MERRILL v. AMERICAN SAND RACING ASSOCIATION INC (1988)

In this personal injury action filed by respondent Duke Merrill (Merrill), appellant American Sand Racing Association, Inc. (ASRA), contends the trial court exceeded its jurisdiction in entering a default judgment in excess of the amount specified in Merrill's statement of damages (Code Civ.Proc.,1 § 425.11).   Merrill concedes the point, but asserts he should be given the option of filing an amended statement of damages upon remand.²

FACTS AND PROCEDURAL BACKGROUND

On March 14, 1982, Merrill was a spectator at an ASRA-sponsored sand drag race.   He was injured when the engine fly wheel of one of the racing vehicles disintegrated, causing a heavy piece of metal to fly through the air and strike him.

On March 10, 1983, Merrill filed his complaint for negligence.   He filed a statement of damages on May 30, 1984, specifying general and special damages of $61,260.   On May 31, the court granted his motion to strike ASRA's answer for failure to respond to interrogatories and entered a default against ASRA.   On December 6, 1985, Merrill filed an amended statement of damages, listing his general and special damages as $375,167.58.   After a prove-up hearing on May 13, 1986, the court entered a default judgment against ASRA in the amount of $265,879.27.

DISCUSSION

In Greenup v. Rodman (1986) 42 Cal.3d 822, 231 Cal.Rptr. 220, 726 P.2d 1295, the complaint failed to specify the amount of compensatory damages although it did request $100,000 in punitive damages.  (Id. at p. 825, 213 Cal.Rptr. 220, 726 P.2d 1295.)   As a discovery sanction the trial court struck the answer and entered a default judgment for $338,000 in compensatory damages and $338,000 in punitive damages.  (Id. at pp. 825–826, 213 Cal.Rptr. 220, 726 P.2d 1295.)   The California Supreme Court held the general rule that a default judgment cannot exceed the amount demanded in the complaint applied to a default judgment entered as a discovery sanction, and the plaintiff's judgment would have to be reduced to the extent it exceeded the prayer.  (Id. at pp. 824, 830, 213 Cal.Rptr. 220, 726 P.2d 1295.)   Thus, the judgment was modified to award the plaintiff $100,000 in punitive damages and $15,000 in compensatory damages (the jurisdictional amount).   (Id. at pp. 830–831, 213 Cal.Rptr. 220, 726 P.2d 1295.)   The court recognized, however, the reduced damages might not fully compensate the plaintiff.  (Id. at p. 830, 213 Cal.Rptr. 220, 726 P.2d 1295).   It also noted because the case was one of first impression, the plaintiff and the trial court might have been unaware the deficiency in the prayer could have been rectified by allowing service and filing of an amended complaint which the defendant would be allowed to answer.  (Ibid.)  The court concluded in the interest of fairness, the plaintiff should be given the option of foregoing the reduced award and instead filing and serving an amended complaint.  (Ibid.)

In his memorandum of points and authorities in support of default judgment filed May 9, 1986, (by Michael Rood of Sutherland & Gerber), Merrill argued:  “DUKE MERRILL is entitled to Default Judgment against AMERICAN SAND RACING ASSOCIATION, INC. under C.C.P. Sections 579, 580.   MR. MERRILL has proceeded diligently.   All required notice has been given.   MR. MERRILL is entitled to prove up all of his damages according to Greenup v. Rodman 168 Cal.App.3d 796 [214 Cal.Rptr. 520]․”  (Emphasis added.)

The Greenup decision was filed in District Two, Division Four, of the Court of Appeal on May 24, 1985.   On August 1, 1985, review was granted by the Supreme Court.   Thus, by May 9, 1986, the “precedent” Merrill cited to the court as controlling authority had lost all the vitality it ever had.   Even though the Supreme Court decision reversing the Court of Appeal was not issued until November 13, 1986, under California Rules of Court, rule 976(d), “[u]nless otherwise ordered by the Supreme Court, no opinion superseded by a grant of review ․ shall be published․”  Under rule 977(a), “[a]n opinion that is not ordered published shall not be cited or relied on by a court or party in any other action or proceeding․”  Knowing use of such a citation is a violation of the Rules of Professional Conduct for attorneys.  (See Rules of Prof. Conduct, rule 7–105.)

Here, Merrill relied upon a depublished Court of Appeal opinion to support a rule which represented a drastic change in California law.   For the first time a default judgment was to be entered where the defendant had no notice of the amount for which he was responsible.   Any attorney who is aware the Supreme Court has granted review in such a case must recognize the continued validity of the new rule is questionable.

Further, throughout this appeal, Merrill has never divulged the facts surrounding his citation by the depublished opinion.   Only through our independent review of the superior court record did we learn of the improper citation before the trial court.

Under these circumstances, Merrill is not entitled to begin his case anew with an amended statement of damages.

Finally, Merrill mentions in his brief he has settled with ASRA's codefendants for $150,000.   He contends ASRA may refuse to pay a reduced judgment of $61,260 on the ground it has already been satisfied by virtue of the settlement, thus benefiting from its default.   Merrill neglects to mention, however, that ASRA may be subject to claims for indemnity by the settling codefendants.   Merrill's fortunate $150,000 in no way affects the procedure employed regarding his default judgment against ASRA.   We therefore reject Merrill's argument he should be allowed to amend on account of the settlement.

DISPOSITION

The judgment is modified to reduce the amount of the default judgment to $61,260.   As modified, the judgment is affirmed.

FOOTNOTES

FN1. All statutory references are to the Code of Civil Procedure..  FN1. All statutory references are to the Code of Civil Procedure.

2.   Merrill actually requests he be allowed to file an amended complaint.   We construe this as a request to file an amended statement of damages since in a personal injury action the complaint cannot specify the amount of damages.  (§ 425.10.)

TODD, Associate Justice.

WIENER, Acting P.J., and HADEN, J.**, concur.