Turbinator, Inc. v. Superior Court

In this matter we hold that a creditor whose security interest has lapsed retains priority rights against a subsequent purchaser which acquires its interest in the collateral with actual knowledge of the first creditor’s interest. We therefore issue a writ commanding the trial court to grant petitioner’s request for a preliminary injunction restraining real party from disposing of the collateral.

Facts and History of the Case

This action involves an effort by petitioner Turbinator, Inc., to gain possession of certain personal property in which, at one time at least, it held a secured interest. The collateral consists of a number of wind turbines given as security for a series of promissory notes originally executed by investor-purchasers of the wind turbines. These notes are in default.

At the time of the commencement of the action, the turbines were alleged to be in the possession of defendants and real parties U.S. Windtricity, Inc., and Clair Nordvik, the principal of Windtricity. (Hereinafter, jointly Windtricity.) Windtricity gained its interest in the turbines long after the security interest was granted to Turbinator’s original predecessor as beneficiary of the…