Case Number: 19PSCV00758 Hearing Date: June 01, 2020 Dept: J

v

OSC DATE: Monday, June 1, 2020

RE: Cathy Logistics, Inc. v. Osborne, et al. (19PSCV00758)

______________________________________________________________________________

Plaintiff Cathy Logistics, Inc.’s APPLICATION FOR DEFAULT JUDGMENT

Tentative Ruling

Plaintiff Cathy Logistics, Inc.’s Application for Default Judgment is DENIED without prejudice.

Background

Plaintiff Cathy Logistics, Inc. (“Plaintiff”) alleges as follows: Plaintiff operates a warehousing and delivery service. Blake Osborne (“Osborne”) is the owner, manager and controller of Venetian Worldwide LLC (“Venetian”) and Fair LLC (“Fair”) (collectively, “Defendants”). In September 2018, Plaintiff entered into an oral agreement with Osborne and therefore with Venetian and Fair by Osbourne’s status of agent, wherein Defendants authorized Plaintiff to bill all its UPS shipments to Fair’s UPS account and Plaintiff agreed to pay Osborne for such service subject to the invoices issued by Osborne periodically. From October 11, 2018-May 24, 2019, Plaintiff shipped more than 15,000 packages by billing Fair’s UPS account and fully paid the invoices for same issued by Osborne through Venetian. However, in June 2019, Plaintiff received several notices and invoices from UPS which indicated that Fair refused to pay for any shipments by Plaintiff. UPS demanded that all those shipments must be paid by Plaintiff immediately. The shipping rate UPS offered Plaintiff was significantly higher than the rate Osborne charged Cathy. The total amount UPS alleged Plaintiff owed exceeds $670,000.00.

On August 22, 2019, Plaintiff filed a complaint, asserting causes of action against Defendants and Does 1-50 for:

Breach of Contract

Breach of Covenant of Good Faith and Fair Dealing

Fraud

On November 8, 2019, Venetian’s and Fair’s defaults were entered. On November 19, 2019, Osborne’s default was entered.

A Case Management Conference and an Order to Show Cause Re: Failure to Proceed with Default Judgment are set for March 23, 2020.

Discussion

Plaintiff’s Application for Default Judgment is DENIED without prejudice. The following defects are noted:

Plaintiff seeks, inter alia, $800,000.00 in punitive damages. On September 24, 2019, Plaintiff filed three proofs of service, which reflected that Osborne, Fair and Venetian were each substitute-served with the summons, complaint and notice of case assignment on September 17, 2019. On November 8, 2019, Fair’s and Venetian’s defaults were entered. On November 19, 2019, Osborne’s default was entered. On February 21, 2020, Plaintiff filed a proof of service, which reflected that Osborne was personally served with a Statement of Damages on February 12, 2020. On March 3, 2020, Plaintiff filed another proof of service, which reflected that Venetian was personally served with a Statement of Damages on January 12, 2020. On March 4, 2020, Plaintiff filed another proof of service, which reflected that Fair was personally served with a Statement of Damages on January 12, 2020. CCP § 425.115(f), however, states that “[t]he plaintiff shall serve the statement upon the defendant pursuant to this section before a default may be taken, if the motion for default judgment includes a request for punitive damages.” (Emphasis added).

A default judgment which includes punitive damages requires plaintiff to provide evidence of defendant’s net worth, so that an appropriate, but not excessive, award of punitive damages may be assessed. (See Cummings Medical Corp. v. Occupational Medical Corp. (1992) 10 Cal.App.4th 1291, 1298 [“Evidence of the defendants financial condition is relevant to a punitive damages award in two ways. ‘[O]bviously, the function of deterrence. . . will not be served if the wealth of the defendant allows him to absorb the award with little or no discomfort . . . By the same token, of course, the function of punitive damages is not served by an award which, in light of the defendant’s wealth and the gravity of the particular act, exceeds the level necessary to punish and deter.’”)

Plaintiff has not explained why Plaintiff is entitled to damages in the amount of $205,257.33. “Contract damages are generally limited to those within the contemplation of the parties when the contract was entered into or at least reasonably foreseeable by them at that time; consequential damages beyond the expectations of the parties are not recoverable. (Civ. Code, § 3300; Mitchell v. Clarke (1886) 71 Cal. 163; Brandon & Tibbs v. George Kevorkian Accountancy Corp. (1990) 226 Cal.App.3d 442, 455-456; Menodoyoma, Inc v. County of Mendocino (1970) 8 Cal.App.3d 873, 879 . . .)” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 515.)

Plaintiff should provide the court with copies of canceled checks.

ANALYSIS

Yes (11/8/19; Default Entered. (JC Form CIV-100.)

11/19/19)

Yes Dismissal of all parties against whom judgment is not sought or an

application for separate judgment against specified parties under CCP

579, supported by a showing of grounds for each judgment. (CRC 3.1800(a)(7).)

Yes Mandatory Judicial Council Form CIV-100. (CRC 3.1800(a).)

Yes Relief sought is within amount of prayer of complaint or statement of damages. (Due Process; Greenup v. Rodman (1986) 42 Cal.3d 822, 824.)

No Summary of the case. (CRC 3.1800 (a)(1).)

Yes Declarations in support of the judgment. (CRC 3.1800 (a)(2).)

N/A Attorney fees if supported by contract, statute or law. (CRC 3.1800 (a)(9); Local R. 3.214; open book – CC 1717.5.)

Yes _________ _ Interest computations. (CRC 3.1800 (a)(3); 10% for contracts – Civ. Code 3289.)

Yes Memorandum of costs and disbursements. (CRC 3.1800 (a)(4); JC Form CIV-100 item 7.)

Yes Declaration of nonmilitary status for each defendant. (CRC 3.1800 (a)(5); JC Form CIV-100 item 8.)

Yes Proposed form of judgment. (CRC 3.1800 (a)(6).)

See above Statement of Damages served (P.I./wrongful death). (JC Form CIV-050; CCP 425.11.)

No Punitive Damages are supported. Info re Defendant’s financial status. (CCP 425.115)