Court of Appeal affirms trial court’s order voiding jurisdictionally invalid default judgment

Plaintiff sued a general contractor for defective construction work at the Anaheim hotel she owned; the general contractor cross-complained against a group of subcontractors.  After settling with the general contractor, plaintiff substituted in as the real party in interest on the general contractor’s cross-complaint and obtained a $1.2 million default judgment against the subcontractors.  She then sued the subcontractors’ insurers, including GMSR’s client, in a separate judgment-creditor action.  The trial court voided the default judgment because the cross-complaint failed to state the amount of damages sought, as jurisdictionally required.

On appeal, plaintiff argued that the prayer for damages of not less than $10 million in her initial complaint against the general contractor was “incorporated by reference” into the cross-complaint.  The Court of Appeal disagreed and affirmed.  It held that the trial court correctly voided the default judgment because the damages amount was not properly alleged in the cross-complaint, and the supposed incorporation by reference of the monetary demand contained in plaintiff’s underlying complaint was not “clear and unequivocal.”

Yu v. Liberty Surplus Ins. Corp. (2018) 30 Cal.App.5th 1024 [Fourth District, Division 3] [published]

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