Judge: Serena R. Murillo, Case: BC696657, Date: 2022-10-20 Tentative Ruling
Case Number: BC696657 Hearing Date: October 20, 2022 Dept: 29
Request for Court Judgment
against Defendants Spa Ritz and Zhi Xing Gau (Doe 3)
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Tentative: On August 18, 2022, entry of default against Defendant
Spa Ritz was rejected by the clerk. The note stated that default has not been
entered for Spa Ritz on the first amended complaint, and that default was
entered on the original complaint. The clerk noted that default was entered
against Defendant Zhi Xin Gao
on June 3, 2021.
After a
defendant's default has been entered, if “ ‘a complaint is amended in matter of
substance as distinguished from mere matter of form, the amendment opens the
default, and unless the amended pleading be served on the defaulting defendant,
no judgment can properly be entered on the default’ ” and any judgment is thus
void. (Ostling v. Loring (1994) 27 Cal.App.4th 1731, 1743; see Sass
v. Cohen (2020) 10 Cal.5th 861, 880-881.)
“ ‘The
reason for this rule is plain. A defendant is entitled to [an] opportunity to
be heard upon the allegations of the complaint on which judgment is sought
against him. His default on the original complaint is limited in its effect to
that complaint, and if by amendment a matter of substance is added, he should
be given the opportunity to contest the same before any judgment is given against
him on account thereof. The law, therefore, requires that the amended pleading
shall be served on all the adverse parties, including defaulting defendants.’ ”
(Ostling, supra, 27 Cal.App.4th at p. 1743; accord Engebretson
& Co. v. Harrison (1981) 125 Cal.App.3d 436, 442-443; see Sass, supra,
10 Cal.5th at pp. 880-881.)
“When a
complaint is served, the defendant faces the decision to contest the action
(perhaps seeking to negotiate a settlement at the same time) or to remain aloof
and risk the entry of default. If the defendant fails to appear in the action
after valid service of process, it is reasonable to assume the latter course
has been chosen. Thereafter, if the complaint is amended in a way which would
materially affect the defendant's decision not to contest the action, this new
circumstance should be brought home to the defendant with the same force as the
notification of the original action.” (Engebretson, supra, 125
Cal.App.3d at p. 442.)
When
there are multiple defendants, the rule requiring new service of a
materially-changed complaint applies only if the change or addition relates to
the particular defendant. (See Weakly-Hoyt v. Foster (2014) 230
Cal.App.4th 928, 934; Carrasco v. Craft (1985) 164 Cal.App.3d 796, 810.)
An
amended complaint makes material changes when it increases the damages sought,
or adds or changes a cause of action based on a different factual or legal
theory. (See Carrasco, supra, 164 Cal.App.3d at p. 808; Leo v.
Dunlap (1968) 260 Cal.App.2d 24, 27-28.) Based on the policies underlying
the rule, “the test for what is and is not a [material or] ‘substantive change’
should focus on whether the [change] might give rise to any different amount or
form of liability, or indicate the existence of any defense or ground for
avoiding liability, not reasonably disclosed
in the original complaint.” (Weil & Brown, Cal. Practice Guide:
Civil Procedure Before Trial (The Rutter Group 2020) ¶ 6:701; see Engebretson,
supra, 125 Cal.App.3d at pp. 442-443.) Under this test, a change is
material if the change would have impacted a reasonable defendant's
consideration of whether to contest the claims or to default.
Based on
a review of the compliant and the FAC, the Court finds that the allegations of
the Complaint and the FAC relating to Defendant Spa Ritz are unchanged. The
only material changes to the pleadings were to add additional allegations
directed to the liability of MWC and Does 4-100. These changes did not add any
theory of liability against Defendant Spa Ritz, add material factual
allegations against Defendant Spa Ritz, and did not increase the damages sought
against Defendant Spa Ritz. The amendments do not impact a reasonable
defendant’s decision whether or not to contest the claims or default. On the
same factual allegations, Defendant Spa Ritz chose to default. As such, the
filing of the FAC did not open the default.
Therefore,
default was properly entered against Defendant Spa Ritz, on the original
complaint, on May 3, 2018.
However,
the Court finds the following issues precluding the granting of default
judgment at this time:
(1) Costs listed only
amount to $1,550.34, not $1,551.34. Moreover, Plaintiff has not shown
entitlement to deposition costs in the amount of $458.60 which appear to have
been incurred in connection with deposing non-defaulting defendants.
(2) As to punitive
damages, there must be some evidence to allow evaluation of the effect of the
punitive damages award on the defendants such that the punitive damages award is
not excessive in light of defendant’s ability to pay. (See Cummings Medical Corp v. Occupational
Medical Corp. (1992) 10 Cal.App.4th 1291 (some measure of the effect of a
punitive damages award in terms of deterrence is required before punitive
damages may be awarded in a default judgment; a showing of profit from the
unlawful transaction may be sufficient); but see Johnson v. Ford Motor Co.
(2005) 35 Cal.4th 1191, 1208 (calculating punitive damages in an individual
tort case based on profits gained may produce an excessive award when there are
multiple similar torts).)
(3) Statement of
damages served on Defendant Gao has not been filed with the Court. Only the
statement of damages as to Spa Ritz has been filed.