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Strabala v. Ramirez6/28/2005
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
The trial court entered a default judgment on a cross-complaint for a total recovery of $700,000, and for the dissolution of a corporation. The judgment is in excess of the sums set forth in the cross-complaint and in the statement of damages. For the reasons we set forth below, the judgment is also ambiguous. Accordingly , we reverse and remand the case to the trial court with directions to determine the amount and to enter a judgment consistent with the principles set forth in this opinion.
FACTS
On May 4, 2001, appellant Paul A. Strabala filed an action against respondent Manuel Ramirez which alleges, among other things, that Strabala and Ramirez, who are certified public accountants, entered into a partnership, Strabala, Ramirez & Associates, CPA's, Inc., in 1993. The complaint alleges that appellant and respondent converted the partnership into a corporation in 1999, but that a series of disagreements, and breaches of fiduciary duties by Ramirez, brought the joint enterprise to a halt. The complaint sought damages of $200,000 that Strabala claimed he advanced to the partnership, damages for breaches of fiduciary duties and for breach of contract, an order for an accounting and for declaratory relief. Ramirez answered the complaint.
On June 25, 2001, Ramirez filed a cross-complaint which names Strabala as the cross-defendant and which alleges that Strabala and Ramirez formed a corporation in 1999 in which they each had a 50 percent interest. The cross-complaint sets forth five causes of action. The first and second causes of action seek an involuntary dissolution of the corporation, an accounting, the appointment of a receiver and the removal of Strabala as a director of the corporation. The third cause of action, denominated a derivative action, seeks damages allegedly caused by various breaches of fiduciary duty by Strabala. The fourth and fifth causes of action are for fraud and constructive fraud, respectively. As set forth in more detail below, the third cause of action, on the one hand, and the fourth and fifth causes of action, on the other, are based on different sets of facts. The third, fourth and fifth causes of action each seek damages in excess of $200,000. However, the prayer of the cross-complaint seeks damages on the third, fourth and fifth causes of action "in a sum according to proof," without stating an amount. The prayer also seeks punitive damages "according to proof."
Strabala demurred to the cross-complaint, and moved to strike it. On October 15, 2001, the demurrer and motion were overruled, and Strabala's first of several attorneys was given leave to withdraw as counsel. Strabala was given 25 days to answer the cross-complaint. An answer to the cross-complaint was never filed.
On November 19, 2001, Ramirez served a statement of damages pursuant to Code of Civil Procedure sections 425.11 and 425.115 for "no less than $200,000.00 in general and special damages" and punitive damages in excess of $200,000.
Ramirez filed a request for entry of default on the cross-complaint on November 27, 2001. The request shows service on Strabala at his place of business. On December 6, 2001, with no appearance given for Strabala and Ramirez appearing by his counsel, the court dismissed Strabala's complaint and ordered Ramirez to obtain a default judgment on the cross
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