Judge: Upinder S. Kalra, Case: 21STCV09354, Date: 2023-03-10 Tentative Ruling

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Case Number: 21STCV09354    Hearing Date: March 10, 2023    Dept: 51

TENTIVE ORDER

Judge Upinder S. Kalra, Department 51

HEARING DATE:     March 10, 2023                                             

CASE:                         SILVIA BALDASSINI, et al. vs SOUTH BAY RESTAURANT GROUP, INC., ELIAS BARRAGAN AND GEORGE MOUSALI 

CASE NO.:                 21STCV09354

OSC RE: SUBMISSION OF DEFAULT JUDGMENT

MOVING PARTY: Plaintiffs SILVIA BALDASSINI, et al.  

RESPONDING PARTY(S): NONE

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiffs filed a complaint on March 9, 2021, alleging 11 causes of action for wage and hours violations under various Codes: seven Labor Code, one Civil, two Government, and one Business and Professions. On that same date, Plaintiffs filed the Civil Case Cover Sheet (CM—010) identifying the case as an Employment Case. On May 12, 2021, Plaintiffs filed the First Amended Complaint (FAC) adding a 12^th Cause of action, alleging a representative action under the California Private Attorney General Act of 2004 (PAGA) under the Labor Code. In the Prayer for Relief, Plaintiffs did not allege damages in a sum certain, but rather alleged damages “in an amount according to proof.” On May 27, 2021, Plaintiff filed Proof of Personal Service on each Individual Defendant as well as the Corporate Defendant of various filings, including the FAC, Summons on the FAC and notice of an August 16, 2021 Case Management Conference. On August 16, 2021, Defendants failed to appear at the Case Management Conference so the Court continued the hearing to October 1, 2021. On June 21, 2021, individual Defendant Elias Barragan, filed a document captioned “Reply to Plaintiff’s FAC” on behalf of both Individual Defendants as well as the Corporate Defendant South Bay Restaurant Group Inc. in the capacity of “attorney-in-fact.” On that same date, Individual Defendant George Mousalli filed the same document but captioned it “Opposition and Response to Plaintiff’s Complaint that Erroneously Named George Mousalli as Defendant.”  On August 19, 2021, individual Defendant Elias Barragan, purported to file an Answer on behalf of corporate Defendant South Bay Restaurant Group Inc. in the capacity of “attorney-in-fact.” On October 1, 2021, Defendants once again failed to appear at the Case Management Conference, so the Court continued the hearing to November 9, 2021. On November 9, 2021, Defendants again failed to appear. The Court granted Plaintiffs’ Motion to Strike the purported “Reply” of all Defendants and the “Answer” of the Corporate Defendant. Notably, the Court found that Elias Barragan was not a licensed attorney so could not represent the corporate Defendant. Moreover, as an unrepresented Corporation, the Corporate Defendant lacked the capacity to file the Reply and Answer. The Court once again continued the Case Management Conference to December 13, 2021 and issued an Order to Show Cause for monetary sanctions for Defendant’s failure to appear. On December 13, 2021, Defendants failed to appear once again. Accordingly, the Court imposed monetary sanctions in the amount of $1,000 against each Individual Defendant, Elias Barragan and George Mousalli. The Court set a further OSC for these Individual Defendants to appear in person or remotely on January 12, 2022. On January 11, 2022, both Individual Defendants filed documents captioned “Notice to Court and all interested parties” announcing that they were both too ill to make an appearance on January 12, 2022. On that same date, Plaintiffs filed objections to the filings. On January 12, 2022, Defendants failed to appear. Thereafter, the Court imposed monetary sanctions in the amount of $1,500 against each Individual Defendant, Elias Barragan and George Mousalli, continued the Case Management Conference to February 17, 2022 and set another OSC re: Why the Court should not strike the responsive pleadings filed by Defendants Elias Barragan and George Mousalli. The Court warned if the prior sanctions were not paid in full by February 10, 2022 or Defendants once again failed to appear, the Court intended to strike their Answers. On February 16, 2022, Defendants Elias Barragan  and George Mousalli each filed duplicate documents requesting 45-day continuances because of health issues and to obtain counsel. On that same date, Plaintiffs filed objections. On February 17, 2022, Defendants again failed to appear. The Court noted it was the sixth case management conference in which the Defendants failed to appear. The Court found that despite their claimed illnesses, there was no reason Defendants could not appear remotely for free on LACourtConnect but were declining to do so. Accordingly, the Court struck each of the named Defendants’ June 21, 2021 filings and entered default. The Court set an OSC re: Default Judgment for May 19, 2022.  That OSC was thereafter continued to November 1, 2022, December 5, 2022, January 9, 2023, and then to March 10, 2023. In the interim, on January 4, 2023, the Court Denied Defendant Elias Barragan’s Ex Parte Application to Set Aside Entry of Default. The Court, however, warned Plaintiffs that they would not be able to obtain a judgment for the $278,542,91 in damages requested in the January 3, 2023 Statement of Damages because that amount of damages were not stated in the FAC, in violation of Code of Civil Procedure (CCP) § 580. The Court also cited to Dhawan v. Biring (2015) 241 Cal. App. 4th 963 (Dhawan)  and Greenup v. Rodman (1986) 42 Cal.3d 822 (Greenup ) as authority for the proposition that the Court could award no more than the jurisdictional minimum for unlimited actions, $25,000. On March 3, 2023, Plaintiffs filed a document captioned “Notice of Authority re: Awarding Default Judgment on Statement of Damages.”

TENTATIVE RULING:

Request to Enter Default Judgment is DENIED.

DISCUSSION:

The relief granted to the plaintiff , if there is no answer, cannot exceed that demanded in the complaint, in the statement required by section 425.11, or in the statement provided for by section 425.115.” (Code of Civil Procedures section 580.) For purposes of section 580, an answer that has been filed but then later stricken, is treated as if no answer had been filed. (Greenup, supra, 42 Cal.3d at p. 828.) As such, in setting the amount of a default judgment, CCP § 580 sets a jurisdictional limit stated in the complaint except as set forth in CCP §425.11—personal injury or wrongful death— or CCP § 425.115—punitive damages claims. (Dhawan. supra., 241 Cal. App. 4th at pp. 968-969.) A Default Judgment that exceeds the jurisdictional limit is void.

In the FAC, Plaintiffs only pled damages “in an amount according to proof.” Dhawan recounted the long line of cases that have strictly construed section 580 and found that such an allegation of damages is insufficient to place Defendants on notice, noting that “ ‘a prayer for damages according to proof passes muster under section 580 only if a specific amount of damages is alleged in the body of the complaint.’ ”(Dhawan. supra., 241 Cal. App. 4th at p. 970.) No specific amount is alleged in the body of the complaint here.

Plaintiff seeks to distinguish Dhawan in two respects. First, Plaintiffs attempt to limit Dhawan’s holding to punitive damages claims. While it is true that the particular damages disputed in Dhawan were the punitive damages award, such a narrow construction ignores Dhawan ‘s thorough and detailed analysis on this whole body of law. To be sure, the Dhawan panel recounted the entire body of law in this area citing numerous Court of Appeal and Supreme Court decisions that consistently have held that Due Process and section 580 limits default judgments to the amount pled in the complaint.

Second, Plaintiff seeks to re-cast this FAC as a personal injury complaint, and therefore, pursuant to CCP §425.11, the January 3, 2023 Statement of Damages satisfies Due Process. These contentions also fail. First, the gist of the complaint is an employment action. Plaintiffs self-identify the complaint as an Employment case in their March 9, 2021Civil Case Cover Sheet (CM—010). Both the Complaint and the FAC describe the action as involving wage and hours violations. Even the January 3, 2023 Statement of Damages primarily requests damages for wage and hour violations. Of the $278,542.91 of damages requested, over $200,000 are for wage and hour violations. Second, even if Plaintiffs dismissed these actions and proceeded only under the sexual harassment in the workplace causes of action, arguably personal injury actions,  the January 3, 2023 Statement of Damages was still served too late. Subdivision (c) of section 425.11 requires service of the statement “before a default may be taken.” Case law has consistently interpreted this to mean before entry of default. “As with. . .Section 425.11, the notice must be given with adequate time for the defendant to respond before a default is entered.” (Van Sickle v. Gilbert (2011) 196 Cal.App.4^th 1495, 1523, emphasis added; accord Ely v. Gray (1990) 224 Cal. App. 3d 1257, 1263 [“The notice must allow sufficient time before the hearing on the entry of default for the defendant to respond.”]; Jones v. Interstate Recovery Serv. (1984) 160 Cal. App. 3d 925, 929 [“we conclude a defendant is entitled to a statement of specials prior to the entry of default.”].) The undisputed record establishes that default was entered on February 17, 2022 whereas the proof of service for the January 3, 2023 Statement of Damages is dated January 3, 2023, almost two years later.

The Court is sympathetic to Plaintiffs’ plight. The Court also recognizes that Defendants’ behavior has been outrageous and warranted the sanction this Court imposed, striking their answers. Nonetheless, Dhawan and Greenup were clear. Plaintiffs must provide Defendants formal notice of the amount of damages sought through an amended complaint or they are otherwise limited to the jurisdictional minimum for unlimited actions, $25,000. The choice is Plaintiffs.

IT IS SO ORDERED.

Dated: March 10, 2023                                               ___________________________________

                                                                                    Upinder S. Kalra

                                                                                    Judge of the Superior Court