Judge: Michelle Williams Court, Case: 22STCV08679, Date: 2022-10-11 Tentative Ruling

Case Number: 22STCV08679    Hearing Date: October 11, 2022    Dept: 74

22STCV08679           RONALD LICHTENSTEIN, et al. vs CORY READER, er al.

OSC RE DEFAULT JUDGMENT

TENTATIVE RULING:  The OSC is CONTINUED  to November 10, 2022.  Plaintiffs must clarify their request for costs and remove the request for punitive damages.

Plaintiffs Adequately Demonstrated Their Compensatory Damages, Attorneys’ Fees, and Prejudgment Interest

Plaintiffs’ default judgment request is accompanied by the declarations of both Plaintiffs that adequately evidence their losses and indicate they closed their accounts with Defendants, thereby realizing their asserted market losses. (R. Lichtenstein Decl. ¶¶ 6-37; S. Lichtenstein Decl. ¶¶ 7-26.) Plaintiff Ronald Lichtenstein seeks attorneys’ fees pursuant to the Welfare and Institutions Code and properly limits the request pursuant to LASC Local Rule 3.214. Plaintiffs’ declarations contain an interest calculation as required. (R. Lichtenstein Decl. ¶ 38; S. Lichtenstein Decl. ¶ 27.)

Plaintiffs Must Clarify Their Cost Request

The memorandum of costs within Plaintiffs’ request for default judgment indicates total costs of $1,798.10. However, the proposed judgment indicates both Plaintiffs are separately claiming this amount, which appears duplicative. Plaintiffs’ must clarify the total costs claimed and apportion the costs  between each Plaintiff.

Plaintiffs’ Must Remove Their Request for Punitive Damages

Plaintiffs’ default judgment package does not include a statement of damages containing their request for punitive damages and there is no evidence that Plaintiffs served a statement of damages upon each Defendant prior to 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 Plaintiffs obtain a default via a stricken answer. (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.”).)