Judge: Michael E. Whitaker, Case: 23SMCV03930, Date: 2025-01-14 Tentative Ruling

Case Number: 23SMCV03930    Hearing Date: January 14, 2025    Dept: 207

TENTATIVE RULING

Plaintiff Raich Ende Malter & Co. LLP (“Plaintiff”) requests for default judgment against Defendants Joseph R. Moran aka JR Moran; Shani Weltsman AKA Shani Moran; Moussa Company, LLC; Greige International Corporation; Gym Technology Corporation; Nour Company, LLC; Yehonatan LLC; Pillow Pops Inc.; Ribenks Corporation; and Blue Chip Capital Group, Inc. FKA Blue Chip Financial Group Corp. (“Defendants”) in the amount of $64,412.24, which is composed of special damages in the amount of $43,593.06 as demanded in the Complaint; prejudgment interest in the amount of $17,969.70; costs in the amount of $1,151.69; and attorneys’ fees in the amount of $1,697.79. 

A.    Damages

            Plaintiff’s Complaint alleges two causes of action for (1) open book account and (2) account stated against Defendants, additional Defendant GY613 Holding Corporation, and Does 1 to 10, inclusive.  Defendant GY613 Holding Corporation was dismissed on May 15, 2024, and the Doe Defendants were dismissed on December 20, 2024.  Default was entered against the remaining Defendants on December 20, 2024.

            Plaintiff’s Complaint seeks $43,593.06 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 Barry Sorkin, Partner and Custodian of Records for Plaintiff, indicating that Plaintiff provided accounting and tax services to Defendants on credit on an open book account, for which an outstanding balance of $43,593.06 remains due and owing.  (Sorkin Decl. ¶ 6 and Ex. A.)

            Therefore, the Court finds that Plaintiff is entitled to the requested $43,593.06 in damages.

B.    Prejudgment Interest

            The interest computation for the $17,969.70 requested is stated as follows:  

·       $43,593.06 x 10% ÷ 365 days/year = $11.94 daily interest x 1,505 days (11/6/2020 – 12/20/2024) = $17,969.70.

            Code of Civil Procedure section 3289 provides “Any legal rate of interest stipulated by a contract remains chargeable after a breach thereof, as before, until the contract is superseded by a verdict or other new obligation.”  However, if a contract “does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum after a breach.”

            But for prejudgment interest on actions not arising from contract, the interest rate shall not exceed 7 percent per annum.  (Code Civ. Proc., § 3287, subd. (c).)

            Here, Plaintiff seeks the contractual 10% interest rate, but does not allege a contract.  Rather, Plaintiff seeks recovery based upon an open book account.  As such, the non-contractual seven percent interest rate applies.

            Therefore, the daily interest is $8.36, and the total interest Plaintiff is entitled to is $12,581.80.

C.    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 [….]” 

Civil Code section 1717.5 provides for the recovery of reasonable attorneys’ fees in an action based on an open book account not to exceed $1,200 or 25% of the principal obligation.

Further, Local Rule 3.214 provides the default reasonable attorneys’ fees for a principal amount between $10,000.01 and $50,000 is calculated as $690 plus 3% of the excess over $10,000.  Here, $690 plus 3% of $33,593.06 (the excess principal balance over $10,000) equals the requested $1,697.79, which does not exceed 25% of the outstanding principal balance of $43,593.06.  Therefore, Plaintiff’s request for attorneys’ fees is granted.

            Plaintiff also requests $1,151.69 in costs composed of $435 in filing fees and $716.69 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’s request for default judgment is granted in part.  Plaintiff has only shown entitlement to prejudgment interest at the non-contractual interest rate of 7 percent per annum, totaling $12,581.80. 

            As such, the Court enters default judgment in the amount of $59,024.34, representing special damages as demanded in the complaint in the amount of $43,593.06; prejudgment interest at the noncontractual rate of 7% in the amount of 12,581.80; attorneys’ fees pursuant to the schedule in Local Rule 3.214 in the amount of $1,697.79; and costs in the amount of $1,151.69.    

DATED:  January 14, 2025                            ________________________________

                                                                        Michael E. Whitaker

                                                                        Judge of the Superior Court