PROCEEDINGS: REQUEST FOR ENTRY OF DEFAULT JUDGMENT 

MOVING PARTY: Nanxi Liu 

RESPONDING PARTY: David Bren and The Bunker LA 2, LLC 

 

BACKGROUND 

 

This case involves a breach of a promissory note.  Plaintiff Nanxi Liu loaned $100,000 to The Bunker LA 2 LLC (“Bunker”).  The promissory note was signed by Defendant David Bren on behalf of Bunker (the “Note”).  Bunker agreed to pay Plaintiff the principal amount of $100,000 with 8% simple interest on the outstanding amount.   

 

Bren, as CEO of Bunker, then signed a Repurchase Agreement with Plaintiff whereby Bren agreed to pay Plaintiff $100,000 (the “Repurchase Price”) in exchange for her transfer to Bunker of all right, title and interest in the Note.  Bren never paid the Repurchase Price, despite numerous demands by Plaintiff.   

 

The parties then entered into a settlement and release agreement (the “Settlement Agreement”) regarding the outstanding amount of the Note that had not been repaid.  The Settlement Agreement provided that Bren was the personal guarantor of Bunker and was personally liable for the full amount owed to Plaintiff, $90,000 in principal plus 8% on the principal until the entire amount is repaid.   

 

The Settlement Agreement requires four $10,000 payments, with the first due immediately upon execution of the Settlement Agreement, and the additional payments due on December 1, 2023, January 1, 2024, and February 1, 2024.  The final $50,000 in principal and 8% interest was due on March 1, 2024.  The Settlement Agreement provides for a $1,000 late charge to be assessed should a payment not be received when due.  

 

The Settlement Agreement provides that the full amount owed shall become due and payable if any of Defendants’ repayment obligations are not made within 10 days of due.  The Agreement also provides that Defendants shall be responsible for all costs of collection including reasonable attorney’s fees.  

 

The Settlement Agreement provides that upon the occurrence of a default and notice to Bren, that Defendants will have 5 days from notice to remedy the default.  Finally, the Settlement Agreement contains a Stipulated Judgment Provision that states that: “upon the occurrence of any material breach of the Settlement Agreement by the Debtors, that Nanxi Liu shall have the right to petition the court for entry of judgment against the Debtors based on the terms of the Settlement Agreement. The Parties further agree that this Provision shall act as a stipulated judgment, subject to the court’s confirmation, without the need for any further hearings or litigation regarding the breach of the Settlement Agreement.”  

 

Defendants failed to make the November payment within 10 days of it being due.  Counsel for Plaintiff notified Bren of the breach in writing.  Bren did not respond to this notice or any other attempts to contact him regarding the missed payments and default.  

 

This action ensued.  On these facts, the operative complaint alleges five causes of action for: (1) breach of contract (Repurchase Agreement), (2) promissory estoppel, (3) fraud, (4) breach of contract (Settlement Agreement) and (5) declaratory relief.  The Complaint seeks $90,000 in damages, plus interest, costs and attorneys’ fees. 

 

After multiple failed attempts were made to serve Defendants, Plaintiff applied for and received an order to serve Defendants via publication.  On May 10, 2024, proof of publication was filed with a service date of April 18, 2024.  Defendants were required to respond.  Defendants did not do so.     

 

Plaintiff successfully requested the entry of Defendants’ default, which was entered by the Clerk’s Office on June 17, 2024.  Plaintiff requested a default judgment on June 27, 2024.  Plaintiff served Defendants by mail with both the Request for Entry of Default and Request for Default Judgment.  Defendants have not appeared. 

 

RELIEF REQUESTED 

 

Default judgment against Defendants for a total of $130,340.22, which is comprised of: (1) $95,000 in damages, (2) $23,081.76 in interest, (3) $1,158.58 in costs, and (4) $11,100 in attorneys’ fees.   

 

ANALYSIS 

 

Code Civ. Proc. § 585 sets forth the two options for obtaining a default judgment. First, where the plaintiff’s complaint seeks compensatory damages only, in a sum certain which is readily ascertainable from the allegations of the complaint or statement of damages, the clerk may enter the default judgment for that amount. However, if the relief requested in the complaint is more complicated, consisting of either nonmonetary relief, or monetary relief in amounts which require either an accounting, additional evidence, or the exercise of judgment to ascertain, the plaintiff must request entry of judgment by the court. In such cases, the plaintiff must affirmatively establish his entitlement to the specific judgment requested.  (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 287.) Section 585 also allows for interest, costs and attorney fees, where otherwise allowed by law. (Code Civ. Proc. § 585(a).) 

 

Multiple specific documents are required, such as: (1) form CIV 100, (2) a brief summary of the case; (3) declarations or other admissible evidence in support of the judgment requested; (4) interest computations as necessary; (5) a memorandum of costs and disbursements; (6) a proposed form of judgment; (7) a dismissal of all parties against whom judgment is not sought or an application for separate judgment under Code Civ. Proc. § 579, supported by a showing of grounds for each judgment; (8) exhibits as necessary; and (9) a request for attorneys’ fees if allowed by statute or by the agreement of the parties.  (Cal. Rules of Court, Rule 3.1800.)  

 

Here, Plaintiff has filed all the necessary papers, but he is requesting judgment in excess of that stated in the Complaint.  The Complaint demands $90,000 in damages, while Plaintiff’s request for default judgment seeks $95,000.   

“It is well settled that a trial court may not grant a default judgment which exceeds the amount demanded in the complaint.”¿ (Levin v. Smith¿(2006) 145 Cal. App. 4th 1131, 1136; see¿also¿Kim v. Westmoore Partners (2011)¿201 Cal. App. 4th 267, 286¿(in all cases other than those for personal injury and wrongful death, “when recovering damages in a default judgment,¿the plaintiff is limited to the damages specified in the¿complaint”; “Code of Civil Procedure section 580¿prohibits the entry of a¿default¿judgment in an¿amount¿in¿excess¿of that demanded in the¿complaint.”).)   

Accordingly, the Court denies the request for default judgment.   

  

CONCLUSION AND ORDER  

 

For the foregoing reasons, Plaintiff Nanxi Liu’s Request for Default Judgment is DENIED as to Defendants David Bren and The Bunker LA 2, LLC.  The hearing on the Order to Show Cause is continued October 17, 2024 at 9:00 a.m.