August 6, 2020

Siry Investment, L.P. v. Farkhondehpour (2020) 45 Cal.App.5th 1098

After a trial court entered a default judgment, defendants filed a motion for new trial. The court ruled that the defaulting defendants had standing to move for a new trial, and then recalculated and reduced some of the damages in the original default judgment. Plaintiff appealed, arguing that the trial court erred in amending the default judgment because the defaulting defendants did not have standing to make a motion for new trial.

The Court of Appeal held that a party against whom a default judgment has been entered may file a motion for new trial, at least when attacking the default judgment as containing an “error in law” in calculating damages. The court held the defendants’ challenges to the damages awarded in the default judgment all constituted “error[s] in law” properly subject to a motion for a new trial. These errors included: (1) the court’s recalculation of treble damages, which reduced quadrupled damages to treble damages; (2) the court’s reduction of punitive damages, which was grounded in constitutional principles defining when such damages become excessive as a matter of law; and (3) the court’s ruling that plaintiff must elect between treble and punitive damages, which addressed a question of law. The court noted that “Allowing a defaulting party to bring excessive damages based on errors in law to the trial court’s attention in a new trial motion puts those potential errors before the court with greater familiarity with the case, does so in a manner likely to yield a faster result, and may thereby altogether obviate the need for an appeal.”