Judge: Peter A. Hernandez, Case: 22PSCV01605, Date: 2023-08-31 Tentative Ruling

Case Number: 22PSCV01605    Hearing Date: August 31, 2023    Dept: K

Plaintiff EBF Holdings, LLC dba Everest Business Funding’s Application for Default Judgment is DENIED without prejudice.

Background   

Plaintiff EBF Holdings, LLC dba Everest Business Funding (“Plaintiff”) alleges as follows:

On February 23, 2022, Nollus’s Poultry (“Defendant”) entered into a Revenue Based Financing Agreement (hereinafter, “Agreement”) with Plaintiff whereby Defendant sold $300,000.00 (the “Purchased Amount”) of its future receipts/receivables to Plaintiff, to be paid from a Specified Percentage of Defendant’s daily receipts/receivables, in exchange for a Purchase Price of $200,000.00 (the “Purchase Price”). That same day, Defendant separately executed an Addendum to the Agreement, as well as an Agreement for Direct Deposits (ACH Credits) and Direct Collections (ACH Debits), which was entered under the terms of the Agreement. As part of the Agreement, Defendant was required to ensure Plaintiff had access to debit the designated bank account on each business day to collect the purchased receipts/receivables. On April 12, 2022, Defendant breached the Agreement when the first of four of Plaintiff’s debits from the designated bank account were returned for insufficient funds.

On November 1, 2022, Plaintiff filed a complaint, asserting a cause of action against Defendant for:

1.                  Breach of Contract

On April 5, 2023, Defendant’s default was entered.

An Order to Show Cause Re: Default Judgment is set for August 31, 2023.

Discussion

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

1.                  Paragraph 2 (i.e., “Judgment to be entered”) of Plaintiff’s Request for Court Judgment Judicial Council Form CIV-100 reflects that Plaintiff seeks interest of $27,324.90. Plaintiff, however, did not request interest in its complaint. Relief not demanded in the complaint cannot be granted by default judgment even though that relief otherwise would have been proper. “The relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint, in the statement required by Section 425.11, or in the statement provided for by Section 425.115.” (Code Civ. Proc., § 580, subd. (a).)

2.                  Plaintiff has submitted a declaration from its attorney, Patrick Kane (“Kane”), in support of its default prove-up application. It is unclear to the court how Kane would have personal knowledge of the events underlying the lawsuit and would be able to authenticate Exhibits A-E and H. Kane does not attest that he is Plaintiff’s custodian of records.