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Cca Financial, LLC v. Time Savers

September 2, 2011


Name of Assigned Judge Sitting Judge if Other or Magistrate Judge Robert M. Dow, Jr. than Assigned Judge



Before the Court is Plaintiff's motion for replevin and detinue [5], brought pursuant to Fed. R. Civ. P. 64 and 735 ILCS 5/19-101, et seq. For the reasons set forth below, Plaintiff's motion for a writ of replevin and order of detinue [5] is granted in part (as to the writ of replevin) and denied in part without prejudice (as to the order of detinue). Plaintiff is directed to submit by 9/9/2011 a proposed order of replevin to the Court's proposed order electronic mail box after circulating the proposed order to counsel for Defendant for review as to form. See People's Capital & Leasing Corp. v. The Strathmore Co., No. 10-cv-7770, docket entry 33 (entered June 6, 2011) (recent order of replevin approved by the Court). This case is set for further status on 9/22/2011, at 9:00 a.m.

O[ For further details see text below.] Docketing to mail notices.


I. Background

Defendant Time Savers, Inc. leases aerial lift equipment to businesses in the Chicago area. During the period from November 16, 2007 through August 24, 2009, Defendant Time Savers and non-party Associated Bank executed 223 separate loans, each of which was documented with a promissory note. To secure its obligations under the notes, Time Savers entered into various commercial security agreements with Associated Bank, granting Associated Bank a security interest in various aerial lift equipment (collectively "the collateral"). Associated Bank subsequently assigned all of its rights, title, and interest in the notes, security agreements, and collateral to Plaintiff CCA Financial. CCA Financial subsequently filed UCC-3 financing statements with the Illinois Secretary of State. CCA represents that it holds a first-priority security interest in the collateral.

Time Savers subsequently defaulted on its obligations to CCA under the notes and security agreements. On November 30, 2010, CCA and Time Savers entered into a forbearance agreement. Time Savers failed to make timely payments when due, and CCA filed the current lawsuit on June 8, 2011. According to CCA, as a result of Time Savers' default under the forbearance agreement, Time Savers owes CCA $3,607,356.73. CCA maintains that under the security agreements, upon default, Time Savers is required to assemble and surrender the collateral. CCA represents that despite its demand, Time Savers refuses to voluntarily surrender the collateral.

II. Analysis

A. Writ of Replevin

On the basis of its review of the record as a whole, the Court finds that Plaintiff has satisfied the standard for the issuance of an order of replevin -- namely, that Plaintiff has established a prima facie case of entitlement to possession of the collateral at issue and that Plaintiff likely will prevail on the merits of its underlying claim to possession. See Carroll v. Curry, 392 Ill. App. 3d 511, 514 (2d Dist. 2009). Notably, Defendant has not contested that it has defaulted under the applicable notes, nor has Defendant challenged Plaintiff's assertion of a valid lien on the collateral at issue. Defendant's principal arguments in opposition to the motion include (1) lack of proper notice to other creditors and customers of Defendant, (2) lack of evidence concerning the value of the collateral, and (3) a contention that an order of detinue would be premature.

On the issue of notice, it appears that the principal concern relates to Cole Taylor Bank, which is reported to have a previously perfected security interest in Defendant's inventory, including the collateral. However, the Court sees nothing in the replevin statute that forecloses a creditor's right to proceed on the ground that another entity may have a superior interest in the property or collateral in question -- an interest that it may or may not choose to assert. Nor can the Court find anything in the statute requiring a party seeking replevin to give notice to the Defendant's other creditors or customers. To be sure, notice is required prior to a sale of the collateral (see 810 ILCS 5/9-610, cmt. 5; 810 ILCS 5/9-611), but not prior to the entry of an order of replevin itself. For purposes of this motion, the Court need not determine the priority of liens on the collateral. Time Savers' argument that CCA does not have a first-priority security interest in the collateral does not bear on the present motion and the Court's determination that CCA has a right to foreclose on its security interest in the collateral.

In regard to the bond, under Illinois law a replevin bond indemnifies the sheriff for damages in the event of a wrongful replevy. See 735 ILCS 5/19-112. Prior to service of the order for replevin, the plaintiff must give the sheriff (or marshal) a bond in the amount of twice the value of the property to be seized. Id. If the plaintiff provides such a bond, the defendant then may retain the collateral only if it posts its own bond for double the value of the collateral. 735 ILCS 5/19-109. Under the statute, establishing the value of the bond is not a prerequisite to the issuance of an order of replevin, but it must be settled "[b]efore the service of the order for replevin." 735 ILCS 5/19-112. Plaintiff has estimated the fair market value of the collateral to be approximately $2,269,175.00. Defendant questions the basis for that estimate, but provides no estimate of its own. While Defendant has not given the Court any concrete reason for doubting Plaintiff's ...

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