedural irregularity in the seizure.

Farrar cites the case of Dowling v. Polack, supra, 18 Cal. 625 for the proposition that a dismissal for failure prosecute is a final determination on the merits in favor of the defendant. However, that case simply held that a dismissal under those circumstances had the same effect as a decision on the merits, in that the party enjoined could maintain an action on the injunction bond following the dismissal.

"[Crosswhite] contends that his right to possession is irrelevant in an action on a claim and delivery bond. He contends that because there was a breach of a condition of the bond, he must necessarily have a right to recover damages. That he would have had a right to recover the costs of the first action, had he asked for them, is clear. To recover more than costs, however, he must show some other injury.

"DeBons dismissal of the action precluded a determination in that action of [Crosswhites] right to possession. Had DeBon prosecuted the action and failed to establish its right to possession, [Crosswhite] could have recovered damages for the loss of use of the truck. The denial of that opportunity was the wrong involved here. [Citations.] That wrong was rectified by giving [Crosswhite] an opportunity to bring an action on the bond in which, if [American] could not show DeBons right to possession, [Crosswhite] was guaranteed satisfaction of his judgment. [Crosswhites] recovery on the bond is limited to the damages he could have recovered had the original action been decided on the merits in his favor. [Citations.]" (Crosswhite, supra, 61 Cal.2d at pp. 302-303, italics added.)

Finally, the court agreed with the trial courts finding that Crosswhite had suffered no damages because he had had no right to use the truck when DeBon took it. It affirmed the judgment accordingly. (Crosswhite, supra, 61 Cal.2d at p. 304.)

Similarly, there appears to be little doubt in this case that the Teicheiras were not entitled to possession of the dairy herd from the time Borges took possession of it on June 11, 1996 until the underlying action was dismissed on September 12, 2001, in which case they could have suffered no damage from their loss of possession during this period. In addition, since the Teicheiras did not file an answer in the underlying action asserting a right to possession of the herd, it appears they would not have been entitled to recover possession had the action gone to trial and they prevailed. (§§ 667, 627; Pico v. Pico (1880) 56 Cal. 453, 458; Skaggs, supra, 77 Cal.App. at p. 523.) However, we do not need to decide these questions because Farrar did not bring an action on the undertaking pursuant to section 996.440, but a "motion to quash" pursuant to sections 512.020 and 512.120. We conclude only that the "motion to quash" was untimely, such that the court properly denied it. Our conclusion does not preclude Farrar from bringing an action on the undertaking either in the present action, or in a separate one. (§§ 996.430, 996.440; Wm. R. Clarke Corp. v. Safeco Ins. Co. of America (2000) 78 Cal.App.4th 355, 359.)

We express no opinion about whether other factors not addressed here, such as the statute of limitations, might affect Farrars right to bring such an action.


The order denying the motion to quash is affirmed. Costs are awarded to Borges.

WE CONCUR: Dibiaso, Acting P.J., Cornell, J.

Summaries of

Borges v. Farrar

Court of Appeals of California, Fifth Appellate District, Placer.
Nov 20, 2003
No. F040810 (Cal. Ct. App. Nov. 20, 2003)
Case details for

Borges v. Farrar

Case Details

Full title:FRANK BORGES, Plaintiff and Respondent, v. GARY FARRAR, as Trustee in…

Court:Court of Appeals of California, Fifth Appellate District, Placer.

Date published: Nov 20, 2003


No. F040810 (Cal. Ct. App. Nov. 20, 2003)

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