Judge: Joseph Lipner, Case: 23STCV02917, Date: 2024-05-13 Tentative Ruling

Case Number: 23STCV02917    Hearing Date: May 13, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Plaintiff Golden Dragon Group LLC (“Plaintiff”) seeks default judgment against Defendant Jonathan Valdez (“Defendant”)

Plaintiff requests:

(1) money judgment in the amount of $67,949.42, consisting of:

(a) damages in the amount of $83,741.00; and

(b) costs in the amount of $1,111.65.

The Court DENIES Plaintiff’s request for default judgment. Plaintiff must amend his Complaint to allege the formation and breach of the Promissory Note and his damages under the Promissory Note. Plaintiff’s requested damages on Default must be limited to the demand of the Complaint, which in turn must be consistent with the Promissory Note if the Promissory Note is in fact the most current statement of the parties’ obligations to each other. Plaintiff must clarify in his CIV-100 and JUD-100 forms whether the $1,111.65 he seeks in costs represent costs of litigation, or money owed under the Promissory Note.

Background

This is a breach of contract case.

In 2020 and 2021, Plaintiff and Defendant made a series of agreements (the “Loan Agreements”) whereby Plaintiff loaned Defendant certain amounts of money and further obtained a loan and a line of credit on Defendant’s behalf to be used exclusively for Defendant’s business.

Defendant thereafter failed to make monthly loan and credit card payments pursuant to the Loan Agreements in a timely manner.

On January 15, 2022, Plaintiff and Defendant agreed to a repayment agreement (the “First Repayment Agreement”). From March 2022 to June 2022, Defendant ignored Plaintiff’s communications and failed to make payments on the First Repayment Agreement. On July 12, 2022, the parties entered into a second repayment agreement (the “Second Repayment Agreement”). From August 2022 to December 2022, Defendant ignored Plaintiff’s communications and failed to make payments on the Second Repayment Agreement.

On December 21, 2022, Plaintiff served Defendant with a demand notice requesting that Defendant fulfill his repayment obligations. However, Defendant did not comply with the notice.

Plaintiff filed this action on February 9, 2023, seeking recovery on Defendant’s breaches of the Loan Agreements, the First Repayment Agreement, and the Second Repayment Agreement. The Complaint seeks the recovery of a total of $81,000.00 under the various agreements.

On March 14, 2023, the parties reached an agreement on the dispute in the form of a promissory note (the “Promissory Note”). Plaintiff filed the Promissory Note with the Court on March 17, 2023. The Promissory Note purports to settle the controversy in this action. However, no party sought dismissal of the action pursuant to the settlement in the Promissory Note. This action is consequenly still pending.

Defendant was defaulted on January 11, 2024.

On January 31, 2024, Plaintiff filed a request for default judgment against Defendant, seeking recovery on the Promissory Note.

Legal Standard

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 that are 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.

Discussion

Service of the Complaint and Summons

            According to the proof of service filed on January 11, 2024, Defendant was served on March 2, 2023 at 18704 Palo Verde Avenue, Suite D, Cerritos, California 90703, by substituted service on Tanya Renee Grace, also known as Tanya Honeycutt, Defendant’s mother.

Non-Military Status

Plaintiff avers to Defendant’s non-military status.

Summary of the Case

Plaintiff provides a brief summary of the case in his Declaration in Support of Application for Default Judgment. Plaintiff has adequately pled breach of the Second Repayment Agreement in the Complaint.

There is a problem, however. Plaintiff and Defendant apparently settled this case via the Promissory Note. The Promissory Note states the parties’ current obligations to each other with respect to the previous agreements. Thus, Plaintiff’s claim for Defendant’s continued failure to repay Plaintiff is a claim under the terms of Promissory Note, for the breach of the Promissory Note – and not of the Loan Agreements or the First or Second Repayment Agreements. However, Plaintiff’s Complaint, which has not been amended, seeks recovery under the older agreements, and was not amended to account for the Promissory Note.

Thus, in order to obtain a default judgment on the Promissory Note, Plaintiff must amend his Complaint to allege the parties’ agreement to the Promissory Note, Plaintiff’s performance on the note or excuse for nonperformance, and Defendant’s breach of the note.

Evidence of Damages

“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.) Moreover, a plaintiff must submit 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.)

            Plaintiff seeks $83,741.00 in damages, which is in excess of the amount of damages pleaded in the Complaint. This appears to be the repayment amount that the parties agreed to in the Promissory Note. If that is the case, Plaintiff must allege as such when he amends the Complaint to account for the Promissory Note in order to be able to obtain that amount in default judgment.

Interest

Plaintiff does not seek prejudgment interest.

Memorandum of Costs and Disbursements

Plaintiff includes a memorandum of costs in the submitted Form CIV-100, averring that it expended $1,111.65 in costs.

First, Plaintiff must include this amount in the Costs row of Section 2, Judgment to be Entered in the CIV-100 form.

Second, it is unclear whether this amount is part of the $83,741.00 in damages that Plaintiff seeks. Costs are separate from damages. Plaintiff’s CIV-100 form states that $83,741.00 is the demand of the Complaint, which would indicate that that amount consists entirely of damages. Plaintiff’s JUD-100 form seems to indicate that the costs are part of the $83,741.00 figure, and that Plaintiff seeks only $82,629.35 in damages.

If the $1,111.65 figure that Plaintiff seeks constitutes costs of litigation in this action, Plaintiff must separate them out as costs, and not as damages. If that figure is part of the money that Plaintiff claims Defendant owes him under the Promissory Note, then Plaintiff must claim it as part of his damages.

The Court also notes that if Plaintiff seeks costs, he must check the box for costs in his JUD-100 form in addition to listing the amount of costs sought.

Proposed Form of Judgment

            Plaintiff has submitted a proposed form of judgment. As discussed above, the costs and damages portions may require changes.

Submission of the Written Agreement

            California Rule of Court 3.1806 states that “unless otherwise ordered” judgment upon a written obligation to pay money 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.