Case Number: BC677979 Hearing Date: June 27, 2018 Dept: 51

Background

Plaintiff Sam Park sues Kyu In Lee for damages based on allegations that defendant failed to pay on an employment contract.

On September 29, 2017, plaintiff filed a form complaint and on October 26, 2017, the operative first amended complaint for breach of contract. (The FAC also indicates the following as a cause of action, which the Court construes instead as an allegation: “Defendant didn’t pay labor and share of stock (20%) profits and disassociated after collecting money.”)

On May 22, 2018, default was entered against defendant.

Plaintiff now seeks default judgment (according to the proposed judgment) against defendant in the principal amount of $184,000.00 plus interest and “emotional suffering” for a total judgment of $370,000.00.

Procedural Requirements

On May 22, 2018, default was entered against defendant. No pending motion to vacate default appears in the record. The default judgment packet includes a request for dismissal of Does 1 through 30 on the appropriate Judicial Council form. It also includes a proposed form of judgment on the optional Judicial Council form. The amount requested as the principal default judgment amount is no greater than the amount prayed for in the complaint. (The complaint prays for $350,000.00 in damages, but according to the proposed judgment, only $184,000.00 is sought in default.) Plaintiff’s proof of service of summons indicates that defendant was personally served on October 27, 2017. The Court is satisfied that defendants received adequate notice of this action.

Evidentiary Support

For a plaintiff to prove entitlement to damages after entry of default, the plaintiff must “merely establish a prima facie case,” a showing that is lower than that under the preponderance of the evidence standard. Johnson v. Stanhiser (1999) 72 Cal.App.4th 357, 361.

The statute of limitations for a breach of written contract is four years. CCP § 337. If the contract is not written, the statute of limitations is two years. CCP § 339.

Plaintiff represents that defendant promised to pay plaintiff a salary of $10,000.00 per month from March 2013 through October 2013 as well as stock representing a 20% ownership interest in defendant’s firm. Park Decl. ¶¶ 3, 8.

If the action were brought within two years of the completion of plaintiff’s work, it would not matter whether there was a written agreement. However, given that the complaint was filed just under four years of the completion of plaintiff’s work, plaintiff must establish that the contract was written. Although plaintiff did not do so in his declaration, he may do so at the hearing.

The following all presumes that the contract is written.

Plaintiff claims damages of $80,000.00 arising from the unpaid salary, $50,000.00 arising from the 20% stock interest, $4,000.00 from “[t]ruck insurance and maintenance cost,” and $50,000.00 from “[d]amage by closing [b]usiness.” Park Decl. ¶ 8. Although plaintiff also claims $84,000.00 from “[e]motional suffering due to financial difficulties” as a category separate and apart from damages, the Court construes the amount as an additional claim for damages.

The salary amount is proper. However, plaintiff fails to any submit substantial evidence regarding any other of his claimed damages. Cf. Johnson, supra, 72 Cal.App.4th at 364-365 (equating “prima facie showing” with “substantial evidence.”) For instance, there is nothing to support plaintiff’s assertion that the gross income of defendant’s company was $500,000 or why 50% of that amount is the bottom-line profit. Although plaintiff does submit certain invoices, he offers no explanation or context that would allow the Court to connect them to any of the above figures. The balance of the damages claims is purely speculative.

Assuming the case is not time-barred, the Court will reduce the amount of damages to $80,000.00.

Interest

“A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day.” Civ. Code § 3287(a).

“Under subdivision (a) the court has no discretion, but must award prejudgment interest upon request, from the first day there exists both a breach and a liquidated claim.” North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828.

The rate of interest is proper. The statutory rate for contract actions, as here, is 10 percent. Civ. Code § 3289(b).

Given that the amount owed as salary is capable of determination as of the completion of plaintiff’s work pursuant to the contract, the Court applies the 10 percent to the damages amount of $80,000.00 from November 1, 2013 through the date of the hearing (June 27, 2018). Accordingly, assuming the principal amount is proper, $37,238.36 will be awarded in interest.

Conclusion

Plaintiff should be prepared to establish whether the contract was written. If it is, then the Court is inclined to enter judgment of $80,000.00 in principal damages and $37,238.36 in interest for a total judgment of $117,238.36.