Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. CV145736
BAMATTRE-MANOUKIAN, J.
I. INTRODUCTION
Defendants 888 Auto Corporation dba 888 Motors and Yujen Chen (erroneously sued as Eugene Lin) failed to file an answer to plaintiff Kevin Lin’s complaint. A default judgment in the amount of $197,365.40 was ultimately entered against defendants. Defendants moved to set aside the default judgment. The superior court granted the motion on the ground that the complaint failed to apprise defendants of the amount of damages being demanded by plaintiff. Relevant here, Code of Civil Procedure section 580, subdivision (a) provides that “[t]he relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint....” On appeal, plaintiff contends that his complaint provided adequate notice of the amount of damages that he was seeking from defendants.
Chen acknowledges in a declaration under penalty of perjury that his “legal name is Yujen Chen” but states that he is “also known as Eugene Chen.” We will refer to Chen in this opinion by his acknowledged legal name.
Further unspecified statutory references are to the Code of Civil Procedure.
For reasons that we will explain, we disagree and we will affirm the order granting the motion to set aside the default judgment.
II. FACTUAL AND PROCEDURAL BACKGROUND
The Complaint
In June 2009, plaintiff filed a complaint against 888 Auto Corporation dba 888 Motors and “Eugene Lin” for breach of contract, fraudulent misrepresentation, negligent misrepresentation, restitution, and unfair business practices. According to the complaint, on or about June 18, 2008, the parties orally agreed that defendants would provide four 2008 Mercedes-Benz GL550 vehicles with specified VIN numbers to plaintiff for $342,000. Pursuant to the agreement, defendants were also required to provide title for the vehicles “with permission to export said vehicles to China within a reasonable amount of time.” “Based on prior dealings between the parties, ” it was understood that a “ ‘reasonable amount of time’... meant one to two months.”
Plaintiff alleges that he made two monetary transfers to defendants for a total of $342,000, with the last transfer occurring on June 25, 2008. Defendants delivered to plaintiff two of the agreed-upon vehicles with title and permission to export, but they failed to deliver the remaining two vehicles.
On or about August 11, 2008, the parties orally agreed that defendants would provide two other 2008 Mercedes-Benz GL550 vehicles with specified VIN numbers “in place of” the two vehicles that defendants had failed to deliver. Defendants further agreed to provide title for these two other vehicles “with permission to export... to China within a reasonable amount of time.” Defendants subsequently delivered the two vehicles to plaintiff but “without title and without permission to export.” As of June 2009, defendants had still “failed to deliver title with permission to export despite [plaintiff’s] repeated demands.”
Plaintiff alleges that “[w]ithout permission to export, the vehicles are of very limited use or value to” him, and that despite his “requests to rescind the contract and return [his] money, Defendants have refused to refund” him any money. Plaintiff states that he “has incurred shipment and storage fees for the two vehicles” as well as attorney fees.
In his first cause of action for breach of contract, plaintiff states that he has “fulfilled all of the conditions” of the parties’ agreement, as modified on or about August 11, 2008, by paying $342,000 to defendants. He alleges that defendants breached the agreement by failing to deliver two of the vehicles with title and permission to export. Plaintiff alleges that on or about May 26, 2009, he “informed Defendants by letter of his election to rescind the Agreement” as to the latter two vehicles that were delivered, but they “have refused to rescind the Agreement.”
In the second and third causes of action for fraudulent and negligent misrepresentation, plaintiff alleges that on or about June 18, 2008, defendants misrepresented their ability to deliver four 2008 Mercedes-Benz GL550 vehicles with title and permission to export within a reasonable time, and that similarly, on or about August 11, 2008, they misrepresented their ability to deliver two such vehicles with title and permission to export within a reasonable time. Plaintiff asserts that defendants knew or should have known that they were unable to provide title and permission to export, and that they nevertheless made the misrepresentations with the intent to induce plaintiff’s reliance. Plaintiff alleges that he relied on the misrepresentations and suffered damages as a result. As to the fraudulent misrepresentation cause of action, plaintiff also seeks punitive damages.
In the fourth cause of action for restitution, plaintiff alleges that defendants entered into the agreement even though they “knew or should have known that they would be unable to deliver the four vehicles with title and permission to export....” Plaintiff asserts that defendants “have been unjustly enriched, ” that he has “suffered to his general detriment, ” and that he “has incurred and will continue to incur attorney’s fees as a result of prosecuting this action.”
In the fifth cause of action for unfair business practices under Business and Professions Code sections 17200 et seq. and 17500, plaintiff alleges that “it is the regular practice of Defendants to violate state law in ways including, but not limited to: failing to perform on their contracts and making fraudulent misrepresentations with the intent to induce reliance by the other party.” Plaintiff further alleges that he “has suffered damages in an amount according to proof.”
Lastly, in his prayer for relief, plaintiff seeks the following: “A. For rescission of the Agreement as to the two vehicles delivered without title and permission to export; [¶] B. For general and special damages in an amount according to proof; [¶] C. For reasonable attorney’s fees and costs; [¶] D. For disgorgement of ill-gotten profits; [¶] E. For restitution of unjust revenue; [¶] F. For punitive damages; and [¶] G. For such other and further relief as the court deems just and proper.”
In June and July 2009, plaintiff apparently served the summons and complaint on defendants by substitute service. (§ 415.20.) No answer was filed by either defendant.
Default and Default Judgment
In August 2009, upon plaintiff’s requests, a default was entered against each defendant. In October 2009, a prove-up hearing was held. Plaintiff sought $197,365.40, based on the following: $85,500 for each of the two vehicles that defendants failed to provide title and permission to export, $650 in “transport costs” for the two vehicles, $7,200 in storage fees for the two vehicles, $17,885 in interest, and $630.40 for court and service of process costs.
On October 19, 2010, a default judgment was filed against defendants in the amount of $197,365.40. Pursuant to the judgment, upon payment of the amount, defendants were to accept the return of the two vehicles for which they had failed to provide title and permission to export.
In November 2009, a notice of appeal was apparently filed by “Eugene Chen.” On December 10, 2009, the appeal (no. H034992) was dismissed for failure to procure the record on appeal.
In March 2010, on motion by plaintiff, the superior court ordered that the judgment be amended to “add Yujen Chen as judgment debtor in place of his alias, Eugene Lin.”
Defendants’ Motion to Set Aside the Default Judgment
In April 2010, defendants filed a motion to “vacate and set aside” the default and default judgment on the grounds that they were void. Among other things, defendants contended that the complaint did not state the amount of damages.
Plaintiff filed written opposition to the motion. He contended that, “[b]ased on the allegations in the Complaint, Defendants were notified that [he] was seeking damages for Defendants’ breach of the $342,000 agreement and for improperly inducing [him] to transfer $342,000” to them.
Defendants filed a reply brief, and a hearing was eventually held on the motion.
By order filed on May 5, 2010, the superior court granted the motion to set aside the default judgment. The court determined that the default judgment was void because the complaint failed to apprise the defendants of the amount of damages being demanded. The court found no basis to set aside the default itself and thus denied defendants’ motion to that extent. The court stated that plaintiff would need to amend the complaint to add a specific demand for damages, that such an amendment would cause the default to be vacated, and that defendants would be entitled to respond to the amended pleading.
On May 27, 2010, plaintiff filed a notice of appeal from the order vacating the default judgment.
III. DISCUSSION
On appeal, plaintiff contends that the superior court erred by vacating the default judgment. According to plaintiff, defendants “were adequately placed on notice that [he] was seeking to recover up to $342,000 for [their] breach. The $342,000 also represents the amount [he] was fraudulently induced into transferring to” defendants. Plaintiff asserts that the default judgment for $197,365.40 was not void, because it was less than the $342,000 pleaded in the complaint.
Defendants respond that the complaint does not contain any allegation concerning the value of the two vehicles that they allegedly failed to deliver, and the value of those vehicles cannot be determined from the complaint.
A complaint must contain “[a] demand for judgment for the relief to which the pleader claims to be entitled.” (§ 425.10, subd. (a)(1).) In general, if the complaint demands “the recovery of money or damages..., the amount demanded shall be stated.” (Id., subd. (a)(2).) Section 580, subdivision (a) provides in relevant part that “[t]he relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint....” Section 580 and related sections “aim to ensure that a defendant who declines to contest an action does not thereby subject himself [or herself] to open-ended liability.” (Greenup v. Rodman (1986) 42 Cal.3d 822, 826 (Greenup).) “[T]he primary purpose of [section 580] is to guarantee defaulting parties adequate notice of the maximum judgment that may be assessed against them.” (Ibid.) “[N]otice enables a defendant to exercise his right to choose... between (1) giving up his right to defend in exchange for the certainty that he cannot be held liable for more than a known amount, and (2) exercising his right to defend at the cost of exposing himself to greater liability. To this end, ... ‘The rules governing default judgment provide the safeguards which ensure that defendant’s choice is a fair and informed one.’ [Citation.]” (Id. at p. 829.)
More broadly, section 580, subdivision (a) provides 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....” Section 425.11 applies to personal injury and wrongful death actions, and section 425.115 applies to actions in which the plaintiff seeks punitive damages. To the extent either of these two sections is applicable in the instant case, plaintiff has not asserted that he provided a statement to defendants pursuant to either section.
In determining whether the defendants were provided with “adequate notice of the maximum judgment that may be assessed against” them (Greenup, supra, 42 Cal.3d at p. 826), the court may consider the prayer and the allegations in the body of the complaint. (National Diversified Services, Inc. v. Bernstein (1985) 168 Cal.App.3d 410, 417-418 (National Diversified Services).) “If no specific amount of damages is demanded [in the prayer], 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. [Citation.]” (Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489, 494, fn. omitted (Becker); see also Greenup, supra, 42 Cal.3d at p. 829.) “Where no amount of damages is demanded any amount awarded is by definition greater than the amount demanded.” (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 830-831, fn. omitted (Falahati).) A default judgment that exceeds the amount demanded in the complaint is void as beyond the court’s jurisdiction. (Greenup, supra, 42 Cal.3d at p. 826; Becker, supra, 27 Cal.3d at pp. 491-492, 494-495; Falahati, supra, 127 Cal.App.4th at p. 830; Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 864-865 (Heidary); National Diversified Services, supra, 168 Cal.App.3d at p. 417.)
A court has the authority to set aside a judgment that is void on its face, such as a default judgment not in conformity with section 580. (Becker, supra, 27 Cal.3d at p. 493; Falahati, supra, 127 Cal.App.4th at p. 830; Heidary, supra, 99 Cal.App.4th at p. 862.) “We review de novo a trial court’s determination that a judgment is void.” (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495-496.)
In support of his argument that damages were adequately pleaded in the complaint, plaintiff primarily relies on National Diversified Services, supra, 168 Cal.App.3d 410. In response, defendants rely on Heidary, supra, 99 Cal.App.4th 857, for the proposition that allegations of fact that include numbers or monetary amounts are not necessarily sufficient to provide adequate notice to defendants about the amount of damagesbeing sought.
In National Diversified Services, the plaintiff allegedly agreed to buy two Ferrari automobiles for $75,284. (National Diversified Services, supra, 168 Cal.App.3d at p. 412.) The plaintiff intended to pay for the automobiles by conveying a boat with a trade-in value of $22,500 and owing the balance of $52,784. (Ibid.) The plaintiff conveyed the boat but never received the automobiles in return. The plaintiff sought specific performance, that is, delivery of the two automobiles, or alternatively, return of the boat plus damages for deterioration and loss of use, amounting to damages “in excess of $10,000.” (Id. at pp. 412, 418) A default judgment was ultimately entered in the amount of $56,779.89. (Id. at p. 412.) The amount of the judgment was based on “$45,000 as damages flowing from breach of the promise to deliver the Ferraris, $6,179.89 for boat repair expenses, and $5,000 for loss of use of the automobiles.” (Id. at p. 418.)
This court determined that the plaintiff “did not identify as damages in connection with the restitution claim any amount near the $55,000 awarded.” (National Diversified Services, supra, 168 Cal.App.3d at p. 418.) For example, “[n]o amounts were alleged to represent the loss of use of the cars or any loss of a benefit of the bargain.” (Ibid.) Ultimately, this court concluded that the “largest money judgment that... defendant was on notice of would be $32,500, representing $22,500 for the value of the boat and $10,000 for its detention.” (Id. at p. 419.) The default judgment was modified by deleting the excess above $32,500. (Ibid.)
In Heidary, a default judgment was entered against two of three cross-defendants on a cross-complaint regarding the ownership and operation of certain gas stations. (Heidary, supra, 99 Cal.App.4th at pp. 859, 860.) Eighteen causes of action were alleged, including breach of contract, breach of fiduciary duty, conversion, and fraud, based on the cross-defendants purportedly converting the cross-complainants’ share of profits from the businesses, failing to make payments on promissory notes, and defrauding the cross-complainants into investing money into the businesses. (Id. at p. 860.) The cross-complainants prayed for compensatory damages, but only a few of the causes of action specified an amount. (Ibid.)
The Court of Appeal concluded that the default judgment was void because, among other things, the damages awarded in the judgment exceeded that which were pleaded. (Heidary, supra, 99 Cal.App.4th at pp. 859-860, 865.) The Court of Appeal distinguished between “allegations of damages, and allegations of fact which include numbers.” (Id. at p. 866.) The Court of Appeal observed that the cross-complaint contained general allegations concerning, among other things, the transfer of funds between accounts. The Court of Appeal explained that “[i]n and of itself, the allegation demonstrates no damages. Of course, if the allegation was that [one of the cross-defendants] had transferred money from the business account to buy himself a Ferrari, that might be a different story. But it is not.” (Ibid.) The cross-complaint also referred to payments, including by the cross-complainants to one of the gas stations, but the Court of Appeal explained that the “allegation does not amount to an assertion of damages. To the contrary, it merely recites payments made for the benefit of the jointly owned business.” (Ibid.) The Court of Appeal determined that the general allegations were “not intended to operate as distinct damage claims, ” but rather, the underlying facts were “re-alleged” within a particular cause of action and thus “subsumed” within the “general prayer for damages” for that cause of action. (Ibid.)
In the present case, a default judgment of $197,365.40 was entered against defendants. Plaintiff argues that defendants were on notice that he was seeking “up to $342,000” for their breach of the agreement by failing to deliver two vehicles with permission to export, and that “$342,000 also represents the amount” of his damages for their fraudulent conduct. Plaintiff concludes that the default judgment was not void, because it was less than the claimed $342,000 in damages.
We determine that the trial court correctly set aside the default judgment as void because the relief granted to plaintiff exceeded that demanded in the complaint. (§ 580, subd. (a); Becker, supra, 27 Cal.3d at p. 494; Falahati, supra, 127 Cal.App.4th at pp. 830-831.) We do not agree with plaintiff that his complaint is similar to the one in National Diversified Services, supra, 168 Cal.App.3d 410. The prayer in plaintiff’s complaint does not include a demand for a specific amount of money or damages. Further, the body of the complaint does not contain any allegation specifying the amount of money or damages that plaintiff is seeking. Although the complaint does refer to $342,000 as being the total amount that plaintiff transferred to defendants for four vehicles, plaintiff fails to clearly articulate how defendants would be on notice that this amount represented the total amount of money or damages being demanded. In this regard, plaintiff’s allegations are more similar to those discussed in Heidary, supra, 99 Cal.App.4th 857, where the factual allegations include numbers, such as the transfer of funds or the making of payments, but do not represent a specific claim for damages. Moreover, as in Heidary, plaintiff only makes a general prayer for damages and the causes of action do not specify the amount of money or damages sought. We also observe that the default judgment appears to include damages for transportation costs and storage fees for the two vehicles. The complaint, however, does not contain any allegation concerning the amount of these losses.
In sum, plaintiff failed to specify the amount of money or damages being demanded in the prayer, and there was similarly no specific allegation in the body of the complaint. Consequently, defendants lacked “adequate notice of the maximum judgment that may be assessed against” them. (Greenup, supra, 42 Cal.3d at p. 826.) The default judgment was therefore void as it exceeded any amount demanded in the complaint, and the trial court properly set aside the default judgment.
IV. DISPOSITION
The May 5, 2010 order granting defendants’ motion to set aside the default judgment is affirmed. Costs on appeal are awarded to defendants.
WE CONCUR: PREMO, ACTING P.J., GROVER, J.
Judge of the Monterey County Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.