In the underlying action, the trial court ordered the entry of a default against appellants as a sanction for discovery abuse, and issued a default judgment awarding respondent damages and injunctive relief. Appellants contend that the discovery sanctions were improper, that the complaint stated no cause of action, that they received inadequate notice of the damages respondent sought, and that the damages awarded were excessive. We reject these contentions, and affirm.
Respondent Los Defensores, Inc., is an "attorney joint advertising group" that focuses on the Spanish-speaking market in Southern California. Beginning in 1984, respondent's advertising included the telephone numbers
In April 2009, respondent initiated the underlying action against appellants Armando Vera and Rosa Gomez. The first amended complaint, filed April 29, 2009, contained claims for unfair business competition and "[p]assing [o]ff." According to the complaint, Vera and Gomez owned the rights to phone numbers that closely resembled respondent's toll-free number. The complaint further alleged that when callers mistakenly dialed Vera and Gomez's numbers in an effort to contact respondent, Vera and Gomez intentionally referred them to attorneys not affiliated with respondent. In May 2010, the complaint was amended to name as "Doe" defendants appellants Donald C. Amamgbo and Amamgbo & Associates, P.L.C. (Amamgbo & Associates).
In July 2010, respondent filed two motions to compel discovery. Respondent requested an order directing the depositions of Vera and Gomez, who refused to appear at their depositions on the ground that they had received a bankruptcy discharge. Respondent contended that the bankruptcy discharge did not encompass its claims against Vera and Gomez, and that the automatic stay accompanying the bankruptcy proceedings ended with the discharge.
On October 19, 2010, the trial court granted the motions. Pursuant to a stipulation of the parties, the court ordered Vera and Gomez to produce responsive documents by October 26, 2010, and to appear for depositions in November 2010. The court awarded no sanctions.
On January 19, 2011, respondent filed its second amended complaint (SAC), which is the operative complaint in the action. The SAC asserts claims for unfair competition and "passing off' under the common law, and a claim for violations of the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.).
The SAC alleges the following facts: Since 1984, respondent's advertising in Southern California has focused on the "easy-to-remember" string of
The SAC further alleges that Vera and Gomez, together with Attorney Amamgbo and his law firm, entered into a "conspiracy scheme" in an effort to "ride [respondent's] coattails." They obtained the rights to several telephone numbers incorporating the "636-3636" string, including those in the 949, 626, 818, 310, and 661 area codes. Due to the similarity between those numbers and respondent's toll-free number, appellants receive calls from persons seeking respondent's legal services. Rather than informing callers of their mistake, appellants "go [to] great lengths to avoid answering any questions about whether they are [respondent] or whether they have any affiliation with [respondent].... [T]o deflect questioning ..., [appellants] say they are `an office for lawyers' or something equivalent to that effect in an attempt to implicitly pass themselves off as affiliated with [respondent]."
According to the SAC, appellants' intent was "to injure [respondent's] business and usurp [respondent's] good will," and their wrongful conduct caused damages to respondent, as well as "actual mistakes, confusion, or deception of the general public." The SAC requested an award of damages, including punitive damages, and "an accounting of [appellants'] unjust profits." In addition, the SAC sought preliminary and permanent injunctions barring appellants from using any telephone number incorporating the numerical string "636-3636."
In March 2011, respondent filed motions to compel discovery against Vera, Gomez, and Amamgbo & Associates. Respondent contended that Vera and Gomez had not responded to discovery propounded in November 2010, including interrogatories and requests for the inspection and production of documents. The motions noted, inter alia, that during Vera's and Gomez's depositions, they referred to a "status book" and a call log in which information regarding calls to their "636-3636" numbers was recorded. Vera and Gomez testified that they recorded caller information in a status book. In addition, Vera acknowledged that the cell phone associated with the "636-3636" lines had a "call log" of incoming phone numbers, and appellants' defense counsel, Robert C. Moest, promised to transcribe the numbers in it.
In addition, in a motion directed against Amamgbo & Associates, respondent contended that from June to December 2010, it propounded three rounds of discovery, including requests for admissions, form interrogatories, special interrogatories, and production of documents. According to respondent, Amamgbo & Associates failed to respond to many of the requests for admissions and interrogatories, responded deficiently to the remaining requests for admissions and interrogatories, and produced few of the requested documents. Respondent sought orders compelling Amamgbo & Associates to respond adequately to the discovery, deeming certain requests for admission to be admitted, and awarding sanctions.
In a two-page consolidated opposition, appellants' defense counsel, Moest, stated: "[Appellants] concede that there is substantial overdue discovery, and that a number of errors were made in the form of the responses provided. [Appellants] are well along in the process of remedying the alleged deficiencies...." The opposition challenged only the amount of sanctions requested by respondent, which totaled $15,000.
On May 19, 2011, the trial court granted the motions against Gomez and Vera. The court granted the motion against Amamgbo & Associates insofar as it sought an order compelling discovery, but denied it insofar as it sought an order deeming certain requests for admission to be admitted.
In November 2011, respondent filed motions for a preliminary injunction and for discovery sanctions. Respondent sought an injunction barring appellants from using telephone numbers incorporating the numerical string "636-3636." Respondent also requested the imposition of monetary, issue, or terminating sanctions, arguing that appellants had engaged in significant misconduct during discovery, including the spoliation of evidence.
In seeking a preliminary injunction, respondent submitted excerpts from appellants' depositions and other evidence supporting the following version of the underlying facts: Vera was born in Peru, where he attended college, but obtained no degree. In 2000, after emigrating to the United States, Vera operated a car rental business, and obtained the rights to the "636-3636" telephone numbers in the 949, 626, 818, 310, and 661 area codes for use in connection with that business. He soon discovered that callers asked him for legal services, and had the "big idea" that the numbers were more valuable to law firms than to a rental car company. Vera started "working for the attorneys," and "gave [them] those lines so that [he] could work."
In 2007, Vera and Gomez, who were then married, were employed by Attorney Les Sherman, who paid them $10,000 per month to use the telephone numbers. In mid-2007, Sherman sold his practice to Attorney Amamgbo for approximately $300,000 after Sherman was charged with federal income tax evasion. Amamgbo continued to use the "636-3636" telephone numbers, and paid salaries to Vera and Gomez totaling approximately $12,800 per month.
According to Amamgbo, the "636-3636" numbers rang on a particular cell phone that Vera possessed "99 percent of the time." Vera and Gomez testified that their duties for Amamgbo consisted of answering calls on the "636-3636" lines, recording the callers' information in a "status book," and setting up appointments for callers. The callers were primarily Spanish speakers, and the majority sought legal services. According to Vera, when a caller sought an attorney, he wrote down the caller's information on a "piece of paper, or whatever is handy," filled out "the paperwork that the attorney require[d]," and recorded the information in the status book.
Vera and Gomez testified that they answered the calls by saying, "`Law office. How can I help you?'" or simply, "`Law offices.'" Nonetheless, respondent had received complaints from callers who used appellants'"636-3636" telephone numbers. According to those complaints, the callers were told they had contacted respondent.
After the inception of the underlying litigation, Vera and Gomez transferred their telephone company accounts for the "636-3636" numbers to Amamgbo. In September 2011, a California State Bar Court determined that Amamgbo had settled cases without his clients' consent and forged their signatures. The State Bar Court recommended that the Supreme Court impose disciplinary measures, namely, a stayed one-year suspension and two years of probation. In addition, malpractice and fraud actions were then pending against Amamgbo.
In seeking discovery sanctions, respondent maintained that appellants had violated the trial court's May 2011 discovery orders. Aside from monetary sanctions, respondent sought issue sanctions, including a determination of its damages, or alternatively, terminating sanctions in the form of the entry of appellants' default. Regarding the request for issue sanctions, respondent asked for a ruling that its annual damages amounted to at least $1,051,596, and offered a calculation that its advertising had effectively conferred annual benefits on appellants totaling as much as $2,631,443.72.
Respondent submitted evidence that despite the May 2011 orders, appellants concealed or destroyed records regarding their "636-3636" telephone lines. Respondent noted that in November 2010, Vera and Gomez testified during their depositions that they entered caller information in a status book, and that missed phone calls were transferred to a voicemail system maintained by a central operator. After the depositions, respondent propounded discovery requests encompassing the status book and call log (or call logs) for the telephone lines, the voicemail system related to the lines, and the identity of the central operator of the voicemail system. Because appellants' initial response to the requests consisted solely of objections, respondent sought the discovery orders issued on May 19, 2011.
According to respondent's showing, following those orders, appellants produced no written documents or call logs regarding incoming calls on the "636-3636" lines. They provided only a privilege log concerning a single item they characterized as a "statute book," the entire contents of which were purportedly subject to the attorney-client and work product privileges. Appellants also produced no recordings of incoming or outgoing voicemail messages, and denied the existence of a central operator.
Respondent also submitted evidence that despite the May 2011 orders, appellants produced no financial records related to their "636-3636" telephone lines. Respondent noted that in 2010, it propounded a demand for
In addition, respondent submitted evidence that despite the May 2011 orders, appellants declined to identify other attorneys who may have benefited from their "636-3636" telephone numbers. Respondent noted that in November 2010, it asked Amamgbo & Associates to disclose the identities of attorneys with whom it had fee-sharing agreements after Amamgbo & Associates began receiving calls on the "636-3636" lines. Amamgbo & Associates's initial response consisted solely of objections. Following the May 2011 orders, Amamgbo & Associates acknowledged that it occasionally collaborated with other attorneys on a shared-fee basis, but declined to provide the terms of the agreements or identify those attorneys, asserting that none of the pertinent clients had been "obtained through a `636' call."
In opposing discovery sanctions, appellants contended they had fully responded to all discovery and had produced every relevant and non-privileged item. They denied any spoliation or destruction of evidence, arguing that respondent "misinterpreted deposition transcripts to evidence documents that never existed." In addition, they noted that they had paid the discovery sanctions awarded in May 2011.
Supporting the opposition were declarations from Vera and defense counsel Moest. Vera stated that he had produced all the documents and records in his possession, with the exception of the item listed in the privilege log. Moest maintained that appellants had fully complied with respondent's discovery requests and the May 2011 orders, stating: "It is my understanding that none of the [appellants] herein kept records of calls received at any of the subject telephone numbers .... The written material [respondent] still complains of not receiving never existed, as far as I know, and my clients would have had to somehow make something up for [respondent], which I told them not to do."
On November 29, 2011, following a hearing, the trial court determined that respondent was entitled to a preliminary injunction, concluding that respondent had shown that it was likely to prevail on the merits of its case at trial, and that the balance of potential harms to the parties favored respondent. In addition, the court imposed terminating sanctions on appellants in the form of the entry of their default, concluding that they had contravened its May 2011 orders. The court stated that appellants' conduct was "an extremely severe and aggravated failure to comply with [its] order[s], with substantial sanctions doing nothing."
In January 2012, respondent filed its "prove up" packet in support of a default judgment, which relied primarily on the evidence it had submitted in seeking a preliminary injunction. Respondent requested damages totaling $11,638,920, pointing to the discussion of damages presented in its motion for discovery sanctions. Later, in a supplemental brief requested by the trial court, respondent offered an alternative calculation of its total damages, which determined them to be at least $689,520.
On April 9, 2012, following a hearing, the trial court entered a default judgment in favor of respondent and against appellants. The judgment awarded respondent $691,280 in damages, and included a permanent injunction barring appellants from using their "636-3636" telephone numbers. This appeal followed.
Appellants contend (1) that the terminating sanctions were improper, (2) that the SAC stated no cause of action, (3) that they received inadequate notice of respondent's claimed damages, and (4) that respondent was awarded excessive damages. As explained below, we reject their contentions.
Appellants contend that the trial court erred in imposing terminating sanctions. They challenge the court's finding that they willfully failed to
"`The power to impose discovery sanctions is a broad discretion subject to reversal only for arbitrary, capricious, or whimsical action.'" (Do It Urself Moving & Storage, Inc. v. Brown, Leifer, Slatkin & Berns (1992) 7 Cal.App.4th 27, 36 [9 Cal.Rptr.2d 396].) The trial court may order a terminating sanction for discovery abuse "after considering the totality of the circumstances: [the] conduct of the party to determine if the actions were willful; the detriment to the propounding party; and the number of formal and informal attempts to obtain the discovery." (Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1246 [92 Cal.Rptr.2d 322].) Generally, "[a] decision to order terminating sanctions should not be made lightly. But where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction." (Mileikowsky v. Tenet Healthsystem (2005) 128 Cal.App.4th 262, 279-280 [26 Cal.Rptr.3d 831].) Under this standard, trial courts have properly imposed terminating sanctions when parties have willfully disobeyed one or more discovery orders. (Lang v. Hochman, supra, 77 Cal.App.4th at pp. 1244-1246 [discussing cases].)
When the trial court's exercise of its discretion relies on factual determinations, we examine the record for substantial evidence to support them. (Waicis v. Superior Court (1990) 226 Cal.App.3d 283, 287 [276 Cal.Rptr. 45]; see Miranda v. 21st Century Ins. Co. (2004) 117 Cal.App.4th 913, 929 [12 Cal.Rptr.3d 159].) In this regard, "the power of an appellate court begins and
We conclude there is sufficient evidence that appellants willfully failed to comply with the May 2011 orders. To begin, the record discloses ample evidence that despite the May 2011 orders, appellants willfully concealed or destroyed written documents and other records regarding phone calls on their "636-3636" telephone lines. In November 2010, Vera testified in his deposition that he wrote down caller information and prepared other paperwork "the attorney require[d]" before entering that information in the status book. In addition, during the deposition, Vera admitted that the cell phone connected to the "636-3636" lines had a call log that recorded incoming phone numbers. When respondent's counsel asked to examine the call log, Moest declined to give him access to it, but agreed to transcribe the phone numbers on it.
After Vera's deposition, respondent propounded discovery seeking written and electronic records of incoming calls. However, following the May 2011 orders, appellants provided none of the above described documents and records identified during Vera's deposition. In opposing respondent's motion for discovery sanctions, appellants relied on declarations from Vera and Moest, who asserted that the documents "never existed."
Notwithstanding Vera's and Moest's declarations, the evidence before the trial court was sufficient to support its finding of willful noncompliance. On review for substantial evidence, we will affirm a finding predicated on the trial court's rejection of a witness's testimony, "unless it appears that there are no matters or circumstances [that] ... impair the accuracy of the testimony ...." (La Jolla Casa deManana v. Hopkins (1950) 98 Cal.App.2d 339, 345 [219 P.2d 871].) When the underlying evidence consists of declarations, the rule applicable to our review "is the same as that governing oral testimony...." (Hammel v. Lindner (1964) 224 Cal.App.2d 426, 431-432 [36 Cal.Rptr. 656].) Because Vera's and Moest's declarations contradicted Vera's
For similar reasons, we conclude there is sufficient evidence that appellants willfully failed to comply with the May 19, 2011 orders in other respects. Even though Vera testified that missed phone calls were transferred to a voicemail system maintained by a central operator, appellants produced no recordings of incoming or outgoing voicemail messages, and neither identified nor provided documents related to the system's central operator. Appellants also produced no financial records related to their "636-3636" telephone lines, although Amamgbo testified that he had records "acquire[d] in the normal course of business," and appellants otherwise admitted in discovery that Amamgbo & Associates was responsible for paying for the lines. In addition, appellants never identified any of the attorneys with whom they admittedly had fee-sharing agreements or the terms of such agreements, after Amamgbo & Associates began receiving calls on the "636-3636" lines. In sum, because there is sufficient evidence that appellants willfully violated the May 2011 orders in several ways, the trial court did not abuse its discretion in imposing terminating sanctions.
Appellants contend the default judgment is invalid because the SAC states no claim. They argue that the allegations in the SAC assert no claims supporting the damages and injunctive relief awarded in the judgment.
Our inquiry here into the complaint's adequacy is akin to that triggered by a general demurrer, namely, whether the complaint lacks factual allegations
The SAC purports to assert claims under the common law for unfair competition and "passing off," as well as a statutory claim for unfair competition under the UCL. Under these claims, the SAC seeks damages, including recovery of appellants'"unjust profits," and injunctive relief. Because damages are unavailable as a remedy under the UCL (Clark v. Superior Court (2010) 50 Cal.4th 605, 610 [112 Cal.Rptr.3d 876, 235 P.3d 171]), we focus our inquiry on the common law claims.
The common law tort of unfair competition has long been recognized in California. An instructive decision is Modesto Creamery. There, the plaintiff, a creamery located in Modesto, sold butter in wrappers bearing the word "Modesto." (Modesto Creamery, supra, 168 Cal. at p. 291.) After 10 years, the defendant began selling butter in similar wrappers in the same area. (Ibid.) When the plaintiff sued the defendant, the trial court awarded the plaintiff damages and injunctive relief. (Ibid.) The court found that the word "Modesto," as used by the plaintiff, had acquired "`a special significance and secondary meaning apart from its geographical sense,'" and had come to signify the plaintiff's butter; in addition, the court found that the defendant acted with the intent to mislead customers. (Id. at pp. 291-292.) Our Supreme Court affirmed the judgment, concluding that the plaintiff was entitled to an
Although our research has disclosed no California decision holding that an action for common law unfair competition is properly predicated on the use of business telephone numbers, we find guidance from Cytanovich Reading Center v. Reading Game (1984) 162 Cal.App.3d 107 [208 Cal.Rptr. 412] (Cytanovich). There, the plaintiff and the defendant provided reading-improvement services in the same community. (Id. at p. 109.) The plaintiff adopted as its business telephone number "321-7323," and incorporated the number in its advertising in the alphanumerical form "321-READ." (Ibid.) Soon afterward, the defendant began using the telephone number "494-7323," and displayed it in advertising in the alphanumerical form "494-READ." (Ibid.) When the plaintiff filed an action against the defendant for unfair competition and trademark infringement, the trial court initially ordered a preliminary injunction, but ultimately issued a judgment in favor of the defendant and against the plaintiff. (Id. at p. 110.)
On appeal, the plaintiff contended the defendant had engaged in unfair competition. (Cytanovich, supra, 162 Cal.App.3d at p. 110.) The appellate court concluded that "the use of such telephone numbers may provide the basis for a claim of unfair competition, at least under circumstances similar to those suggested in the present case. Basic and essential to such a determination by a trial court ... are its factual findings and conclusions as to material considerations such as these: Whether there is some imitation of the telephone number associated with a particular service; whether the telephone number represents a somewhat novel or distinctive use; whether the telephone number imitated has received some significant prior use; whether a largely coterminous or at least competitive service area is involved; whether there is a likelihood that the ordinary public will be deceived; and, if the alphanumeric representation is generic or descriptive, whether it has acquired a secondary meaning such that a substantial segment of the purchasing public associates the symbol with the original, single source of a given service." (Id. at p. 114.) The appellate court nonetheless declined to reverse the judgment, as the record on appeal was insufficient to show that the trial court's implied findings regarding these matters were erroneous. (Id. at pp. 114-115.)
Here, the SAC asserts those key facts. The SAC alleges that since 1984, respondent's advertising incorporated the easy-to-remember numerical string "636-3636," as found in its toll-free number; that the numerical string thus acquired "significant notoriety," and was associated with respondent by consumers in respondent's target market; that appellants intentionally used telephone numbers incorporating the "636-3636" string to pass themselves off as affiliated with respondent; and that they engaged in misleading conduct to avoid informing callers that they were not so affiliated. Although the similarity between respondent's toll-free number and appellants' numbers resides simply in a numerical string, rather than in an alphanumerical mnemonic term (such as "READ"), the SAC asserts that the "easy-to-remember" numerical string has acquired the requisite secondary meaning, and that appellants intentionally engaged in a deceptive scheme to exploit that meaning.
Appellants' reliance on Holiday Inns, Inc. v. 800 Reservation Inc. (6th Cir. 1996) 86 F.3d 619 (Holiday Inns) and Dranoff-Perlstein Associates v. Sklar (3d Cir. 1992) 967 F.2d 852 (Dranoff-Perlstein Assocs.) is misplaced. In Holiday Inns, a hotel chain asserted unfair competition and trademark infringement claims under the Lanham Act (15 U.S.C. §§ 1114, 1125) against a reservation service, alleging that the service used a phone number that customers often misdialed when attempting to contact the hotel chain via its "800" number. (86 F.3d at pp. 620-621.) After the hotel chain secured summary judgment on its claims, the Sixth Circuit reversed, concluding there was no evidence that the reservation service created or promoted consumer confusion. (Id. at pp. 622-626.) The Sixth Circuit noted there was evidence that the reservation service tried to dispel confusion by a recorded message informing callers that they had not reached the hotel chain. (Ibid.) In contrast, the SAC alleges that appellants intentionally avoided dispelling consumer confusion, and exploited it to their own advantage.
In Dranoff-Perlstein Assocs., the plaintiff and the defendant practiced personal injury law in the same area. (Dranoff-Perlstein Assocs., supra, 967 F.2d 852 at p. 853.) After the plaintiff advertised a business telephone number containing the alphanumerical string "INJURY-1," the defendant advertised a similar number containing the alphanumerical string "INJURY-9." (Id. at pp. 853-854.) When the plaintiff asserted unfair competition and trademark infringement claims under the Lanham Act against the defendant, the trial court granted summary judgment in the defendant's favor. (Dranoff-Perlstein Assocs., supra, at p. 854.) The Third Circuit reversed the summary judgment, reasoning that there were triable issues of fact whether the alphanumerical string "INJURY-1" had a secondary meaning sufficient for Lanham Act claims. (967 F.2d at pp. 860-863.) In so concluding, the Third Circuit determined that the alphanumerical string "INJURY," viewed in
Pointing to Code of Civil Procedure section 580, appellants contend the trial court erred in issuing a default judgment awarding damages, because the SAC does not allege the amount of respondent's damages. For the reasons explained below, their contention fails, as respondent served a predefault notice specifying the amount of its damages.
The notice requirement is nonetheless subject to at least two exceptions. The first arises in cases involving statutory prohibitions of a statement of the amount of damages in the complaint. Under Code of Civil Procedure section 425.10, subdivision (b), a complaint in an action for personal injury or wrongful death may not state the amount of damages. Similarly, under Civil Code section 3295, subdivision (e), a complaint may not state the amount of punitive damages sought. In such cases, Code of Civil Procedure sections 425.11, subdivision (b), and 425.115, subdivision (b), permit the service of notices on the defendant stating the amounts of the plaintiff's compensatory and punitive damages. Under Code of Civil Procedure section 580,
The notice requirement is also subject to an exception in actions in which an accounting is sought. The leading case regarding this exception is Ely v. Gray (1990) 224 Cal.App.3d 1257 [274 Cal.Rptr. 536] (Ely). There, the plaintiff sued the defendant, seeking the dissolution of two partnerships in which they had participated, along with an accounting. (Id. at p. 1260.) The complaint did not specify the amount due the plaintiff. (Ibid.) When the defendant failed to answer the complaint, the court ordered the entry of his default and rendered a default judgment in favor of the plaintiff for $44,618.44. (Ibid.)
On appeal, the defendant contended the judgment was void because the complaint contained no allegation specifying the amount due the plaintiff. (Ely, supra, 224 Cal.App.3d at p. 1259.) The appellate court observed that the notice requirement in Code of Civil Procedure section 580, subdivision (a), places plaintiffs seeking an accounting "in a bind," as the presence of allegations in a complaint specifying an amount due ordinarily undermines a prayer for an accounting. (Ely, supra, at pp. 1261-1262.) To resolve that conundrum, the court looked to the statutory scheme governing the first exception to the notice requirement. The court concluded: "By analogy [with those statutes], ... a plaintiff who seeks an accounting has the solution of [a] postcomplaint and predefault notice to the defendant of the amount the plaintiff will seek to prove due him if the defendant defaults. As with Code of Civil Procedure section 425.11, the notice must be given with adequate time for the defendant to respond before a default is entered." (Ely, supra, at p. 1263.) Turning to the case before it, the appellate court reversed the judgment, as the plaintiff had provided no such notice to the defendant. (Id. at pp. 1263-1264.)
Following Ely, a division of opinion has arisen regarding whether a plaintiff seeking an accounting must provide a predefault notice of the amount due. In Cassel v. Sullivan, Roche & Johnson (1999) 76 Cal.App.4th 1157, 1159-1160 [90 Cal.Rptr.2d 899] (Cassel), an attorney filed an action against a legal partnership in which he had participated, seeking an accounting and a valuation of his interest in the partnership. His complaint specifically alleged that the partnership possessed the financial records needed to determine that interest. (Id. at p. 1159.) After the partnership failed to answer the complaint, its default was entered and a judgment for $305,690 was issued in the attorney's favor. (Id. at p. 1160.) Before the trial court, the partnership challenged the judgment, arguing that the attorney never served
On appeal, the partnership contended that both judgments were void because no notice of the amount due had been served prior to the entry of default. (Cassel, supra, 76 Cal.App.4th 1157.) In rejecting that contention, the appellate court concluded that the holding in Ely requiring such a notice was not "analytically sound." (Id. at p. 1164.) The court stated: "We hold that in an action seeking to account for and value a former partner's partnership interest and for payment of that interest, the complaint need only specify the type of relief requested, and not the specific dollar amount sought. We foresee no danger that defaulting defendants will be taken by surprise by judgments entered against them, because ... they will be in possession of the essential information necessary to calculate their potential exposure." (Id. at pp. 1163-1164.) The court thus ordered the second judgment vacated and the first judgment reinstated. (Id. at p. 1164.)
In Van Sickle, supra, 196 Cal.App.4th at page 1527, the appellate court rejected Cassel in favor of Ely. There, the former client of an attorney sued him for breach of fiduciary duty, alleging that he had mismanaged property she had obtained in a divorce. (Id. at pp. 1500-1503.) Her complaint sought an accounting and contained no demand for a specific amount of money. (Ibid.) She also provided no statement of an amount due her before the trial court ordered the entry of a default judgment against the attorney for discovery misconduct. (Ibid.) In reversing the default judgment, the appellate court distinguished Cassel, noting that the complaint in that action — unlike the client's complaint — alleged that the defendant possessed the records necessary to assess the value of the potential judgment. (Id. at pp. 1526-1527.) The appellate court further stated that even if Cassel were not factually distinguishable, it would apply Ely, which it viewed as correctly decided. (Id. at p. 1527.)
It is unnecessary for us to resolve this division of opinion, as the default judgment against appellants was proper under both Ely and Cassel. As explained below, the SAC adequately pleaded a request for an accounting, and respondent served a predefault notice of an amount due.
The record further discloses that prior to the entry of appellants' default, respondent gave them notice of the amount of damages it sought. Respondent's motion for discovery sanctions stated that appellants had been using their "636-3636" telephone numbers since 2007. Moreover, in seeking issue sanctions, the motion stated: "[Respondent] propounded discovery requests for [Amamgbo & Associates's] financial records and information in order to determine the amount of damages in this case, i.e., the amount of money [appellants] wrongfully profited from their use of the infringing phone numbers.... Due to [Amamgbo & Associates's] refusal to provide any of the documents requested that would substantiate these figures, [respondent] seeks an order ... deeming the damages in this case to amount to at least $1,051,596.00 per year." (Italics added.) In an effort to support that estimate of damages, respondent offered a calculation of the benefits appellants had derived from respondent's advertising expenditures. According to the calculation, the value of those benefits was approximately $2,631,443.72 per year.
Appellants contend the damages awarded in the default judgment are excessive. They argue that the $691,280 award of damages "ha[s] absolutely nothing to do with [their] profits," and is not supported by the evidence presented in respondent's "prove up" packet. We reject their contentions.
Here, respondent's "prove up" packet initially sought damages totaling $11,638,920. Noting that appellants' failure to provide any financial records "undermined [respondent's] ability to calculate [their] unjust profits," respondent argued that it was entitled to "restitutionary or compensatory damages" based on the calculations in its motion for discovery sanctions.
Later, in a supplemental brief requested by the trial court, respondent offered an alternative calculation of its damages, which determined them to be at least $689,520. The alternative calculation relied on the payments Vera and Gomez had received from Amamgbo and his law firm. Respondent offered evidence that appellants engaged in their wrongful conduct for at least 4.42 years, during which Vera and Gomez received funds totaling $156,000, based on their testimony that Vera received $10,000 per month and Gomez received $700 per week. Respondent maintained that it was entitled to recover at least $689,520, which represented the total funds paid to Vera and Gomez during the 4.42-year period.
In support of this estimate, respondent argued: "If [Amamgbo & Associates] was willing to pay ... Gomez and Vera $156,000 annually essentially for use of the [`636-3636'] numbers, it clearly was making significantly more than that amount from its use of the numbers. Thus, [appellants] themselves through their actions have demonstrated that the use of the [`636-3636'] numbers [is] easily worth over $156,000 per year."
At the hearing on respondent's request for a default judgment, the trial court rejected respondent's demand for $11,638,920 in damages, and instead determined that respondent was entitled to $691,280 in damages. In so doing, the court apparently concluded that the payments to Vera and Gomez provided an adequate basis for a determination of appellants' net profits, as the court noted those payments in announcing its rulings. We further observe that the court's award of damages closely tracks Vera's and Gomez's testimony regarding the payments. Because Gomez was paid $700 per week, she received $36,400 per year (based on a 52-week year). As Vera was paid $120,000 per year ($10,000 per month for 12 months), they jointly received $156,400 per year. Accordingly, during the 4.42-year period, they were paid funds totaling $691,288, which is effectively the amount of damages awarded in the judgment.
In view of the allegations in the SAC and respondent's "prove up" showing, the trial court reasonably concluded that Vera and Gomez were paid "salaries" solely for their efforts in effectuating the tortious scheme, that is, providing the "636-3636" lines, receiving calls on the lines, and directing callers to Amamgbo and his law firm. The trial court's award of damages thus represents a conservative estimate of appellants' collective net profits. In sum, the damages awarded in the judgment were not excessive.
The judgment is affirmed. Respondent is awarded its costs on appeal.
Willhite, Acting P. J., and Edmon, J.,
