Judge: Michael E. Whitaker, Case: 23SMCV03109, Date: 2024-09-17 Tentative Ruling

Case Number: 23SMCV03109    Hearing Date: September 17, 2024    Dept: 207

TENTATIVE RULING

Plaintiff ODK Capital, LLC (“Plaintiff”) requests for default judgment against Defendants Jaxon Pierce, LLC and Laronda Pierce Ross (“Defendants”) in the amount of $34,487.72, representing special damages as demanded in the complaint in the amount of $32,439.53; costs in the amount of $685; and attorneys’ fees in the amount of $1,363.19.

A.    Damages

            Plaintiff’s Complaint alleges two causes of action for breach of written contract, stemming from a business loan and a revolving line of credit Plaintiff extended to Defendants.  Defendants were served with a copy of the summons and complaint via substitute service on April 10, 2024, with copies thereafter mailed on May 3, 2024.  Default was entered against Defendants on August 7, 2024, and the Doe defendants were dismissed on August 9, 2024.

            Plaintiff’s Complaint seeks $32,439.53 in special damages. (See Compl.) Therefore, Plaintiff does not seek damages that are in excess of what is pled in the Complaint. (See Code Civ. Proc., § 580, subd. (a) [“The relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint”]; Levine v. Smith (2006) 145 Cal.App.4th 1131, 1136-1137 [“when recovering damages in a default judgment, the plaintiff is limited to the damages specified in the complaint”].) 

            In support of the request, Plaintiff has provided the declaration of Mackynzi West, custodian of records for Plaintiff, with copies of the agreements entered into between Defendants and Plaintiff’s predecessor-in-interest, Celtic Bank, on June 17, 2022 and June 21, 2022.  (West Decl. ¶ 4 and Exs. A-B.)  Plaintiff has also provided evidence of Celtic Bank’s assignment of the claims to Plaintiff.  (West Decl. ¶ 4 and Exs. C-D.)  Further, Plaintiff has provided evidence that on December 5, 2022, Defendants beached the agreements by failing to pay the outstanding sums of $14,471.52 and $17,968.01 on the respective agreements (for a total of the requested $32,439.53.)  Finally, Plaintiff has provided copies of the Business Term Loan Transaction History and/or Statement of Account, demonstrating that the outstanding amount Defendants currently owe to Plaintiff is the requested $32,439.53.  (West Decl. ¶ 8 and Exs. E-F.)

            Therefore, the Court finds that Plaintiff is entitled to the requested $32,439.53 in damages.

B.    Attorneys’ Fees and Costs

Code of Civil Procedure section 1033.5, which outlines recoverable costs to a prevailing party under Code of Civil Procedure section 1032, permits the recovery of attorneys’ fees when authorized by contract, statute, or law.  (Code Civ. Proc., § 1033.5, subd. (a)(10).)  Code of Civil Procedure section 1021 provides “[e]xcept as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties [….]”  Similarly, Civil Code section 1717 provides “[i]n any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.”  (Civ. Code, § 1717, subd. (a).)

The Code of Civil Procedure defines the “prevailing party” as follows:

[T]he party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. If any party recovers other than monetary relief and in situations other than as specified, the “prevailing party” shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.

(Code Civ. Proc., § 1032, subd. (a)(4).)

            Plaintiff seeks attorneys’ fees pursuant to paragraph 24 of the loan agreement and paragraph 26 of the credit agreement.  (West Decl. ¶ 7.) 

            Paragraph 24 of the loan agreement provides:

24. ATTORNEYS’ FEES AND COLLECTION COSTS.  To the extent not prohibited by applicable law, Borrower shall pay to Lender on demand any and all expenses, including, but not limited to, collection costs, all attorneys’ fees and expenses, and all other expenses of like or unlike nature which may be expended by Lender to obtain or enforce payment of Obligations either as against Borrower or any guarantor or surety of Borrower or in the prosecution or defense of any action or concerning any matter arising out of or connected with the subject matter of this Agreement, the Obligations or the Collateral of any Lender’s rights or interests therein or thereto, including, without limiting the generality of the foregoing, any counsel fees or expenses incurred in any bankruptcy or insolvency proceedings and all costs and expenses (including search fees) incurred or paid by Lender in connection with the administration, supervision, protection or realization on any security held by Lender for the debt secured hereby, whether such security was granted by Borrower or by any other person primarily or secondarily liable (with or without recourse) with respect to such debt, and all costs and expenses incurred by Lender in connection with the defense, settlement or satisfaction of any action, claim or demand asserted against Lender in connection therewith, which amounts shall be considered advances to protect Lender’s security, and shall be secured hereby.  To the extent permitted by applicable law, all such expenses will become a part of the Obligations and, at Lender’s option, will: (i) be payable on demand; (ii) be added to the balance of the Loan and be apportioned among and be payable with any installment payments to become due during the remaining term of the Loan; or (iii) be treated as a balloon payment that will be due and payable at the Loan’s maturity.  Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon an Event of Default.

(Ex. A to West Decl.)

            Similarly, Paragraph 26 of the credit agreement provides:

26. ATTORNEYS’ FEES AND COLLECTION COSTS.  To the extent not prohibited by applicable law, Borrower shall pay to Lender on demand any and all expenses, including, but not limited to, collection costs, all attorneys’ fees and expenses, and all other expenses of like or unlike nature which may be expended by Lender to obtain or enforce payment of Obligations either as against Borrower or any Guarantor or surety of Borrower or in the prosecution or defense of any action or concerning any matter arising out of or connected with the subject matter of this Agreement, the Obligations, or any of Lender’s rights or interests therein or thereto, including, without limiting the generality of the foregoing, any counsel fees or expenses incurred in any bankruptcy or insolvency proceedings, and all costs and expenses incurred by Lender in connection with the defense, settlement or satisfaction of any action, claim or demand asserted against Lender in connection therewith, which amounts shall be considered advances to protect Lender rights hereunder.  To the extent permitted by applicable law, all such expenses will become a part of the Obligations and, at Lender’s option, will be payable on demand.  Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon an Event of Default.

(Ex. B to West Decl.)

            Local Rule 3.214 provides that for damages amounts between $10,000.01 and $50,000, the reasonable attorneys’ fees are calculated as $690 plus 3% of the excess over $10,000.  3% of $22,439.53 is $673.19.  $690 + $673.19 = $1,346.38.  Plaintiff has requested $1,363.19, but has provided no explanation for the discrepancy.  Therefore, the Court finds Plaintiff is entitled to reasonable attorneys’ fees in the amount of $1,346.38.

            Plaintiff also requests $685 in costs composed of $435 in filing fees and $250 in process server fees. (CIV-100.)  Plaintiff’s request for costs is granted as Plaintiff is the prevailing party in this action. (Code Civ. Proc., § 1032, subd. (a)(4).)

CONCLUSION

            Plaintiff has only shown entitlement to judgment in the amount of $34,470.91, composed of $32,439.53 in special damages, $685 in costs, and $1,346.38 in attorneys’ fees. 

            Accordingly, the Court will enter the Judgment as indicated. 

DATED:  September 17, 2024                       ________________________________

                                                                        Michael E. Whitaker

                                                                        Judge of the Superior Court