Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment and order of the Superior Court of Los Angeles County No. BC366180, Conrad R. Aragon, Judge.
Garrett Skelly for Plaintiff and Appellant.
No appearance for Defendants and Respondents.
MANELLA, J.
INTRODUCTION
Appellant Florentina Sambile appeals from a judgment entered in favor of defaulting defendant Zenaida Aguila, and from an order dismissing defaulting defendant Michael Aguila with prejudice. Appellant contends that the trial court erred in entering judgment in favor of defendants who never appeared or sought relief in the action. Appellant also contends that her showing was sufficient to require a judgment in her favor. We agree, and further conclude that the judgment and order are void.
As both defendants bear the same surname, we shall refer to them by their first names to avoid confusion.
BACKGROUND
Appellant filed a complaint against defendants in February 2007 to collect amounts due on a secured promissory note, setting forth three causes of action. The first cause of action alleged that between October and December 2006, appellant sold 42 items of jewelry to defendants, in consideration for which defendants promised to pay a total of $163,150. The complaint further alleged that defendants gave appellant personal checks, but the checks remained uncashed and unpaid, because the account upon which they were drawn had been closed. Copies of 36 checks bearing various dates between September and December 2006 are attached to the complaint as an exhibit.
The first cause of action also alleged that in December 2006, defendants gave appellant a promissory note in the sum of $163,150, and signed a security agreement with the jewelry as collateral. The complaint alleged that defendants failed to pay the note, and that $163,150 remained due and owing.
The note, security agreement and financing statement were signed only by Zenaida.
The second and third causes of action were common counts. The second prayed for the reasonable value of goods sold and delivered to defendants, for which defendants promised to pay the sum of $163,150. The third alleged an account stated in writing, in which defendants agreed they were indebted to appellant in the sum of $163,150.
The fourth cause of action sought claim and delivery. It alleged that appellant sold the jewelry to defendants, who paid with checks written on an account with insufficient funds, that appellant demanded the return of the jewelry, and that defendants refused to do so.
The complaint, summons and application for writ of possession were personally served on each defendant, and proof of service was filed March 1, 2007. On March 27, 2007, appellant obtained an order for the issuance of a writ of possession of the jewelry against defendant Zenaida only. The following month, appellant applied for the entry of default and a court judgment. The clerk entered the defendants’ default April 9, 2007.
The record does not reflect whether the writ ever issued.
Appellant applied for a court default judgment against both defendants. The court denied the application May 11, 2007, without prejudice to renew it upon submission of further evidence. In particular, the court indicated that appellant should present evidence that Michael signed the documents in question, or that he was otherwise liable for the debt, as well as proof of appellant’s attempt to negotiate the checks.
On June 13, 2007, appellant submitted a default “prove-up” application supported by declarations, along with a prepared form judgment naming Zenaida only. In her declaration, appellant attested to the authenticity of the same exhibits as those attached to the complaint. She also stated that she had sold the jewelry listed in the exhibits to defendants, who agreed to pay for them with their personal checks. Appellant alleged that she was unable to cash the checks, because the account upon which they were written had been closed. Appellant stated that defendant Zenaida signed the security agreement and promissory note, which was immediately payable, but failed to pay the sums due under it.
The application included the declaration of Garrett Skelly, appellant’s attorney. Skelly computed the value of his services and expenses to be paid under the terms of the promissory note. He attached to his declaration a copy of his letter to defendants demanding payment of the $163,150, along with copies of certified mail receipts showing delivery on January 18, 2007.
Also included with the application was a request for dismissal of defendant Michael from the action, without prejudice. The clerk did not enter the dismissal.
The trial court considered appellant’s application on the declarations in lieu of personal testimony, as permitted by Code of Civil Procedure section 585, subdivision (d). The court rejected appellant’s request for dismissal of the action as to Michael without prejudice, and entered an order of dismissal with prejudice. As to Zenaida, the court not only denied the application, it entered judgment in her favor and against appellant. Neither defendant had ever appeared in the action, and neither had ever requested relief of any kind.
All further statutory references are to the Code of Civil Procedure, unless otherwise indicated.
The judgment for Zenaida and the order of dismissal were entered June 13, 2007. Appellant timely filed a notice of appeal from the judgment and order. Neither Zenaida nor Michael has made an appearance in this appeal.
Judgment was entered on a judicial council default judgment form submitted by appellant’s attorney. Counsel had checked the box next to the statement that judgment was entered for plaintiff. Without striking that statement, the court’s clerk checked the box stating that judgment was entered for defendant, and wrote “ZENAIDA AGUILA, an individual,” below it. Only by reference to the court’s minutes can the form be definitively construed as a judgment in favor of defendant.
DISCUSSION
Appellant contends first that the trial court had no power to enter judgment in favor of the defaulting defendants. We agree.
“[T]he court’s jurisdiction to render default judgments can be exercised only in the way authorized by statute. It cannot act except in a particular manner, that is, by keeping the judgment within the bounds of the relief demanded. It has been held repeatedly . . . that where a statute requires a court to exercise its jurisdiction in a particular manner, [or] follow a particular procedure, . . . an act beyond those limits is in excess of its jurisdiction. [Citations.]” (Burtnett v. King (1949) 33 Cal.2d 805, 807, italics omitted.)
The statute governing judgments on defaults provides for entry of judgment in favor of the plaintiff, as to a properly pled cause of action, not the defaulting defendant. (§ 585.) Appellant sought a court judgment under section 585, subdivision (b), rather than a clerk’s judgment under subdivision (a). Subdivision (b) provides, in relevant part: “[After entry of default,] [t]he plaintiff . . . may apply to the court for the relief demanded in the complaint. The court shall hear the evidence offered by the plaintiff, and shall render judgment in the plaintiff’s favor for that relief, not exceeding the amount stated in the complaint, . . . as appears by the evidence to be just. . . .” (Italics added.)
In a contract action, so long as the plaintiff makes a prima facie case for breach of contract and resulting damages, the court must enter judgment against the defaulting defendants in some amount. (Csordas v. United Slate Tile etc. Roofers (1960) 177 Cal.App.2d 184, 185-186 (Csordas.) “Generally speaking, the party who makes default thereby confesses the material allegations of the complaint. [Citations.] It is, of course, true that the court may not by default grant any relief in excess of that prayed for. [Citation.] Where, however, a cause of action is stated in the complaint and evidence is introduced sufficient to establish a prima facie case the trial court may not disregard the same. [¶] ‘The court must hear the evidence offered by the plaintiff, and must render judgment in his favor for such sum, not exceeding the amount stated in the complaint, as appears from the evidence to be just.’ [Citation.]” (Id. at p. 186; see also Taliaferro v. Davis (1963) 216 Cal.App.2d 398, 408-409.)
The court dismissed the action as to Michael with prejudice, because it found insufficient evidence that Michael had signed the promissory note. However, our review shows that, apart from the promissory note, the complaint adequately pleaded the elements of an ordinary breach of contract by both defendants, including Michael. (See First Commercial Mortgage Co. v. Reece (2001) 89 Cal.App.4th 731, 745 [existence of the contract, plaintiff’s performance, defendant’s breach, and damages.]; 4 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 476, p. 570.) It alleged that appellant sold and delivered the jewelry to both defendants, who both agreed to pay for it, but failed to do so, to appellant’s damage in the sum of $163,150. The defendants’ default confessed the material allegations of the complaint. (Csordas, supra, 177 Cal.App.2d at p. 186.) Thus, appellant would have been entitled to recover from both defendants for breach of the sales contract, apart from any recovery on the promissory note.
While appellant had filed a request that the clerk enter a dismissal of the claims against Michael without prejudice, the clerk never acted upon the request. But for the court’s judgment of dismissal with prejudice, appellant would have had the right to withdraw her request and apply for judgment against Michael, or to proceed with the dismissal without prejudice, and re-file the complaint prior to the running of the statute of limitations for breach of contract. (See §§ 337, 339.) Thus, the court’s dismissal with prejudice precluded further action against Michael, who never appeared or requested affirmative relief from potential liability. Because the trial court lacked jurisdiction to adjudicate a matter not asserted, claimed or prayed for, the order of dismissal with prejudice is void. (See Burtnett v. King, supra, 33 Cal.2d at p. 807; § 585, subd. (b); Valenzuela v. Valenzuela (1959) 168 Cal.App.2d 565, 567.)
With regard to Zenaida, the court rejected appellant’s proof as insufficient, finding that appellant did not establish that she had presented the checks to the bank for payment or that the checks were returned by the bank. Appellant contends that proof of the agreement and nonpayment was sufficient to justify a judgment in appellant’s favor against Zenaida. Again, we agree.
In addition to Zenaida’s breach of her promise under the sales contract to pay for the jewelry she purchased, the proof was sufficient to hold Zenaida liable on the promissory note. The complaint alleged that Zenaida signed the note, and Zenaida’s default constituted an admission of that allegation. (Csordas, supra, 177 Cal.App.2d at p. 186.) Appellant’s possession of the note established her prima facie right to recovery, and nonpayment was presumed. (See Remington Investments, Inc. v. Hamedani (1997) 55 Cal.App.4th 1033, 1041 [uncancelled note held by lender is presumed unpaid; burden shifts to borrower to show payment]; Evid. Code, § 635.) Appellant’s declaration established the amounts owing, and her attorney’s declaration established the amount of attorney fees she incurred. The court may not simply disregard the defendant’s admissions or uncontradicted credible evidence. (Csordas, supra, at p. 186.)
The trial court had the discretion to require appellant to present the original instruments if circumstances justified such an order. (Kahn v. Lasorda’s Dugout, Inc. (2003) 109 Cal.App.4th 1118, 1123-1124.) The record does not indicate that the court considered doing so.
The court’s ruling suggests that it did not find appellant’s evidence credible, because the amounts on the checks add up to more than $163,150, and the checks did not bear the bank’s notation that they were dishonored. Apparently concerned with appellant’s hearsay statement that defendants’ bank account had been closed, the court also ruled that appellant’s declaration was incompetent. However, defendants’ default had resulted in an admission of the allegations that the checks had been given in payment of the jewelry and that their bank account had been closed. The court was not free to disregard the defendants’ admissions. (Csordas, supra, 177 Cal.App.2d at p. 186.)
Appellant did not allege that she deposited the checks for payment once she learned the account had been closed. Rather, she stated only that she was unable to cash them, because the account was closed. Thus, there would not necessarily be evidence that she deposited the checks or that the bank returned them.
In any event, the checks and the evidence that the account was closed appear to be nothing more than irrelevant and unnecessary evidentiary facts. Although the complaint alleged that defendants paid by checks which appellant was unable to negotiate, it did not pray for treble damages, as provided by Civil Code section 1719, which creates a cause of action for damages and penalties for checks returned due to insufficient funds. Thus, the action does not appear to be based upon the dishonor of any negotiable instrument other than the promissory note.
The allegations regarding the checks appear to have had no purpose other than to show nonpayment of the debt. However, appellant did not bear that burden of proof, as a check given to discharge a debt does not do so until it is cashed; the debt for which the check was given remains unpaid until the debtor shows that the check was negotiated and paid. (Hodgson v. Banner Life Ins. Co. (2004) 124 Cal.App.4th 1358, 1374-1375.) Thus, Zenaida remained liable to pay for the jewelry she purchased so long as she failed to meet her burden to prove that the checks were negotiated and paid. Far from meeting her burden of proof, Zenaida failed to file an answer, and her default was taken. Thus, she admitted nonpayment of the underlying debt. (See Csordas, supra, 177 Cal.App.2d at p. 186.)
In sum, the trial court rejected two properly proven causes of action -- breach of the sales contract and recovery on a promissory note -- and did so on the basis of its finding that the evidence was insufficient to prove a cause of action that the complaint did not purport to state, viz., passing checks on insufficient funds. A default judgment may not be entered on an unpleaded cause of action, and may not be entered in favor of a defaulting defendant. (Taliaferro v. Davis, supra, 216 Cal.App.2d at p. 409; Csordas, supra, 177 Cal.App.2d at p. 186.) As either the breach of contract cause of action or the action on the promissory note would have supported a judgment against Zenaida, the court erred.
We conclude that because the trial court lacked jurisdiction to enter judgment in favor of Zenaida, or to enter the order dismissing Michael from the action with prejudice, the judgment and order are void. (Burtnett v. King, supra, 33 Cal.2d at p. 807; § 585, subd. (b).) Because the judgment and order are void, they must be reversed. (See Mellinger v. Municipal Court (1968) 265 Cal.App.2d 843, 848 [proper procedure is to reverse appealable but void orders].) Further, we conclude that as appellant made a prima facie case against Zenaida based upon Zenaida’s admissions, judgment must be entered in appellant’s favor and against Zenaida. (See Csordas, supra,177 Cal.App.2d at pp. 185-186.)
DISPOSITION
The judgment and the order of dismissal are reversed. The trial court is directed to vacate the judgment and order, to enter a new judgment against Zenaida Aguila in the amounts shown by the evidence, and to give appellant the opportunity to proceed as to Michael Aguila in accordance with the views expressed in this opinion. Appellant may recover costs on appeal upon application in the trial court pursuant to California Rules of Court, rule 3.1700(a)(2).
We concur: WILLHITE, Acting P. J., SUZUKAWA, J.