Opinion
G054494
06-22-2018
EWA CZUPERSKA, Plaintiff and Respondent, v. DAVID KALAI, Defendant and Appellant.
Law Office of Matthew Shayefar and Matthew Shayefar for Defendant and Appellant. Watkins & Letofsky, Daniel R. Watkins and Nicole A. Naleway for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2015-00793345) OPINION Appeal from a judgment order of the Superior Court of Orange County, David R. Chaffee, Judge. Reversed and remanded with directions. Law Office of Matthew Shayefar and Matthew Shayefar for Defendant and Appellant. Watkins & Letofsky, Daniel R. Watkins and Nicole A. Naleway for Plaintiff and Respondent.
After the trial court entered default and an approximately $192,000 default judgment against him, defendant David Kalai appeals. He contends the judgment is void because, among other deficiencies, plaintiff Ewa Czuperska's complaint failed to state the amount of damages she sought. We agree the judgment is void and must be vacated. Accordingly, we reverse the judgment as directed.
I
FACTS
The parties met after plaintiff responded to an online advertisement defendant posted in which he sought a "Property Manager." During an in-person interview at Kalai's residence, he advised her the job required her to live at "company headquarters"—his Newport Beach residence—with room and board included as part of the compensation. Defendant later e-mailed Czuperska to offer her the position, she accepted and began work that same evening.
Czuperska moved her belongings from a temporary place where she had been staying to a small suite in Kalai's residence. She claims to have quickly realized the situation was not what she expected. Defendant allegedly made sexual advances and solicited sexual acts from her "in a quid pro quo fashion." According to plaintiff, the alleged inappropriate touching, kissing, and other behavior happened several times per day over the course of a few days even though she resisted and asked him to leave immediately.
Kalai allegedly informed Czuperska he was not interested in a platonic relationship with her, and he instead wanted her to become his caretaker and companion. When Czuperska refused, Kalai fired her.
Czuperska sued Kalai for sexual harassment, breach of the implied covenant of good faith and fair dealing, wrongful discharge, and Labor Code violations. Czuperska requested compensatory damages, loss of earnings, punitive damages, and attorney fees. The complaint did not include any specific dollar amounts. Though Czuperska initially had difficulty serving Kalai with the summons and complaint, a process server eventually found Kalai and personally served him with the documents.
When Kalai did not take any action in response to the complaint, the court entered default against him at Czuperska's request. Thereafter, Czuperska served Kalai with a statement of damages, which listed the specific amount of damages, fees and costs being sought (approximately $300,000 plus interest), and notice of a default prove-up hearing. Because Kalai was then incarcerated in federal prison, a California deputy sheriff served him with the papers. Czuperska also filed a request for a default judgment and served Kalai by mailing a copy to his Newport Beach residence.
Before the default prove-up hearing, Kalai filed a motion to set aside the default under Code of Civil Procedure section 473 and pursuant to equitable principles. He claimed inadvertence and excusable neglect.
All further statutory references are to the Code of Civil Procedure.
The trial court held a hearing at which Kalai was represented by counsel. The court concluded Kalai's motion was untimely and there were no facts to justify equitable relief. It also heard Czuperska's default judgment request. Based on Czuperska's testimony and evidence, the court awarded her approximately $170,000 in damages and $22,000 in attorney fees and costs. It entered a default judgment and Kalai timely appealed.
II
DISCUSSION
Kalai argues the default judgment is void and the trial court erred in denying his motion to set aside the entry of default for various reasons. He primarily relies on the undisputed fact that Czuperska did not provide him with a list of the amount of damages sought until after the court entered default against him. We agree the judgment is void and must be vacated. The entry of default must be set aside if Czuperska wishes to pursue her claims; therefore, we need not reach the remainder of Kalai's contentions.
When a defendant fails to file an answer to a complaint, or makes a tactical decision not to do so, section 580 limits the relief accorded the plaintiff. (Stein v. York (2010) 181 Cal.App.4th 320, 325 (Stein).) Specifically, it provides that "[t]he relief granted to the plaintiff . . . cannot exceed that demanded in the complaint[.]" (§ 580, subd. (a).) But in personal injury and wrongful death cases, a party may not specify damages in the complaint. Consequently, relief may not exceed the amount specified in a statement of damages served pursuant to section 425.11. (§§ 425.10, subd. (b), 580, subd. (a).) The "notice requirement . . . was designed to insure fundamental fairness" (Becker v. S.P.V. Construction Co., Inc. (1980) 27 Cal.3d 489, 494 (Becker)) and "'constitutes a statutory expression of the mandates of due process.'" (Electronic Funds Solutions. LLC v. Murphy (2005) 134 Cal.App.4th 1161, 1176 (Electronic Funds).)
Section 580 must be strictly construed and is jurisdictional in nature. (Stein, supra, 181 Cal.App.4th at p. 325; Electronic Funds, supra, 134 Cal.App.4th at p. 1176.) "If no specific amount of damages is demanded [in the prayer of a complaint], 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.) If no specific amount is alleged, a default judgment in any amount "is void and subject to either direct or collateral attack." (Stein, supra, 181 Cal.App.4th at p. 326.)
Here, nowhere in the complaint did Czuperska specify the amount of damages or attorney fees sought. Instead, she simply listed categories of damages and prayed for "reasonable attorneys' fees" and "costs of suit[.]" As a result, the court was without jurisdiction to enter a default judgment in any amount. (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 830-831 (Falahati).) The judgment is void and must be vacated. (Ibid.; Stein, supra, 181 Cal.App.4th at p. 326.)
Czuperska argues Kalai waived his right to raise the section 580 issue because he did not raise it in the trial court. Not so. Because a default judgment entered in contravention of section 580 is void ab initio as outside the court's jurisdiction, it may be challenged at any time, including for the first time on appeal. (Becker, supra, 27 Cal.3d at p. 493; Falahati, supra, 127 Cal.App.4th at p. 831, fn. 18; National Diversified Services, Inc. v. Bernstein (1985) 168 Cal.App.3d 410, 417.)
Equally unavailing is Czuperska's attempted reliance on two communications allegedly provided to Kalai: (1) a prelitigation demand letter sent to Kalai stating Czuperska was seeking $150,000 in compensatory damages and $150,000 in punitive damages; and (2) a statement of damages served on Kalai pursuant to section 425.11 after default was already entered.
Section 580 limits a court to the amounts specified "in the complaint." (§ 580, subd. (a).) Thus, even if a defendant has actual notice of damage amounts sought, a court may not award those amounts unless they are specified in the complaint itself, or in an amended version thereof that is properly served. (See Greenup v. Rodman (1986) 42 Cal.3d 822, 826 (Greenup); Engebretson & Co. v. Harrison (1981) 125 Cal.App.3d 436, 443 [mail service of amended complaint which included specific amount of damages sought not sufficient to satisfy section 580].)
As for the statement of damages, we need not decide whether this case is of the type for which such a statement is required because there is at least one problem with it: its timing. Czuperska did not send it to Kalai until five months after the court had entered default in her favor. "The entry of a default terminates a defendant's rights to take any further affirmative steps in the litigation until either its default is set aside or a default judgment is entered." (Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385.) Thus, by the time Czuperska sent the statement, Kalai could no longer meaningfully participate in the proceedings. (Ibid. [defaulted defendant has no standing to participate in prove-up hearing, or to complain of evidence introduced therein].) Due process demands more. (See Warren v. Warren (2015) 240 Cal.App.4th 373, 379 ["A defendant must receive notice of [damages] a reasonable time before default is entered so that the defendant can make a reasoned decision whether to take action"]; Matera v. McLeod (2006) 145 Cal.App.4th 62 [statement of damages served two days before entry of default does not satisfy due process].)
"[A] statement of damages cannot satisfy section 580 in an action not involving personal injury or wrongful death." (Electronic Funds, supra, 134 Cal.App.4th at p. 1176; Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 286.)
Because Czuperska did not satisfy the due process demands embodied in section 580, a default judgment in any amount cannot stand. Thus, the judgment is void and it must be vacated. On remand, if Czuperska wishes to continue to pursue her claims, the court must set aside the entry of default to allow Kalai an opportunity to attack the operative complaint, answer it, or default once again. (See Falahati, supra, 127 Cal.App.4th at p. 831.)
"Vacating the default judgment has no necessary effect on the underlying default and simply returns the defendant to the default status quo ante. [Citations.] Ordinarily when a judgment is vacated on the ground the damages awarded exceeded those pled, the appropriate action is to modify the judgment to the maximum amount warranted by the complaint." (Ostling v. Loring (1994) 27 Cal.App.4th 1731, 1743.) Here, however, because the complaint did not specify any amount of damages and the statement of damages was untimely, the only way plaintiff may recover something is for the default to be vacated to allow for contested proceedings. (See Van Sickle v. Gilbert (2011) 196 Cal.App.4th 1495, 1529-1530.)
III
DISPOSITION
The default judgment is reversed and the case is remanded with directions to vacate the default judgment. Defendant is awarded his costs on appeal.
ARONSON, J. WE CONCUR: O'LEARY, P. J. THOMPSON, J.