Judge: Michael E. Whitaker, Case: 24SMCV02027, Date: 2025-01-28 Tentative Ruling

Case Number: 24SMCV02027    Hearing Date: January 28, 2025    Dept: 207

TENTATIVE RULING

Plaintiff Danielle Rose Altman (“Plaintiff”) requests for default judgment against Defendant The Probably Nothing Company LLC (“Defendant”) in the amount of $5,722,407.53, which is composed of general damages in the amount of $5,500,000; special damages in the amount of $105,579.22; costs in the amount of $1,749.58; and attorneys’ fees in the amount of $115,078.73.

A.    Damages

            Plaintiff’s operative First Amended Complaint alleges nine causes of action for (1) failure to pay all wages upon termination: waiting time penalties; (2) failure to pay all wages earned; (3) failure to pay overtime wages; (4) failure to issue accurate itemized wage statements; (5) failure to timely produce personnel file; (6) fraudulent misrepresentation; (7) fraudulent concealment; (8) reimbursement of employee expenses; and (9) violations of California’s Unfair Competition Act against Defendant and Jeremy Lloyd Fall (“Fall”). 

            Defendant was personally served with the summons and original Complaint on May 22, 2024 and personally served with the operative First Amended Complaint and Statement of Damages on November 2, 2024.  Default was entered against Defendant on August 29, 2024.  The Doe defendants were voluntarily dismissed on January 3, 2025, but Fall has not been dismissed. 

            As a threshold matter, Plaintiff’s request for default judgment is made only as to Defendant The Probably Nothing Company LLC.  The Court cannot enter the requested default judgment as to Defendant while Fall remains a defendant to the litigation.  (Cal. Rules of Court, rule 3.1800(a)(7).)

            Further, Plaintiff’s operative First Amended Complaint seeks only $68,236.28 in damages.[1]  However, the Court cannot award 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”].) 

            Plaintiff has submitted a statement of damages with the default judgment request, listing damages as follows:

·       Unpaid Wages $42,641.50

·       Overtime Violation $7,596.18

·       Wage Statement Violations $4,000

·       Waiting Time Penalties $11,253.60

·       Personnel and Payroll File Violation $750

·       Reimbursement of Employee Expenses $1,995

·       Other (Tax Penalties) $6,000

·       Other (Accounting Fees) $4,500

·       Unemployment Damages $11,700

·       Pain, suffering, and inconvenience $500,000

·       Emotional Distress $500,000

·       Punitive Damages $5,000,000

For a total of $5,590,436.28.

            But the service of a Statement of Damages in lieu of alleging specific damages in the operative complaint is not apt.  Generally, “A statement of damages cannot be relied on to establish a plaintiff's monetary damages on the defendant's default, except in a personal injury or wrongful death case.”  (Cal. Judges Benchbook, Civ. Proc. Before Trial § 16.16, p. 1924, citations omitted.)   In Sporn v. Home Depot USA, Inc., the Court of Appeal determined:

Defendant also attacks the judgment under section 425.11, contending that plaintiff was required to serve it with a statement of damages and failed to do so. Section 425.11 applies to an action for personal injuries or wrongful death and was passed concurrently with the amendment to section 425.10 that prohibits stating the amount demanded in the complaint filed in such an action. Section 425.11 was enacted to satisfy the due process requirement that defendants be apprised of their exposure before a default may be taken.  But here the complaint, which was not limited to personal injuries and did not claim wrongful death, expressly apprised defendant of the amount demanded. A statement of damages would have been superfluous and was not required under these circumstances.

(Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1302 [Plaintiff’s claims of negligence, gross negligence, fraudulent misrepresentation and fraud centered on the theft of his identity] [cleaned up].)  Similar to the appellate court’s determination Sporn v. Home Depot USA, Inc., this Court finds that Plaintiff’s action is based in wage and hour violations, not one for personal injuries or wrongful death as defined pursuant to Code of Civil Procedure sections 425.10 and 425.11.  As such, Plaintiff will need to amend the complaint with the amounts listed in the statement of damages and serve it on Defendant(s) before the Court can enter default judgment in the amount requested. 

Further, in determining how much to award in punitive damages, Plaintiff needs to provide evidence of Defendant’s financial condition. (Adams v. Murakami (1991) 54 Cal.3d 105, 119.) “[T]he purpose of punitive damages is not served by financially destroying a defendant. The purpose is to deter, not to destroy.” (Id. at p. 112.) “[A] punitive damages award is excessive if it is disproportionate to the defendant’s ability to pay.” (Ibid., citations omitted.) For this reason, the United States Supreme Court has explained that there are constitutional limitations on punitive damages awards. (State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 416.) “It has been recognized that punitive damages awards generally are not permitted to exceed 10 percent of the defendant’s net worth.” (Weeks v. Baker &McKenzie (1998) 63 Cal.App.4th 1128, 1166.)

            Therefore, the Court cannot award the requested 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 [….]” 

Labor Code section 218.5 provides a statutory basis for the recovery of attorneys’ fees to a prevailing employee in an action brought for the nonpayment of wages. 

Plaintiff seeks attorneys’ fees in the amount of $115,078.73, pursuant to the schedule in Local Rule 3.214.  Because Plaintiff has not substantiated the damages request, the amount of reasonable attorneys’ fees, which is premised upon the amount of principal damages, is similarly unsubstantiated. 

            Plaintiff also requests $1,749.58 in costs composed of $570.17 in filing fees, $1,158.06 in process server fees, and $21.35 in postage. (CIV-100.)

            Plaintiff’s request for $21.35 in postage is expressly disallowed by statute.  (See Code Civ. Proc., § 1033.5, subd. (b)(3).)  Plaintiff’s requested costs for filing and process server fees are granted, as Plaintiff is the prevailing party in this action. (Code Civ. Proc., § 1032, subd. (a)(4).)

CONCLUSION

            Because Defendant Fall remains a defendant in the action, the amount of damages sought exceeds what is demanded in the operative First Amended Complaint, Plaintiff has not provided evidence of Defendant’s financial condition vis-à-vis Plaintiff’s claim for punitive damages, and postage costs are expressly disallowed by statute, Plaintiff’s request for default judgment is denied.

            Further, the Court continues the Order to Show Cause re Entry of Default Judgment to June 30, 2025 at 8:30 A.M.   The Continuance to June 2025 should provide Plaintiff with ample time to cure the defects as noted in the Court’s ruling. 

DATED:  January 28, 2025                           ________________________________

                                                                        Michael E. Whitaker

                                                                        Judge of the Superior Court