Judge Edward B. Moreton, Jr., Case Number: 23SMCV03909, Date: 2024-07-16 Tentative Ruling

Judge: Edward B. Moreton, Jr., Case: 23SMCV03909, Date: 2024-07-16 Tentative Ruling

Case Number: 23SMCV03909 Hearing Date: July 16, 2024 Dept: 205

DEFAULT JUDGMENT PROVE-UP CHECKLIST

(CRC Rule 3.1800)

Case Name: The Real A-Team Corporation v. Independence HCM Inc., et al

Case #: 23SMCV03909

Hearing Date (if any): July 16, 2024

Defaulting Party: Defendants Independence HCM Inc. and Dov Jacobs.

Total Amount: $211,745.35

BACKGROUND:

On August 21, 2023, Plaintiff The Real A-Team Corporation filed a complaint against Defendants Independence HCM Inc. and Dov Jacobs.

Plaintiff, a consulting firm, helps home health companies with placement, compliance, billing, and recertification for Medicare and Medi-Cal. (Compl. ¶ 7.) Defendants provide in-home care billed to Medicare or other insurance. (Compl. ¶ 8.) From May 2017 to August 2018, Plaintiff entered into four service agreements with Legacy and Defendants, who claimed to be the same organization. Plaintiff performed its obligations, but Defendants did not pay in full. (Compl. ¶ 9-10.)

Defendants assured Plaintiff they would pay for all services and managed Legacy’s accounts, making some payments to Plaintiff. (Compl. ¶ 11.) However, several checks from Defendants bounced due to insufficient funds. (Compl. ¶ 12.) On September 5, 2019, a $30,000 check from Defendants was returned, causing Plaintiff to incur a bank fee. (Compl. ¶ 13.) Plaintiff continued to provide services and follow up on payments but suspended services on September 12, 2019, due to non-payment. (Compl. ¶ 14-15.)

Plaintiff filed for arbitration with JAMS against Legacy and Defendants Jacobs and Independence. The arbitration, held in Los Angeles with Hon. Linda L. Miller, Ret. as arbitrator, resulted in an award of $192,424.21 in favor of Plaintiff on December 21, 2020. (Compl. ¶ 16-19.) Plaintiff filed a Petition to Confirm Arbitration Award in the Superior Court of California on June 30, 2021. (Compl. ¶ 20.) On October 13, 2022, Plaintiff filed a Motion to Confirm Arbitration Award, which the Court granted on June 8, 2023, confirming the award against Legacy. (Compl. ¶ 21.).

Plaintiff alleges that Defendants Jacobs, owner of both Legacy and Independence, disregarded corporate formalities, representing the entities as one and liable for Legacy’s debts. (Compl. ¶ 2.2) Independence’s employees worked for Legacy, and Defendants managed Legacy’s accounts, commingling funds and using business funds for personal expenses. (Compl. ¶ 23-24.) Defendants engaged in fraudulent activities to avoid their obligations, misrepresenting their authority and responsibilities, leading Plaintiff to believe they were liable for services rendered. (Compl. ¶ 25.) Defendants benefited from Plaintiff’s services and actively participated in related actions. (Compl. ¶ 26.)

[¿] DEFAULT ENTERED ON:

[¿] MANDATORY JUDICIAL COUNCIL FORM CIV-100 SUBMITTED FOR ENTRY OF COURT JUDGMENT (CRC 3.1800(a))

[¿] SERVICE:

Summons and Complaint

· On October 3, 2023, Defendant Dov Jacobs was served via substitute service on “Valerie Hanson, Social Service Director” at 11620 W. Washington Blvd., Los Angeles, CA 90006

· On October 3, 2023, Defendant Independence HCM Inc. was served via substitute service on “Valerie Hanson, Social Service Director” at 11620 W. Washington Blvd., Los Angeles, CA 90006

o Compliant service on a corporation under CCP §§ 416.10, 415.20

[¿] DECLARATION OF MAILING -- Request for Entry of Default to Defendant (CCP § 587)

· Mailed to Defendants at 11620 W. Washington Blvd., Los Angeles, CA 90006

[¿] NO PENDING MOTION TO VACATE DEFAULT

[¿] SUMMARY OF CASE PROVIDED (CRC 3.1800(a)(1)) - or other declaration OK [ ]

[¿] EVIDENTIARY DECLARATIONS/OTHER EVIDENCE (CRC 3.1800(a)(2))

· Declaration of Michelle Imhotep:

o CEO of the Real A-Team Corporation

o Imhotep discusses:

§ The nature of Plaintiff’s consulting business and the services provided.

§ The business operations of Defendants and Legacy Plus Unlimited in providing in-home care services.

§ Details of the service agreements between Plaintiff, Legacy, and Defendants from May 2017 to August 2018.

§ Plaintiff’s fulfillment of its obligations and Defendants’ failure to pay in full.

§ The arbitration process initiated by Plaintiff with JAMS, resulting in a $192,424.21 award in favor of Plaintiff.

§ Defendant Jacobs’ misrepresentation and fraudulent activities, including the disregard of corporate formalities and commingling of funds.

§ The assertion that Jacobs and Independence are alter egos of Legacy, leading to Plaintiff's claims of liability for the services rendered.

· Declaration of Navneet Chugh:

o Attorney for Plaintiff

o Chugh discusses:

§ The service of summons and complaint to Defendants through their agent for service of process on or about October 3, 2023.

§ Defendants’ failure to respond to the Complaint or file any responsive pleadings, leading to a request for entry of default, which was granted on May 23, 2024.

§ The service agreements entered into by Plaintiff with Legacy Plus Unlimited d/b/a Alta Vista Health Services and Defendants from May 2017 to August 2018, where Plaintiff provided various services but was not paid in full.

§ Plaintiff’s filing of a Demand for Arbitration with JAMS and an Amended Demand against Legacy and Defendants Jacobs and Independence, which led to arbitration proceedings in Los Angeles under Hon. Linda L. Miller, Ret.

§ Defendant Jacobs’ active participation in the arbitration proceedings, claiming ownership and authority over Legacy and Independence.

§ The Arbitrator’s award in favor of Plaintiff for $192,424.21 against Legacy on December 21, 2020.

§ Plaintif’'s filing of a Petition to Confirm Arbitration Award in the Superior Court of California on June 30, 2021, and the subsequent Motion to Confirm Arbitration Award on October 13, 2022.

§ The Court’s granting of Plaintiff’s Motion on June 8, 2023, confirming the Arbitration Award of $192,424.21 against Legacy.

[¿] RELIEF PRAYED FOR IN COMPLAINT (same as requested in default?): [X] yes [ ] no

[¿] Compensatory: $ 192,424.21

[] Damages

Special: $

General: $

[] Interest: $

[] Costs: $

[¿] Attorney’ Fees: $ 19,321.14

Total: $ 211,745.35

(Relief afforded in default judgment is limited to type and amount of claims in complaint, except for punitives and PI/death. CCP §§ 425.11, 580, 585(a)(b). The amount in the complaint prayer controls (National Diversified Services, Inc. v. Bernstein (1985) 168 Cal.App.3d 410, 418).)

Civil Code § 1719(a)(2) states:

Notwithstanding any penal sanctions that may apply, any person who passes a check on insufficient funds shall be liable to the payee for damages equal to treble the amount of the check if a written demand for payment is mailed by certified mail to the person who had passed a check on insufficient funds and the written demand informs this person of (A) the provisions of this section, (B) the amount of the check, and (C) the amount of the service charge payable to the payee. The person who had passed a check on insufficient funds shall have 30 days from the date the written demand was mailed to pay the amount of the check, the amount of the service charge payable to the payee, and the costs to mail the written demand for payment. If this person fails to pay in full the amount of the check, the service charge payable to the payee, and the costs to mail the written demand within this period, this person shall then be liable instead for the amount of the check, minus any partial payments made toward the amount of the check or the service charge within 30 days of the written demand, and damages equal to treble that amount, which shall not be less than one hundred dollars ($100) nor more than one thousand five hundred dollars ($1,500). When a person becomes liable for treble damages for a check that is the subject of a written demand, that person shall no longer be liable for any service charge for that check and any costs to mail the written demand.

[N/A] INTEREST COMPUTATIONS (CRC 3.1800(a)(3))

[ ] ATTORNEY FEE DECLARATION -- Request according to Local Rule 3.214 or reason provided why greater fees should be allowed (CRC 3.1800(b))

[ ] Request for atty fees allowed by statute or agreement of parties (CRC 3.1800(a)(9)):

[] $960/$1,200 for book account claim (Civil Code § 1717.5)

No attorney fee declaration supporting the requested fees. Plaintiff includes attorney’s fees within costs, but in the judgment to be entered puts the costs amounts in the attorney’s fees section

Civil Code § 1717.5 states:

(a) Except as otherwise provided by law or where waived by the parties to an agreement, in any action on a contract based on a book account, as defined in Section 337a of the Code of Civil Procedure , entered into on or after January 1, 1987, which does not provide for attorney's fees and costs, as provided in Section 1717 , the party who is determined to be the party prevailing on the contract shall be entitled to reasonable attorney's fees, as provided below, in addition to other costs. The prevailing party on the contract shall be the party who recovered a greater relief in the action on the contract. The court may determine that there is no party prevailing on the contract for purposes of this section.

Reasonable attorney's fees awarded pursuant to this section for the prevailing party bringing the action on the book account shall be fixed by the court in an amount that shall not exceed the lesser of: ¿(1) nine hundred sixty dollars ($960) for book accounts based upon an obligation owing by a natural person for goods, moneys, or services which were primarily for personal, family, or household purposes; and one thousand two hundred dollars ($1,200) for all other book accounts to which this section applies; or (2) 25 percent of the principal obligation owing under the contract.

[¿] MEMORANDUM OF COSTS (CRC 3.1800(a)(4))

[N/A] STATEMENT OF DAMAGES (CCP § 425.11):

[ ] PI/Death Case [ ] Punitives demanded [ ] Accounting

[ ] Evidence of net worth of defendant? [ ] Yes [ ] No

(If no, punitives may not be assessed. Adams v. Murakami (1991) 54 Cal.3d 105.)

[¿] DECLARATION OF NON-MILITARY STATUS executed within 6 months?

(CRC 3.1800(a)(5); Interinsurance Exchange v. Collins (1994) 30 Cal.App.4th 1445, 1447.)

[] REQUEST FOR DISMISSAL OF DOES (CRC 3.1800(a)(7))

[ ] If not, authority/basis for several judgment (CCP § 579)

No request for dismissal.

[N/A] WAS DEFAULTING DEFENDANT A DOE? (CCP § 474) - must do one of the following:

[ ] Summons notifies defendant that s/he was served under a fictitious name

[ ] Proof of service states that the Doe amendment form was served with the complaint

[ ] Complaint amended to reflect the true defendant’s name & allegations support claim

[¿] ORIGINALS Promissory note or other written obligation to pay money must be provided for cancellation by the Clerk per CRC 3.1806

[ ] If no originals, declaration explaining loss/destruction/unavailability of originals

[ ] Proposed order for Court to accept authenticated copy in lieu of original

Copies attached to complaint, but no request to accept authenticated copy in lieu of original.

[] PROPOSED FORM OF JUDGMENT INCLUDED (CRC 3.1800(a)(6))

No proposed judgment on file.

NOTES:

1. Judgment to be entered against only one defendant? CCP §§ 579, 585(a) indicate that judgment may be taken against one defendant in cases having more than one defendant unless liability is joint only (e.g., possession of property).

2. In actions affecting title to or possession of land, Court policy is that oral testimony is required. (CCP § 585(c).)

RECOMMENDATION: CONTINUE to allow Plaintiff to cure deficiencies:

1. Dismissal of Doe Defendants

2. Proposed order for Court to accept authenticated copy in lieu of original

3. Proposed judgment

4. File request for entry of court judgment

5. Attorney fee declaration

TENTATIVE RULING

Plaintiff’s Request for Default Judgment against Defendants is denied without prejudice. The Order to Show Cause re Default Judgment is continued to September 18, 2024 at 9:00 a.m.