Kim v. Westmoore Partners, Inc.
201 Cal. App. 4th 267
| Cal. Ct. App. | 2011Background
- Kim filed an unverified complaint alleging six promissory notes and a seventh note, with various damages and a demand for up to $30 million total.
- Notes 1–6 required payment years before filing; no extensions or amendments were alleged; note 7’s payment depended on Temecula Harry’s restaurant sale, with a complex compensation plan and a no-amendment clause.
- Kim sought defaults on the six defendants; defaults were entered, and Kim later sought a $30 million default judgment against all defendants.
- Defendants moved to set aside defaults unsuccessfully; trial court entered a default judgment in Kim’s favor for $5,000,000 per defendant, plus costs.
- On appeal, the court reviewed whether the complaint supported such relief and whether the damages evidence was adequate, including sanctions against counsel for improper conduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the default judgment reflect valid causes of action and damages? | Kim argues the defaults support breach of contract and related claims with damages. | Westmoore contends the complaint fails to state actionable claims or damages and the court erred in awarding. | Judgment reversed; no cognizable claims or damages proven. |
| Did the court properly analyze the complaint and damages before entering judgment? | Kim contends the court correctly used the pleadings to award damages. | Defendants argue the court failed to ensure damages matched the pleadings and evidence. | Court failed; must avoid excess or inconsistent relief and verify damages with evidence. |
| Were the damages proven by admissible evidence in the prove-up? | Kim maintained damages through the statements of damages and supporting exhibits. | Defendants contend the prove-up relied on conclusory numbers and inadmissible or uncorroborated materials. | Damages not proven; award cannot stand; maximum recovery is zero. |
| Should sanctions be imposed for improper conduct by counsel? | No sanctions argued; focus on merits. | Sanctions warranted for copying briefs and improper extensions. | Sanctions imposed on counsel Donahue in the amount of $10,000. |
Key Cases Cited
- Ostling v. Loring, 27 Cal.App.4th 1731 (Cal. Ct. App. 1994) (default duties; express admissions and evidence requirements)
- Stein v. York, 181 Cal.App.4th 320 (Cal. Ct. App. 2010) (default judgment—damages must be within pleadings)
- Electronic Funds Solutions, LLC v. Murphy, 134 Cal.App.4th 1161 (Cal. Ct. App. 2005) (misapplication of damages in default judgment)
- Sole Energy Co. v. Hodges, 128 Cal.App.4th 199 (Cal. Ct. App. 2005) (default damages; damages cannot exceed complaint; fn. on damages)
- Uva v. Evans, 83 Cal.App.3d 356 (Cal. Ct. App. 1979) (review of damages in default judgments permissible)
- Mead v. Sanwa Bank California, 61 Cal.App.4th 561 (Cal. Ct. App. 1998) (exhibit terms govern when conflict with complaint occurs)
- Finney v. Gomez, 111 Cal.App.4th 527 (Cal. Ct. App. 2003) (modifying judgments to the amount warranted by complaint)
- DeRose v. Heurlin, 100 Cal.App.4th 158 (Cal. Ct. App. 2002) (appellate sanctions for misconduct by counsel)