Judge Peter A. Hernandez, Case Number: 18PSCV00137, Date: 2023-11-14 Tentative Ruling

Judge: Peter A. Hernandez, Case: 18PSCV00137, Date: 2023-11-14 Tentative Ruling

Case Number: 18PSCV00137 Hearing Date: November 14, 2023 Dept: K

Plaintiff N.D.U. Capital, LLC’s Application for Default Judgment is DENIED without prejudice.

Background

Plaintiff N.D.U. Capital LLC (“Plaintiff”) alleges as follows:

YYP Entertainment (“YYP”) is in the entertainment business arranging and promoting concert events; Yiping Ye (“Ye”) is the principal of YYP. On January 6, 2018, Plaintiff and YYP entered into four identical written Investment Agreements (“Agreement”), wherein Plaintiff agreed to invest $50,000.00 in YYP’s project under each Agreement for a total of $200,000.00. YYP, in turn, agreed to repay Plaintiff the principal amount, plus a $5,000.00 profit, by July 6, 2018. YYP was unable to make payment on July 6, 2018, so on July 17, 2018, Plaintiff and YYP entered into a Supplemental Agreement in which YYP agreed to pay $5,000.00 by July 20, 2018 and $174,155.66 by August 10, 2018. On July 17, 2018, Ye executed a Personal Guarantee. YYP and Ye failed to pay Plaintiff by August 10, 2018. Starting from December 2017 and throughout 2018, Ye transferred various assets to his wife, Ling Ren aka Michelle Ren (“L. Ren”), to avoid his payment obligations to Plaintiff.

On December 18, 2019, YYP’s and Ye’s defaults were entered.

On June 1, 2021, Plaintiff filed three “Amendment[s] to Complaint,” wherein Yanhu Ren (“Y. Ren”) was named in lieu of Doe 1, Xiufen Liu (“Liu”) was named in lieu of Doe 2 and Lingyun Bian (“Bian”) was named in lieu of Doe 3.

On December 13, 2022, the court ordered Y. Ren and Liu dismissed without prejudice based upon Plaintiff’s failure to effectuate service.

On February 16, 2023, Plaintiff filed a First Amended Complaint (“FAC”), asserting causes of action against YYP, Ye, L. Ren, Bian and Does 1-20 for:

1. Breach of Contract

2. Breach of Personal Guarantee

3. Fraud

4. Violation of Uniform Fraudulent Transfer Act

On July 24, 2023, a “Stipulation and Order for Court to Retain Jurisdiction to Enforce Settlement Agreement” was filed.

On August 7, 2023, Plaintiff dismissed L. Ren and Bian, with prejudice.

An Order to Show Cause Re: Default Judgment as to Defendants YYP and Ye is set for November 14, 2023.

Discussion

Plaintiff’s Application for Default Judgment is denied without prejudice. The following defects are noted:

1. Plaintiff has failed to utilize the most current version of Judicial Council Form CIV-100 [Rev. January 1, 2023].

2. Plaintiff’s CIV-100 lists the “[d]emand of complaint” as $129,155.0. Plaintiff’s FAC, however, identifies damages as being “at least $105,000” (FAC, ¶¶ 14 and 30; see also ¶ 20 [“not less than $105,000”] and ¶ 24 [“no less than $105,000”].) There are no other references in the FAC to specific monetary amounts owed. In actions for money damages a default judgment is limited to the amount demanded in the complaint. (See Greenup v. Rodman (1986) 42 Cal.3d 822, 824.) The amount demanded in the complaint is determined both from the prayer and from the damage allegations in the complaint. (National Diversified Services, Inc. v. Bernstein (1985) 168 Cal.App.3d 410, 417-418).

3. Plaintiff seeks default judgment against Ye for Ye’s alleged breach of a personal guarantee; however, the second cause of action in Plaintiff’s FAC, for Breach of Personal Guarantee, is purportedly alleged against YYP only, not Ye. (See FAC, 5:2-5). The sole cause of action directed against Ye is the fourth cause of action, for Violation of Uniform Voidable Transactions Act. The fourth cause of action does not seek monetary relief but the voidance of purportedly fraudulent transfers.

4. The case caption contained on the first page of the “Declaration of Di Zhao in Support of Default Judgment” (i.e., Hsia v. Lee, Case No. CVRI2102104480”) is incorrect and must be corrected.

5. Di Zhao has not attached any of the initial four Investment Agreements to his declaration.