Judge: Yolanda Orozco, Case: 21STCV28586, Date: 2022-12-16 Tentative Ruling

Case Number: 21STCV28586    Hearing Date: December 16, 2022    Dept: 31

REQUEST FOR ENTRY OF DEFAULT JUDGMENT IS DENIED WITHOUT PREJUDICE

BACKGROUND

On August 3, 2021, Plaintiff Jerrold A. Fine (“Plaintiff”) filed a complaint against Defendant Teri Lee Bernardi, Green Grown Bulk, Inc., and Does 1 through 10 for (1) breach of written contract, (2) money lent, (3) money had and received, (4) open book account, and (5) account stated. Plaintiff alleges Defendants borrowed money from Plaintiff and failed to repay him.

GGB was served with a copy of the summons and complaint on September 1, 2021. (Fine Decl. ¶ 14, Ex. 6.) Default was entered against GGB on October 13, 2021. (Fine Decl. ¶ 15, Ex. 7.)

On November 14, 2022, Summary Judgment was granted in favor of Plaintiff and against Defendant Terri Lee Barnardi.

On November 16, 2022, Plaintiff moved for Default Judgment against Defendant Green Grown Bulk, Inc. (“GGB”).

On November 17, 2022. Defendant Terri Bernardi filed an Appeal.

LEGAL STANDARD

CCP § 585 permits entry of a judgment after a Defendant has failed to timely answer after being properly served.  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; (7) 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; (8) exhibits as necessary; and (9) a request for attorneys’ fees if allowed by statute or by the agreement of the parties.  (CRC Rule 3.1800.)

DISCUSSION 

a. Summary of Case and Damages Sought

Defendant Terri Lee Bernardi is the chief executive officer, sole director, and sole shareholder of Green Grown, Bulk, Inc. (“GGB”). (Soffer Decl. ¶ 8, Ex. 11, Fine Decl. ¶ 4.)

On May 15, 2019, Bernardi signed a Promissory Note pursuant to which Plaintiff lent Bernardi and GGB at total of $150,000.00 with an interest rate of 10% per annum. (Fine Decl. ¶ 5, Ex. 1.) The Promissory Note provided that Bernardi would make payments on the loan beginning June 19, 2019, until December 14, 2019, at which time all outstanding amounts were due and payable. (Fine Decl. ¶ 5.) The Promissory Note also provided that Bernardi was liable for legal costs, including attorney’s fees, for costs incurred in connection with collecting on the Promissory Note. (Id.) The Promissory Notes states that it is a “business loan.” (Id. Ex. 1.)

Unable to pay the Promissory Note, Plaintiff and Bernardi, on behalf of herself and GGB, executed a second loan (the “Loan Agreement”) on January 9, 2020. (Fine Decl. ¶ 6.) The Loan Agreement modified the Promissory Note and allowed further cash advances and modified the repayment schedule. (Id. Ex. 2.) The Loan Agreement refers to Bernardi as TB and states:

“TB owns and operates Green Growth Bulk, Inc. When referring to TB, by reference this includes Green Grown Bulk as well.”

(Fine Decl. Ex. 1.)

Plaintiff discovered in or about April 2021, that Bernardi had failed to comply with the terms set out in the Loan Agreement and that Bernardi and GGB had breached their obligations under the Loan Agreement. (Fine Decl ¶¶ 9, 10.)

On June 11, 2021, Plaintiff provided Bernardi and GGB an accounting of all amounts due under the Promissory Note and the Loan Agreement (the “Loan Accounting”). (Fine Decl. ¶ 11, Ex. 3.) Under the Loan Accounting Bernardi/GGB paid back $23,000.00 of the $564,060.00 lent, with Bernardi and GGB owing a total of $541,060.00. (Id.)

On June 11, 2021, Plaintiff also provided Bernardi and GGB an accounting of all amounts paid on Bernardi’s behalf in connection with her purchase of two personal items (a ring and a car) and freight charges relating to GGB outlined in the Expenditures Accounting. (Fine Decl. ¶ 12.) The sum due on the Expenditures Accounting was $75,407.00. (Id. Ex. 4.) In total, Bernardi and GGB owe $616,467.00 ($541,060.00 plus $75,507.)

Plaintiff’s Complaint alleged that Plaintiff sought general damages in the amount of $631,467.00, along with prejudgment interest in that amount, and attorney’s fees, expenses, and costs. (See e.g., Compl.) Therefore, GGB had proper notice of the amount of damages sought by Plaintiff in the Complaint. (See Code Civ. Proc., § 580.)

b. Prejudgment Interest

The Case Summary states that GGB owes $79,869.53 in pre-default interest based on the Loan Accounting. (Soffer Decl. ¶¶ 13-14, Ex. 9 (Table No. 1.) GGB owes $65,372.00 since default was entered starting on August 26, 2022, when the Complaint was filed. (Id. Ex. 9 (Table No. 3).) GGB owed $3,294.64 in pre-judgment interest based on the amounts owed in the Expenditures Accounting. (Id. (Table No. 2).) Since entry of Default, GGB owes $9,100.83 on the Expenditures Accounting. (Id. Ex. 9 (Table No. 4).) In total, GGB owes $157,637.00 in interest as of August 26, 2022. The prejudgment interest on the judgment form is incorrectly stated as  $157,647.00.

Therefore, the prejudgment interest owed by GGB as of August 26, 2022, is $157,637.00

c. Attorney Fees and Costs

Before hiring an attorney, Plaintiff represented himself and incurred the following costs: $435.00 for the Complaint filing fee and $240.25 for the service of process, totaling $675.25. (Fine Decl. ¶ 17.) Plaintiff’s attorney incurred $150.00 in litigation expenses. (Soffer Decl. ¶ 16.) In total, Plaintiff’s costs are $825.25. (Id.)

Plaintiff’s counsel’s billing rate is $500.00 per hour and attorney’s fees amount to a total of $36,800.00. (Soffer Decl. ¶ 17, Ex. 10 [invoices].) Plaintiff’s counsel anticipates spending an additional $1,500.00 attending the prove-up hearing. (Id.)

In the Proposed Judgment, Plaintiff indicates that Lisa Long is to be held jointly and severally liable for payment of Plaintiff’s attorney’s fees. (See Proposed Judgment ¶ 4.) However, no facts are stated as to why Lisa Long shall be charged with the payment of fees by the judgment.

d. Failure to Request Separate Judgment

Along with the defects outlined above, Plaintiff has failed to comply with the California Rules of Court, rule 3.1800 subdivision (a)(7) which states:

“A dismissal of all parties against whom judgment is not sought or an application for separate judgment against specified parties under Code of Civil Procedure section 579, supported by a showing of grounds for each judgment[.]”

Plaintiff has not submitted an application for separate judgment against GGB nor explained why a separate judgment should be entered. Moreover, Plaintiff has not explained why Judgment against GGB should proceed while an appeal is pending. (See Code of Civ. Proc., § 916 [“the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.”].)

Based on the foregoing, the request for Default Judgment is DENIED WITHOUT PREJUDICE. 

Conclusion

Plaintiff’s request for Default Judgment against Green Grown Bulk, Inc. is DENIED.