• The Importance of Damage Allegations when Defendant is in Default
  • February 2, 2016
  • Law Firm: Prenovost Normandin Bergh Dawe A Professional Corporation - Santa Ana Office
  • A defendant who is in default in a lawsuit cannot participate in an action until either (a) the default is set aside (by motion or stipulation), or (b) default judgment is entered (whereupon the defendant can file an appeal). Stipulating to set aside the default may be more cost-effective than a motion for the same relief, but limited bargaining power can result in a stipulation which imposes unfavorable conditions upon the defendant (i.e., inability to attack pleadings, discovery limitations). In evaluating the responsive strategy, you should consider the Complaint’s damage allegations, the improper pleading of which can improve the defendant’s bargaining position.

    Under California law, the relief granted to a plaintiff, if there is no answer, cannot exceed the amount demanded in the Complaint, in the statement required for personal injury or death actions, or in the statement provided for punitive damages actions. Code Civ. Proc. § 580(a).

    Where the damage allegations in the body of the Complaint exceed the amount demanded in the prayer, the prayer controls. In such circumstances, a default judgment in excess of the prayer is void as to the excess. Importantly, a vague prayer for “damages according to proof” is legally sufficient only if a specific amount of damages is alleged in the body of the complaint. Thus, a default judgment which awards monetary relief where no specific monetary relief was demanded is void as being in excess of the court’s jurisdiction.

    When judgment is reversed because the damages awarded exceed those pled, the court typically modifies the judgment by reducing it to the amount specified in the Complaint. Alternatively, the plaintiff can amend the Complaint to state the full amount of damages, but the amendment vacates the default, and entitles the formerly-defaulted defendant to either attack the pleadings or answer the amended complaint. Consequently, a complaint which does not allege a specific amount of damages will have to be amended prior to entry of judgment if the plaintiff hopes to recover anything, and therein lies the opportunity to actually leverage the default.

    Therefore, it is imperative that counsel specifically allege the amount of damages sought to secure a default judgment for the alleged amount. Conversely, if you are a defendant and the Complaint is deficient pleaded, the Plaintiff may not have a valid judgment. Poorly pleaded damage allegations can render a default functionally worthless, and can be used against the plaintiff to avoid law and motion, negotiate better stipulation terms, or perhaps even settle the case.