Judge: Salvatore Sirna, Case: 23PSCV01114, Date: 2024-08-08 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: 23PSCV01114    Hearing Date: August 8, 2024    Dept: G

Plaintiff City National Bank’s Application for Default Judgment

Respondent: NO OPPOSITION

TENTATIVE RULING

Plaintiff City National Bank’s Application for Default Judgment is GRANTED in the reduced amount of $126,809.00.

BACKGROUND

This is a collections action. In January 2022, Plaintiff City National Bank (CNB) entered into a written agreement with Defendant IOU USA, Inc. (IOU USA) in which CNB agreed to extend credit to IOU. In support of the agreement, Defendant Max Cho executed a personal guaranty. In May 2022, CNB alleges IOU USA and Cho failed to make payments as required and now owes a balance of $111,841.89.

On April 17, 2023, CNB filed a complaint against IOU USA, Cho, and Does 1-10, alleging causes of action for (1) breach of contract and (2) common counts. On February 20, 2024, CNB’s process server served IOU USA through the California Secretary of State. In March 2024 and April 2024, CNB served IOU USA and Cho by publication.

On June 27, 2024, the court entered default against IOU USA and Cho after they failed to file a timely answer. On July 16, 2024, CNB submitted the present application for default judgment.

An OSC Re: Default/Default Judgment is set for August 8, 2024.

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

CNB seeks default judgment against IOU USA and Cho in the total amount of $137,838.01, including $100,000.00 in damages, $33,916.00 in interest, $2,890.00 in attorney fees, and $1,032.01 in costs. Because the Court finds CNB has submitted sufficient evidence, the court GRANTS CNB’s application for default judgment with the following modification.

In CNB’s supporting declaration, CNB requests interest of $33,916.44 at an annual rate of 15.75% pursuant to paragraph ten of their contract with IOU USA and Cho. (Moore Decl., p. 3:2-3.) But the Court notes paragraph ten of the contract does not explicitly impose an interest rate of 15.75%. Instead, it states the annual percentage rate is comprised of an index and margin which are calculated by CNB and subject to change. (Moore Decl., Ex A, ¶ 10.) Because CNB does not provide any evidence establishing what these amounts were at the time of default, the court will limit CNB’s requested interest to the initial annual interest rate of 10.25% as stated in the contract. (Moore Decl., Ex A, p. 1.)

Accordingly, the court reduces the requested interest to $22,886.99 (10.25% of $100,000.00 divided by 365 = $28.0821917808 per diem multiplied by 815 days (5/16/22 – 8/08/24)) and calculates the total amount of damages as $126,809.00.

CONCLUSION

Based on the foregoing, CNB’s application for default judgment is GRANTED in the reduced amount of $126,809.00.