Judge Armen Tamzarian, Case Number: 23STCV01202, Date: 2024-02-02 Tentative Ruling

Judge: Armen Tamzarian, Case: 23STCV01202, Date: 2024-02-02 Tentative Ruling

Case Number: 23STCV01202 Hearing Date: February 2, 2024 Dept: 52

Order to Show Cause Re: Entry of Default Judgment

Plaintiffs Paul Claydon, Luciana Muchaty, Christian Rodriguez, Gloria Martin, Christopher Owhadi, and Ocean Point Development, Inc. request court judgment by default against defendants Elegant Windows and Doors, Inc., Artor Ghahermanian, Armond Shahnazarian, and Edvin Ghahermanian.

Plaintiffs’ application for default judgment has six defects.

1. Judgment Exceeds Amount Demanded by Complaint

Plaintiffs request judgment for relief exceeding the amount demanded in the complaint. “A default judgment greater than the amount specifically demanded in the complaint is void as beyond the court’s jurisdiction.” (Airs Aromatics, LLC v. CBL Data Recovery Technologies, Inc. (2018) 23 Cal.App.5th 1013, 1018.) “Where no amount of damages is demanded any amount awarded is by definition greater than the amount demanded.” (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 830–831.)

Plaintiffs’ request for court judgment on form CIV-100 requests a judgment totaling $35,001,072.68. Plaintiffs’ proposed judgment on form JUD-100 seeks a total of $440,257.54. The complaint, however, neither demands nor alleges any specific amount of damages. The prayer for relief demands, “Compensatory damages in an amount to be proven at trial” and “General and special damages in an amount to be proven at trial.” (Comp., p. 12.)

Based on this complaint, the court cannot award damages via default judgment. To recover damages, plaintiffs must amend the complaint. Filing an amended complaint vacates defendants’ defaults. After a plaintiff “file[s] an amended complaint praying for a different amount of damages and/or other appropriate relief… she must serve her amended complaint on defendants, who will be entitled to file a new answer; all issues will then be at large, including liability.” (Greenup v. Rodman (1986) 42 Cal.3d 822, 830; accord Airs Aromatics, LLC v. CBL Data Recovery Technologies, Inc. (2018) 23 Cal.App.5th 1013, 1025 [filing amended complaint vacates default].) The amended complaint must be served in the manner of a summons. (Engebretson & Co. v. Harrison (1981) 125 Cal.App.3d 436, 444.)

2. Insufficient Factual Allegations

Plaintiffs’ complaint does not allege sufficient facts for the second through eighth causes of action. “Under the ‘well pleaded’ complaint rule, it is error to enter a default judgment on a complaint that fails to state a cause of action against the defaulting defendant.” (Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 539.) Plaintiffs’ only well-pleaded allegations are that three pairs of plaintiffs entered contracts with defendants to pay “for sale and installment of windows and doors” (Comp., ¶¶ 24-26), they each “paid a down payment” (¶ 27), and defendants “failed to perform” (¶ 28).

In addition to the first cause of action for breach of contract, plaintiffs assert seven tort causes of action against defendants. The complaint makes only conclusory allegations to support them. The factual allegations show no more than breach of contract. Plaintiffs cannot recover tort damages, including emotional distress, based on those factual allegations. “[T]he economic loss rule ‘prevent[s] the law of contract and the law of tort from dissolving one into the other.’ ” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.) “[C]onduct amounting to a breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law.” (Erlich v. Menezes (1999) 21 Cal.4th 543, 551.) “[T]he reasons for denying tort recovery in contract breach cases” include “the different objectives underlying tort and contract breach; the importance of predictability in assuring commercial stability in contractual dealings; the potential for converting every contract breach into a tort, with accompanying punitive damage recovery, and the preference for legislative action in affording appropriate remedies.” (Id. at p. 553.)

Plaintiffs also do not allege sufficient facts for any cause of action against the individual defendants: Artor Ghahermanian, Armond Shahnazarian, and Edvin Ghahermanian. Where “the liability of the individual defendants” relies “upon disregard of the corporate entity by application of the alter ego doctrine,” a complaint’s “bare conclusory allegation[s]” are insufficient for a default judgment against the individuals. (Vasey v. California Dance Co. (1977) 70 Cal.App.3d 742, 748-749.) Plaintiffs’ complaint alleges only boilerplate legal conclusions that the individual defendants were each alter egos of Elegant Windows and Doors, Inc., among other assorted forms of vicarious liability. (Comp., ¶¶ 20-21.)

Plaintiffs’ evidence includes contracts only between the following parties: (1) plaintiff Paul Claydon and defendant Elegant Windows and Doors, Inc. (Claydon Decl., Ex. A), (2) plaintiff Christian Rodriguez and defendant Elegant Windows and Doors, Inc. (Rodriguez Decl., Ex. A), and (3) plaintiff Ocean Point Development, Inc. and defendant Elegant Windows and Doors, Inc. (Owhadi Decl., Ex. A). Not only are none of the individual defendants parties to the contracts, but also neither are plaintiffs Luciana Muchaty, Gloria Martin, or Christopher Owhadi.

3. Punitive Damages

Plaintiffs’ brief states they seek $150,000 in punitive damages. Plaintiffs cannot recover punitive damages for two reasons. First, for the reasons discussed above, plaintiffs allege nothing more than breach of contract. Punitive damages are only available “for the breach of an obligation not arising from contract.” (Civ. Code, § 3294(a).) Second, plaintiffs present no evidence of defendants’ financial condition. “[E]vidence of the defendant’s financial condition is a prerequisite to a punitive damages award.” (Adams v. Murakami (1991) 54 Cal.3d 105, 119.) The plaintiff bears the burden of introducing such evidence. (Ibid.)

4. Attorney Fees

Plaintiffs also seek excessive attorney fees of $50,000. Attorney fees for a default judgment are generally limited to a specified schedule based on the amount of damages. (Local Rule 3.207(a), 3.214(a).) Plaintiffs may recover “a fee greater than listed in the [default] schedule because of extraordinary services.” (3.214(d).) Plaintiffs’ counsel fails to show extraordinary services justifying a fee greater than permitted under the schedule.

5. Proposed Judgment

Plaintiffs did not submit a sufficient proposed judgment or judgments. A plaintiff seeking default judgment must submit “[a] proposed form of judgment.” (Cal. Rules of Court, rule 3.1800(a)(6).) Plaintiffs submitted a single proposed judgment on form JUD-100. It only provides for entry of judgment in favor of one of the plaintiffs, Paul Claydon. (JUD-100, § 5.a.)

6. Doe Defendants

Finally, plaintiffs did not request dismissal of defendants Does 1-25. A request for default judgment must include “[a] dismissal of all parties against whom judgment is not sought or an application for separate judgment against specified parties under Code of Civil Procedure section 579, supported by a showing of grounds for each judgment.” (Cal. Rules of Court, rule 3.1800(a)(7).) Plaintiffs do not seek default judgment against the Doe defendants and therefore must dismiss them.

Disposition

Plaintiffs’ request for court judgment by default is denied. Under Code of Civil Procedure section 473(a)(1), the court hereby grants plaintiffs leave to file a first amended complaint.