Judge Thomas Falls, Case 22PSCV00373 2023-01-26 Tentative Ruling

This case arises from an oral contract. Plaintiffs Art and Theresa Saracho (collectively, “Plaintiffs”) allege the following against Defendant Mario Lemus (“Defendant”): In March 2021, the parties entered into an oral agreement[1] wherein Defendant would prepare the necessary plans to obtain the required permits to construct an ADU on the subject property. The total cost of the construction was $57,000. Plaintiffs gave Defendant $5,700.00 as down payment for the construction, $2,000.00 to prepare the plans and submit the permit request, $10,000.00 for material and labor, and $13,000.00 as further consideration for the construction. Defendant began the project by cutting concrete, removing pipes, gutting the garage, and removing the garage door and frame, but then ceased all work.[2]

On April 13, 2022, Plaintiff filed suit against Defendant MARIO LEMUS, as an individual and dba MAXIMUM VARIETIES STRUCTURES for:

On August 25, 2022, Plaintiffs filed the instant application for default judgment.

Plaintiffs seek default judgment in the amount of $120,141.00, which includes $119,621.00 in special damages and $520 for court costs.

CCP section 580 states that “[t]he relief granted to the plaintiff, if there is no answer, cannot exceed that which he or she shall have demanded in his or her complaint, in the statement required by Section 425.11, or in the statement provided for by Section 425.115.” “The Legislature enacted section 580 and related statutes to ensure that a defendant who declines to contest an action does not suffer open-ended liability.” (Electric Funds Solutions, LLC v. Murphy (2005) 134 Cal.App.4th 1161, 1173) (emphasis added).

Here, the complaint seeks damages “in an amount not less than $100,000.00.” Effectively, while Plaintiffs are not necessarily seeking more than the amount alleged, they are not providing notice of Defendant’s liability, which amounts to open-ended liability. Accordingly, the complaint itself fundamentally fails as the primary purpose of section 580 which is to guarantee defaulting parties adequate notice of the maximum judgment that may be assessed against them. (Greenup v. Rodman (1986) 42 Cal.3d 822, 826.)

Therefore, should Plaintiffs seek default judgment against Defendant, they are to file and serve a new/amended complaint.

[1] According to Plaintiffs, they requested a written documentation, but Defendant did not provide such.

[2] As such, Plaintiffs allege that they paid Defendant $30,700. However, according to the application for default judgment, Plaintiffs state that they paid Defendant $33,700.00. The inconsistent factual allegation would be another reason to deny the application for default judgment.