Judge: Michael P. Linfield, Case: 23STCP02324, Date: 2024-05-16 Tentative Ruling

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Case Number: 23STCP02324    Hearing Date: May 16, 2024    Dept: 34

PLAINTIFF'S REQUEST FOR ENTRY OF DEFAULT JUDGMENT

I.          BACKGROUND

On July 5, 2023, Plaintiff Dai Yongzheng filed a Complaint against Defendant Paul S. Chao on causes of action for conversion, breach of fiduciary duty, and breach of duty of good faith and fair dealing pursuant to Corporations Code section 17704.08, subdivision (d).

On December 29, 2023 and January 2, 2024, the Court issued Orders for Publication in this matter.

On April 19, 2024, Plaintiff filed:

(1)       Judicial Council Form CIV-100, Request for Entry of Default and Court Judgment;

(2)       Judicial Council Form JUD-100, Proposed Judgment;

(3)       Judicial Council Form MC-030, Declaration; and

(4)       Declaration of Plaintiff Dai Yongzheng.

On April 19, 2024, by request of Plaintiff, the Clerk’s Office entered default on Defendant.

II.       ANALYSIS

The Request for Default Judgment is GRANTED in part.

The Court awards $132,070.00 in damages (the amount requested in the Complaint), $8,003.80 in pre-judgment interest (the total amount allowable based on the causes of action alleged), and $1,385.0 in costs (the total amount claimed).

Regarding the interest calculation, Plaintiff’s Counsel used a rate of 10% per year in their calculation. (MC-030.) However, the three causes of action in the Complaint — conversion, breach of fiduciary duty, and breach of duty of good faith and fair dealing pursuant to Corporations Code section 17704.08 (as opposed to its common law analogue) — are all torts, not contract claims. (See Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066 [“Conversion is a strict liability tort.”]; See also Strebel v. Brenlar Invs., Inc. (2006) 135 Cal.App.4th 740, 747 [“California law is committed to the view that the fraudulent breach of fiduciary duty is a tort . . . .” (Quotation and internal quotation marks omitted.)].) Further, no contract is alleged in the pleading; rather, the allegations discuss tort violations, such as removing and selling inventory, failing to timely collect debts for the corporate entity, and building a separate business relationship with the company’s customers. (Complaint, ¶¶ 29, 36–38, 42.) Pre-judgment interest for tort violations is only 7% per year, not 10% per year. (Civ. Code, § 3287, subd. (c).)

Default Judgment is AWARDED in favor of Plaintiff and against Defendant in the total amount of $141,458.80 as indicated in the spreadsheet below: