Traci & Marx Co. v. Legal Options, Inc.

23 Cal. Rptr. 3d 685, 126 Cal. App. 4th 155, 2005 Daily Journal DAR 1148, 2005 Cal. Daily Op. Serv. 896, 2005 Cal. App. LEXIS 110
CourtCalifornia Court of Appeal
DecidedJanuary 28, 2005
DocketB168877
StatusPublished
Cited by7 cases

This text of 23 Cal. Rptr. 3d 685 (Traci & Marx Co. v. Legal Options, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Traci & Marx Co. v. Legal Options, Inc., 23 Cal. Rptr. 3d 685, 126 Cal. App. 4th 155, 2005 Daily Journal DAR 1148, 2005 Cal. Daily Op. Serv. 896, 2005 Cal. App. LEXIS 110 (Cal. Ct. App. 2005).

Opinions

Opinion

ARMSTRONG, J.

Plaintiff Traci & Marx Co. appeals the grant of the motion of defendants Legal Options, Inc., and Stuart Grant to vacate the sister state default judgment obtained by plaintiff in Ohio. We conclude that the trial court erred in granting the motion, and so reverse the judgment.

FACTS1

Plaintiffs sued defendants in the Court of Common Pleas for Cuyahoga County, Ohio for fraudulent inducement to enter contract, bad faith, negligence, and fraud, and for violations of the Ohio Consumer Sales Practices Act, the Ohio Deceptive Trade Practices Act, and the Ohio Corrupt Activity Act. Their prayer for relief requested, among other things, “compensatory damages in excess of $25,000” and “punitive damages in excess of $25,000.”2 Defendants did not answer. The Ohio court conducted a “default hearing” on September 20, 2001, after which it granted plaintiff judgment against defendants in the amount of $25,890 as compensatory damages and $130,000 as punitive damages (the Ohio Judgment). On December 22, 2002, pursuant to the Sister State Money-Judgments Act (Code Civ. Proc., § 1710.10 et seq.), the Superior Court for Los Angeles County ordered entry of the Ohio Judgment in the amount of $171,793.50, representing the principal amount of the Ohio Judgment, along with accrued interest.

[158]*158On January 17, 2003, defendants filed a motion to vacate sister state default judgment, seeking to collaterally attack the Ohio Judgment on three separate bases: Lack of personal jurisdiction due to failure to serve defendants in the underlying action; lack of subject matter jurisdiction due to a forum selection clause in the underlying contract; and unenforceability of the Ohio Judgment because the damages awarded exceeded those sought in the complaint.

The trial court held an evidentiary hearing on defendants’ motion to vacate. The court found that defendants were properly served in the Ohio action; that the forum selection clause of the underlying contract did not divest the Ohio court of subject matter jurisdiction; and that “the sums set forth in the [Ohio] default judgment exceeded those which could have been awarded. Since this Court has no authority to modify the Ohio Judgment, the motion to vacate the entry of the sister state judgment must be, and hereby is, granted.” Thus, the vacation of the judgment was based on the trial court’s conclusion that the Ohio Judgment was in excess of the jurisdiction of the Ohio court in which it was rendered, because the damages awarded exceeded the prayer for relief in plaintiff’s complaint. Plaintiff appeals this latter ruling.

DISCUSSION

We begin our analysis with the observation that “ ‘California must, regardless of policy objections, recognize the judgment of another state as res judicata, and this is so even though the action or proceeding which resulted in the judgment could not have been brought under the law or policy of California.’ ” (Silbrico Corp. v. Raanan (1985) 170 Cal.App.3d 202, 207 [216 Cal.Rptr. 201], quoting World Wide Imports, Inc. v. Bartel (1983) 145 Cal.App.3d 1006, 1011 [193 Cal.Rptr. 830].)

“[A] sister state money judgment entered pursuant to the provisions of the Uniform Act may be vacated in California only when the statutory ground or grounds therefor have been established. Section 1710.40 provides in relevant part that ‘A judgment entered pursuant to this chapter may be vacated on any ground which would be a defense to an action in this state on the sister state judgment.’ In elaborating on the defense available under [Code Civ. Proc.] section 1710.40, the Law Revision Commission makes the following comment: ‘Common defenses to enforcement of a sister state judgment include the following: the judgment is not final and unconditional (where finality means that no further action by the court rendering the judgment is necessary to resolve the matter litigated); the judgment was obtained by extrinsic fraud; the judgment was rendered in excess of jurisdiction; the judgment is not enforceable in the state of rendition; the plaintiff is guilty of misconduct; the judgment has already been paid; suit on the judgment is barred by the statute [159]*159of limitations in the state where enforcement is sought.’ (19A West’s Ann. Codes (1982) p. 694; accord: 5 Witkin, Cal. Procedure (2d ed. 1971) Enforcement of Judgment, §§ 194-195, pp. 3549-3550; Rest. 2d Conf. of Laws, §§ 103-121.)” (World Wide Imports, Inc. v. Bartel, supra, 145 Cal.App.3d at pp. 1009-1010.)

Ohio law, like California law, limits a default judgment to the amount requested in the complaint or demand for judgment. (Ohio Civ.R. 54(C); Code Civ. Proc., § 580, subd. (a).) “A judgment by default shall not be different in kind from or exceed in amount that prayed for in the demand for judgment.” (Ohio Civ.R. 54(C); see also Raimonde v. Van Vlerah (1975) 42 Ohio St.2d 21, 27 [325 N.E.2d 544] [“In Ohio, a party is not limited to the relief claimed in the complaint, except when judgment by default is entered or when a judgment for money is sought and awarded”], italics added.) As plaintiff notes, Ohio Civil Rule 54(C) was amended in 1994 to remove the second instance when relief is limited to the amount claimed in the complaint, that is, when a judgment for money is sought. Current Ohio law continues to limit the relief to that claimed in the complaint when the judgment is by default. The trial court below simply ruled that a default judgment for $25,890 in compensatory damages exceeded the requested relief of “in excess of $25,000” in compensatory damages, and the award of $130,000 in punitive damages exceeded the prayer of “in excess of $25,000” in punitive damages, rendering the judgment beyond the jurisdiction of the court. Contrary to plaintiff’s argument, the trial court came to this conclusion not as a result of its reading or misreading of Ohio Civil Rule 54(C) or due to “the fact that the Appellant did not ‘prove up’ its prayer to the amount of damages ultimately awarded by the Ohio Court,” but because the court concluded that, in the absence of Ohio law, the California Supreme Court case of Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489 [165 Cal.Rptr. 825, 612 P.2d 915] was dispositive.

In Becker v. S.P.V. Construction Co., supra, 27 Cal.3d 489, plaintiff’s complaint alleged breach of contract and fraud, and sought damages “in excess of $20,000 ... or according to proof,” punitive damages of $100,000, and costs. A default judgment was entered for $26,457.50 in compensatory damages and $2,500 in attorney fees and costs. The appellants sought to collaterally attack the judgment as void on its face, because it granted relief which the court had no power to grant. The appellants maintained that the judgment violated Code of Civil Procedure section 580, which, like Ohio Civil Rule 54(C), requires that “[t]he relief granted to the plaintiff, if there be no answer, cannot exceed that which he shall have demanded in his complaint. . . .” They contended that a compensatory damage award “in excess of $20,000—the largest amount specifically requested in the complaint”— violated the statute. The appellants made the common sense argument which plaintiffs here propose, that “the prayer for compensatory damages ‘in [160]

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Traci & Marx Co. v. Legal Options, Inc.
23 Cal. Rptr. 3d 685 (California Court of Appeal, 2005)

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23 Cal. Rptr. 3d 685, 126 Cal. App. 4th 155, 2005 Daily Journal DAR 1148, 2005 Cal. Daily Op. Serv. 896, 2005 Cal. App. LEXIS 110, Counsel Stack Legal Research, https://law.counselstack.com/opinion/traci-marx-co-v-legal-options-inc-calctapp-2005.