Monday, September 14, 2015
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C.A. Tosses Judgment for Actor Claiming Parents Took His Money
Panel Says Statement of Damages Required Before Default Because Plaintiff Knew What His Damages Were
By KENNETH OFGANG, Staff Writer
A plaintiff seeking an accounting cannot obtain a default without first serving a statement of damages, if the plaintiff knows what the damages are and the defendant does not, the Court of Appeal for this district ruled Friday.
Div. Three ordered a default and default judgment set aside in an action by actor Chris Warren against his parents.
Warren, 25—his full name is Christopher Warren Jr.—has been acting professionally since he was nine years old. He is the son of Christopher Warren Sr. and actress Brook Kerr, who starred for eight years in the soap opera “Passions.”
Lawsuit Filed
In 2012, he sued his parents and Share the Night, Inc., a corporation they formed in 2001 to promote his career. Seeking damages for breach of oral contract and fiduciary duty, and an accounting, he claimed that his parents looted the company, in which he continued to deposit his earnings after reaching the age of majority, in order to pay their personal expenses.
The parents went through a bitter divorce proceeding around the time the lawsuit was filed, with Kerr calling her then-husband a bipolar drug dealer, according to TMZ.
None of the defendants answered the complaint, and default was entered. The request for entry of default sought damages of more than $330,000 and was supported by declarations from the plaintiff, his lawyer, and the corporation’s accountant.
Motion to Set Aside
Judgment was entered against all defendants. Warren Sr. and the corporation subsequently moved to set aside the default and judgment on grounds of improper service, failure to give notice of damages prior to entry of default, and mistake, surprise, inadvertence, or excusable neglect.
Warren claimed that Kerr had run the company and the family finances, cut him off from access to the family’s bank accounts, stopped paying his bills, and colluded with their son against him.
Judge Stephen Pfahler denied the motion, but the Court of Appeal reversed in an opinion by Justice Richard Aldrich.
The justice explained that a split of authority exists as to whether a statement of damages is a prerequisite for obtaining a default in an action for an accounting. He contrasted Ely v. Gray (1990) 224 Cal.App.3d 1257, holding that an action for accounting was analogous to one for personal injury, so that a statement of damages was required, with Cassel v. Sullivan, Roche & Johnson (1999) 76 Cal.App.4th 1157.
The court in Cassel, a case involving a law firm breakup, rejected the analogy to personal injury actions. The panel reasoned that in a case like the one before it, the facts needed to determine damages would most likely be better known to the defendant than the plaintiff, contrary to the typical personal injury case.
Cassel, Aldrich concluded, better states the general rule, since “the defendant’s due process right to notice of potential liability will not be offended by the plaintiff’s failure to serve a predefault notice of damages in accounting actions.”
Exception to Rule
But the circumstances of Warren’s action call for application of an exception to the rule, the justice said.
Share the Night, he explained, was not a law firm, but a “family loan out corporation,” whose business records were accessible to the plaintiff—as demonstrated in the declaration he obtained from the company’s accountant—but were apparently not available to Warren Sr. The plaintiff, Aldrich said, failed to rebut the evidence that Warren Sr. had been cut off from access to the family’s financial information.
“Under these circumstances, where Warren, Jr., had access to the necessary information before filing his request for entry of default, and Warren, Sr., has raised an issue as to his (Warren, Sr.’s) access to that information, we will not apply Cassel,” the jurist wrote.
Attorneys on appeal were Charles K. Wake for the defendants and James R. Felton of Greenberg & Bass for the plaintiff.
The case is Warren v. Warren, 15 S.O.S. 4370.
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