Judge Salvatore Sirna, Case Number: 24PSCV00514, Date: 2024-11-06 Tentative Ruling

Judge: Salvatore Sirna, Case: 24PSCV00514, Date: 2024-11-06 Tentative Ruling

Case Number: 24PSCV00514 Hearing Date: November 6, 2024 Dept: G

Plaintiff Satish K. Mahajan’s Application for Default Judgment

Respondent: NO OPPOSITION

TENTATIVE RULING

Plaintiff Satish K. Mahajan’s Application for Default Judgment is CONTINUED to a date to be determined at the hearing set in Department G (Pomona). Plaintiff Satish K. Mahajan is also ordered to provide additional briefing to the Court on Defendant Deepak Gosain’s liability as to the fourth cause of action for breach of fiduciary duty and fifth cause of action for conversion.

BACKGROUND

This is a corporate dissolution action. In August 2020, Plaintiff Satish K. Mahajan and Defendant Deepak Gosain allegedly entered into a partnership agreement in which they each agreed to invest $250,000 in the purchase of a retail business in Azusa. In furtherance of their partnership, they formed Defendant Humble Retailers, Inc. (Humble Retailers). After Gosain was unable to make the investment, the parties allegedly agreed that Gosain could obtain the funds through a loan taken out in Humble Retailers’ name. In exchange, Gosain allegedly agreed to be held personally liable for all loan payments. The parties also allegedly agreed that Gosain would be responsible for the day-to-day operation of the business. Subsequently, Mahajan alleges Gosain stole from the business’s inventory and embezzled its funds while failing to make payments on the loan or the business’s expenses.

To prevent the business’s collapse, Mahajan allegedly invested an additional $100,000. The parties also allegedly agreed to terminate their partnership and sell the business in September 2021. As part of the agreement to sell the business, Gosain allegedly agreed to pay off the loan made on Gosain’s behalf, to pay $270,000 to Mahajan plus a monthly amount of $3,000 until the business was sold, and to continue to operate the store. After the sale of the business, Mahajan only allegedly received $182,000. Mahajan also allegedly discovered that Gosain obtained $80,718 in tax credits for the business and then converted the funds for Gosain’s personal use.

On February 20, 2024, Mahajan filed a complaint against Gosain, Humble Retailers, and Does 1-50, alleging the following causes of action: (1) dissolution of partnership, (2) involuntary dissolution of corporation, (3) fraud, (4) breach of fiduciary duty, and (5) conversion. On February 27, 2024, Mahajan’s process server personally served Gosain in Playa Vista.

On April 22, 2024, the court entered default against Gosain after Gosain failed to file a timely answer.

On November 4, 2024, Mahajan dismissed Humble Retailers from the present action and submitted the present application for default judgment.

A case management conference and OSC Re: Default/Default Judgment is set for November 6, 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

Mahajan seeks default judgment against Gosain in the total amount of $268,688.00, including $236,279.00 in damages, $31,772.00 in interest, and $637.00 in costs. For the following reasons, the court CONTINUES the hearing on Mahajan’s application.

First, Mahajan’s counsel states Mahajan is dismissing the first, second, and third causes of action against Gosain without prejudice. (Ahluwalia Decl., ¶ 8.) But Mahajan failed to formally file such a request for dismissal with the court. Thus, Mahajan’s application is deemed incomplete as to this issue.

Second, Mahajan’s counsel states Mahajan is seeking $196,190.00 in contract damages for Gosain’s alleged failure to abide by the terms of the parties’ dissolution agreement. (Ahluwalia Decl., ¶ 8.) But while Mahajan’s counsel references a fourth cause of action for “breach of contract,” no such cause of action was included in Mahajan’s Complaint. Instead, the fourth cause of action is for breach of fiduciary duty. Thus, Mahajan must provide additional briefing on this issue.

Last, Mahajan’s counsel states Mahajan is seeking $45,470 in funds that Gosain allegedly converted from Humble Retailers’ tax credits. (Ahluwalia Decl., ¶ 8.) But it is unclear what standing Mahajan has to assert this cause of action as the funds allegedly converted belonged to the business. (Complaint, ¶ 17.) To the extent Mahajan may claim Mahajan has standing to assert claims on the behalf of Humble Retailers against Gosain, Mahajan must also provide additional briefing on this issue.

CONCLUSION

Based on the foregoing, Mahajan’s application for default judgment is CONTINUED to a date to be determined at the hearing set in Department G (Pomona).

Mahajan is also ordered to provide additional briefing to the court on Gosain’s liability as to the fourth cause of action for breach of fiduciary duty and fifth cause of action for conversion.