Court Opinion

ID: 4697697
Source: CourtListenerOpinion
Date Created: 2021-06-22 23:02:17.055734+00
Date Added: 2024-06-11T08:05:48.225170
License: Public Domain

Filed 6/22/21 Timmins v. Zheng CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

 ARTHUR TIMMINS,

      Plaintiff and Respondent,                                          G058705

           v.                                                            (Super. Ct. No. 30-2017-00941120)

 XIAO ZHENG et al.,                                                      OPINION

      Defendants and Appellants.

                   Appeal from an order and judgments of the Superior Court of Orange
County, Nathan R. Scott, Judge. Affirmed in part, reversed in part and remanded with
directions.
                   Law Offices of Angela Swan and Angela Swan; Travis M. Poteat for
Defendants and Appellants.
                   The Law Offices of Sam X.J. Wu and Sam X.J. Wu for Plaintiff and
Respondent.
                                    INTRODUCTION
              Xiao Zheng, Juan Cheng, and Shedoor International, Inc. (Shedoor, Inc.)
appeal from default judgments entered against them and in favor of Arthur Timmins on a
wage-and-hour complaint. Timmins alleged that Zheng, Shedoor, Inc., and others
violated California labor laws with regard to overtime, meal and rest breaks, record
keeping, and reimbursement for business expenses. He also alleged voidable transfers
among various defendants, including Cheng.
              We reverse the default judgment against Juan Cheng. Timmins’ complaint
does not allege that she was his employer, and it does not allege any damages attributable
to her. She is involved in the action only with respect to the voidable transfer causes of
action, as to which no damages amounts were alleged. We vacate the default judgments
against Zheng and Shedoor, Inc., solely for possible calculation errors and return the
matter to the trial court to re-review the damages calculations and, if necessary, revise
them. The other objections to the defaults and the default judgments lack merit.
                                          FACTS
              Timmins filed a wage-and-hour complaint against Zheng, Cheng, Shedoor,
Inc., and others on August 30, 2017. He alleged that he had worked up to 18 hours a day,
6 or 7 days a week, without breaks or overtime payments. He also alleged that he had
incurred business expenses for which he had not been reimbursed. He asked for damages
in the amount of no less than $150,000.
              Zheng, Cheng, and Shedoor, Inc., did not respond, and Timmins took their
defaults in December 2017 and January 2018. Appellants’ motions to set aside the
defaults were denied on October 15, 2018. After a default prove-up, the court issued a
minute order granting default judgment on October 28, 2019. Judgments were entered
against appellants in the amount of $75,871 on the same day. This amount represented
the total of Timmins’ overtime hours, unpaid meal and rest breaks, and unpaid business
expenses, plus costs and attorney fees.

                                             2
              Timmins’ complaint also alleged causes of action for voidable transfers of
Shedoor, Inc.’s assets to another defendant entity, Shedoor International, LLC. Another
alleged voidable transfer was of a piece of real estate from Zheng as his separate property
to Cheng and Zheng as joint tenants for zero consideration. This is the only allegation in
the complaint specifically against Cheng.
                                             DISCUSSION
              Appellants have identified three issues on appeal. They assert the court
abused its discretion when it refused to set aside their defaults. They also assert the court
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erred in entering a default judgment because (1) Timmins failed to state a cause of action
and (2) the amount of the judgments entered against them was more than the amount
alleged in the complaint and was not supported by sufficient evidence.
I.            The Set-Aside Motions
              The default against Zheng was entered on December 27, 2017. The
defaults against Cheng and Shedoor, Inc., were entered on January 4, 2018. Shedoor,
Inc., moved to set aside its default on July 9, 2018. Zheng and Cheng filed their motions
on July 16. All three motions were filed on dates past the six-month deadline for relief
under Code of Civil Procedure section 4732.
              Instead appellants moved for relief in equity, that is, for extrinsic fraud or
mistake. The grounds for setting aside a default on equitable principles are narrower than
those for setting aside a default under section 473. (Kramer v. Traditional Escrow, Inc.
(2020) 56 Cal.App.5th 13, 29.) The code section includes surprise, inadvertence, and
neglect as bases for setting aside a default (§ 473, subd. (b)); extrinsic fraud and mistake
are the only equitable grounds for a set-aside motion filed past the six-month time limit
of the Code of Civil Procedure. “[T]o constitute extrinsic fraud, there must have been
some representation or concealment by the defendant which prevented the plaintiff from

       1
              This argument applies to Cheng only.
       2
              All further statutory references are to the Code of Civil Procedure.

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having his day in court[.]” (Gale v. Witt (1948) 31 Cal.2d 362, 366.) Extrinsic mistake is
“‘a mistake [that] led a court to do what it never intended . . . .’ [Citations.]” (Rappleyea
v. Campbell (1994) 8 Cal.4th 975, 981 (Rappleyea).)
                  “The Legislature has determined that during the time frame provided by . . .
section 473 there is a strong public policy in favor of allowing litigants their day in court.
Thus, by a lesser showing than extrinsic fraud (mistake, inadvertance, surprise, or
excusable neglect) public policy favors setting aside judgments under section 473. Once
relief is no longer available under section 473, the public policy in favor of finality of
judgments predominates, and the power to set aside valid final judgments . . . should be
exercised only when exceptional circumstances require that the consequences of res
judicata be denied. Thus, during the period when relief under section 473 is available,
there is a strong public policy in favor of granting relief and allowing the requesting party
his or her day in court. Beyond this period there is a strong public policy in favor of the
finality of judgments and only in exceptional circumstances should relief be granted.” (In
re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1070-1071.)
                  We review the trial court’s decision regarding an equitable set-aside motion
for abuse of discretion. (Rappleyea, supra, 8 Cal.4th at p. 981.)
                  Zheng, Cheng, and Shedoor, Inc., based their set-aside motions on the same
argument. They all contended that Timmins’ counsel had agreed to withdraw the defaults
in exchange for a defense agreement to consolidate the present case with another, similar,
case pending in the superior court.3 In addition, Cheng and Shedoor, Inc., contended that
they had not been properly served. The court denied the set-aside motions because they

         3
                  Timmins’ counsel denied that there had ever been an agreement to withdraw the defaults. In reply
declarations, which the court refused to consider as lacking proofs of service and supplying new evidence, an
employee of defense counsel declared she typed a stipulation to withdraw the defaults and “gave it to our building
receptionist for mailing to Plaintiff’s counsel.” Attached to the declaration as its exhibit is the heading of an email
from the employee to defense counsel regarding “Kheng et al. stipulation” (no text) and a screen shot of an email
from the employee to defense counsel (no text).

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failed to offer evidence of meritorious defenses, satisfactory excuses for untimeliness, or
reasonable diligence.
                 There was no evidence of a representation or concealment by Timmins’
counsel or anyone else preventing appellants from answering the complaint. Likewise,
nothing suggests that the court did something it never intended.
                 Regarding the set-aside motions themselves, Timmins’ counsel denied the
contention that he had agreed to withdraw the defaults. At a case management
conference in April 2018, at which defendants’ counsel was present, Timmins’ counsel
reported to the court that the defaults were complete. In May, at another hearing, defense
counsel claimed there was an agreement to withdraw the defaults and consolidate the
case with the pending case. Timmins’ counsel responded that he knew of no such
agreement. Defense counsel was aware in plenty of time to file a timely motion for relief
under the Code of Civil Procedure that (1) defaults had been entered and (2) they were
not going to be withdrawn.
                 The trial court concluded that appellants had failed to show reasonable
diligence and satisfactory excuses for untimeliness. We cannot see that it abused its
discretion in so doing.
II.              The Default Judgment
                 A court may not enter a default judgment for an amount that exceeds the
amount alleged in the complaint. (Airs Aromatics, LLC v. CBL Data Recovery
Technologies, Inc. (2018) 23 Cal.App.5th 1013, 1018; § 580, subd. (a).) Appellant’s
contention on this issue can be dealt with swiftly. Timmins’ complaint twice alleged
damages for labor law violations “in an amount of no less than $150,000.” The ultimate
judgment was a little over half that amount.4

        4
               Timmins also filed a statement of damages on August 30, 2017, but the notice is directed to Yicen
Tsai, Mama’s Home Consulting, Inc., and Yu Cheng Lin, so it would be ineffective to give notice in this action.

                                                       5
              Appellants argue the amount of the default judgment must be specified in
the prayer. Otherwise the judgment is void. They supply no authority for this argument.
The point of specifying the amount of damages in the complaint is to allow the defendant
to decide whether it is worth his or her while to appear in the lawsuit. (See Greenup v.
Rodman (1986) 42 Cal.3d 822, 826.) If the amount in controversy is small and the suit
has merit, the defendant may decide that the attorney fees spent contesting the action
would amount to significantly more than the judgment itself. As long as a complaint
specifies an amount of damages, it passes muster. (See Becker v. S.P.V. Construction Co.
(1980) 27 Cal.3d 489, 494 (Becker).)
              This complaint passes muster with respect to Zheng and Shedoor, Inc.,
regarding the amount of damages. There is a problem, however, with the judgment
against Cheng. She is not alleged to have been Timmins’ employer. The only allegation
against her specifically is that Zheng transferred property from himself alone to himself
and Cheng as joint tenants for no consideration. In other words, the complaint against
her is limited to voidable transfers. The complaint does not allege any value for the real
property. There is, therefore, no amount of damages alleged against her. The default
judgment against Cheng must therefore be reversed.
              We also agree with appellants that the amount of the default judgments is
problematic. To take one example, in the chart Timmins provided to the court as part of
the default prove-up, he stated he worked an average of 13 hours per day for 6 days
during the week of July 24, 2016. He calculated the amount of overtime payable at 1.5
times his hourly wage ($16.62) as $797.76 (4 hours x $24.95 [1.5 x $16.62] x 6 days).5
Four hours times $24.95 times 6 days equals $598.80. For the next week, starting July
31, Timmins stated he also worked four hours of overtime for six days at 1.5 times his
hourly rate, but the total amount on the chart was $947.34.6

       5
              $16.62 times 1.5 is actually $24.93.
       6
              It is not clear to us whether all hours over 40 in a week would be considered overtime.

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              It is not necessary to reverse a default judgment for simple mathematical
errors. The judgments can be returned to the trial court for further review and
recalculation if necessary. (See Becker, supra, 27 Cal.3d at p. 489; Electronic Funds
Solutions, LLC v. Murphy (2005) 134 Cal.App.4th 1161, 1177.) We return the default
judgments against Zheng and Shedoor, Inc., to the trial court for this purpose.
                                      DISPOSITION
              The order denying the motions to set aside the defaults against Xiao Zheng,
Juan Cheng, and Shedoor International, Inc. is affirmed. The default judgment against
Juan Cheng is reversed. The default judgments against Xiao Zheng and Shedoor
International, Inc., are vacated and remanded to the trial court to re-review and, if
necessary, recalculate the amount of the judgments. Respondent may submit a revised
chart. The parties are to bear their own costs on appeal.

                                                  BEDSWORTH, ACTING P. J.

WE CONCUR:

THOMPSON, J.

GOETHALS, J.

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