Judge: Lynette Gridiron Winston, Case: 24PSCV02134, Date: 2024-11-20 Tentative Ruling
Case Number: 24PSCV02134 Hearing Date: November 20, 2024 Dept: 6
Plaintiff EBF Holdings, LLC dba Everest Business Funding’s Request for Entry of Default Judgment
Defendants: Castro Aljurdi, Inc. and Theodoro Hinojosa Castro
TENTATIVE RULING
Plaintiff’s request for entry of default judgment is GRANTED as to the money judgment but DENIED as to possession of collateral. If Plaintiff submits to the tentative ruling, Plaintiff can submit a corrected Proposed Judgment for only the money judgment prior to the November 20, 2024 case management conference and the Court will sign it.
BACKGROUND
This is a breach of contract case. On July 3, 2024, plaintiff EBF Holdings, LLC dba Everest Business Funding (Plaintiff) filed this action against defendants Castro Aljurdi, Inc., a California Corporation dba Teddy’s Taco (Teddy’s Taco), Theodoro Hinojosa Castro (collectively, Defendants), and Does 1 through 10, alleging causes of action for breach of revenue based financing agreement, fraud, negligent misrepresentation, violation of UCL, claim and delivery, and breach of guaranty. On August 27, 2023, default was entered against Defendants. On August 30, 2024, Plaintiff submitted a default judgment package.
LEGAL STANDARD
Code of Civil Procedure section 585 permits entry of a default judgment after a party has failed to timely respond or appear. (Code Civ. Proc., § 585.) A party seeking judgment on the default by the court must file a Request for Court Judgment, and: (1) a brief summary of the case; (2) declarations or other admissible evidence in support of the judgment requested; (3) interest computations as necessary; (4) a memorandum of costs and disbursements; (5) declaration of nonmilitary status; (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 of Civil Procedure section 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.)
ANALYSIS
Plaintiff seeks default judgment against Defendants in the total amount of $58,984.13, including $56,326.60 in damages, $2,016.53 in attorney fees, and $641 in costs. The Court finds Plaintiff has submitted sufficient evidence to support the amount requested, but notes a couple issues. First, Plaintiff failed to provide either the original finance agreement or a declaration explaining why the original could not be produced. (Cal. Rules of Court, rule 3.1806; Kahn v. Lasorda’s Dugout, Inc. (2003) 109 Cal.App.4th 1118, 1123.)
Second, the Court takes issue with the proposed judgment providing for both a money judgment and possession of the collateral under the subject finance agreement. The Court finds this potentially problematic since the collateral under the subject finance agreement is simply Defendant Teddy’s Taco’s future earnings, (Johnson Decl., Ex. 1, p. 9 of pdf), while the judgment itself can be used to obtain a writ of execution to levy funds from Defendants’ bank accounts, (see Adir Internat., LLC v. Superior Court (2013) 216 Cal.App.4th 996, 998). An award of both a money judgment and possession of the collateral could potentially lead to a double recovery. The better approach is to award a money judgment and then for Plaintiff to proceed based on that.
CONCLUSION