Farm Credit Services of America, PCA v. Samra
2:20-cv-01142
E.D. Cal.Jun 23, 2020Background:
- Farm Credit Services of America (Plaintiff) made five secured loans (Aug–Jan 2018–2019) to Steven Samra/Tranquility Pistachio, LLC for farm equipment; Plaintiff holds first-priority security interests in listed equipment.
- Defendants defaulted, Tranquility filed Chapter 12 bankruptcy (Jan 13, 2020), and allegedly failed to list the equipment in its bankruptcy schedules; Plaintiff obtained relief from the automatic stay.
- Plaintiff could not locate some equipment, alleges Defendants moved/failed to insure it, and Samra testified some items were stolen and would not identify possessors.
- Plaintiff filed suit (June 5, 2020) and moved ex parte for a writ of possession (four loans) and, alternatively, for a temporary restraining order (TRO) to prevent transfer or concealment of collateral.
- Plaintiff claims Defendants owe roughly $380,000–$388,000 while collateral value is estimated at ~$352,962, suggesting Defendants lack equity in the collateral.
- Court denied the ex parte writ as unnecessary at this stage, granted the TRO enjoining transfer/impairment of the equipment, waived bond, and ordered Defendants to file opposition to the writ application within 10 days.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to an ex parte writ of possession under Cal. Civ. Proc. Code §512.020 | Exigent circumstances: concealment, movement, nondisclosure in bankruptcy, and theft risk justify immediate ex parte repossession | Ex parte writ is a drastic remedy; TRO would suffice to protect interests and allow Defendants opportunity to oppose | Court declined to grant ex parte writ at this time; TRO deemed sufficient short term and Defendants given opportunity to oppose |
| TRO — probable validity of Plaintiff's claim | Loan, security, default, notice, and acceleration documents show Plaintiff likely to succeed on merits | Defendants (no opposition filed yet) could dispute amounts, validity, or priority | Court found probable validity and likelihood of success; element met |
| Necessity of undertaking/bond under Cal. Civ. Code §§513.010, 515.010 | No bond required because Defendants appear to have no equity (debt exceeds collateral value) | Defendants could argue they retain some interest and bond should protect them | Court waived bond requirement because claimed debt exceeds collateral value |
| Immediate danger / irreparable harm (risk of transfer, concealment, impairment) | Movement of equipment, failure to insure, concealment in bankruptcy, and testimony of theft create substantial, immediate risk of loss | Defendants could argue risk is speculative or manageable without TRO | Court found immediate danger and irreparable harm; granted TRO enjoining transfer, removal, concealment, or impairment |
Key Cases Cited
- Sea Rail Truckloads, Inc. v. Pullman, Inc., 131 Cal. App. 3d 511 (1982) (California law on pre-judgment writs of possession; ex parte writ is drastic and disfavored)
- Blair v. Pitchess, 5 Cal.3d 258 (1971) (ex parte writ of possession only when justified by weighty state or creditor interests)
- Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (federal standard for TRO/preliminary injunction: likelihood of success, irreparable harm, balance of equities, and public interest)