Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Fresno County, No. 04CECG00009 Roger D. Randall, Judge.
Retired judge of the Kern Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Law Office of Mark W. Deutinger and Mark W. Deutinger for Defendant and Appellant.
Law Offices of James A. Alexander and James A. Alexander for Plaintiffs and Respondents.
OPINION
DAWSON, J.
In this appeal, a defendant challenges the default judgment entered against it on the grounds that (1) the superior court erred in denying a motion to dismiss for failure to bring the case to trial within the five years (Code Civ. Proc., § 583.310) and (2) the default judgment was entered improperly because neither the prayer nor the body of the complaint alleged the specific amount of damages sought by the plaintiff (§ 580).
All further statutory references in this opinion are to the Code of Civil Procedure.
With respect to the motion to dismiss, we conclude that (1) a superior court has the discretion to exclude some or all of the time between the entry of a default and the entry of a default judgment when calculating the five-year period and (2) under the circumstances presented by this case, the superior court did not abuse its discretion. Thus, the order denying the motion to dismiss will be affirmed.
With respect to the entry of the default judgment, we conclude that the plaintiffs did not comply with section 580, which requires the complaint to state the specific amount of damages sought. As a result, the default judgment will be reversed and the default vacated.
FACTS AND PROCEEDINGS
Sanders Pest Control, Inc. (Sanders), a corporation, was one of the defendants in this lawsuit. It is owned by Billy Sanders and Doris Sanders. Sanders defaulted in the superior court and is now challenging the default judgment entered against it.
The second amended complaint in this lawsuit identified the plaintiffs as Donald Aluisi, Donald G. Aluisi, and Karen Aluisi.
For convenience, this opinion refers to these plaintiffs collectively as the Aluisis. At least two of these three individuals appear in the documents relevant to this appeal. Because the variations in the documents are not critical to the outcome of this appeal, we do not attempt to identify all of those variations in this opinion.
In 1996, plaintiffs entered negotiations with Ronald and Fran Kolkka (the Kolkkas) regarding plaintiffs’ purchase of a lot and house located in Clovis, California (the property).
In August 1996, the Kolkkas accepted a counteroffer from plaintiffs to purchase the property for a price of $437,500. After the Aluisis moved into the property, they allegedly discovered many defects and malfunctions of the property that they believed were significant. They asked the Kolkkas to perform their obligations under the contract for the sale of the property and address the problems. The Aluisis were not satisfied with the response.
On October 31, 1997, the Aluisis filed a complaint against the Kolkkas and other defendants alleging nine causes of action and a claim for punitive damages. The other defendants included Realty Concepts, John Shamshoian, Joyce Biglione, Central Title Company, and Sanders.
Defendant Realty Concepts is a licensed real estate broker engaged in the business of marketing residential real estate. Defendant John Shamshoian is the owner of Realty Concepts. Defendant Joyce Biglione is a licensed real estate agent who works for Realty Concepts. Realty Concepts and Biglione acted as dual agents for the Aluisis and the Kolkkas in the purchase and sale of the property.
Realty Concepts, Shamshoian and Biglione will be referred to collectively as the realtor defendants.
Defendant Central Title Company, a corporation, was engaged by Realty Concepts and Biglione to act as an escrow agent in connection with the sale of the property.
Sanders was engaged by Realty Concepts and Biglione to inspect the property and prepare a wood-destroying pests and organisms inspection report. Sanders inspected the property on September 12, 1996 and issued a report that stated no evidence of active infestation or infection was found in the visible and accessible areas.
The original complaint labeled the ninth cause of action “Fraud, Concealment and Suppression of Facts.” Sanders was named only in the ninth cause of action, which included allegations that Sanders was the agent for the sellers and intentionally failed to disclose various deficiencies after it inspected the property. In particular, paragraph 80 of the complaint alleged:
“[Sanders], with full knowledge of all the foregoing and for the purpose of inducing the Plaintiff to purchase the property and do the acts herein alleged, negligently and falsely purported to make an inspection of the property to determine the presence or absence of termite infestation, dry rot, and fungi and furnished and deposited in escrow a written statement signed by [Sanders]. This statement represented that [Sanders] had inspected the property and the property was free and clear of any infestation by termites, dry rot of any kind, and required no work whatsoever to place the property in a free and clear condition.”
Paragraph 81 of the complaint alleged that Sanders had a duty to properly inspect the property, negligently failed to discover and disclose the conditions affecting the property, and breached its duty as a result of its negligence. Paragraph 82 of the complaint alleged that the property had been infested with termites, had experienced dry rot, and had been damaged so that it required extensive repairs and improvement.
Paragraph 86 of the complaint alleged: “The reasonable cost in sum for the repair of the damage caused by the infestation and the necessary repairs to the property of the infestation is substantial and the Plaintiffs have been damaged as a result of the acts of the Defendants herein alleged.”
The prayer of the complaint requested judgment against each defendant for “special damages according to proof at trial; [¶] … general damages according to proof at trial; [¶] … punitive damages according to proof at trial”; attorney fees; interest; and costs.
Sanders was served with the complaint on July 16, 1998. On August 26, 1998, a request for entry of default of Sanders was filed on behalf of the Aluisis. The parties appear to agree that, on the same day, the clerk of the court entered default pursuant to this request.
The first amended complaint was filed on October 23, 1998.
On March 29, 1999, the attorneys currently representing the Aluisis filed a second amended complaint.
Sanders was not served with either the first or second amended complaint.
This lawsuit has taken a long time to complete because it was divided. The Aluisis and the Kolkkas submitted their dispute to binding arbitration. The Aluisis and the other defendants litigated their dispute in the superior court. During the time that the Aluisis and the Kolkkas were involved in arbitration, several trial dates were set by the superior court and then continued.
The arbitration was conducted from September 2000 to April 2001. On January 28, 2002, after a lengthy briefing period, the arbitrator issued an initial arbitration award in favor of the Kolkkas. Subsequently, the arbitrator awarded the Kolkkas approximately $291,000 in attorney fees and costs. A judgment was entered confirming the arbitration award and the Aluisis appealed that judgment. This court issued its opinion affirming the judgment in early 2005. (Donald G. Aluisi et al. v. Fran Kolkka et al. (Feb. 28, 2005, F043605) [nonpub. opn.].)
On December 3, 2003, the superior court signed a stipulation and order staying the proceeding pending resolution of the arbitration. That stay was dissolved in an order filed January 20, 2005.
On November 4, 2005, the realtor defendants filed a motion to dismiss the action against them on the grounds the Aluisis had failed to bring the matter to trial within the five-year period. On January 31, 2006, the superior court filed an order denying the motion to dismiss and setting the case for trial.
The realtor defendants contested the denial of their motion to dismiss by filing a petition for writ of mandate with this court on April 21, 2006. (John Shamshoian et al. v. Superior Court, F050198.) On May 5, 2006, this court denied the petition for writ of mandate.
On June 14, 2007, this court ruled it would take judicial notice of the record in case No. F050198.
In September 2006, the Aluisis relied on the default entered in August 1998 and filed a request for court judgment against Sanders in the amount of $24,275.62. Later that month, the superior court set a hearing for its own motion to dismiss the case against Sanders pursuant to section 583.360 on the same date as the hearing on the Aluisis’ request for court judgment.
The Aluisis’ attorney filed documents opposing the motion to dismiss and supporting the request for a court judgment. The attorney’s declaration asserted that Billy Sanders testified in a February 8, 2000, deposition that his employee “didn’t do a good inspection. He missed things. He did not write it down properly.” The declaration further asserted that Billy Sanders testified at the arbitration on October 20, 2000, consistent with his deposition testimony.
The hearing on the motion to dismiss, the entry of default judgment against Sanders, and a request for attorney fees by the Kolkkas was held on October 13, 2006. Counsel for Sanders was present at the hearing but did not participate in argument as Sanders was in default.
At the October 13, 2006, hearing, the superior court stated that it was convinced there were good reasons to extend the five-year period for mandatory dismissal with respect to the other defendants. It appears the superior court was concerned about whether to include Sanders with the other defendants when it stated:
“The issue is … whether or not it was appropriate to prove up the default on Sanders or impossible, and that’s – that’s the issue that has to be decided. [¶] … [¶] I’m satisfied that there is no case law involved in that issue. There is an argument that can be made, you’re not making it, but there is an argument that can be made that the five-year statute only applies to the case as a whole. And because the five-year statute may only apply to the case as a whole, and because Sanders is in default, I’m going to deny the Court’s own motion to dismiss the action as to Sanders. Okay? You’ll have to prepare an order in that regard.”
On October 25, 2006, the superior court filed (1) a written order denying the court’s own motion to dismiss and (2) a judgment against Sanders “in favor of plaintiffs, Donald Aluisi and Donald G. Aluisi” in the principal amount of $19,966 plus recoverable costs of $1,459.62, with 10 percent interest on the total to accrue from October 13, 2006.
The two plaintiffs named in the judgment do not correspond with the two plaintiffs named in the request for entry of judgment (Donald G. Aluisi and Karen Aluisi).
In early November 2006, Sanders filed a timely notice of appeal.
DISCUSSION
I. Dismissal Under Section 583.310
A. Contentions of the Parties
Sanders framed its contention of error as follows: “[T]he Trial Court erred in basing its denial of its own motion on the erroneous conclusion that the five year statute applies to the entire case and not to each separate defendant.”
The Aluisis first dispute the factual premise of Sanders’ contention by asserting: “The court gave express consideration to separately considering dismissal for defaulted defendant Sanders .…” The Aluisis then argue that a proper analysis of the motion to dismiss will lead to the conclusions that (1) the appropriate standard of review is abuse of discretion, (2) substantial evidence supports the superior court’s determination to exclude time when calculating the five-year period, and (3) Sanders has failed to establish that any purported error resulted in a miscarriage of justice—that is, that the error was prejudicial.
Sanders replied to the Aluisis’ arguments by contending (1) the denial of the motion to dismiss should be reviewed de novo, (2) the order is erroneous even under an abuse of discretion standard, and (3) it has demonstrated prejudice from the erroneous order.
B. Background on Statutory Provisions
Section 583.310 provides that an “action shall be brought to trial within five years after the action is commenced against the defendant.”
The five-year period may be extended by written stipulation or oral agreement made in open court. (§ 583.330.) Also, the five-year period is tolled while (1) the jurisdiction of the court is suspended, (2) the action has been stayed or enjoined, or (3) bringing the action to trial is impossible, impracticable, or futile. (§ 583.340.)
If an action is not brought to trial in the time prescribed by statute, then the “action shall be dismissed by the court on its own motion or on motion of the defendant, after notice to the parties .…” (§ 583.360, subd. (a).)
Dismissal for failure to bring an action to trial within five years is described as mandatory and often is contrasted with the discretionary dismissals for shorter delays set forth in sections 583.410 and 583.420. (6 Witkin, Cal. Procedure (4th ed. 1997) Proceedings Without Trial, § 330, p. 746; see Hughes v. Kimble (1992) 5 Cal.App.4th 59, 65, fn. 5 [describing the mandatory and discretionary provisions of the prior statutory scheme, former § 583].)
The mandatory nature of dismissal under section 583.310 is clear from the statute itself. First, subdivision (b) of section 583.360 provides: “The requirements of this article are mandatory and are not subject to extension, excuse, or exception except as expressly provided by statute.” Second, section 583.310 and subdivision (a) of section 583.360 use the word “shall,” which generally is regarded as mandatory. (E.g., Pacific Law Group: USA v. Gibson (1992) 6 Cal.App.4th 577, 580 [phrase “court shall confirm” in § 1286 interpreted to mean confirmation was mandatory].)
C. Principles From Case Law Regarding Dismissal After Five Years
Notwithstanding the mandatory language in the statute, a superior court has some discretion when deciding whether to dismiss an action five years after its commencement. (See Sagi Plumbing v. Chartered Construction Corp. (2004) 123 Cal.App.4th 443, 447 [lower court’s dismissal of action under § 583.310 reviewed for an abuse of discretion].) For example, the trial court exercises its discretion when determining whether to exclude time from the calculation of the five-year period on the grounds that “[b]ringing the action to trial … was impossible, impracticable, or futile” (§ 583.340, subd. (c)). (De Santiago v. D & G Plumbing, Inc. (2007) 155 Cal.App.4th 365, 371.)
D. Analysis
1. Standard of review
The following rule of appellate review is settled: An “‘order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown.’” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)
Alternatively, when considering a matter as to which the record is not silent, the appellate court determines whether the superior court’s comments unambiguously disclosed that its ruling embodied, or rested upon, a misunderstanding of the relevant law. (In re Jerry R. (1994) 29 Cal.App.4th 1432, 1440.)
These two principles lead to the conclusion that (1) when the record is ambiguous, rather than silent, regarding the basis for the court’s order and (2) the relevant law is correctly applied under one reasonable interpretation of that ambiguity, then a reviewing court must presume the superior court correctly applied the law. (See Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 631 [ambiguities in ruling resolved in favor of affirmance].) In other words, when ambiguity exists in the court’s statement of the basis for its order, the general rule that all intendments and presumptions are indulged to support the order applies, and one such presumption is the adoption of the interpretation that provides a legally sound basis for the order.
The term “ambiguous” is used in this opinion to mean reasonably susceptible to more than one interpretation. (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1403.)
In contrast, the effect of an ambiguous judgment (as opposed to the grounds upon which it is based) is determined under the rules governing the interpretations of writings generally, and the appellate court may examine the entire record to determine the meaning and effect of the judgment. (Hirshfield v. Schwartz (2001) 91 Cal.App.4th 749, 766.) Here, the effect of the order is not ambiguous—the motion to dismiss was denied.
2. Written order denying dismissal
The superior court’s written order in this case does not disclose the legal rationale for the decision to deny the court’s own motion to dismiss. The written order simply recited that the superior court “considered all of the facts and circumstances of this case” and stated that, good cause appearing, the motion to dismiss was denied. Nothing in the contents of the written order discloses, or even suggests, that the denial of the motion to dismiss was based on a misunderstanding of relevant law.
3. Statements of the superior court at the hearing
The foundation for Sanders’ contention that the superior court denied the dismissal on an erroneous view of the law is the following statement by the superior court during the October 13, 2006, hearing:
“There’s no question in my mind that the case is totally viable, except as to Sanders. So there’s no need to argue all of these things that happened. The issue is … whether or not it was appropriate to prove up the default on Sanders or impossible, and that’s—that’s the issue that has to be decided. [¶] … [¶] … I’m satisfied that there is no case law involved in that issue. There is an argument that can be made, you’re not making it, but there is an argument that can be made that the five-year statute only applies to the case as a whole. And because the five-year statute may only apply to the case as a whole, and because Sanders is in default, I’m going to deny the Court’s own motion to dismiss the action as to Sanders. Okay? You’ll have to prepare an order in that regard.”
We will divide our analysis of this statement into two steps. First, was the superior court’s statement ambiguous? Second, can the ambiguity reasonably be interpreted so that the denial of the motion rests on a sound legal basis?
a. Ambiguity regarding legal bases for denial
The superior court stated it denied the motion “because the five-year statute may only apply to the case as a whole, and because Sanders is in default .…”
This statement contains a number of ambiguities. One ambiguity concerns whether the superior had one or two legal bases for denying the motion. The use of the word “because” twice creates the possibility that the superior court had two separate grounds for denying the motion. Under this interpretation, the first ground concerns the application of the five-year statute to the case as a whole, and the second ground is related to Sanders being in default.
We recognize that the superior court did not provide a detailed legal analysis of this possible second ground. Superior courts, however, are under no duty to provide that level of detail when explaining their rulings on motions of this type. (Cf. §§ 632 [statement of decision after a bench trial], 657 [specification of reasons for granting motion for new trial].)
Consequently, we examine whether there is a legally recognized basis for denying the motion to dismiss that is related to Sanders being in default.
b. Relevant law
A number of published decisions have discussed whether the time during which a default is entered, but before a default judgment is entered, is excluded from the five-year period for mandatory dismissal. (Hughes v. Kimble, supra, 5 Cal.App.4th at p. 70, fn. 6; Maguire v. Collier (1975) 49 Cal.App.3d 309, 313; Vanyek v. Heard (1971) 18 Cal.App.3d 467, 471 [time from entry of default until default judgment was set aside excluded from five-year period].)
In Hughes v. Kimble, the court rejected the mandatory rule of law “‘that the period during which an adversary is in default … is to be excluded from computation of the mandatory five-year dismissal’ ….” (Hughes v. Kimble, supra, 5 Cal.App.4th at p. 66, quoting Maguire v. Collier, supra, 49 Cal.App.3d at p. 313.) The court explained its rejection of mandatory exclusion as follows:
“Although we can imagine circumstances in which three years of default time might appropriately be excluded, it would be absurd, in our view, to require such exclusion in all cases, regardless of the reasonableness of the plaintiff’s delay in having a judgment entered. Such a mandatory rule of exclusion would give to negligent or dilatory plaintiffs who have obtained clerk’s defaults an unlimited time in which to apply for entry of a judgment. The results would include the clogging of court calendars with stale cases, and the exposure of defendants, albeit defaulting defendants, to liability in an unknown amount, on claims of unproven merit, potentially for all eternity.” (Hughes v. Kimble, supra, 5 Cal.App.4th at p. 70.)
The court’s rejection of a rule of mandatory exclusion did not lead it to conclude that the time between the entry of default and the entry of default judgment always must count towards the expiration of the five-year period. Instead, it explicitly concluded “that the trial court should determine on the basis of particular facts and circumstances of a case whether the plaintiff’s time to bring the case to trial should run during all, or some, or none of any time in which the defendant is in default.” (Hughes v. Kimble, supra, 5 Cal.App.4th at p. 70, fn. 6.) In other words, the court rejected a mandatory rule for the flexibility of a discretionary rule. Under that discretionary rule, the court determined that the superior court had not abused its discretion when it decided not to exclude three years that Kimble was in default from the calculation of the five-year period. (Hughes v. Kimble, supra, at p. 71.)
The superior court here mentioned Hughes v. Kimble during the October 13, 2006, hearing. Thus, indulging the presumption that the superior court was aware of the rule of discretionary exclusion of time in default adopted in Hughes v. Kimble is factually realistic.
We are persuaded by the analysis set forth in Hughes v. Kimble and, consequently, join its conclusion by adopting the following rule of law: A superior court calculating the five-year period applicable to a defaulted defendant under section 583.310 has the discretion to exclude some, and perhaps all, of the time after the default was entered against that defendant. Reiterating that court’s published legal analysis here is not necessary.
Repeating that analysis would not be useful because, among other things, our adoption of the discretionary rule could be viewed as dicta. If we had followed those cases that approvingly mentioned a rule of mandatory exclusion, our ultimate determination that the superior court did not err in denying the motion to dismiss would be the same.
c. Superior court did not abuse its discretion
We conclude that the circumstances present in this case were sufficient to allow the superior court to exercise its discretionary authority and exclude enough of the time that Sanders was in default so that dismissal was not required under the five-year statute.
Those circumstances included, without limitation, (1) a lawsuit that involved multiple defendants; (2) a plaintiff actively prosecuting the lawsuit against other defendants without having obtained a judgment against those defendants; (3) a possible factual or legal connection between the liability of the nondefaulting defendants and the liability of the defaulting defendant; (4) a potential benefit to the defaulting defendant from not having the amount of its liability determined prior to the liability of some of the nondefaulting defendants; (5) awareness by the defaulting defendant of the status of the ongoing litigation; and (6) the absence of a dismissal for delay in prosecuting any of the other defendants under the five-year statute.
To the extent that any of the facts in this or the following paragraph are disputed by Sanders, we must indulge all presumptions in favor of the superior court’s ruling, which includes presuming the superior court implicitly made these findings of fact.
In these circumstances, few if any of the evils the five-year statute was intended to address are present. First, plaintiffs have not neglected the litigation or been dilatory. Second, this lawsuit has not clogged the court’s calendar because of the failure to reduce the entry of default to a default judgment. The litigation involving the other defendants would have kept the case pending before the superior court regardless of what was done with the entry of default against Sanders. Third, there is no evidence that Sanders suffered any detriment as a result of (1) the time that passed between the entry of default and the entry of default judgment or (2) the uncertainty of not having the matter resolved. Indeed, the superior court may have found, albeit implicitly, that Sanders intentionally chose its course of action as an economically rational strategy and its choice subsequently was vindicated by the way the litigation and related arbitration developed. Also, Sanders benefited because of the time value of money and the fact that interest did not begin to accrue until the default was reduced to a judgment.
In summary, the statements made by the superior court during the hearing did not unambiguously disclose that its denial of the motion to dismiss was based on an error of law. A legally sound theory (which is related to Sanders’ default) exists for upholding the denial. Furthermore, when that theory is applied to the circumstances of this case, it appears that the superior court acted within its discretion when it denied the motion to dismiss. Therefore, we must affirm the superior court’s denial of that motion.
Based on the foregoing, we do not address the following questions. Did the superior court commit legal error on the alternative ground stated by the superior court for denying the motion—that is, “the five-year statute may only apply to the case as a whole”? Was the superior court required or permitted to deny the motion to dismiss under a theory of waiver or estoppel (§ 583.140)? Assuming error was committed, did Sanders make a sufficient showing of prejudice?
II. Default Judgments and Amount Specified in the Complaint
Former section 585, subdivision (b) provided that, after the clerk has entered default, the “plaintiff thereafter may apply to the court for the relief demanded in the complaint; the court shall hear the evidence offered by the plaintiff, and shall render judgment in his or her favor for such sum (not exceeding the amount stated in the complaint, in the statement required by Section 425.11, or in the statement provided for by Section 425.115), as appears by such evidence to be just.”
Similarly, former section 580, subdivision (a) provided that “[t]he 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 .…”
In Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489 (Becker), the California Supreme Court stated the primary purpose of section 580 was to provide adequate notice to defaulting defendants of the judgment that might be taken against them. (Becker, at p. 493.) It also discussed the meaning of the statutory phrase “relief … demanded in the complaint” (§ 580) as it pertained to the body of the complaint and the prayer for relief.
“The notice requirement of section 580 was designed to insure fundamental fairness. Surely, this would be undermined if the door were opened to speculation, no matter how reasonable it might appear in a particular case, that a prayer for damages according to proof provided adequate notice of a defaulting defendant’s potential liability. If no specific amount of damages is demanded, the prayer cannot insure adequate notice of the demands made upon the defendant. [Citation.] Consequently, 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.” (Becker, supra, 27 Cal.3d at p. 494.)
In this case, the prayer for relief in the original complaint served on Sanders requested “damages according to proof at trial.” Thus, like the complaint in Becker, the Aluisis’ complaint will pass muster under section 580 only if a specific amount of damages is alleged in the body of the complaint.
The ninth cause of action in the original complaint set forth allegations against Sanders. Paragraph 86 of the original complaint, which is the last paragraph of the ninth cause of action, alleges in full: “The reasonable cost in sum for the repair of the damage caused by the infestation and the necessary repairs to the property of the infestation is substantial and the Plaintiffs have been damaged as a result of the acts of Defendants herein alleged.” This allegation does not identify a specific amount and, therefore, does not pass muster under section 580.
The ninth cause of action also incorporated paragraphs set forth earlier in the complaint. For example, paragraph 73 of the complaint was incorporated and it alleged that the Aluisis “have suffered and will continue to suffer damages including, but not limited to, general damages, special damages, lost profits, loss of business, and such other damages in an amount according to proof at trial.” Neither paragraph 73 nor any other incorporated paragraphs alleging damages identified a specific amount as required by section 580.
The Aluisis argue that the complaint identified the value of the property at $437,500. Based on this allegation, the Aluisis contend an upper limit was placed on their damages and Sanders was put on notice of this upper limit.
The complaint alleged that the seller accepted a counteroffer to sell the property at a price of $437,500. The paragraphs that contained this allegation were incorporated by reference into the ninth cause of action.
We reject the Aluisis’ contention because a specific amount of damages is not alleged in the complaint, either directly or indirectly. We conclude that an allegation of the sale price cannot be interpreted as an allegation of the specific amount of damages where the complaint contains no allegation that connects or relates the damages suffered to the sale price and contains allegations of damages that are not consistent with the sale price representing a ceiling on damages.
The Aluisis argue that section 580 is not violated when the amount of damages awarded does not exceed the jurisdictional limits of the court and specific allegations were made regarding the termite infestation and dry rot and the need for extensive repairs. In this case of multiple defendants, Sanders was not informed by allegations in the complaint that the amount of damages which the Aluisis sought to recover from it exceeded the jurisdictional limits of the court. (Greenup v. Rodman (1986) 42 Cal.3d 822, 830.) Furthermore, the Aluisis are not entitled to a presumption that the jurisdictional limits of the court somehow provided constructive or implicit notice to Sanders of the minimum amount of damages sought against it. (See Janssen v. Luu (1997) 57 Cal.App.4th 272, 279 [jurisdictional limits of municipal court that set maximum that could be recovered did not provide notice required by § 580].)
In summary, we conclude that the Aluisis did not comply with section 580.
The legal consequences that flow from the failure to comply with section 580 were identified by the California Supreme Court in Schwab v. Rondel Homes, Inc. (1991) 53 Cal.3d 428:
“We cannot allow a default judgment to be entered against defendants without proper notice to them of the amount of damages sought. A defendant is entitled to actual notice of the liability to which he or she may be subjected, a reasonable period of time before default may be entered. The trial court in this case properly vacated the default entered against defendants.” (Id. at p. 435.)
Accordingly, the default judgment entered against Sanders must be reversed and the matter remanded with directions to the superior court (1) to vacate the default entered against Sanders and (2) to conduct further proceedings.
III. Reopening of Default
Because section 580 requires that the default entered in this case be vacated, we need not address whether the default was reopened by the filing of the first amended complaint in October 1998 and, as a result, the superior court was precluded from issuing a default judgment against Sanders.
DISPOSITION
The default judgment entered against Sanders is reversed. The matter is remanded with directions to the superior court to vacate the default entered against Sanders and to conduct further proceedings consistent with this opinion.
The order denying the court’s own motion to dismiss is affirmed. The parties shall bear their own costs on appeal.
WE CONCUR: HARRIS, Acting P.J. LEVY, J.