Just Demand a Billion Dollars

Sass v. Cohen, No. B283122 (D2d2 Apr. 4, 2019)

Plaintiff brought Marvin and other claims against her ex-paramour, claiming to be entitled to half the value of various items of real and personal property acquired during the relationship. Defendant defaulted. Notwithstanding Code of Civil Procedure § 580(a), which limits relief on a default judgment to that demanded in the complaint, the trial court awarded plaintiff almost $3 million, plus a constructive trust over one house. Defendant appeared and moved to vacate the judgment. But the trial court upheld the award, finding that § 580(a)’s limits don’t apply to an accounting-type claim where the defendant already has sufficient information to calculate an exposure. 

There’s a Court of Appeal case from 1999 that says so much. See Cassel v. Sullivan, Roche & Johnson, 76 Cal. App. 4th 1157 (1999). Cassel justified a non-statutory exception to § 580(a) for two reasons. First, since the whole point of an accounting case is to ascertain the value of something, it’s a little weird to make a plaintiff plead that number at the outset. And second, so long as the claim identifies the types of property being accounted, a defendant in possession of that property has sufficient information to calculate exposure. 

So the main question before the Court of Appeal is whether it will follow Cassel. It will not. For two reasons of its own. First, the Court sees no reason to depart from the plain meaning of § 580(a). While § 580(a) has textual exceptions, accountings are not among them. So the Court declines to recognize a non-textual exception outside of the statutory scheme. Second, the default scheme requires formalized notice in the form of a complaint. It eschews the sufficiency of constructive or informal notice, even when the defendant actually knows the exposure. So the Court declines to follow a rule based on informal notice specific to accounting cases.

The Court goes on to find that when computing the value of a complaint’s demand under § 580(a), courts should look to the aggregate of the monetary relief demanded, not on an item by item basis. Tallying up the relief that way, Plaintiff here demand either $3.8 million or $1 million and a constructive trust. So the trial court’s award of both $3 million and a constructive trust exceeded the prayer.

So the case gets reversed. On remand, the trial court can either: (1) reduce the damages to $1 million; or (2) vacate the default and permit plaintiff to serve an amended complaint demanding the full damages she seeks.

Reversed and remanded.