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Pet Food Experts, Inc. v. Alpha Nutrition, Inc.

Superior Court of Rhode Island

May 10, 2016

PET FOOD EXPERTS, INC. Plaintiff,
v.
ALPHA NUTRITION, INC. d/b/a DOGGIEFOOD.COM Defendant.

Appeal from Superior Court Kent County

For Plaintiff: Vincent A. Indeglia, Esq.

For Defendant: Alpha Nutrition, Inc., pro se

For Interested Parties: V. Edward Formisano, Esq.; Paul DeMarco, Esq.; Michael D. Pushee, Esq.; Edward L. Gnys, III, Esq.

DECISION

STERN, J.

Before the Court is Pet Food Experts, Inc.'s (Plaintiff) motion for a writ of replevin (the Motion). Plaintiff argues that it is entitled to the repossession and liquidation of an automobile identified as a 2015 Cadillac Escalade (the Vehicle) in partial satisfaction of a promissory note given to it by Alpha Nutrition, Inc. d/b/a Doggiefood.com (Defendant). Greenwood Credit Union (Greenwood), another creditor of Defendant, has objected to the Motion, arguing that it maintains a security interest with a superior priority to Plaintiff in the Vehicle. Jurisdiction is pursuant to G.L. 1956 §§ 8-2-13 and 8-2-14. For the following reasons, the Court grants the Motion.

I Facts[1] and Travel

On September 19, 2014, Defendant executed and delivered a promissory note (the Note) to Plaintiff in the amount of $700, 000. SUF at ¶ 1; Ex. A. To secure Defendant's obligations under the Note, Defendant and Plaintiff entered into a security agreement (the Agreement), which provided that the Note would be secured by Defendant's currently owned and after-acquired equipment, inventory accounts, general intangibles, deposit accounts, investment property, letter of credit rights, supporting obligations, property in its possession, and its books and records. See Ex. B at 1-3. After executing the Agreement, Plaintiff filed a UCC-1 Financing Statement (the Financing Statement) with the Rhode Island Secretary of State. SUF at ¶ 2; Ex. B.

Plaintiff claims that the Agreement extends to the Vehicle, which was acquired by Defendant after the execution of the Note and the Agreement and filing of the Financing Statement. SUF at ¶ 7. The Vehicle was purchased by Defendant when David Paolo (Paolo) executed a Motor Vehicle Purchase Contract (the Purchase Contract) on behalf of Defendant. Id. at ¶ 8. Defendant financed the purchase of the Vehicle with Greenwood through a Loan and Security Agreement (the Greenwood Loan). Id. at ¶ 11. The Greenwood Loan was dated March 6, 2015, totaled $71, 959.47, identified Defendant as the borrower, and granted a security interest in the Vehicle to Greenwood. Id. at ¶ 11; Ex. D. On March 7, 2015, a motor vehicle certificate of title (the Title) was issued for the Vehicle, identifying Defendant as the owner and listing no lienholders. Id. at 12; Ex. F. Paolo delivered the Title to Greenwood, who currently holds it in its possession. Id. at ¶ 13.

Subsequent to the execution of the Agreement, filing of the Financing Statement and purchase of the Vehicle, Defendant failed to make payments on its loan to Plaintiff and defaulted on the terms of the Note. Id. at ¶ 3. As a result, Plaintiff filed the instant suit and filed a motion for pre-judgment attachment against any and all of Defendant's assets, which was granted. Id. at ¶ 4. Defendant failed to file an Answer and a default judgment was entered against it in the amount of $616, 000 (the Judgment). Id. at ¶ 5. Subsequently, in October 2015, Anthony Gabrielle (Gabrielle), Defendant's president, demanded that Paolo return the Vehicle to Defendant, which he did. Id. at ¶ 17. Gabrielle then turned the Vehicle over to Plaintiff. Id. at ¶ 18. However, Paolo, who was aware of the pre-judgment attachment order and that Defendant voluntarily remitted the Vehicle to Plaintiff, used a spare set of keys to take the Vehicle from Plaintiff's property. Id. at ¶ 20. Thereafter, Plaintiff filed the instant Motion. At an initial hearing on the Motion, Paolo agreed to store the Vehicle on Plaintiff's property pending a further order of the Court, and on December 12, 2015, he delivered the Vehicle to Plaintiff. Id. at ¶ 22.

II Standard of Review

"'Replevin is merely a provisional remedy that applies prior to a trial on the merits.'" Moseman Constr. Co. v. State Dep't of Transp., 608 A.2d 34, 36 (R.I. 1992) (quoting Goldberg v. Lancellotti, 503 A.2d 1129, 1130 (R.I. 1986)). "Stated differently, the replevin statute applies only when the plaintiff seeks pretrial seizure of personal property pending a trial to determine ownership." Id. The issuance of a writ of replevin is governed by Rule 64 of the Superior Court Rules of Civil Procedure, which provides, in pertinent part, that a writ of replevin shall be granted "only upon a showing that there is a probability of a judgment being rendered in favor of the plaintiff and that there is a substantial need for transfer of possession of the goods and chattels to the plaintiff pending adjudication of the claim." Super. R. Civ. P. 64(a).

III Analysis

In order to prove that it has a probability of judgment in its favor, Plaintiff must demonstrate that its interest in the Vehicle is superior to Greenwood. Plaintiff maintains that its interest is superior because the Agreement is valid and was properly perfected because the Financing Statement was filed with the Secretary of State and identified the secured collateral. Conversely, Greenwood avers that it has a superior interest in the Vehicle because the Agreement is invalid for three reasons: (1) Plaintiff did not give value for the Vehicle; (2) the Agreement does not adequately describe the secured collateral; and (3) the purchase of the Vehicle is a consumer goods purchase, which is exempt ...


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