Judge: Salvatore Sirna, Case: 21PSCV00974, Date: 2023-02-09 Tentative Ruling

Case Number: 21PSCV00974    Hearing Date: February 9, 2023    Dept: G

Plaintiff Row Construction, Inc.’s Application for Default Judgment

Respondent: NO OPPOSITION

TENTATIVE RULING

Plaintiff Row Construction, Inc.’s Application for Default Judgment is DENIED without prejudice.

BACKGROUND

This is an action for fraud arising from a business partnership. In April 2017, Plaintiff Row Construction, Inc.’s principals, Filadelfo Baca (Baca) and Maria Ornelas (Ornelas), entered into a partnership agreement with Yesenia Castaneda (Castaneda) and Ramon Lopez (Lopez). In September 2017, the partnership agreement was novated with an agreement by Castaneda and Lopez (collectively, Defendants) to work as independent contractors for Plaintiff. Under the agreement, Defendants would maintain separate bank accounts, credit cards, and accounting records from Plaintiff with all of Plaintiff’s checks being signed by Ornelas.

In October 2019, Baca and Ornelas discovered Defendants were forging Ornelas’ signature on checks and forging their signatures “for [Defendants’] own use and benefit,” including submitting applications for building permits and licenses. As a result, Plaintiff terminated the agreement with Defendants in January 2020 and prepared to close Defendants’ bank account. Plaintiff also discovered that Defendants opened up a cellular phone plan under Plaintiff’s name without Plaintiff’s authorization. In April 2020, Plaintiff closed Defendants’ bank account and obtained an invoice with Plaintiff’s name and logo that included a different address belonging to one of Defendants’ sisters. Plaintiff believed this was proof that Defendants were impersonating Plaintiff to establish their own business without Plaintiff’s authorization.

Additionally, Plaintiff alleges Defendants caused Plaintiff to incur liabilities by refusing to pay a subcontractor $6,200, ultimately forcing Plaintiff to settle with the subcontractor for $7,000. Plaintiff also alleges Defendants forges Baca and Ornelas’ signatures to place a mechanic’s lien on a property in Laguna Hills.

On November 24, 2021, Plaintiff filed a complaint against Defendants and Does 1-50 alleging the following causes of action: (1) breach of fiduciary duty and duty of loyalty; (2) aiding and abetting a breach of fiduciary duty and duty of loyalty; (3) fraud—intentional misrepresentation of fact; (4) aiding and abetting fraud—intentional misrepresentation of fact; (5) fraud—concealment; (6) aiding and abetting fraud—concealment; (7) negligent misrepresentation of fact; (8) aiding and abetting negligent misrepresentation of fact; (9) negligence; (10) violation of the Trade Secrets Act; (11) unfair competition; (12) declaratory relief; (13) civil conspiracy; (14) unjust enrichment; (15) accounting; and (16) conversion.

On February 17, 2022, Plaintiff’s process server personally served Castaneda in Perris. On March 29, default was entered against Castaneda. On November 3, Plaintiff’s registered process server served Lopez in Perris with substituted service. On December 14, default was entered against Lopez.  

On January 10, 2023, Plaintiff submitted the present application for default judgment. An OSC Re: Default is set for February 9.    

LEGAL STANDARD

Code of Civil Procedure section 585 permits entry of a default judgment after a party has filed to timely respond or appear.  A party seeking judgment on the default by the court must file a Request for Court Judgment, and: (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 or an application for separate judgment under CCP § 579, supported by a showing of grounds for each judgment; (7) exhibits as necessary; and (8) a request for attorneys’ fees if allowed by statute or by the agreement of the parties.  (Cal. Rules of Court 3.1800.) 

ANALYSIS

Plaintiff seeks default judgment against Defendants in the total amount of $503,506.30, including $384,062.34 in damages, $119,006.71 in interest, and $437.25 in costs. Because Plaintiff’s request for $384,062.34 exceeds the demand of $250,000 in the complaint (Complaint, ¶ 177, 182-183, 187) and Plaintiff has not served a statement of damages on Defendants, the court DENIES Plaintiff’s application without prejudice. (See Greenup v. Rodman (1986) 42 Cal.3d 822, 826.)

CONCLUSION

Based on the foregoing, Plaintiff’s application for default judgment is DENIED without prejudice.