Opinion
NOT TO BE PUBLISHED
Super. Ct. No. PC20030158.
SIMS, Acting P.J.
In this dispute over the ownership and operation of E2 Brokers, Inc. (E2), a closely held corporation, plaintiff Robin Giffin alleged, in essence: (1) he and Jacob Mickalich created E2, then brought in defendant Michael Kehoe to run it; (2) Kehoe cheated Giffin out of his share in E2 and turned it into a personal piggy bank. Claiming breach of fiduciary duty and fraud, Giffin sought damages “in excess of $500,000, ” the imposition of a constructive trust, and a declaration of the parties’ respective ownership interests in E2.
Jacob Mickalich was a defendant in the lead case consolidated by the trial court with related cases in which he was a plaintiff and cross-complainant with claims against Giffin and others. Mickalich and Giffin dismissed their claims against each other without prejudice, leaving it to the trial court to declare their ownership interests in E2 after resolution of another party’s claim of ownership interest.
Giffin successfully moved to strike Kehoe’s answer and enter his default as a terminating sanction for discovery abuse. After a prove-up hearing, the trial court awarded Giffin $1,804,025.60 in damages and determined that he and Mickalich each owned 50 percent of E2, while Kehoe had no interest therein. The court declined to impose the constructive trust Giffin sought, for reasons we shall explain.
Kehoe appeals from the default order and the subsequent award. We shall affirm Kehoe’s default and the trial court’s judgment aside from the damage award. However, we shall vacate that award.
E2 also filed an appeal, but we dismissed it because a corporation may not proceed without counsel and E2 never obtained counsel.
When a complaint alleges damages “in excess of x dollars” and the defendant defaults, the maximum damage award the plaintiff may receive is “x dollars.” Therefore, on remand either the trial court shall enter an award not to exceed $500,000, or Giffin may amend his complaint to specify greater damages; if he does so, however, Kehoe’s default will be opened.
FACTUAL AND PROCEDURAL BACKGROUND
The complaint
Giffin filed his original complaint in Placer County Superior Court in April 2002. The complaint was transferred to El Dorado County Superior Court and consolidated with related litigation, including a complaint filed by Kehoe against Mickalich and Mickalich’s cross-complaint against Kehoe.
By the time Giffin’s action got past demurrer, the related case was well underway. The following events from that case, which Giffin brought to the trial court’s attention when he moved for terminating sanctions, show that Kehoe persistently obstructed discovery in all phases of this litigation.
The trial court sustained demurrers with leave to amend as to Giffin’s original complaint and second amended complaint. The court then overruled Kehoe’s demurrer to Giffin’s third amended complaint, filed on July 29, 2004, “for damages for fraud, breach of fiduciary duties, and for equitable and declaratory relief and imposition of a constructive trust.” (Capitalization omitted.)
The parties stipulated on March 5, 2004, that Kehoe would take his demurrer to Giffin’s first amended complaint off calendar without prejudice and that the demurrer was deemed sustained with leave to amend. Giffin filed his second amended complaint on March 15, 2004.
The third amended complaint, which named E2 and Mickalich as codefendants along with E2’s secretary-treasurer Lora Hobbs (not a party to this appeal), alleged:
Giffin and Kehoe, longtime friends and business partners, had a close, confidential relationship. From 1988 to 1993, Giffin employed Kehoe in Giffin’s business, VitaBlend, Ltd.
From March to October 1992, Giffin and Mickalich successfully operated E Z Brokers, a joint venture which brokered and sold health-related products. Giffin provided funding and credit and arranged the lease of office space and equipment, while Mickalich provided inventory, product, and materials. Much of the sales and all of the shipping went through VitaBlend.
In October 1992, Giffin and Mickalich brought in Kehoe to help run E2 Brokers. The three decided to create a corporation with the same name in the state of Nevada, to which the joint venture’s business would be transferred. This was done, although a clerical error caused the new business to be incorporated as E2 Brokers, Inc. Kehoe and Mickalich represented to Giffin that Giffin and Mickalich would each be 40-percent shareholders in E2 and Kehoe would pay $15,000 for the remaining 20-percent interest; Giffin would not have agreed to transfer his joint venture interests to E2 but for the promise of a 40-percent interest in the corporation. E2 thereafter took over the business of E2 Brokers.
From 1993 on, Giffin continued to provide equipment and funding to E2 but did not actively manage it; the parties agreed that Kehoe would do so. Giffin reasonably relied on Kehoe’s assurances that Giffin’s interests would be protected.
In 1998, Giffin called Kehoe to ask about E2’s status and to find out whether Giffin could receive dividends. Kehoe said he and Mickalich had voted themselves to be directors of E2; Giffin, not being an officer or director, would receive no monies from E2; and E2 was not in a position to pay dividends to its shareholders. Giffin accepted the last representation.
The third amended complaint does not specify what Giffin was doing from 1993 to 1998. According to his original complaint, he was incarcerated in a federal facility as of April 15, 1993, for a 48-month term, while Mickalich was incarcerated in a federal facility as of May 17, 1993, for a 12-month term.
Around April 25, 2001, Kehoe tried to convince Mickalich that they should become the sole owners of E2. Kehoe informed Giffin by letter that Mickalich was a 50-percent owner of E2. Kehoe also told Mickalich that Giffin was no longer a shareholder in E2. Mickalich then notified Giffin that Kehoe was trying to steal Giffin’s ownership interest in the corporation.
Kehoe and the other defendants not only wrongfully deprived Giffin of his interest in E2, but also misappropriated its assets and profits to their own use and benefit, transferring those assets to themselves for wholly inadequate consideration.
Based on these allegations, Giffin pled counts (styled “causes of action”) for “breach of fiduciary duty/constructive fraud, ” “promissory fraud, ” “conspiracy to defraud, ” “constructive trust, ” and “declaratory relief.”
As to each of the first three counts, Giffin alleged “actual damages in excess of $500,000, the exact amount to be proven at time of trial.” His prayer for relief also sought damages “in excess of $500,000[]” as to each count, plus exemplary damages according to proof.
Giffin’s alleged damages as to his first three counts are duplicative. In his first count (breach of fiduciary duty/constructive fraud), after alleging damages in excess of $500,000, Giffin explains: “These damages consist of the Plaintiff’s 50 [percent] of the value of EZ BROKERS, the present value of the business interests[, ] and the past, present and future profits of such business, all of which are best evidenced by the business of E2 BROKERS, INC., and all of which were wrongfully taken by Defendants.” In his second count (promissory fraud) and his third count (conspiracy to defraud), he defines the separately alleged damages exactly the same way. Thus, as we explain more fully in part II of the Discussion, these allegations do not state an “aggregate” damage claim in excess of $1,500,000.
In his “declaratory relief” count, Kehoe asked the trial court to determine the respective rights and obligations of the parties with respect to E2, asserting among other things that Kehoe had not paid the consideration he promised in return for his purported 20-percent ownership interest.
Kehoe and E2 answered the third amended complaint on February 16, 2005.
Discovery
Despite the pending demurrer to the then-existing version of his complaint, Giffin began taking formal discovery and noticing depositions in July 2003.
In November 2003, Giffin filed a motion to compel the taking of Kehoe’s and Hobbs’s depositions. In January 2004, the trial court granted the motion.
In February 2004, the trial court sent the matter to a discovery referee, but the referee did not issue a decision, apparently due to the ongoing litigation over defendants’ demurrer.
During the rest of 2004 and the first half of 2005, discovery disputes persisted, as described below.
Giffin’s first motion for terminating sanctions
On June 21, 2005, Giffin filed his first motion to strike defendants’ answer and enter their default. Giffin’s counsel declared that Kehoe had sought to frustrate discovery at every step, despite prior court orders in this case and the related case. He had resisted being deposed for over 23 months, from July 2003 to May 2005; most recently, he had failed to appear at scheduled depositions on December 29, 2004, March 30, 2005, April 7, 2005, April 25, 2005, and May 25, 2005. He had also willfully failed to produce most of the documents requested by Giffin (and by Mickalich in the related action).
The trial court’s ruling
At the hearing on Giffin’s motion, conducted on August 8, 2005, the trial court declined to impose terminating sanctions “at THIS TIME” because Kehoe had not disobeyed a court order in this action. Instead, the court ordered: (1) Kehoe was to appear for deposition on August 10, 2005, and at any further time specified by Giffin, until completed, “AT THE CONVENIENCE of Mr. Kruse [Giffin’s counsel].” (2) Kehoe was to “provide copies of all checks, front and back”; “[i]f necessary, . . . to obtain copies from the bank”; and “to provide copies of ledgers, and profit and loss statements of all E2 accounts.” (3) Kehoe and E2 were jointly and severally liable for $8,000 in sanctions, payable to Kruse not later than August 19, 2005. (4) E2 was to obtain counsel and file a substitution of attorneys with the court by September 2, 2005, on pain of terminating sanctions if it failed to do so.
The reporter’s transcript of the hearing shows that the court took offense when Kehoe arrived a half-hour late without explanation and wearing shorts. After lecturing him, the court added: “Mr. Kehoe, I will tell you, I was very close to dis -- striking your answer and having a default entered against you. You better make sure you are timely in court from now on. If you have a question, you write down the time. If you have a question about it after that, you call this court and we will tell you when to be here. All right. I’m not messing around with this case anymore.”
Before making these orders, the court stated: “Violation of this order is punishable by terminating sanctions, which means I strike your responsive pleading, default is entered against you, you have no standing to be present at the prove-up hearing where they present to me what damages they’re entitled to based upon this case. And it’s a one-sided battle because you have no standing to be here. So if you violate the Court’s orders, that’s one of the possibilities. [The court then discussed contempt and monetary sanctions.]” The court asked if Kehoe had any questions about “those ramifications if you do not follow the Court’s orders[.]” Kehoe said: “No, no questions.”
Giffin’s second motion for terminating sanctions
On August 22, 2005, Giffin moved again for terminating sanctions. In support of the motion, Giffin’s counsel declared:
1. When Kehoe appeared for deposition on August 10, pursuant to the court’s August 5 order, he produced only three boxes of documents and claimed he had not had the chance to search for the rest. The deposition was continued to the next day.
2. On August 11, Kehoe appeared with a few unidentified and unorganized boxes of checks. It appeared that checks and statements had been deliberately separated and checks had been deliberately put into the wrong envelopes, so as to conceal the most incriminating items.
3. On August 12, counsel notified Kehoe what documentation was still missing, then told him he was expected to request that information from the banks and to bring written proof and confirmation when his deposition resumed on August 15.
4. On August 15, Kehoe brought in more checks, but no proof that he had requested documentation from the banks; the deposition was continued to August 19. Like the previously produced evidence, the new evidence was unidentified, unsummarized, and unorganized.
5. On August 17, counsel faxed Kehoe a new list of missing documentation, asserting that he had deliberately failed to comply with the court’s August 5 orders, demanding again that he request the missing documentation from the banks and bring proof that he had done so to the next deposition session, and also demanding that he pay the court-ordered $8,000 in sanctions at that time.
6. On August 18, counsel sent Kehoe another fax with a spreadsheet documenting that well over 2000 checks and 250 bank statements were still missing.
7. On August 19, Kehoe failed to appear for deposition, claiming car trouble. He also claimed that he had not received counsel’s fax of the previous day, he had still been unable to find all the missing documents, and he could not now pay the full sanctions ordered. As of 4:00 p.m. on that date, the court’s deadline for payment of sanctions, Kehoe still had not paid them.
Kehoe’s opposition
Through newly retained counsel, Kehoe filed opposition to the motion on September 16, 2005. Counsel asserted: Kehoe had produced substantial documentation and would soon produce all that remained outstanding; Giffin could also have requested the missing documents from the banks; Giffin had unreasonably refused to pay any costs required by the banks to produce the documents; and Giffin had not shown prejudice from Kehoe’s actions. Kehoe declared that he had not deliberately refused to produce any documents, that he had produced all records he possessed in the manner in which he normally kept them, and that on September 13, 2005, he had asked the banks to send opposing counsel all remaining records.
Kehoe, who had been in propria persona, substituted in attorney Gaspar Garcia, II, on September 2, 2005.
The trial court’s ruling
The trial court issued a tentative ruling granting Giffin’s motion, then held a hearing on October 27, 2005. After argument from counsel and testimony from Kehoe, the court stated (italics added):
Kehoe’s counsel offered to prove that Kehoe’s document production was disorganized partly because Mickalich’s theft of E2 documents had made it hard to organize what was left. Kehoe testified that Mickalich stole E2 documents and computers in 2001.
“Well, Mr. Garcia, I do agree striking a pleading and entering a default is an extreme measure and one that the Court not only personally but under the case law of the State of California enters into not lightly. But I will say for the record that in my years on the bench I have never seen such an abuse of the discovery and the court and the justice system than [sic] I have seen in this case. And I will further add that that was before you became involved in the case, Mr. Garcia.” The court found that Kehoe’s arguments about cost-shifting came too late and Giffin had clearly suffered prejudice: “I can’t see how the plaintiff in this case has not been prejudiced by the way that this case has been conducted since not only since it has been in my court, but in other courts in Sacramento County, which the Court has reviewed the transcripts of the proceedings there and in Placer County. To provide 11, 000[-]plus documents less than a month . . . before trial and requiring the plaintiff to go through and organize those in some sort of usable fashion essentially on the eve of trial does not comport with the function of the Court.” Finally, the court noted: “I agree with you that failure to pay a monetary sanction alone is not a basis or justification for striking a pleading and entering a default. But this Court has . . . made orders, tried to enforce orders, made order after order in this case trying to get Mr. Kehoe to comply. The Court denied a previous motion to strike because in the Court’s opinion that is a drastic measure that was not appropriate. At that time the Court made specific orders, some of which have not been complied [with] to date.” For all these reasons, the court adopted its tentative ruling as its order.
The order
The court found: Where a party has established a months-long pattern of avoiding or evading discovery, it is not an abuse of discretion to dismiss the party for violating a court order to provide discovery. Kehoe had had many opportunities to appear for deposition and to provide requested documents, and had repeatedly failed to do both without explanation. Furthermore, he had missorted or misfiled the documents he did produce. Under all the circumstances, this conduct did not show mere sloppy recordkeeping: it showed “willful misfiling designed to defeat discovery and inject confusion into the discovery process.”
Because Kehoe did not object to the court’s discovery orders, including the order that he get records from the banks if necessary, he could not now claim that Giffin could have subpoenaed the records himself.
Kehoe’s and E2’s “willful[] obstruct[ion of] discovery” and “pattern of noncompliance over many months” were “so egregious that terminating sanctions are appropriate and just.”
The prove-up hearing
Giffin’s alleged damages
In his pre-hearing brief (Code Civ. Proc., § 585), which attached voluminous exhibits from E2’s records and a declaration by forensic accountant David Smith, Giffin asserted that he was entitled to recover as damages the secret profits Kehoe had gained through his breach of fiduciary duty, “conservatively” totaling $1,804.025.60. Giffin also sought punitive damages of $500,000 and an order imposing a constructive trust in Giffin’s favor against specified items of corporate and personal property.
Giffin stated that he had settled with codefendant Hobbs and that he and Mickalich had reached a stipulation as to the declaratory relief claim between them. At the prove-up hearing, Giffin testified that this stipulation included the dismissal of Mickalich as a defendant.
In support of the motion, Smith declared:
He had attempted to audit E2 on Mickalich’s behalf, but E2’s refusal to cooperate shut down the audit in October 2004; he had obtained usable records only from January 1999 through June 2001. For that period, exclusive of officer compensation and commissions, E2 had paid $1,040,784.85 for Kehoe’s personal expenses. Kehoe’s secret profits could be calculated most conservatively by deriving the “annual effect” of that two-and-one-half-year total payment, which yielded the figure of $416,313.60 per year, and extending that annual sum forward to October 31, 2005. The resulting estimate, not including any excess compensation or undisclosed income, was $1,804.025.60.
The declaration itemized this spending at length, as well as sums paid to Kehoe’s wife and E2 employees out of corporate funds. Smith opined, based on his experience as a former special agent for the Criminal Investigation Division of the IRS, that Kehoe and the others were “virtually living off the corporate entity” and that a criminal case could have been made against them had their activities been discovered before this civil action was filed.
At the hearing, Smith testified that he had miscalculated and that the correct sum was $2,844,809.50. However, the trial court apparently disregarded that testimony. Giffin does not now contend that he was entitled to the higher amount.
The award
The trial court awarded Giffin the entire $1,804.025.60 he had requested in monetary damages. The court also determined that Giffin and Mickalich each owned 50 percent of E2, since Kehoe had never paid the money he had agreed to pay for his 20-percent share.
The court declined to order punitive damages because Giffin had not produced evidence of Kehoe’s net wealth. The court also declined to order a constructive trust in Giffin’s favor as to the items of property he had mentioned: having been purchased with corporate funds, they belonged to the corporation, to which the court ordered Kehoe to reassign ownership of these items.
DISCUSSION
I
Kehoe contends that the trial court abused its discretion by striking his answer and entering his default. We disagree.
Code of Civil Procedure section 2023.030 provides in part:
“To the extent authorized by the chapter governing any particular discovery method or any other provision of this title, the court, after notice to any affected party, person, or attorney, and after opportunity for hearing, may impose the following sanctions against anyone engaging in conduct that is a misuse of the discovery process: “[¶] . . . [¶] “(d) The court may impose a terminating sanction by one of the following orders: “(1) An order striking out the pleadings or parts of the pleadings of any party engaging in the misuse of the discovery process. “[¶] . . . [¶] “(4) An order rendering a judgment by default against that party.” “A court’s decision to impose a particular sanction [for discovery abuse] is ‘subject to reversal only for manifest abuse exceeding the bounds of reason.’ [Citation.]” (Electronic Funds Solutions, LLC v. Murphy (2005) 134 Cal.App.4th 1161, 1183 (EFS).) Thus, even if the trial court had the discretion to impose a lesser sanction, “our task is not to [substitute] our own judgment for that of the trial court, but to ascertain whether the trial court abused its discretion by imposing a terminating sanction.” (Ibid.)
Kehoe does not even begin to show an abuse of discretion. He omits key facts, including the discovery abuses that prompted Giffin’s first motion for terminating sanctions. He omits the trial court’s specific findings in ruling on that motion and issuing its orders of August 5, 2005. He discusses events after that date only from his own point of view. And he does not quote, discuss, or even mention the court’s clearly stated reasons for its terminating sanctions order. By failing to come to grips with the record and the court’s reasoning, Kehoe has forfeited his claim of error.
He omits these facts not only from his argument, but also from his “Procedural History” and “Statement of the Facts.”
In any event, the claim is meritless. The court imposed terminating sanctions because Kehoe, after establishing a pattern of bad-faith conduct throughout the litigation, had maintained that pattern by violating the court’s discovery orders. The court was well within its discretion to reject any lesser sanction. (See EFS, supra, 134 Cal.App.4th at pp. 1183-1184.)
II
Kehoe contends that the trial court exceeded its jurisdiction by issuing a damage award in excess of the complaint’s prayer. We agree.
Code of Civil Procedure section 580 (section 580) provides in part: “The relief granted to the plaintiff, if there is no answer, cannot exceed that demanded in the complaint, in the statement required by Section 425.11, or in the statement provided for by Section 425.115[.]” (§ 580, subd. (a).) This limitation is compelled by due process, which requires fair notice of the defendant’s potential liability. (Greenup v. Rodman (1986) 42 Cal.3d 822, 826 (Greenup).)
Code of Civil Procedure section 425.11 provides that in an action for personal injury or wrongful death, the plaintiff must serve on the defendant a statement setting forth the nature and amount of damages sought before a default may be taken. (Code Civ. Proc., § 425.11, subds. (b), (c).) Code of Civil Procedure section 425.115 provides for the service of a similar statement where the plaintiff seeks punitive damages. Neither provision is relevant here, as this is not a personal-injury or wrongful-death action (cf. EFS, supra, 134 Cal.App.4th at pp. 1176-1177) and the trial court did not award punitive damages.
Over twenty years ago, our Supreme Court held that where the trial court struck a defendant’s answer and entered his default as a terminating sanction for discovery abuse, former section 580 (which did not refer to sections 425.11 and 425.115) controlled the default judgment. Because it was as if no answer had been filed, the plaintiff could not receive greater damages than he had pled in the complaint. (Greenup, supra, 42 Cal.3d at p. 824.) Greenup relied in part on Engebretson & Co. v. Harrison (1981) 125 Cal.App.3d 436 at page 444, which held that a prayer for damages “in excess of $5,000” will support (at most) a default judgment for $5,000. (Greenup, supra, 42 Cal.3d at p. 830.)
Following Greenup, an appellate court recently held that a plaintiff who pled damages “in an amount in excess of $50,000, ” and thereafter obtained the defendants’ default as a terminating sanction for discovery abuse, could recover only $50,000 in compensatory damages in a default judgment. (EFS, supra, 134 Cal.App.4th at pp. 1173-1174.) The court explained: “The purpose of section 580 is to require the plaintiff to provide notice of the maximum amount of the defendant’s potential liability. The complaint in the present case, however, seeks damages ‘in an amount in excess of $50,000.’ [Fn.] Thus, rather than giving defendants notice of their maximum liability, the complaint instead purports to provide notice of their minimum liability. Other than stating that damages will be at least $50,000, the complaint provides notice no better than pleadings which seek ‘damages according to proof.’ [Citation.]” (Id. at p. 1174.)
A damage award which violates section 580 is void. (Greenup, supra, 42 Cal.3d at p. 826; EFS, supra, 134 Cal.App.4th at p. 1176.) The award here does so. Therefore, we must vacate it.
Giffin asserts that he is entitled to the full damage award notwithstanding Greenup, supra, 42 Cal.3d 822, because (1) section 580 as it now reads gives greater discretion to trial courts than it did when Greenup was decided, (2) the facts here differ significantly from those of Greenup and other cases involving default judgments, and (3) his request for damages beyond those alleged in his complaint is excusable even under Greenup because Kehoe’s obstructionism kept Giffin from determining his true damages until after Kehoe’s default. In the alternative, Giffin asserts that he is entitled to $1,500,000 in damages because his complaint alleged those damages in the aggregate and the trial court impliedly found that he had proven at least those aggregate damages. We reject these contentions. As we shall explain, section 580 has not changed materially since Greenup; the facts of this case do not differ significantly from those of the leading cases; a defendant’s discovery abuses do not render section 580 inoperative; and Giffin’s complaint did not allege aggregate damages of $1,500,000.
Giffin claims that section 580 “has changed somewhat from that in Greenup in 1986 [sic], it is now broader[.]” He then quotes from current section 580 as follows: “[B]ut in any other case, the court may grant plaintiff any relief consistent with the case made by the complaint and embraced within the issue.” (Bolding supplied by Giffin.) Unfortunately for Giffin, the language he highlights has been in the statute since 1872. (16 West’s Ann. Code Civ. Proc. (1976 ed.) § 580, p. 30.) Thus it does not provide an escape hatch from Greenup.
Giffin also tries to distinguish Greenup and EFS, supra, 134 Cal.App.4th 1161, asserting that the discovery violations were more “egregious” here than in those cases and that therefore section 580 should apply less strictly here. He is doubly mistaken. First, the abuses in those cases were at least equally egregious. Second, Greenup and EFS do not purport to restrict section 580 as Giffin proposes: on the contrary, they plainly hold that it applies to all default judgments which follow terminating sanctions. (Greenup, supra, 42 Cal.3d at pp. 826-829; EFS, supra, 134 Cal.App.4th at p. 1175.)
In addition, he tries to distinguish EFS on the ground that the trial court was reversed there for using the wrong measure of damages. (Cf. EFS, supra, 134 Cal.App.4th at p. 1167.) That distinction is immaterial to the rule of law for which we cite the case.
In Greenup, the defendant, who had actively resisted all discovery for months, responded to a court order to appear with records at opposing counsel’s office by “produc[ing] an assortment of papers in a box filled with straw and horse excrement, which he laughingly dumped on the table. After counsel and the court reporter had inspected the documents for an hour, [the defendant] announced they must be sure to wash their hands thoroughly because the straw had been treated with a toxic chemical readily absorbed through the skin.” (Greenup, supra, 42 Cal.3d at p. 825.)
Finally, Giffin asserts that he was entitled to seek and receive greater damages at the prove-up hearing than he pled in his complaint because he could not ascertain his full damages until after Kehoe’s default. We disagree. Whenever a defendant is defaulted for discovery abuses, the suspicion arises that he might have been trying to conceal the plaintiff’s full damages. But in such a case, as in any other default case, due process requires the plaintiff either to amend his complaint to allege the additional damages he has discovered or to accept the award he asked for in the complaint. (§ 580; Greenup, supra, 42 Cal.3d at pp. 826-829; EFS, supra, 134 Cal.App.4th at p. 1175.)
Giffin appears to argue in this context that we should follow the dissenting opinion of Chief Justice Bird in Greenup, supra, 42 Cal.3d 822, rather than the holding of the court. We may not do so. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.)
Giffin’s fallback argument that he is at least entitled to a damage award of $1,500,000 also fails, because it misstates the damages he pled in his complaint.
After noting that Greenup “looked to each of the plaintiff’s causes of action to determine how much plaintiff could recover” (cf. Greenup, supra, 42 Cal.3d at p. 830), Giffin asserts that his first, second, and third “causes of action” (“breach of fiduciary duty/constructive fraud, ” “promissory fraud, ” “conspiracy to defraud”) stated an aggregate damage claim “in excess of $1,500,000, ” and that the trial court in its award made separate findings as to each “cause of action.” Therefore, he concludes, even if he is not entitled to the full award he received, he is entitled to an award of $1,500,000. We disagree. Giffin did not state such an aggregate damage claim.
As we have already suggested (see fn. 6, ante), Giffin’s complaint did not state an aggregate damage claim “in excess of $1,500,000” based on the separate allegations of the first three “causes of action” -- it merely pled the same damages “in excess of $500,000, ” identically defined, in each of those “causes of action.” To put it another way, the complaint did not really plead three different causes of action as that term is understood in California law: it alleged the violation of a single primary right -- Kehoe’s entitlement to his share of the financial rewards accrued by E2, valued at “in excess of $500,000” -- under three different theories mislabeled “causes of action.” (See, e.g., Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co. (1993) 5 Cal.4th 854, 860; Slater v. Blackwood (1975) 15 Cal.3d 791, 796 [“counts which state differently the same cause of action” not independent causes of action].)
Because Giffin did not plead aggregate damages of “in excess of $1,500,000, ” it is immaterial whether the trial court purported to find he had proved such damages in accordance with the so-called “causes of action” in the complaint, as Giffin claims.
For all the above reasons, we must vacate the damage award and remand the matter to the trial court with directions that it enter a new award not to exceed $500,000, unless Giffin opts to file an amended complaint alleging further damages. If Giffin does so, Kehoe’s default will be opened. (Cf. EFS, supra, 134 Cal.App.4th at p. 1185.)
III
Kehoe contends that the trial court exceeded its jurisdiction and acted arbitrarily and capriciously by ordering that items of property be held in a constructive trust on Giffin’s behalf. However, as Giffin points out, the trial court did not so order: instead, it ordered Kehoe to reassign title to those items of property to E2. Since Kehoe has not raised any claim of error as to the court’s true order, we do not discuss the point further.
IV
Lastly, Kehoe attacks the trial court’s determination on Giffin’s declaratory relief claim that Giffin and Mickalich each owned 50 percent of E2 and that Kehoe had no interest in the corporation because he never paid the money he promised in consideration for his purported interest. We conclude that he may not raise this issue now.
When a defendant defaults to a complaint, the ensuing default judgment renders all well-pleaded factual allegations in the complaint res judicata. (Kahn v. Kahn (1977) 68 Cal.App.3d 372, 382.) By defaulting, Kehoe thus forfeited any right to challenge the factual allegations of the complaint, including the allegation that he had not paid for his purported interest in E2. Therefore, he may not attack the trial court’s determination of ownership based on that finding.
DISPOSITION
Kehoe’s default is affirmed, as is the default judgment aside from the damage award. The damage award is vacated and the matter is remanded to the trial court with directions to enter a new award not to exceed $500,000, unless Giffin files an amended complaint alleging greater damages, in which case Kehoe’s default will be opened. The parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.276(a)(4).)
We concur: NICHOLSON, J., MORRISON, J.
In May 2001, the trial court issued an order providing, among other things, that Mickalich would be permitted to audit E2 (of which Kehoe was president).
After a dispute over E2’s cooperation, the trial court issued a subsequent order to enforce E2’s compliance with the audit; this court upheld that order on appeal. (E2 Brokers v. Mickalich (Nov. 3, 2003, C042513 [nonpub. opn.])
In September 2004, Mickalich moved to compel audit pursuant to the previous court order and for an OSC re contempt. On October 12, 2004, the trial court ordered E2 to accommodate the auditor (among other things, by providing him lighting, a desk, and electric power). The court also itemized the classes of documents for the period 1999-2003 which E2 must produce for auditing, including canceled checks, check registers, bank statements of all corporate accounts, computer reports of corporate disbursements to officers and other individuals, tax returns, financial statements, and reports on “uncategorized expenses.” (As will appear, Giffin was seeking the same documentation almost a year later.)
On appeal, Kehoe insinuates that this episode proves the court defaulted him because of bias. We reject this insinuation. To point out only the most obvious difficulty, if Kehoe’s casual approach to the hearing had truly biased the court against him, the court would most likely have defaulted him then and there.
The discovery violations in EFS, though less colorful, also easily match those of Kehoe. The defendants there incurred monetary sanctions for violating discovery orders on four occasions, even after the court had made clear that the next violation could be their last; on one occasion, they tried to destroy requested e-mails with a “Data Eraser” program and were caught only because they ran the program incompetently. (EFS, supra, 134 Cal.App.4th at pp. 1183-1184.)