This case was last updated from Los Angeles County Superior Courts on 10/21/2015 at 00:47:42 (UTC).

VAZGEN MIRZAKHANYAN VS JV & T CAPITAL LLC ET AL

Case Summary

On 08/02/2010 VAZGEN MIRZAKHANYAN filed a Contract - Other Contract lawsuit against JV T CAPITAL LLC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are RALPH W. DAU, MICHAEL P. LINFIELD and ZAVEN V. SINANIAN. The case status is Disposed - Dismissed.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****2906

  • Filing Date:

    08/02/2010

  • Case Status:

    Disposed - Dismissed

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

RALPH W. DAU

MICHAEL P. LINFIELD

ZAVEN V. SINANIAN

 

Party Details

Plaintiff

MIRZAKHANYAN VAZGEN

Defendants

BATES TERRI

DOES 1 THROUGH 50

GLOBAL CAPITAL INTRODUCTIONS LLC

JV & T CAPITAL LLC

MERCERI MICHELLE

MFI SOFTWARE CORPORATION

SETYAN MONIKA M.

SRF GROUP INC.

SWENSON L. KEN JR.

Attorney/Law Firm Details

Plaintiff Attorneys

FOSTER RICHARD M.

LIM JULIE C. ESQ.

Defendant Attorneys

BADKOUBEHI KEVIN M. ESQ.

HILL BENJAMIN M.

SADIGH JAMES ESQ.

 

Court Documents

NOTICE OF CASE MANAGEMENT CONFERENCE

8/23/2010: NOTICE OF CASE MANAGEMENT CONFERENCE

PROOF OF SERVICE SUMMONS

9/14/2010: PROOF OF SERVICE SUMMONS

PROOF OF SERVICE SUMMONS

9/14/2010: PROOF OF SERVICE SUMMONS

PROOF OF SERVICE SUMMONS

11/2/2010: PROOF OF SERVICE SUMMONS

NOTICE OF RULING

12/23/2010: NOTICE OF RULING

REQUEST FOR ENTRY OF DEFAULT

1/31/2011: REQUEST FOR ENTRY OF DEFAULT

REQUEST FOR ENTRY OF DEFAULT

1/31/2011: REQUEST FOR ENTRY OF DEFAULT

REQUEST FOR ENTRY OF DEFAULT

1/31/2011: REQUEST FOR ENTRY OF DEFAULT

Minute Order

5/18/2011: Minute Order

PROOF OF SERVICE-OF SUMMONS

6/16/2011: PROOF OF SERVICE-OF SUMMONS

Unknown

7/19/2011: Unknown

Minute Order

9/1/2011: Minute Order

NOTICE OF CASE REASSIGNMENT AND OF ORDER FOR PLAINTIFF TO GIVE NOTICE

12/22/2011: NOTICE OF CASE REASSIGNMENT AND OF ORDER FOR PLAINTIFF TO GIVE NOTICE

PLAINTIFF VAZGEN MIRZAKHANYAN'S STATUS CONFERENCE REPORT

4/27/2012: PLAINTIFF VAZGEN MIRZAKHANYAN'S STATUS CONFERENCE REPORT

MOT1ON IN LIMINE NO.3 BY PLAINTIFF FOR TERMINATING SANCTIONS AGAINST DEFENDANT MONICA M. SETYAN DUE TO HER REFUSAL TO BE DEPOSED AND FMSCO VERY ABUSE

11/21/2012: MOT1ON IN LIMINE NO.3 BY PLAINTIFF FOR TERMINATING SANCTIONS AGAINST DEFENDANT MONICA M. SETYAN DUE TO HER REFUSAL TO BE DEPOSED AND FMSCO VERY ABUSE

NOTICE OF CASE REASSIGNMENT AND OF ORDER FOR PLAINTIFF TO GIVE NOTICE

3/14/2013: NOTICE OF CASE REASSIGNMENT AND OF ORDER FOR PLAINTIFF TO GIVE NOTICE

Minute Order

5/22/2013: Minute Order

APPLICATION AND ORDER FOR APPEARANCE AND EXAMINATION OF JUDGMENT

5/23/2016: APPLICATION AND ORDER FOR APPEARANCE AND EXAMINATION OF JUDGMENT

71 More Documents Available

 

Docket Entries

  • 05/06/2015
  • Writ issued (ISSUED-LA COUNTY-MAILED OUT-AB; ) Filed by Attorney for Creditor

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  • 05/06/2015
  • Abstract of Judgment (RETURNED BY MAIL ) Filed by Attorney for Creditor

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  • 04/24/2015
  • Affidavit - misc Filed by Attorney for Creditor

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  • 04/24/2015
  • Cost Bill After Judgment (TOTAL $50.00 cREDIT $0.00 INTEREST $22,429.72 ) Filed by Attorney for Pltf/Petnr

    Read MoreRead Less
  • 04/24/2015
  • Appl for Writ of Possession (C&D) Filed by Attorney for Pltf/Petnr

    Read MoreRead Less
  • 04/14/2014
  • Substitution of Attorney Filed by Attorney for Plaintiff/Petitioner

    Read MoreRead Less
  • 10/08/2013
  • Notice of Reassignment and Order Filed by Clerk

    Read MoreRead Less
  • 09/17/2013
  • Writ-Other Issued (REJECTED: MEMO AND WRIT AMOUNTS DO NOT MATCH, ATTORNEY AND ATTY'S ADDRESS DO NOT MATCH RETURNED BY MAIL ) Filed by Clerk

    Read MoreRead Less
  • 09/03/2013
  • Abstract of Judgment (ABSTRACT REJECTED--$25 FEE REQUIRE D. NO MEMO OF COSTS FILED. SENT BY MAIL. ) Filed by Clerk

    Read MoreRead Less
  • 06/10/2013
  • Proof of Service (3 ) Filed by Attorney for Plaintiff/Petitioner

    Read MoreRead Less
39 More Docket Entries
  • 12/15/2010
  • Statement-Case Management Filed by Attorney for Plaintiff/Petitioner

    Read MoreRead Less
  • 12/14/2010
  • Statement-Case Management Filed by Attorney for Plaintiff/Petitioner

    Read MoreRead Less
  • 12/09/2010
  • Statement-Case Management Filed by Attorney for Defendant/Respondent

    Read MoreRead Less
  • 11/09/2010
  • Answer (****ANSWER STRICKEN PER COURT **** **********ORDER 7/19/11*********** ) Filed by Attorney for Defendant/Respondent

    Read MoreRead Less
  • 11/02/2010
  • Proof-Service/Summons Filed by Attorney for Plaintiff/Petitioner

    Read MoreRead Less
  • 09/21/2010
  • Proof-Service/Summons Filed by Attorney for Plaintiff/Petitioner

    Read MoreRead Less
  • 09/14/2010
  • Proof-Service/Summons Filed by Attorney for Plaintiff/Petitioner

    Read MoreRead Less
  • 08/23/2010
  • Notice-Case Management Conference Filed by Clerk

    Read MoreRead Less
  • 08/23/2010
  • OSC-Failure to File Proof of Serv Filed by Clerk

    Read MoreRead Less
  • 08/02/2010
  • Complaint

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Tentative Rulings

Case Number: BC442906    Hearing Date: July 13, 2020    Dept: 34

SUBJECT: (1) Motion to Compel Deposition Attendance and Production of Documents

Moving Party: Defendant Monika Setyan

Resp. Party: None

(2) Motion to Compel Deposition Attendance and Production of Documents

Moving Party: Defendant Monika Setyan

Resp. Party: None

The motion to compel deposition attendance and production of documents is GRANTED.

The Court GRANTS Defendant’s request for sanctions against Volodya Adanyan and his counsel Julie C. Lim in the amount of $1,478.50.

The motion to be relieved as counsel is DENIED.

BACKGROUND:

On August 2, 2010, Plaintiff Vazgen Mirzakhanyan commenced this action against JV & T Capital, LLC, Global Capital Introductions, LLC, MFI Software Corporation, SRF Group, Inc., Michelle Merceri, Terri Bates, L. Ken Swenson, Jr., and Monika M. Setyan for (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) fraud and intentional deceit; (4) money had and received; and (5) negligent misrepresentation.

On May 22, 2013, Defendant Monika M. Setyan and Plaintiff entered into a stipulation for entry of judgment.

On May 23, 2013, the Court entered judgment in favor of Plaintiff against Defendant Monika M. Setyan for $119,849.00. (05/23/13 Court Judgment).

On July 18, 2019, Creditor Assignee Volodya Adanyan filed a notice of assignment of judgment, stating that Plaintiff assigned his interest in the within Judgment to Creditor Assignee Volodya Adanyan.

On September 4, 2019, a writ of execution was issued where Volodya Adanyan is the assignee of record and the judgment debtor is Monika M. Setyan.

On November 1, 2019, the Court granted Defendant Monika M. Setyan’s motion to set aside/vacate judgment.

On March 20, 2020, Defendant Monika M. Setyan filed the instant motion to compel attendance at deposition and production of documents.

On April 8, 2020, Julie C. Lim, counsel for Volodya Adanyan, filed the instant motion to be relieved as counsel.

ANALYSIS:

I. Motion to Compel Deposition Attendance and Production of Documents

A. Relevant Law

The service of a deposition notice under Code of Civil Procedure section 2025.240 is effective to require any deponent who is a party to the action to attend and testify. (Code Civ. Proc., § 2025.280, subd. (a).) Code of Civil Procedure section 2025.450, subdivision (a) states in relevant part:

“If, after service of a deposition notice, a party to the action or an officer, director, managing agent, or employee of a party, or a person designated by an organization that is a party under Section 2025.230, without having served a valid objection under Section 2025.410, fails to appear for examination, or to proceed with it, or to produce for inspection any document, electronically stored information, or tangible thing described in the deposition notice, the party giving the notice may move for an order compelling the deponent's attendance and testimony, and the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.”

A motion to compel deposition shall be accompanied by a meet and confer declaration under Section 2016.040 or, when the deponent fails to attend the deposition and produce the documents, electronically stores information, or things described in the deposition notice, by a declaration stating that the petitioner has contacted the deponent to inquire about the nonappearance. (Code Civ. Proc., § 2025.450, subd. (b)(2).) “Implicit in the requirement that counsel contact the deponent to inquire about the nonappearance is a requirement that counsel listen to the reasons offered and make a good faith attempt to resolve the issue,” including by rescheduling. (Leko v. Cornerstone Bldg. Inspection Serv. (2001) 86 Cal. App. 4th 1109, 1124.)

A court shall impose monetary sanctions if the motion to compel is granted, unless the one subject to sanction acted with substantial justification or other circumstances would make the imposition of the sanction unjust. (Code Civ. Proc., § 2025.450, subd. (g)(1).)

B. Discussion

1. Deposition Attendance

Defendant moves to compel “Volodya Adanyan to attend his deposition and to produce, without objection, all of the documents set forth in the third amended notice of deposition.” (Motion, p. 2:6-10.) Defendant maintains that “even after the dates were repeated [sic] modified at the request of the deponent’s counsel, Ms. Lim, the deponent and Ms. Lim failed and refused to appear for two duly noticed depositions, including the Third Amended Notice of Deposition.” (Id. at p. 11:5-9.)

Specifically, after the deponent did not appear on January 31, 2020, Defendant asserts that her counsel “did contact the deponent’s attorney to ascertain the reasons for not appearing.” (Id. at p. 10:19-20, pp. 4:9-5:24.) Defendant maintains that after her counsel contacted the deponent’s counsel, the deponent’s counsel “stated that she had forgotten and asked [Defendant’s counsel] to postpone the deposition to March 13, 2020 giving her enough time to substitute herself out of the matter.” (Id. at p. 6:17-20.) However, Defendant asserts that “neither Ms. Lim nor the deponent appeared on that date.” (Id. at p. 6:22-23.)

This motion is unopposed and Defendant has demonstrated that after the service of the third amended deposition notice, Volodya Adanyan failed to serve a valid objection, failed to appear at the deposition, and failed to produce the documents requested in the deposition notice. Accordingly, the Court GRANTS Defendant’s motion to compel deposition attendance and production of documents.

2. Sanctions

Defendant seeks monetary sanctions against Volodya Adanyan and his counsel, Julie C. Lim, “in the sum of 8.5 hrs. x $500.00 per hour = $4,250.00. plus $60.00 motion fee plus $418.50 court reporter fee, or a total of $4,718.50.” (Motion, pp. 2:10-12, p. 7:14-16.) Defendant asserts that “if no reply were filed, this figure should be reduced by $750.00.” (Id. at p. 7:16-17.)

Defendant’s counsel explains that his hourly rate is $500.00 per hour and that he spent approximately 1 hour when the deponent did not appear pursuant to the second amended deposition notice; 1 hour when the deponent did not appear pursuant to the third amended deposition notice; anticipates spending 2 hours attending the hearing; and anticipates spending an additional 1.5 hours to prepare a reply. (Id. at p. 7:7-14.)

The Court finds that Defendant is entitled to seek monetary sanctions against Volodya Adanyan and his counsel Julie C. Lim for two hours of attorney time @ $500.00/hour, plus $60.00 motion fee, plus the $418.50 court reporter fee, for a total amount of $1,478.50.

II. Motion to be Relieved as Counsel

An attorney moving to be relieved as counsel under California Code of Civil Procedure section 284(2) must meet the requirements set out in California Rules of Court, rule 3.1362. To comply with rule 3.1362, the moving party must submit the following forms: (1) Notice of Motion and Motion to be Relieved as Counsel; (2) Declaration in Support of Attorney's Motion to be Relieved as Counsel; and (3) Order Granting Attorney's Motion to be Relieved as Counsel. (Cal. Rules of Court, rule 3.1362(a), (c), (e).) The moving party must serve the aforementioned forms on the client and all other parties who have appeared in the case. (Cal. Rules of Court, rule 3.1362(d).) Further, when the client is served by mail, the attorney's declaration must show that the client's address was confirmed within the last 30 days and how it was confirmed. (Id.) Absent a showing of resulting prejudice, an attorney’s request for withdrawal should be granted. (People v. Prince (1968) 268 Cal.App.2d 398, 406.)

Counsel’s Motion complies with some of the requirements of California Rules of Court, Rule 3.1362, in that Counsel provided a notice of motion and motion to be relieved as counsel; order granting attorney’s motion to be relieved as counsel; and declaration in support of the motions to be relieved as counsel. Additionally, the declaration states that Volodya Adanyan was served by mail the copies of the motion and supporting documents, and Counsel confirmed by telephone that her client’s address is current. (See Declaration, Nos. 3(a)(2), 3(b)(1)(b).)

However, Counsel filed a proof of service that demonstrating she only served her own client, Volodva Adanyan, with the notice of motion, motion, and supporting declaration. Because Counsel has not served all other parties who have appeared in the case, namely Plaintiff Vazgen Mirzakhanyan and Defendant Monika M. Setyan, the motion to be relieved as counsel is DENIED without prejudice to counsel refiling this motion.

Case Number: BC442906    Hearing Date: November 01, 2019    Dept: 34

SUBJECT: Motion to Set Aside/Vacate Judgment

Moving Party: Defendant Monika M. Setyan

Resp. Party:  Judgment Creditor Assignee Volodya Adanyan

The Court SUSTAINS the objections to the declaration Vahan Setyan.

The Court SUSTAINS Objection 1 and OVERRULES Objections 2 and 3 to the declaration of Monika Setyan.

The Court OVERRULES the objections to the declaration of James K. Sadigh.

BACKGROUND:

ANALYSIS:

A. Evidentiary Objections

Creditor Assignee Volodya Adanyan submits three objections to the declaration of Monika Setyan; two objections to the declaration of Vahan Setyan; and four objections to the declaration of James K. Sadigh.

The Court SUSTAINS the objections to the declaration Vahan Setyan.

The Court SUSTAINS Objection 1 and OVERRULES Objections 2 and 3 to the declaration of Monika Setyan.

The Court OVERRULES the objections to the declaration of James K. Sadigh.

B. Relevant Law

Code of Civil Procedure section 473(d) provides:

The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.” (Code of Civ. Proc., §473(d).)

“A judgment that is void on its face may be set aside at any time.” (Manson, Iver & York v. Black (2009) 176 Cal. App. 4th 36, 42.) “A judgment or order is said to be void on its face when the invalidity is apparent upon inspection of the judgment-roll.” (Id. at p. 43.)

However, “[a] trial court has no statutory power under section 473, subdivision (d) to set aside a judgment that is not void: Once six months have elapsed since the entry of a judgment, ‘a trial court may grant a motion to set aside that judgment as void only if the judgment is void on its face.’” (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495-496 [citing Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1441].)

C. Discussion

Defendant explains that “with no advance notice of default as mandated by the stipulation and without notice to defendant or her attorney, Plaintiff went in ex parte application and had a large judgment entered based on a stipulation for judgment which Defendant acknowledges she executed.” (Motion, p. 8:7-9.) Defendant maintains that “despite the fact that the total payments were only $4,000.00, the stipulation provided that judgment could be entered for ‘all amounts as prayed as set forth in plaintiff’s complaint.’” (Id. at p. 8:22-23.)

Defendant first argues that this judgment should be deemed void because “the court’s judgment enforces what is clearly a ‘penalty’ . . . and as a matter of public policy must therefore be vacated and set aside pursuant to C.C.P., Section 473(d) as a matter of law.” (Id. at p. 10:23-25.) Defendant argues that “the penalty for a single late or nonpayment of the $500 installments was essentially $100,000 or more” and “the judgment this court entered bore no relationship to the total of $4,000.00 that was due under the terms of the stipulation.” (Id. at p. 8:25-27.) Defendant cites to Viatech International, Inc. v. Sporn (2017) 16 Cal.App.5th 796, 807 for the proposition that “a stipulation for judgment which essentially contained a provision allowing entry of a judgment that was approximately 4 times the payments that were due in the event of a default” is considered an unenforceable penalty that is void and can be set aside any time pursuant to Code of Civil Procedure section 473. (Id. at p. 9:3-15.)

Next, Defendant asserts that “the ex parte order and judgment were no less a penalty than would have been an award of sanctions by the court, and doing so via an ex parte application was void as a matter of law” and the “lack of notice of either the default or the ex parte application itself violated due process.” (Id. at p. 12:7-10.)

Lastly, Defendant argues that this judgment should be set aside on equitable grounds because “Defendant was given no notice of the ex parte application and counsel for defendant also disputes that he was ever given the 5 day grace period notice.” (Id. at p. 14:15-19.) Defendant maintains that “relief has been sought within a reasonable time after discovery of the judgment, i.e., shortly after defendant learned of it through attempting to refinance a property.” (Id. at p. 14:20-21.) Defendant argues that “the extrinsic fraud and/or mistake (which have broad definitions) are established in the attached declarations.” (Id. at p. 14:21-22.)

In opposition, Plaintiff argues that Defendant received notice of the ex parte application which is shown by “the declaration of Attorney James K. Nobles [which] sets forth his sworn statement that ex parte notice was given to Attorney James K. Sadigh on May 21, 2013” and shown by Attorney Sadigh’s response to Attorney Nobles when he “offered a new and different payment plan, on the day prior to the ex parte application.” (Id. at p. 5:10-15.) Plaintiff asserts that Defendant was also on constructive notice when an abstract of judgment was recorded on July 2, 2015 in the Office of the County Recorder County of Los Angeles. (Id. at p. 6:3-9 [citing Lim Decl., Ex. 3].)

Plaintiff also argues that the defense of Section 1671, of liquidated damages and unenforceable penalties, does not arise in this case because this case was not a pure breach of contract case, but rather a case based upon Defendant’s fraudulent conduct. (Id. at p. 3:16-22.) Plaintiff explains that “at the time of the events, Defendant is and was a licensed real estate broker, allowed to engaged organizing loans for borrowers” and “Plaintiff was seeking funding to open a Quiznos sandwich business and was convinced by Setyan to advance a $4,000 application fee and $90,000 in “consideration funds.’” Plaintiff argues that “Plaintiff was defrauded out of $94,000 by Monika Setyan acting in her capacity as a licensed broker” by reasonably relying upon Defendant’s false representations. (Id. at pp. 2:23-3:6.)  Plaintiff asserts that in this case, “the application of Civil Code section 1671 effectuates a forfeiture for Plaintiff, not for Defendant Setyan, [which is] not intended by the Legislature.” (Id. at p. 3:22-23.)

Plaintiff maintains that “Defendant failed to submit any ‘supporting facts’ showing that the challenged stipulation provisions were ‘unreasonable under the circumstances existing at the time the contract was made.” (Id. at p. 3:25-27.) Plaintiff asserts that “no amount of factual support or legal analysis was offered by Defendant to support the conclusion that Defendant Setyan should be excused from her fraudulent conduct and that Plaintiff should suffer a forfeiture by the loss of his $94,000.” (Id. at p. 4:7-9.)

An inspection of the judgment roll in this case does not establish that the judgment was invalid based on lack of notice. Judgment was entered pursuant to the terms of the stipulated judgment after the Court considered the ex parte application and its supporting documents.

Paragraph 4 of the Stipulated Judgment states:

“In the event defendant is mom than five (5) days late in payment of any of the payments required under this Stipulation, plaintiff shall notify defendant by fax as follows:

James K. Sadigh

The Law Offices of James K Sadigh

468 N. Camden Dr., 3rd Floor

Beverly Hills, CA 90210

Facsimile No: (310) 860.7760

If the defendant does not make the required payment within five (5) days following the date of said notice by plaintiff, plaintiff shall be entitled to immediately apply to the Court having proper jurisdiction by Ex Pane Application for Judgment herein. The defendant expressly waives any and all rights to a noticed motion and/or right to a hearing on the entry of judgment pursuant to this stipulation.” (Stipulation for Entry of Judgment, ¶ 4.)

The ex parte application states:

“Notice of the within Ex Parte Application was given on May 21, 2013 at 9:59 a.m. by counsel for Plaintiff Vazgen Mirzakhanyan to counsel for Defendant Monika M. Setyan, by way of facsimile. (Declaration of James E. Nobles). Pursuant to the Stipulation for Entry of Judgment (Exhibit "A"¶ [sic]), pursuant to which the within Ex Parte Application is brought, no notice of the within hearing is required (Exh. A ¶4).” (05/22/2013 Ex Parte Application, p. 3:4-8.)

Attached to the ex parte application to enter judgment pursuant to the stipulation, the declaration by James E. Nobles, Esq. states:

· “Neither did the defendant pay the down payment of $1000 nor any of the monthly installments in March, April or May. After telephone calls and faxes to defendant's counsel, defendant's counsel responding by saying that his client was having financial problems but that she would pay. To this day, defendant has failed to make any of the payments under the stipulation and after notice to her attorney; she has wholly, without mitigation, defaulted on the Stipulation for Entry of Judgment.” (05/22/13 Ex Parte Application, Nobles Decl., ¶ 5.)

· “On Tuesday, May 21,2013, only after notice of this ex parte action, defendant emailed plaintiff's counsel suggesting other payment terms. Plaintiff's counsel has rejected any additional terms and has elected to File this Stipulation for Entry of Judgment and seek judgment against defendant pursuant to the terms of the Stipulation for Entry of Judgment.” (05/22/13 Ex Parte Application, Nobles Decl., ¶ 6.)

The Court finds that the ex parte application was granted after proper notice was given to Defendant, pursuant to the terms of the stipulated settlement agreement. (See 05/22/13 Ex Parte Application, Nobles Decl., ¶¶ 5-6; Stipulation for Entry of Judgment, ¶ 4.) The Court finds that the judgment is not void for lack of notice.

However, the Court finds that the judgment is invalid based on the inclusion of an unlawful penalty in the terms of the stipulated judgment.

Under Civil Code section 1671, subdivision (b), “a provision in a contract liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the contract was made.” A “liquidated damages clause will generally be considered unreasonable, and hence unenforceable[,] under [Civil Code] section 1671(b), if it bears no reasonable relationship to the range of actual damages that the parties could have anticipated would flow from a breach.” (Ridgley v. Topa Thrift & Loan Assn. (1998) 17 Cal.4th 970, 977; Viatech International, Inc. v. Sporn (2017) 16 Cal.App.5th 796, 807-808.) In the absence of such relationship, a contractual clause purporting to predetermine damages must be construed as a penalty. (Vitatech, 16 Cal.App.5th at p. 805–806.)

In Viatech, the plaintiff sued the defendants for breach of contract, alleging defendants failed to pay $166,372.14 for various products the plaintiff manufactured for the defendants. (Id. at p. 810.) The parties agreed to a stipulated entry of judgment “‘in the full prayer of the Complaint’ and Viatech agreed to ‘forbear from the filing [of the stipulation for entry of judgment and to] accept, as full settlement of its claims . . . the principal sum of Seventy-Five Thousand Dollars ($75,000), payable in one (1) payment on or before June 5, 2015.’” (Ibid.)

Viatech held that a provision authorizing the entry of a $303,000.00 judgment upon failure to timely pay $75,000.00 was an unenforceable penalty provision because no reasonable relationship existed between the damages that could have been anticipated based on their failure to pay the $75,000 settlement amount and the stipulated judgment for more than $300,000.00. (Ibid.) The court explained that “the parties made no effort to anticipate the damages that might flow from [the defendants’] failure to pay the settlement amount” but “instead, the parties simply selected the amount Viatech had sought as damages in the underlying lawsuit.” (Id. at pp. 810-811.) The court provided that “the record, however, lack[ed] any evidence suggesting Vitatech was likely to recover all of the damages it sought if it proceeded to trial.” (Id. at 811.) The court was unable to “conceive of any meaningful relationship between [defendants’] failure to pay the amount Viatech agreed to accept in settlement of its disputed claims and a judgment that [was] four times that amount.” (Ibid.) The court explained that “the stipulation for entry of judgment merely used the amount of damages Viatech alleged in the complaint with no inquiry or evidence to support it.” (Id. at p. 812.)

Although Viatech is based on examining a breach of contract case, the holding in Viatech is not explicitly limited to cases that only include breach of contract claims. Despite Plaintiff’s argument that the holding does not apply to this case because there is a fraud cause of action present that was not present in Viatech, the relative inquiry is whether a reasonable relationship existed between the damages that could have been anticipated based on Defendant’s failure to pay the settlement amount of $4,000.00 and the stipulated judgment amount of $94,000.00. (See Viatech, 16 Cal.App.5th at 807-808.)

Here, like in Viatech, the parties made no effort to anticipate the damages that might flow from Defendant’s failure to pay the $4,000.00, but instead, the parties simply selected the amount of $94,000.00, which was the amount Plaintiff sought as damages in this lawsuit. (See id. at pp. 810-811; see Complaint, Prayer for Relief, pp. 12:19-14:1.)  The stipulation for entry of judgment amount of $94,000.00 is the same amount of damages Plaintiff alleged in the complaint.  No evidence has been presented to the Court to support that the $94,000.00 due in the event of the missed payments of $4,000.00 bears any reasonable relationship to the range of actual damages that the parties could have anticipated from the breach of the stipulated settlement agreement. The Court finds that Defendant has shown that there is an unlawful penalty, making the judgment void.

The Court GRANTS Defendant’s motion to set aside the judgment.