Judge Bruce G. Iwasaki, Case Number: 21STCV43632, Date: 2023-12-12 Tentative Ruling

Tentative Ruling: The request for default judgment is granted in a reduced amount upon the dismissal of the remaining Defendants.

This is an action arising from a breach of a loan agreement. Plaintiff Aida Shahbandeh Masihi (Plaintiff) alleges that Defendants solicited a $400,000 loan from Plaintiff, representing that the funds would be used to develop a “proven cure” for Coronavirus/COVID-19 and that the loan would be repaid with interest (for a total $500,000) by a due date of April 1, 2021. Defendants never provided written loan documents and never repaid any of the funds, despite repeated promises.

On November 30, 2021, a Complaint was filed against Defendants Prexa Santé LLC, Infusion Pharmacy Network LLC, Integrative Wellness Network LLC, Stem Cell Therapeutics LA LLC, Robbin Messier, Matthew A. Bennett, and Christine Collins (Defendants). After filing a demurrer (which the Court overruled), Defendants Prexa Santé LLC, Infusion Pharmacy Network LLC, Integrative Wellness Network LLC, Stem Cell Therapeutics LA LLC (collectively, Companies), Robbin Messier, Matthew A. Bennett, Christine Collins filed an answer. Plaintiff then filed a motion to strike the answer of Stem Cell Therapeutics LA LLC. On April 27, 2023, the Court entered an order striking the Answer as to all Companies and entering their defaults.

On July 18, 2023, the Court entered Judgment against Defendants Companies, in the amount of $500,000, jointly and severally.[1]

On July 18, 2023, Plaintiff filed a motion for leave to file a FAC. The Court granted the motion. On August 15, 2023, Plaintiff filed a FAC alleging claims for (1) breach of oral contract; (2) account stated; (3) open book account; (4) fraud and deceit, and (5.) money had and received. On October 2, 2023, default was entered as to Matthew A Bennet, MD and Robin Messier.

Plaintiff moved for default judgment against Defendants Matthew A Bennet, MD and Robin Messier. Defendant Christine Collins, MD had been dismissed. The request for entry of default judgment was denied.

Plaintiff again moves for entry of default judgment against Defendants Matthew A Bennet, MD and Robin Messier.

Plaintiff seeks default judgment in the amount of $1,520,323.71 against Defendants Matthew A Bennet, MD and Robin Messier.

Here, the FAC only seeks damages in an amount “not less than $400,000.” (FAC, Prayer.) As such, the amount of damages Plaintiff can recover is limited to $400,000. (See Finney v. Gomez (2003) 111 Cal.App.4th 527, 533–536; Traci & Marx Co. v. Legal Options, Inc. (2005) 126 Cal.App.4th 155, 160 [“in a default proceeding in California, a prayer for relief ‘in excess of’ a specified dollar amount will result in an award of ‘no more than’ that dollar amount”].)

Moreover, included in the default judgment request is Plaintiff’s request for an award of punitive damages against Defendants Messier and Bennett in the amount of $1,000,000 arising from their allegedly fraudulent conduct.

On this attempt at entry of default judgment, Plaintiff submits evidence that a statement of damages was served on Defendants. However, the statement of damages was served electronically on Defendants’ counsel. Code of Civil Procedure section 425.11 provides that a statement of damages, when required, “shall be served in the same manner as a summons.” As such, service of this statement of damages was improper.

Moreover, Plaintiff’s evidence is inadequate to show clear and convincing evidence of fraud, malice or oppression, as required pursuant to Civil Code section 3294. (Masihi Decl., ¶¶ -13.) In fact, the evidence shows nothing more than – at most – a breach of contract. (Masihi Decl., ¶¶ 8-11, Ex. 2-4.)[2] Accordingly, Plaintiff cannot recover on its request for special damages.

Nonetheless, Plaintiff is entitled to default judgment against Defendants Matthew A Bennet, MD and Robin Messier in the amount of $400,000. Additionally, Plaintiff has substantiated her request for prejudgment interest at 10% starting on April 1, 2021. (Eanet Decl., ¶ 13.) Plaintiff is also entitled to costs in the amount of $12,049.74. (Eanet Decl., ¶ 14.)

However, the FAC purports to state claims against Defendants Prexa Sant'e LLC, Infusion Pharmacy Network LLC, Integrative Wellness Network L.L.C. and Stem Cell Therapeutics LA LLC despite the entry of default judgment as to these Defendants in July 2023. At minimum, these Defendants must be dismissed from the FAC. Plaintiff still has not dismissed these parties.

Further, an entry of default judgment in the amount requested as to Matthew A Bennet, MD and Robin Messier might allow Plaintiff to obtain a double recovery on these two separate judgments. While Plaintiff argues alter ego between all the parties, Plaintiff does not provide adequate evidence to support this theory of liability.

It is well established that, regardless of the nature or number of legal theories advanced by a plaintiff, “[plaintiff] is not entitled to more than a single recovery for each distinct item of compensable damage supported by the evidence. (Shell v. Schmidt (1954) 126 Cal.App.2d 279, 291.) Double or duplicative recovery for the same items of damage amounts to overcompensation and is therefore prohibited. (Ibid.)” (Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1158–1159.)

Here, the FAC makes clear there was a single injury flowing from the breach of the loan agreement as to all Defendants.[3]

To prevent a double recovery here, “equity demands credit be given for payments received on the judgment. Such a balance acts as an offset against the judgment. ‘At common law, a setoff is based upon the equitable principle that parties to a transaction involving mutual debts and credits can strike a balance between them.’ ... The right of offset rests upon the inherent power of the court to do justice to parties appearing before it. [Citations.]” (Jhaveri v. Teitelbaum (2009) 176 Cal.App.4th 740, 753.)

While admittedly it is unlikely that Plaintiff has recovered any portion of her judgment from Defendant Companies at this time, an order under Code of Civil Procedure section 724.110 directing a plaintiff to execute and deliver a partial satisfaction of judgment “is the appropriate means by which a codebtor on a judgment may be credited with money received by the plaintiff in offset against the judgment.” (Jhaveri v. Teitelbaum, supra, 176 Cal.App.4th at p. 752.)

Further, the Court should include language in each judgment that states to the effect: “To prevent a double recovery, damages awarded pursuant to this judgment will not be recoverable to the extent that such damages are recovered and collected under the other judgment entered in this action on July 18, 2023 against Defendants Prexa Sant’e LLC, Infusion Pharmacy Network LLC, Integrative Wellness Network L.L.C. and Stem Cell Therapeutics LA LLC.”

Thus, judgment is entered in the total, reduced amount of $520,323.71 upon the filing of a dismissal of the remaining Defendants and a judgment is entered in accordance with this order.

[1] Generally, multiple judgment in a single case should be avoided. “[A]s a general rule there can be only one final judgment in a single action.” (Nicholson v. Henderson (1944) 25 Cal.2d 375, 378.) “A final, ordinarily single, judgment is a prerequisite to appealing from an action, its purpose to avoid piecemeal appeals.” (Cuevas v. Truline Corp. (2004) 118 Cal.App.4th 56, 60 [citing 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 58, p. 113]; see also Kinsmith Financial Corp. v. Gilroy (2003) 105 Cal.App.4th 447, 451 [“The one final judgment rule is a principle of appellate practice that prohibits review of intermediate rulings by appeal until final resolution of the case.’”].)

[2] Interestingly, Plaintiff’s own evidence repeatedly refer to the $400,000 as an “investment” not a loan.

[3] A judgment for damages arising from the fraud would not be jointly and severally liable as to Defendant Companies and would not be part of this double recovery analysis. However, as noted above, Plaintiff has not demonstrated any fraud damages and has not proceeded in the manner required to recover punitive damages arising from fraud.

Department 58