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Jlg Enterprises, Inc v. Excalibur Sires

March 22, 2011


The opinion of the court was delivered by: Sheila K. Oberto United States Magistrate Judge



A. Procedural Background

On September 10, 2010, Plaintiff JLG Enterprises, Inc. ("JLG") filed a complaint in Stanislaus County Superior Court against Excalibur Sires, Inc. ("Excalibur") asserting claims for (1) breach of livestock service agreement, (2) unjust enrichment, (3) account stated, (4) open book account, (5) work, labor, services, and materials received, (6) quantum meruit, and (7) enforcement of livestock service lien. (Doc. 1-3 ("Compl.").)

JLG alleges that, since approximately January 1994, JLG and Excalibur have had an oral agreement whereby JLG agreed to render livestock services to bulls provided by Excalibur and boarded at JLG's facility in Oakdale, California, in exchange for Excalibur's agreement to pay for the livestock services. (Compl. ¶ 8.) The services for Excalibur's bulls include boarding, feeding, veterinary and general health services, and semen collection. (Doc. 17, Declaration of Jack Lerch, ¶ 4.) The parties also agreed that JLG would store the semen collected from the bulls at its secure facility for sale to others. (Id.) JLG asserts that Excalibur agreed to pay on a monthly basis for the services rendered by JLG. (Id.)

After the parties entered into this oral agreement, Excalibur delivered a number of registered bulls to JLG's facility. (Doc. 17, ¶ 5.) Since then, JLG has continuously provided Excalibur's bulls with livestock services. (Id.) In 2007, Excalibur apparently got behind in its payments to JLG, and a balance on Excalibur's account began to accumulate. (See Doc. 43-2, p. 3.)*fn1 In June 2010, Excalibur ceased making any payments on its account with JLG (Doc. 17, ¶ 6) and continues to refuse to make payment (Doc. 17, ¶ 20). The principal amount due on Excalibur's account as of July 31, 2010, was $160,964.51 plus applicable interest. (Doc. 17, ¶ 6.) Although the number has fluctuated over time, JLG presently remains in possession of 30 of the bulls Excalibur provided and continues to provide services to them.*fn2 (Doc. 17, ¶ 5.)

On November 22, 2010, Excalibur filed an answer to the complaint and a counterclaim against JLG. (Doc. 6.) Excalibur asserts that it has an oral agreement with JLG to provide livestock services to the bulls it houses at JLG's operating facility. Excalibur maintains that it does not have legal title to all the bulls that it provided for JLG to house and service. (Doc. 6, p. 14, ¶ 17.) Instead,

Excalibur leases top-rated bulls from dairy cattle producers around the country and makes payments to the lessors through royalties generated from the sale of semen produced by the bulls. (Id.) Excalibur asserts it has the sole control and possession of the bulls as part of its lease agreements and has the right to direct semen production. (Doc. 6, p. 14, ¶ 19.)

On December 16, 2010, JLG filed an application for an order authorizing the sale of livestock pursuant to California Civil Code §§ 3080, et. seq. JLG asserts that, by virtue of Excalibur's nonpayment, JLG has a lien against Excalibur's bulls in its possession; as a result of the lien, JLG contends it is entitled to seek an order authorizing the sale of Excalibur's bulls housed at JLG's facilities to pay the accumulated account balance.

On January 12, 2011, Excalibur filed an opposition arguing that it had negotiated an alternative payment schedule with JLG, that JLG had initially agreed to this alternative, accepted payment under the alternative, but ultimately refused to honor the agreement and demanded that the full amount of the balance due be paid immediately. (Doc. 23, ¶¶ 13-22.) Thus, Excalibur argues that JLG should be estopped from seeking an order authorizing sale of the bulls on equitable grounds. (Doc. 24, p. 3-5.) Further, Excalibur claims that the 30 bulls that JLG proposes to sell are not all owned by Excalibur, which prevents JLG from obtaining an order authorizing the sale of these bulls without issuing proper notice to the owners of those bulls. (Doc. 24, p. 5-6.)

On January 12, 2011, JLG filed a supplemental reply brief asserting that Excalibur's opposition was untimely, that the doctrine of equitable estoppel is not applicable in this circumstance, and that the bulls JLG seeks to sell are owned by Excalibur, not leased by it. (Doc. 26, ¶ 3 ("It is [Larry Gerber's] belief that all of the bulls listed on Exhibit A [to be sold by JLG] are bulls which are owned by Excalibur.").)

On January 13, 2011, Excalibur filed a supplemental declaration of David Winkels, Excalibur's Chief Executive Officer. (Doc. 28.) Mr. Winkels states that 5 of the 30 bulls that JLG seeks to sell are owned by Excalibur, but the remainder of the 30 bulls are leased to Excalibur and are owned by others. (Doc. 28, ¶¶ 9, 10.) On January 14, 2011, JLG filed a supplemental declaration of Larry Gerber and attached information downloaded from a website hosted by an entity named the Holstein Association USA, Inc. ("Holstein Association") showing purported ownership information associated with each of the 30 bulls JLG proposes to sell. For each of the 30 bulls, the Holstein Association's website identifies Excalibur as the owner. (See Doc. 29-1.)

B. Requested Sale Order

The following is a list of the bulls currently in JLG's possession that it believes are owned by Excalibur and that JLG proposes to sell pursuant to the livestock lien that has arisen by virtue of Excalibur's nonpayment:

Bull Name Bull No. Registration No.

1. Lesperron Big Daddy 204H2037 M100754243

2. Our-Favorite Shyster-ET 204H2048 134779441

3. Eskdale Momentous-ET 204H2068 136707781

4. Mr. KY-Blue Roy Casino-ET 204H2078 137629147

5. Regancrestdl S Ryker-ET 204H2079 61898421

6. Regancrest S Mystical-ET 204H2083 62496490

7. Regancrest Shottle Myrik-ET 204H2084 62496435

8. E-Evans-A Allen Rascal-ET 204H2090 62613542

9. Budjon-JK Evangelos 204H2091 137533420

10. Canyon-Breeze G Auston-ET 204H2093 62897572

11. Canyon-Breeze G Allied-ET 204H2094 62897571

12. Canyon-Breeze Storm Ames-ET 204H2095 62897570

13. Canyon-Breeze Goldwyn Ash 204H2096 62897569

14. Canyon-Breeze Storm Arch-ET 204H2097 62897568

15. Canyon-Breeze Eliminator-ET 204H2098 62897573

16. Canyon-Breeze Marsh Astonic 204H2099 62897564

17. Eskdale Hotshot-ET 204H2101 138272021

18. Budjon-JK Stormtc Element-ET 204H2102 137902095

19. Budjon-JK Stormatic Eon-ET 204H2103 138263052

20. Henkeseen Exotic-ET 204H2106 63445826

21. Henkeseen Expression-ET 204H2107 63445831

22. Regancrest PR Bloker-ET 204H2109 62744760

23. Regancrest Mac Bence-ET 204H2110 62744695

24. Regancrest Mac Benat-ET 204H2111 62744687 4

25. Bonaccueil Duplicate 204H2112 103862758

26. Ralma Mac Granite-ET 204H2113 53451987

27. Hnkes-Wessel Emmitt-TW 204H2114 63445910

28. Hnkes-Wessel Enforce-TW 204H2115 63445911

29. Mr. Golfing America-ET 204H2116 139245811

30. Sonnek Damion Archmedes-ET 204H2118 139072848 (Doc. 19-1, Exhibit A.)

C. Excalibur's Supplemental Briefing

Following the January 26, 2011, hearing on this motion, the Court provided the parties additional time to present evidence and supplemental briefing regarding ownership of the 30 bulls identified above. On February 7, 2011, Excalibur filed additional briefing with several exhibits it purports indicate that the above bulls are leased by Excalibur, but are owned by others. Excalibur asserts that JLG cannot obtain a sale order as to these bulls without providing notice to the owners of the bulls. (Doc. 33, p. 2.)

Excalibur filed exhibits attached to a declaration of David Winkels, which are described as follows: *fn3

1. Docket No. 34: A purported lease agreement between Excalibur and Lesperron Holsteins for the lease of the bull named Lesperron Big Daddy, Registration No. 100754243. (Doc. 34-1 at 2-4.) Lesperron Holsteins is the bull owner, according to the lease.*fn4 (Id.)

2. Docket No. 34: A purported lease agreement between Excalibur and Steven Gillens for bulls

(1) Canyon-Breeze G Allied-ET, and (2) Canyon-Breeze Eliminator-ET. (Doc. 34-1, p. 6-13.)

3. Docket No. 35: A "Sire Development Agreement" between Excalibur and Gale Hoese dba Hoese Investment Group. (Doc. 35-1, p. 2-8.) The Sire Development Agreement is not a lease between Excalibur and owners of various bulls, but an agreement between Excalibur and an investment group; the agreement recites that certain bulls are leased by Excalibur, some of which may be the subject of the Sire Development Agreement.

4. Docket No. 36: A purported lease agreement between Excalibur and Matt and Mandy Nunes regarding the bull named Scientific CBA Drama -- ET. (Doc. 36-1, p. 1-7.)

5. Docket No. 37: A Holstein Association USA, Inc. Certificate of Registration indicating that Excalibur is the record owner of a bull named Mr. Golfing America--ET. (Doc. 37-1, p. 2-3.) This exhibit is attached to the declaration of David Winkels wherein he states that the Certificate of Registration "is not intended to show ownership as articulated on the document." (Doc. 37, ¶ 5.)

6. Docket No. 38: A purported lease agreement between Excalibur and Gale Hoese dba Hoese Investment Group. The lease involves 12 bulls that Gale Hoese purportedly owns ...

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