WELL FORTUNE INTERNATIONAL INC VS BLAINE GRAY ET AL

Tentative Rulings

Case Number: ****8378    Hearing Date: April 16, 2021    Dept: 36

*COUNSEL – YOU CANNOT SUBMIT ON THE TENTATIVE PRIOR TO THE HEARING* 

Superior Court of California

County of Los Angeles

Department 36

Plaintiff’s application for default judgment is denied without prejudice. OSC is set for May 28, 2021. New papers are to be filed within 10 days of the hearing.

Legal Standard

A party seeking a default judgment on declarations must use mandatory Request for Entry of Default (Application to Enter Default) (form CIV-100). (California Rules of Court Rule 3.1800.) Per Rule 3.1800(a), a party seeking a default must file various documents with the court including: a brief summary of the case identifying the parties and the nature of plaintiff's claim; declarations or other admissible evidence in support of the judgment requested; interest computations as necessary; a memorandum of costs and disbursements; a declaration of nonmilitary status for each defendant against whom judgment is sought; a proposed form of judgment; a dismissal of all parties against whom judgment is not sought or an application for separate judgment against specified parties under Code of Civil Procedure section 579, supported by a showing of grounds for each judgment; exhibits as necessary; and a request for attorney fees if allowed by statute or by the agreement of the parties. The court must deny a request for default judgment when the party seeking default judgment has not filed the required documents.

California Rules of Court, Rule 3.1800

Plaintiff has provided most documents in support of default judgment, but to obtain default judgment must submit further exhibits, as discussed below.

Breach of Contract; Individual Liability

“[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.” (Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1244.) Judgment by default confesses the material facts properly pleaded by the plaintiff in a complaint, but not contentions, deductions, or conclusions of fact or law. (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 281.)

Plaintiff Well Fortune International, Inc. alleges having entered into agreements with Defendants Gray and LA Auto Deals 4 Less, Inc. (Compl. ¶ 9.) The agreements were for Plaintiff to purchase (1) ten 2016 Ford Mustang Ecoboost Fastbacks, entered into on June 2, 2015; (2) one 2015 Mercedes Benz GL 45, entered into on January 26, 2015; and (3) one 2016 Land Rover Range Rover HSE, entered into on September 17, 2015. (Id.)

Plaintiff alleges having performed under the agreements. For the Ford Mustangs, Plaintiff paid a deposit of $20,000. (Compl. ¶ 11.) For the Mercedes Benz, Plaintiff paid the full purchase price of $85,140. (Id. ¶ 10.) For the Land Rover, Plaintiff paid the full purchase price of $127,087. (Id. ¶ 12.)

Plaintiff alleges Defendants breached, because Defendants failed to delivery any of the Ford Mustangs or the Mercedes Benz. (Compl ¶¶ 13-14.) Plaintiffs did receive the Land Rover, but Defendants failed to deliver title to the vehicle, rendering it useless to Plaintiff who has kept the vehicle in storage. (Id.) The dates of breach have not been alleged.

Plaintiff alleges damages in the amounts paid to Defendants alleged above, in a total sum of $232,227. (Id. ¶ 15.)

The alleged contracts are attached to the Brief in Support of Default Judgment. They are authenticated by Plaintiff’s declarant Weidong Wang. (See Wang Decl. ¶¶ 4-6.)

The contracts are unsigned by either a person on Plaintiff’s behalf, or a person on Defendants’ behalf, though lines are provided for signatures by both the buyer and seller. (See Brief in Support of Default Judgment, Exhs. A-C.) This is insufficient to show a valid contract, which requires an objective manifestation of mutual assent to the contract. (See, e.g., Ruiz v. California State Automobile Assn. Inter-Insurance Bureau (2013) 222 Cal.App.4th 596, 602.) Nor has Plaintiff otherwise alleged or brought evidence in support as to how Defendants accepted or offered the same contracts.

Last, the court notes the contracts are between Plaintiff and LA Auto Deals 4 Less, Inc., which was voluntarily dismissed from the litigation on January 17, 2019. The alleged liability against Mr. Gray as an individual defendant appears to be solely as an alter ego between himself and LA Auto Deals 4 Less, Inc. California requires for alter ego liability that “(1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow.” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.) The allegations in the Complaint are made on information and belief and thus are insufficient for evidentiary purposes. (See Compl. ¶ 4.) “An affidavit based on ‘information and belief’ is hearsay and must be disregarded [Citations] and it is ‘unavailing for any purpose’ whatsoever [Citations].” (Star Motor Imports, Inc. v. Superior Court (1979) 88 Cal.App.3d 201, 204; Kendall v. Barker (1988) 197 Cal.App.3d 619, 624.) Next, the banking statement provided by Plaintiff displays a wire out appearing to be to LA Auto Deals 4 Less. (See Brief, Exh. D.)

Based on the foregoing, Plaintiff has not stated a claim for breach of contract, or for individual liability of Mr. Gray.

Unjust Enrichment; Individual Liability

California courts do not recognize a cause of action for unjust enrichment. (Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231.) However, courts have construed unjust enrichment claims as quasi-contract claims seeking restitution. (See id. at 231.)

“A cause of action for quasi-contract invokes consideration of equitable principles, rather than of contract. ‘... [It] is an obligation ... created by the law without regard to the intention of the parties, and is designed to restore the aggrieved party to [its] former position by return of the thing or its equivalent in money.’ [Citations.] The doctrine focuses on equitable principles; its key phrase is ‘unjust enrichment,’ which is used to identify the ‘transfer of money or other valuable assets to an individual or a company that is not entitled to them.’” (Welborne v. Ryman-Carroll Foundation (2018) 22 Cal.App.5th 719, 725.) “An individual is required to make restitution if he or she is unjustly enriched at the expense of another. [Citations.] A person is enriched if the person receives a benefit at another’s expense.” (Id.) An action in which a party seeks only money damages is legal in nature, even though equitable principles are to be applied. (Id. at 728, fn. 8.)

Plaintiff alleges that Plaintiff paid to Defendants the sum of $232,227. (Compl. ¶ 19.) Plaintiff alleges that Defendants’ retention of these fund would be unjust, on the facts alleged above. (Id.) The allegations support that the failure to deliver one vehicle for which Plaintiff paid in full, the failure to deliver title to another vehicle for which Plaintiff paid in full, and the failure to deliver any vehicles or refund the money paid toward ten vehicles, would be unjust.

However, again, Plaintiff has not alleged individual liability against Mr. Gray as an individual defendant, for the reasons discussed above. The court notes that proof of all payments suggest payments were made to LA Auto Deals 4 Less. (Brief, Exhs. A-D.)

Conversion

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.) The plaintiff must establish an actual interference with his ownership or right of possession of property, requiring showing “either ownership and the right of possession or actual possession [of the property] at the time of the alleged conversion thereof.” (Sanowicz v. Bacal (2015) 234 Cal.App.4th 1027, 1041 (Sanowicz).) A “mere contractual right of payment, without more, will not suffice” to support a claim for conversion. (Id.)

“Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another and fails to make the payment.” (Sanowicz, 234 Cal.App.4th at 1042.) But “it is not necessary that each coin or bill be earmarked.” (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 209.) “[C]ases recognizing claims for the conversion of money ‘typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others.’” (Voris v. Lampert (2019) 7 Cal.5th 1141, 1152, reh'g denied (Oct. 23, 2019).)

Plaintiff alleges that between January 2015 and October 2015, Plaintiff transmitted $232,227 to Defendants for the purchase of the vehicles described above. (Compl. ¶ 22.) Plaintiff alleges Defendants received the funds without providing consideration to Plaintiff, and refused to return the funds, thus exercising dominion and control over this property of money. However, the foregoing does not sound in circumstances in which there is a specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another, or circumstances that Defendants misappropriated specific funds held for the benefit of others. (Sanowicz, 234 Cal.App.4th at 1042; Voris, 7 Cal.5th at 1152.)

Based on the foregoing, Plaintiff does not state a claim for conversion.

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, except when the debtor is prevented by law, or by the act of the creditor from paying the debt.” (Civ. Code, ; 3287(a).)

Plaintiff alleges entitlement to $129,619.12 in interest. Whether Plaintiff is entitled to interest at the rate of 10% or 7% will depend on whether Plaintiff can state a claim upon any subsequent application for default judgment for breach of contract or unjust enrichment against Defendant Gray. (See Cal. Const. Art 15, ; 1; Civil Code, ; 3289.)

Next, the court is not inclined to award interest for the period in which the action was dismissed based on the authority provided but would accept legal authority in support that Plaintiff is entitled to recover interest during this period on a subsequent default application.

Dated: ____________________________

Gregory Alarcon

Superior Court Judge

Case Number: ****8378    Hearing Date: January 28, 2021    Dept: 36

Superior Court of California

County of Los Angeles

Department 36

The motion to set aside dismissal is granted.

The court sets an Order to Show Cause Re: Default Judgment for 04/16/21.

Legal Standard

A trial court has broad discretion to vacate the judgment and/or the clerk’s entry of default that preceded it. (CCP ; 473.) However, that discretion can be exercised only if the moving party establishes a proper ground for relief, by the proper procedure, and within the time limits. (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495.) A party may seek discretionary or mandatory relief from default under CCP ; 473(b) on grounds of “mistake, inadvertence, surprise or excusable neglect.”

“Because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default.” (Elston v. City of Turlock (1985) 38 Cal.3d 227, 233.) Where the party in default moves promptly to seek relief, and no prejudice to the opposing party will result from setting aside the default and letting the case go to trial on the merits, “very slight evidence will be required to justify a court in setting aside the default.” (Id.)

Discussion

Timely Filing

A motion to set aside must be brought within 6 months; the requirement is jurisdictional. (CCP ; 473(b); Austin v. Los Angeles Unified School Dist. (2016) 244 Cal.App.4th 918, 928; Davis v. Thayer (1980) 113 Cal.App.3d 892, 901 [as used in ; 473(b), “six months” means 182 days].) Plaintiff’s motion was filed on August 28, 2020, 182 days after dismissal entered on February 28, 2020. The motion is thus timely.

Notice

This court previously continued the motion for Plaintiff to provide sufficient notice of the hearing date and location of the motion. Plaintiff on November 3, 2020 then filed a notice of continuance of the hearing date displaying the correct continued hearing date; and when the motion was continued then filed a subsequent notice of the continued hearing date.

Motion to Set Aside Dismissal

Plaintiff Well Fortune International, Inc. moves to set aside dismissal of this action pursuant to Code of Civil Procedure, Section 473(b). Plaintiff asserts entitlement to mandatory relief under Section 473 on grounds of Plaintiff’s Counsel’s declaration attesting to mistake.

The motion is unopposed.

“[W]henever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise or neglect,” relief from dismissal for the attorney’s client is mandatory. (CCP ; 473(b).)

The court ordered this case dismissed on February 28, 2020, on the court’s own motion pursuant to California Rules of Court, Rule 3.110(h) for failure to obtain default judgment within 45 days of the entry of default.

Plaintiff’s Counsel attests that Counsel failed to obtain default judgment within 45 days was a result of Counsel’s mistaken understanding that the most recent entry of default, having been entered on February 6, 2020, allowed Counsel more time to file the default judgment package. (Liu Decl. ¶ 11.)

Plaintiff has now filed default prove-up papers.

Based on the foregoing, Plaintiff’s motion to set aside dismissal is granted.

Dated: ____________________________

Hon. Gregory Alarcon

Superior Court Judge

Case Number: ****8378    Hearing Date: November 03, 2020    Dept: 36

Superior Court of California

County of Los Angeles

Department 36

The hearing on Plaintiff’s Motion to Set Aside Dismissal is continued to 12/13/20.

Plaintiff to file proper notice of this motion and proposed documents in support of default within 10 days.

Timely Filing

A motion to set aside must be brought within 6 months; the requirement is jurisdictional. (CCP ; 473(b); Austin v. Los Angeles Unified School Dist. (2016) 244 Cal.App.4th 918, 928; Davis v. Thayer (1980) 113 Cal.App.3d 892, 901 [as used in ; 473(b), “six months” means 182 days].) Plaintiff’s motion was filed on August 28, 2020, 182 days after dismissal entered on February 28, 2020. The motion is thus timely.

Notice

A Notice of Motion must state the “date, time, and location, if ascertainable, of any scheduled hearing and the name of the hearing judge, if ascertainable.” (Cal. Rules of Court, Rule 3.1110(b)(1).) Plaintiff’s Notice of Motion erroneously states the instant motion to set aside dismissal is to be heard in Department 32 at the Spring Street Courthouse located at 312 Spring Street, Los Angeles, California. As such, Plaintiff’s Notice of Motion does not provide sufficient notice of the hearing date and location of this motion.

In addition, Plaintiff’s Counsel filed a Notice of Lodging on October 29, 2020 stating that the proposed papers have been lodged in support of Plaintiff’s default judgment; these papers have not been filed, as required by Code of Civil Procedure, section 473(b), nor received by lodging. The court notes that the Notice of Lodging likewise indicates the incorrect address and Department for the motion.

The hearing on this motion is continued for Plaintiff to provide proper notice of this motion, and to file the proposed papers in support of default judgment with proper notice thereof.

Dated: ____________________________

Hon. Gregory Alarcon

Superior Court Judge