Yayan v. Lee

California Court of Appeal, 6th District

Aug 31, 2026

H053483

THE COURT¹

Respondent Yayan Inc. (Yayan) filed a verified complaint for breach of contract, breach of fiduciary duty, fraud, defamation, trespass, declaratory relief, and injunctive relief against appellant Katy Lee alleging that Lee committed various breaches and tortious conduct while purporting to act as the association manager of Commercial Building Owners’ Association. Although Yayan designated the complaint as unlimited jurisdiction, pleading that “[t]he relief sought is greater than $35,000,” the complaint did not specify the amount of damages sought but rather stated that damages would be proven at trial.

When Lee did not timely respond to the complaint, Yayan sought and obtained entry of default. After a prove-up hearing, the trial court entered a default judgment against Lee in the amount of $548,527.10, which included $351,504.24 in punitive damages. After the court denied Lee‘s Code of Civil Procedure section 473 motion to set aside the entry of default and default judgment, Lee filed a timely notice of appeal.

After Lee filed an opening brief, the parties jointly moved for summary reversal of the judgment. We grant the motion and reverse the judgment pursuant to the stipulation of the parties.

I. DISCUSSION

In their joint motion, the parties request that we summarily reverse the default judgment entered against Lee with instructions that Yayan be allowed to file an amended complaint specifying the amount of damages sought. The reason that the parties seek a summary reversal, as outlined in their request, is that they agree the trial court erred in awarding damages in an amount that exceeded the prayer for relief. (Code Civ. Proc., § 580, subd. (a).) The parties further agree that the trial court erred in awarding punitive damages because Yayan never served Lee with a notice of intent to seek punitive damages under Code of Civil Procedure section 425.11. Accordingly, they contend that the judgment awarding amounts in excess of those sought in the compliant is void. (Airs Aromatics, LLC v. CBL Data Recovery Technologies, Inc. (2018) 23 Cal.App.5th 1013, 1018; Greenup v. Rodman (1986) 42 Cal.3d 822, 824.)

The parties’ joint motion supports the conclusion that a summary reversal pursuant to stipulation is appropriate under the facts of this case and the law. (See Code Civ. Proc., § 128, subd. (a)(8).) For the reasons stated in the motion, the court finds that there is no possibility that the interests of nonparties or the public will be adversely affected by the reversal. Summary reversal of the judgment would place the parties in the same position they would be in if the appeal were successfully prosecuted to completion and would save both private and judicial resources because it would obviate the need for additional briefing by the parties and review of the record by this court. The public interest is served by a speedy resolution of this appeal because it will conserve judicial resources.

This court further finds that the parties’ grounds for requesting reversal are reasonable. The parties correctly recognize that reversal of the void judgment is necessary. These grounds outweigh the erosion of public trust that may result from the nullification of a judgment and outweigh the risk that the availability of a stipulated reversal will reduce the incentive for pretrial settlement. Here, the parties did not have a chance to pursue settlement or to litigate the matter on the merits below. Expeditious reversal of the void judgment, especially when parties agree that further appellate litigation is unnecessary, will enhance public trust in the courts, not erode it. (See Union Bank of California v. Braille Inst. of America (2001) 92 Cal.App.4th 1324, 1330–1331.)

II. DISPOSITION

The default judgment and order entering default are reversed pursuant to the stipulation of the parties. The matter is remanded to the trial court with directions to allow Yayan to file an amended complaint. The parties shall bear their own costs on appeal. The remittitur shall issue forthwith.

Notes

Before Danner, Acting P. J., Lie, J., and Wilson, J.