Judge Cherol J. Nellon, Case Number: 23STCV26312, Date: 2025-02-06 Tentative Ruling

Judge: Cherol J. Nellon, Case: 23STCV26312, Date: 2025-02-06 Tentative Ruling

Case Number: 23STCV26312 Hearing Date: February 6, 2025 Dept: 14

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Facts of the Case: This is an action for breach of contract and fraud. Plaintiff alleges Defendants agreed to sell and store Plaintiffs greenhouses for $3,500 per set for a total of $227,500. Defendants failed to deliver the greenhouses in the number and dimensions promised and absconded with the $68,250 down payment.

Procedural History:

On October 27, 2023, Plaintiffs Ma Auto Parts Corp and Xinli Meng filed their Complaint against Defendants Annie Yeh and Sun Logistics, Inc.

On February 27, 2024, default was entered against Sun Logistics, Inc. and Annie Yeh.

On November 13, 2024, Plaintiffs submitted their application for default judgment.

Submitted: The requirements of CRC Rule 3.1800 have been met.

Principal Requested: $716,250

Plaintiffs provide the declaration of Xinli Meng, who testifies that his business, Ma Auto Parts Corp., was in the business of purchasing greenhouse build kits and selling them. (Meng Decl., ¶3.) In 2021, Plaintiffs agreed to purchase 65 greenhouse kits from Defendants for $227,500. (Id., ¶7.) The contract price was later lowered to$117,00. (Id., ¶21.) Meng paid Defendants a $68,250 down payment. (Id., ¶¶14-15.) After Defendants were evicted from their warehouse where the kits were being stored, Plaintiffs paid $1,500 to store the kits at another site. (Id., ¶17.) Plaintiffs continue to owe storage fees and now has a total of $33,000 in storage fees. (Id., ¶18.)

When Plaintiffs retrieved the kits from Defendants’ warehouse, only steel framing remained which cost $15,000 to transport. (Meng Decl., ¶20.) The steel framing constituted only part of the greenhouse build kits and were useless without the missing components. (Id., ¶¶22-26.) Plaintiffs discovered Defendants never had components for the larger greenhouses Plaintiffs ordered when Plaintiffs’ inspection of the remaining components revealed the components were for smaller greenhouses. (Id., ¶29.) When Plaintiffs demanded that Defendants return the down payment, Defendants ignored the demand. (Id., ¶30.) Meng suffered emotional distress as a result of Defendants’ fraud. (Id., ¶31.)

The damages flowing from Defendants’ conduct include the following:

$68,250 downpayment

$2,000 labor to move the metal framing from Defendants’ warehouse

$15,000 labor to remove the metal framing

$33,000 storage fees

$78,000 lost profits

$136,500 emotional distress

Total: $332,750

Although Plaintiffs request additional damages associated with each cause of action, the damages are duplicative. Damages are not awarded separately for each cause of action.

The Court awards Plaintiff the reduced amount of $332,750.

Interest: $20,475

Plaintiffs provided a computation of interest and seek interest for the $68,250 downpayment at a rate of 10% per annum. The request is properly calculated.

Costs: $997.80

The costs for filing and service fees are allowable.

Punitive Damages: $538,500

The Court may not award punitive damages without evidence of Defendant’s financial condition. (Adams v Murakami (1991) 54 C3d 105, 111–114.) The Court requires this information to ensure that an award for punitive damages in not excessive in light of a defendant’s ability to pay. (See Cummings Medical Corp v. Occupational Medical Corp. (1992) 10 Cal.App.4^th 1291 (some measure of the effect of a punitive damages award in terms of deterrence is required before punitive damages may be awarded in a default judgment; a showing of profit from the unlawful transaction may be sufficient); but see Johnson v. Ford Motor Co. (2005) 35 Cal.4^th 1191, 1208 (calculating punitive damages in an individual tort case based on profits gained may produce an excessive award when there are multiple similar torts).)

Here, Plaintiffs provide no evidence of financial condition. Aside from the evidence that Plaintiffs paid Defendant a down payment, there is no evidence that Defendants profited from the transaction with Plaintiffs. There is certainly no evidence which would allow the Court to determine that an award of over $500,000 in punitive damages would not be excessive.

Plaintiffs’ request for punitive damages is denied.

Total Judgment: $354,222.80

Recommendation: GRANT in the reduced amount of $354,222.80. Plaintiffs must submit a new JUD-100 reflecting the reduced damages and striking the demand for punitive damages.