Department 78, Stanley Mosk Courthouse

21STCV08562

March 7, 2024

OSC Re: Dismissal of Defendant Coast Spas Manufacturing, Inc. for Failure to Request Entry of Default Judgment

DECISION

Plaintiffs’ request for entry of default judgment is denied.

Moving party to appear at the hearing remotely or in person.

Moving party to provide notice and to file proof of service of such notice within five court days after the date of this order.

DISCUSSION 

Plaintiffs request default judgment as follows.

Damages $93,205

Costs $722.26

Attorney’s Fees Per Motion

Facts 

This is an action for violation of Civ. Code, section 1793.2, breach of express written warranty, breach of implied warranty of merchantability, fraudulent inducement, and negligent repair. Plaintiff alleges that he purchased a Coast Swim Spa 1600 Wellness from Defendants in March 2020, and that the product was defective. Defendants failed to repair the product despite a reasonable number of opportunities.

8/26/2021 Default Entered

1/18/2024 Doe Dismissal submitted

Plaintiffs previously failed to dismiss the Doe Defendants in this case. The Doe Defendants were dismissed on January 18, 2024. 

Plaintiff seeks entry of default judgment against Defendant Coast Spa Manufacturing, Inc. (“Coast Spa”).

Damages

Plaintiffs seek $93,205 in damages. However, the damages a court may grant on default may not exceed the of the complaint, which sets a ceiling on the damages to which a plaintiff is subject. (Code Civ. Proc., section 580(a); Greenup v. Rodman (1986) 42 Cal.3d 822, 829.) The purpose of section 580 is to ensure a defendant has adequate notice of the maximum judgment that may be assessed against him. (Greenup at p.826.) An allegation that damages are in an amount “according to proof” is insufficient to provide a defendant with notice of potential damages. (Yu v. Liberty Surplus Ins. Corp. (2018) 30 Cal.App.5th 1024, 1032.)

Here, Plaintiffs provide declarations stating they incurred $20,000 in damages from purchasing the product at issue, are entitled to $40,000 in statutory damages, $22,203 in installation cost, and $9,800 in expenses to remove the defective spa. (John Sigler Decl., ¶16.)

However, Plaintiffs’ Complaint states that Plaintiffs suffered damages in a sum to be proven at trial in an amount that is not less than $25,001. (Compl., ¶9.) Additionally, the prayer seeks actual damages according to proof. (Compl., prayer.) Plaintiffs’ demand for $93,205 in damages exceeds the $25,001 alleged in the Complaint. Additionally, the prayer for damages “according to proof” is insufficient to place Coast Spa on notice of the maximum judgment that may be assessed against it. The Court cannot grant Plaintiffs’ requested damages.

Plaintiffs’ counsel argues that the Complaint sets out the actual damages because it alleged the exact spa model and that Plaintiff is seeking civil penalties of two times Plaintiffs’ damages. (Doddy Decl., ¶¶2-3.) Counsel argues that Defendant would have had notice of the price of the spa. However, even if a defendant could have calculated the damages themselves, formal notice of the potential liability is mandatory. (Yu v. Liberty Surplus Ins. Corp., supra., 30 Cal.App.5th at p. 1034.) Because Defendant was not given formal notice of the damages amount, the Court cannot grant Plaintiffs’ requested damages. 

Plaintiff requests an opportunity to amend the Complaint. However, if that is done, then default must be set aside and the Complaint must be re-served. Then, a default must be reentered. Any additional costs incurred in this regard cannot be recovered in the default. 

Attorney’s fees

Plaintiffs seek attorney’s fees under Civ. Code, section 1794(d). However, the JUD-100 merely states “per motion” and does not include an amount. Attorney’s fees on default, if they are authorized by promissory note, contract, or statute, are typically awarded under LASC Local Rule 3.214(a). An application for a fee greater than listed in the schedule because of extraordinary services must include an itemized statement of services rendered or to be rendered. (LASC Local Rule 3.214(d).) 

Plaintiffs’ counsel requests attorney’s fees for 41 hours of attorney time at a rate of $550 for a total of $22,550. Code Civ. Proc., section 585(a) provides that if a plaintiff is entitled by statute to recover attorney fees and a schedule of attorneys’ fees to be allowed has been adopted, the clerk of court may include attorneys’ fees in accordance with the schedule. Here, attorney’s fees are authorized under Civ. Code, section 1794(d) and Local Rule 3.214 provides a schedule of allowable fees. Plaintiffs’ counsel fails to explain how the services he rendered in this default case warrant fees in the amount of $22,550. The billing entries counsel submitted show that he prepared the Complaint, served Defendants, attended hearings, prepared this application, negotiated settlement with the other defendant, responded to discovery from the other defendant, and communicated with Plaintiffs. It does not appear fees greater than those allowed under Rule 3.214(a) are reasonable.

Plaintiffs must calculate attorney’s fees under Local Rule 3.214(a) and amend their forms to include the request for attorney’s fees.

Costs

Plaintiffs seek costs for filing fees and service of process. These costs are allowable.

Effect of settlement

The Court notes that Plaintiffs have already settled with and dismissed Defendants Coastal Hotsprings Spas, Inc. dba Coastal Spa & Patio and Coast Spas (CHS). 

Code Civ. Proc., section 877(a) provides that where a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort, or to one or more other co-obligors mutually subject to contribution rights, the settlement shall not discharge any other party from liability, but it shall reduce the claims against the others in the amount stipulated by the release, dismissal, or covenant. 

Plaintiffs’ counsel argues that the $8,000 settlement with CHS only accounted for the cost to repair the spa after CHS negligently completed repairs. The damages sought against Coast Spas Manufacturing do not include damages for the cost of repairs to the spa and therefore there is no need for a reduction in the damages sought here.