Judge: Edward B. Moreton, Jr, Case: 24SMCV00254, Date: 2025-01-24 Tentative Ruling

Case Number: 24SMCV00254    Hearing Date: January 24, 2025    Dept: 205

PROCEEDINGS:                          REQUEST FOR ENTRY OF DEFAULT JUDGMENT

MOVING PARTY:                   MDWWP Ventures, LLC and Hi Time Investor Pub PHMG 1,                                                        LLC  

RESPONDING PARTY:       Hightimes Holding Corp. and Adam E. Levin

BACKGROUND

This case arises from alleged fraud in connection with a stock investment.  High Times is a cannabis media brand and marketing platform founded in 1974 and based in Los Angeles, California. Defendant Hightimes Holding Corp. (the “Company”) acquired the rights to High Times in 2016.  Defendant Adam Levin is the Company’s founder, the Executive Chairman of its Board and its CEO. 

Pursuant to subscription agreements, Plaintiff Hi-Times Pub PHMG 1, LLC bought 39,683 shares of the Company’s Class A Common Stock at $4.20 per share, totaling $166,668.60, and another 39,651 shares of Class A Common Stock at $.001 per share, totaling $39.65.  Plaintiff MDWWP Ventures, LLC purchased 39,683 Class A Common Stock shares at $4.20 per share, totaling $166,668.60.

Plaintiffs allege the Company never provided any accounting of its use of funds and never repaid Plaintiffs’ investments, despite Plaintiffs’ numerous demands.  Instead, Plaintiffs claim the Company improperly used such funds to wrongfully enrich its CEO and principal, Defendant Levin, in various unauthorized, self-dealing and illegal transactions.     

On January 19, 2024, Plaintiffs filed a complaint alleging six claims for (1) fraud, (2) breach of fiduciary duty, (3) demand for inspection of books and records, (4) demand for accounting, (5) unfair competition law and (6) declaratory relief.  The Complaint seeks compensatory damages, punitive damages, attorneys’ fees and costs, injunctive and declaratory relief and an accounting. 

Plaintiffs served Defendants by personal service on January 23, 2024.  Defendants were obligated to respond within 30 days.  Plaintiff successfully requested the entry of Defendants’ default, which was entered by the Clerk’s Office on February 26, 2024.  Plaintiff requested a default judgment on October 4, 2024.  Plaintiff served Defendants by mail with both the Request for Entry of Default and Request for Default Judgment. 

RELIEF REQUESTED

Default judgment against Defendants for a total of $333,762.20, which is comprised of: (1) $333,327.20, for damages, and (2) $435, for costs.

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.  (CRC Rule 3.1800.)

Here, Plaintiffs have properly complied with all the substantive and procedural requirements for a default judgment. Substantively, Plaintiffs declare via declarations there have been damages in the amount of $333,327.20 as amounts paid under the Subscription Agreements.  A memorandum of costs in the amount of $435 is set forth in Item 10 of the CIV-100 form.  The evidence submitted (the Subscription Agreements) is authenticated by further declaration.  Procedurally, Plaintiffs properly served Defendants more than 30 days prior to requesting entry of default and default judgment, correctly completed JC Form CIV-100 in a manner that would not void or put at issue the entry of default, provided a declaration of non-military status, requested damages in amounts supported by the filings and not in excess of the amount stated in the Complaint, requested dismissal of doe defendants and filed a proposed judgment (JUD-100).  As default has already been entered and there has been no appearance by Defendants, default judgment is appropriate here.

CONCLUSION AND ORDER

For the foregoing reasons, Plaintiffs’ Request for Default Judgment is GRANTED as to Defendants.  Judgment in the amount of $333,762.20 is awarded in favor of Plaintiff.