Judge: Joseph Lipner, Case: 23STCV02125, Date: 2023-12-20 Tentative Ruling
Case Number: 23STCV02125 Hearing Date: March 18, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
JPMORGAN CHASE BANK, N.A., Plaintiff, v. KORCA, INC., et al., Defendants. |
Case No:
23STCV02125 Hearing Date: March 18, 2024 Calendar Number: 1 |
Plaintiff JPMorgan Chase Bank, N.A. (“Plaintiff”) seeks
default judgment against Defendants Korca, Inc. (“Korca”) and Dongguk Kim
(collectively, “Defendants”).
Plaintiff requests:
(1) money judgment in the amount of $203,768.77, consisting
of:
(a) damages in the amount of $199,800.00;
(b) late fees and costs in the
amount of $843.77;
(c) litigation costs in the amount
of $1,275.00;
(d) attorney’s fees in the amount
of $1,850.00;
The Court tentatively GRANTS Plaintiff’s request for default
judgment. However, because Plaintiff does not provide declarations or authority
indicating that it would have to reimburse the SBA for the guaranty payment
upon recovering the judgment from Defendants, the Court requests a
representation on the record of such in order to confirm that this is the case.
On October 28, 2021, Korca executed a Line of Credit Note in
the amount of $200,000.00 and a Credit Agreement in favor of Plaintiff (the
“Contract”), the repayment of which was personally guaranteed by Kim. Korca
defaulted on the Contract for failure to make payments when due. Kim defaulted
on the guaranty for failure to cure the default of Korca. Plaintiff alleges an
outstanding sum of $199,800.00, plus late fees and costs pursuant to the terms
of the Contract.
Plaintiff filed this action against Defendants on January
31, 2023, alleging (1) breach of contract; and (2) common counts.
The Court entered default against Defendant Kim on August
17, 2023. The Court entered default against Korca on September 20, 2023.
CCP § 585 permits entry of a judgment after a Defendant has
failed to timely answer after being properly served. A party seeking judgment on the default by
the Court must file a Form CIV-100 Request for Court Judgment, and:
(1) Proof of service of the complaint and summons;
(2) A dismissal of
all parties against whom judgment is not sought (including Doe defendants) or
an application for separate judgment under CCP § 579, supported by a showing of
grounds for each judgment (CRC 3.1800(a)(7);
(3) A declaration
of non-military status as to the defendant (typically included in Form CIV-100)
(CRC 3.1800(a)(5));
(4) A brief summary of the case (CRC 3.1800(a)(1));
(5) Admissible
evidence supporting a prima facie case for the damages or other relief
requested (Johnson v. Stanhiser (1999)
72 Cal.App.4th 357, 361-362);
(6) Interest computations as necessary (CRC 3.1800(a)(3));
(7) A memorandum of
costs and disbursements (typically included in Form CIV-100 (CRC 3.1800(a)(4));
(8) A request for
attorney’s fees if allowed by statute or by the agreement of the parties (CRC
3.1800(a)(9)), accompanied by a declaration stating that the fees were
calculated in accordance with the fee schedule as per Local Rule 3.214. Where a request for attorney fees is based on
a contractual provision the specific provision must be cited; (Local Rule
3.207); and
(9) A proposed form
of judgment (CRC 3.1800(a)(6));
(10) Where an
application for default judgment is based upon a written obligation to pay
money, the original written agreement should be submitted for cancellation (CRC
3.1806). A trial court may exercise its discretion to accept a copy where the
original document was lost or destroyed by ordering the clerk to cancel the
copy instead (Kahn v. Lasorda's Dugout, Inc. (2003) 109 Cal.App.4th
1118, 1124);
(11) Where the
plaintiff seeks damages for personal injury or wrongful death, they must serve
a statement of damages on the defendant in the same manner as a summons (Code
Civ. Proc. § 425.11, subd. (c), (d)).
(California Rules
of Court rule 3.1800.)
Pursuant to Code Civ. Proc., § 1033.5(a)(1), items are
allowable as costs under Section 1032 if they are “filing, motion, and jury
fees.”
A party who defaults only admits facts well pleaded in the
complaint or cross-complaint. (Molen
v. Friedman (1998) 64 Cal.App.4th 1149, 1153-1154.) Thus, the complaint must state a claim for
the requested relief.
According to the proof of service documents filed on August
14, 2023, Refugio Mora served Kim with the summons and complaint on March 20,
2023 via substitute service on John Doe Manager at 769 Kohler St, Los Angeles,
CA 90021. Refugio Mora served Korca with the summons and complaint on March 20,
2023 through its registered agent, Kim, via substitute service on John Doe
Manager at 769 Kohler St, Los Angeles, CA 90021.
The Doe defendants were dismissed from the action on November
6, 2023, pursuant to Plaintiff’s request.
Elizabeth Aronson and Drew A. Callahan aver to Defendants’
non-military status.
Plaintiff provides a brief summary of the case in its Case
Management Statement filed on October 11, 2023.
“Code of Civil Procedure section 580 prohibits the entry of
a default judgment in an amount in excess of that demanded in the complaint.” (Kim v. Westmoore Partners, Inc. (2011)
201 Cal.App.4th 267, 286.) Moreover, “a statement of damages cannot be relied
upon to establish a plaintiff's monetary damages, except in cases of personal
injury or wrongful death.” (Ibid.) “In all other cases, when recovering
damages in a default judgment, the plaintiff is limited to the damages
specified in the complaint.” (Ibid.)
The
Complaint specifies damages in the amount of $199,800.00 in the form of unpaid
principal on the loan. The Complaint pleads the existence of late fees, but not
their amount. This is not a personal injury or wrongful death case. Thus,
Plaintiff is limited to the $199,800.00 in damages alleged in the complaint. (Kim,
supra, 201 Cal.App.4th at p. 286.)
Christine
Betz avers that Plaintiff is owed $199,800.00 on the Contract and provides the
transaction history for the contract (Betz Decl. ¶¶ 5, 7.) Betz further
declares that the Small Business Administration (“SBA”) guaranteed a portion of
the loan and repurchased that portion, paying Plaintiff $101,870.63 and leaving
an amount of $97,929.37. (Betz Decl. ¶¶ 6, 7.) Plaintiff appears to still
request the full amount of $199,800.00.
In order to avoid a double-recovery, the Court requested briefing
on whether the SBA’s payment of $101,870.63 satisfied that portion of the loan,
or whether the guaranteed portion is nevertheless recoverable from Defendants.
Plaintiff explains in its memorandum of points and authorities that, if it
recovers the full amount of the loan from Defendants, it will have to repay the
SBA for the guaranty payout. Plaintiff also cites to the loan papers and out of
state authority, both of which indicate, specifically and generally, that the
SBA payout does not extinguish a lender Plaintiff’s right to recover from the
borrower.
The Court is tentatively willing to approve Plaintiff’s
requested damages on this basis. However, because Plaintiff does not provide
declarations or authority indicating that it would have to reimburse the SBA,
the Court requests a representation on the record of such in order to confirm
that this is the case.
Although the Complaint included a demand for interest,
Plaintiff does not request interest on default judgment.
Plaintiff includes a memorandum of costs in the submitted
Form CIV-100. Drew A. Callahan avers that Plaintiff expended $1,275.00 in
costs.
Plaintiff
requests attorney’s fees in the amount of $1,850.00.
This is an action on a contract.
Because the judgment is greater than $100,000, the maximum recovery of
attorney’s fees is equal to $2,890 plus 1% of the excess over $100,000. (Local
Rule 3.214.) Thus, Plaintiff’s request for attorney’s fees is permissible.
Plaintiff
has submitted a proposed form of judgment. Due to the issues discussed under
damages, the form will require some degree of revision.
California
Rule of Court 3.1806 states that “unless otherwise ordered” judgment upon a
written obligation requires a clerk’s note across the face of the writing that
there has been a judgment. Here, Plaintiff has not submitted the original
documents. The Court does not discern any practical need for such a clerk’s
note on the written obligation in the current case and therefore orders that it
need not be included. If this causes any issues for any party or non-party they
are authorized to bring the matter to the Court’s attention.
Plaintiff does not need to submit a statement of damages
because this is not a personal injury or wrongful death case.