Judge Salvatore Sirna, Case Number: 22PSCV00553, Date: 2024-01-31 Tentative Ruling

Judge: Salvatore Sirna, Case: 22PSCV00553, Date: 2024-01-31 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on a tentative ruling by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 22PSCV00553 Hearing Date: January 31, 2024 Dept: G

Plaintiff Shaozhang Li’s Application for Default Judgment

Respondent: NO OPPOSITION

TENTATIVE RULING

Plaintiff Shaozhang Li’s Application for Default Judgment is DENIED without prejudice.

BACKGROUND

This is an action for breach of contract and fraud arising from a franchise agreement. In December 2021, Plaintiff Shaozhang Li entered into an oral agreement with Defendant An Ni in which Li agreed to pay $40,000 for a franchise of Defendant Yomie Rice X Yogurt Inc. (Yomie Yogurt). After Li made the payment to Defendant Zhao Wei Ding, who claimed to work for Yomie Yogurt’s headquarters, Li alleges Ni, Ding, and Defendant Xiaotian Yin failed to take any action and refused to return Li’s money. Li alleges on information and belief that Li and Ding were not authorized to sell Yomie Yogurt franchises and did so with the intent to defraud Li.

On June 8, 2022, Li filed a complaint against Ni, Ding, Yin, Yomie Yogurt, and Does 1-10, alleging (1) breach of contract and (2) fraud. On March 4, 2023, Li’s process server personally served Ni and Yin in Portland, Oregon. On March 12, Li’s process server personally served Yomie Yogurt in Diamond Bar. On March 14, Li’s process server personally served Ding in Temple City.

On June 12, 2023, default was entered against Ni, Ding, Yin, and Yomie Yogurt. On August 14, Li filed an amendment to the Complaint that corrected Ni’s name to Xiaofang Tian. On January 9, 2024, Li dismissed Tian from the present action.

On January 11, 2024, Li submitted the present application for default judgment. An OSC Re: Default Judgment is set for January 31.

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

Li seeks default judgment against Yin, Ding, and Yomie Yogurt in the total amount of $40,635, including $40,000 in damages and $635 in costs. For the following reasons, the court DENIES Li’s application without prejudice.

To support a default judgment, a complaint’s well-pleaded allegations must state a cause of action. (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 281.) In this case, Li alleges two causes of action for breach of contract and fraud.

To state a cause of action for breach of contract, a plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) If a breach of contract claim “is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.) In some circumstances, a plaintiff may also “plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.) “[T]he vital elements of a cause of action based on contract are mutual assent (usually accomplished through the medium of an offer and acceptance) and consideration.” (Division of Labor Law Enforcement v. Transpacific Transportation Co. (1977) 69 Cal.App.3d 268, 275.)

Here, the Complaint alleges Li entered into an oral agreement with Tian to purchase a Yomie Yogurt franchise. (Complaint, ¶ 22.) But the Complaint fails to allege any facts that establish how Li entered into a contract with Yomie Yogurt, Ding, and Yin. Furthermore, the Complaint contradicts itself by stating the Defendants “did nothing” after Li made the payment while elsewhere alleging they sent a contract to Li. (Complaint, ¶ 16-17.) Thus, the Complaint fails to state a cause of action for breach of contract against Yomie Yogurt, Ding, and Yin.

“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638, quoting 5 Witkin, Summary of Cal. Law (9th ed. 1988) Torts, § 676, p. 778.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Id., at p. 645.)

In this case, the Complaint alleges Tian represented to Li that Yomie Yogurt was a franchise business, had good tasting yogurt, and was profitable. (Complaint, ¶ 29.) Putting aside the fact that this allegation is not sufficiently pled with specificity and fails to demonstrate how this representation was false, Li failed to allege any misrepresentations were made by Yomie Yogurt, Ding, and Yin. While the Complaint does allege Ding claimed to work for Yomie Yogurt’s headquarters, the Complaint failed to allege this representation with the required specificity and failed to allege how this representation was false. In fact, the Complaint suggests this was not a false representation as elsewhere it alleges Ding was the managing member of Yomie Yogurt. (Complaint, ¶ 6.) Thus, the Complaint fails to state a cause of action for fraud against Yomie Yogurt, Ding, and Yin.

Last, to the extent Li seeks default judgment against Tian, the court notes Tian is no longer a party to this action following Li’s dismissal of Tian on January 9, 2024.

CONCLUSION

Based on the foregoing, Li’s application for default judgment is DENIED without prejudice. The court is inclined to give Plaintiff leave to amend the Complaint to correct the deficiencies note above.