Throttle Films, Inc. v. National Mobile Television, Inc.
Filed December 22, 2009, publication ordered January 12, 2010, Second District, Div. One
Cite as 2010 SOS 137

Claimant Failed to Show Security Interest

Full Throttle Films, Inc. (Full Throttle) and National Mobile Television, Inc. (National Mobile) entered into a rental agreement.

When National Mobile failed to pay the unpaid balance, Full Throttle filed a collection suit. It also applied for a right to attach order and an order for the issuance of a writ of attachment.

The trial court granted the application and issued a writ of attachment for any property of National Mobile for which a method of levy could be provided.

Subsequently, Wachovia Capital Finance Corporation (Wachovia Capital), a third-party claimant, filed an application for the release of levied property. In the alternative, Wachovia Capital applied for an order shortening time for the release of said property.

The court granted the application for an order shortening time for the release of levied property. Consequently, Full Throttle opposed such application.

In reply, Wachovia Capital alleged that Full Throttle had already levied deposit accounts of National Mobile held at Wachovia Bank. It also alleged that pursuant to the loan agreement between Wachovia Capital and National Mobile, the former held a continuing interest in the property and fixtures of the latter.

The trial court favored Wachovia Capital and granted the application for release of levied property. Further, it ruled that Full Throttle was not entitled to the levied property. It even ordered the quashal of the levy and the release of the property.

Full Throttle appealed the ruling.

The California Court of Appeal, Second Appellate District, in reversing the ruling of the trial court, made the following judgments:

• The loan agreement between Wachovia Capital and National Mobile did not give the former priority over Full Throttle with respect to funds in National Mobile's bank accounts in which Wachovia Capital alleged a security interest.


• Wachovia Capital failed to show that it perfected its security interest or met one of the conditions specified in Commercial Code Sec. 9203(b)(3 and filed a financing statement covering the deposit accounts.

Wachovia Capital failed to establish that it perfected a security interest in deposit accounts where it presented no evidence that the accounts on which Full Throttle levied were the same ones identified as security in the contracts between Wachovia Capital and National Mobile.

Further, evidence that Wachovia Capital filed financing statements with Delaware Department of State was insufficient to prove that the statements covered accounts on which Full Throttle levied.