Judge: Michelle Williams Court, Case: 20STCV19369, Date: 2022-08-19 Tentative Ruling

Case Number: 20STCV19369    Hearing Date: August 19, 2022    Dept: 74

20STCV19369           UNG THI LAM vs JIM TURCO

OSC RE ENTRY DEFAULT

TENTATIVE RULING:  The OSC is CONTINUED to September 29, 2022 at 8:30 a.m.

Background

On May 21, 2020, Plaintiffs Ung Thi Lam and Phung Nguyen filed this action against Defendants Jim Turco, Margaret Cheng, American Gateway Regional Centers, LLC, 1875 N. Palm Canyon Gateway Partners I, LP, JM Investment Group, LLC, and 1875 N. Palm Canyon Partners II, LLC. The complaint alleges seven causes of action: (1) Enforcement of Rights Under California Uniform Limited Partnership Act, (2) Breach of Fiduciary Duty, (3) Breach of Contract, (4) Fraud, (5) Fraudulent Inducement, (6) Fraudulent Concealment, and (7) Violation of Cal. Bus. & Prof. Code Section 17200.  

On August 26, 2020, the clerk entered Defendant 1875 N. Palm Canyon Gateway Partners I, LP’s default.

On December 17, 2020, Defendants filed a Notice of Stay of Proceedings due to Defendant 1875 N. Palm Canyon Partners II, LLC’s filing of a bankruptcy petition.

On June 2, 2021, the Court dismissed Does 1-10.

On January 21, 2022, the Court granted Plaintiffs’ motion for terminating sanctions against Defendants Jim Turco, Margaret Cheng, American Gateway Regional Centers, LLC, and JM Investment Group, LLC. The Court struck these Defendants’ answers and entered their defaults.

On May 4, 2022, the Court struck Defendant 1875 N. Palm Canyon Partners II, LLC’s answer and on June 23, 2022, the clerk entered its default.

On June 23, 2022, Plaintiffs filed a Status Report indicating the bankruptcy proceedings were closed on July 12, 2021 without a discharge.

On July 6, 2022, Plaintiffs filed their default judgment package.

Legal Standard

Code of Civil Procedure section 585 permits entry of a judgment after a Defendant fails to timely answer following proper service of process. A party seeking judgment on the default by the Court must file a Request for Court Judgment, and provide: (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) a proposed form of judgment; (6) a dismissal of all parties against whom judgment is not sought; (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. R. Ct., rule 3.1800(a).)

Plaintiffs Must Submit Additional Documents

Plaintiffs’ proposed judgment is not consistent with the declarations regarding breach of contract damages. The proposed judgment states “Plaintiffs’ total damages under their third cause of action for breach of contract is $1,100,000 plus pre-judgment interest at the lawful rate of 10%, the daily rate of $273.97 per day from November 27, 2018.” Plaintiffs’ counsel’s declaration states “Plaintiffs’ total actual damages under the Third Cause of Action for Breach of Contract is $1,000,000. As none of the agreements specify a specific rate of interest, the rate of interest applicable here is 10%. See Cal. Civ. Code § 3289(b). Per diem pre-judgment interest would therefore be $273.97.” (Veeneman Decl. ¶ 17.) Plaintiffs must resolve this discrepancy.

Plaintiffs also must execute declarations in their native language that are then translated into English via a court-certified translator. (See Cal. R. Ct., rule 3.1110(g); Evid. Code §§ 750, 751, 753; Gov. Code §§ 68561(a); 68566.) Plaintiff Nguyen’s declaration states “English is not my primary language. While I can understand basic English, I am not fluent.” (Nguyen Decl. ¶ 3.) It is not clear whether Nguyen’s ability to understand English is sufficient to read and understand the English declaration filed with the Court absent interpretation. Plaintiff Lam’s declaration states “I neither speak nor read English. . . . My son, plaintiff Phung Nguyen, translated the contents of this declaration so that I could review and sign.” (Lam Decl. ¶ 3.) Accordingly, both Plaintiffs’ declarations appear to be uncertified translations.

Additionally, Plaintiffs must remove their request for punitive damages.

Plaintiffs served their statement of damages related to their $200,000.00 punitive damages request on February 1, 2022. (Veeneman Decl. ¶ 10, Ex. 24.) However, all but Defendant 1875 N. Palm Canyon Partners II, LLC’s default had been entered prior to February 1, 2022. To be valid, a statement of damages must be served within a reasonable time before the entry of default. (See Code Civ. Proc. § 425.115(f) (“The plaintiff shall serve the statement upon the defendant pursuant to this section before a default may be taken, if the motion for default judgment includes a request for punitive damages.”).)

This rule applies even where, as here, Plaintiffs obtain a default via terminating sanctions. (Behm v. Clear View Technologies (2015) 241 Cal.App.4th 1, 11–12 (“By not filing a statement of punitive damages until after the hearing on the order terminating sanctions . . . [Plaintiffs] . . . , effectively deprived [Defendants] of notice of the full potential consequences of foregoing its last chance to change its course of noncompliance and nonopposition, demonstrating to the court that it will take part in the litigation process. [Plaintiffs] failed to give [Defendants] sufficient notice of its potential liability.”); Matera v. McLeod (2006) 145 Cal.App.4th 44, 62 (“plaintiffs personally served a statement of damages on defendants' attorney only two days before the court struck the defendants' answer and entered their defaults. . . . We conclude that two days before the entry of default was not a reasonable period of time to apprise the defendants of their substantial potential liability for purposes of due process.”).)

Moreover, Plaintiffs failed to provide adequate evidence of Defendants’ financial condition to support the claim for punitive damages. Accordingly, a punitive damages award is also not appropriate on this basis. (See Adams v. Murakami (1991) 54 Cal.3d 105, 114; Robert L. Cloud & Associates, Inc. v. Mikesell (1999) 69 Cal.App.4th 1141, 1151 (1999) (“an award of punitive damages must be supported by meaningful evidence of the defendant's financial condition.”); Baxter v. Peterson (2007) 150 Cal.App.4th 673, 680 (“there should be some evidence of the defendant's actual wealth. Normally, evidence of liabilities should accompany evidence of assets, and evidence of expenses should accompany evidence of income.”).)