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Hsbc Bank Nevada, N.A v. Lizet G. Aguilar

May 15, 2012


APPEAL from an order of dismissal of the Superior Court of Los Angeles County, Lancaster Trial Court, Randolph A. Rogers, Judge. (Lancaster Trial Court No. 09C05847)

The opinion of the court was delivered by: P. McKAY, P. J.


This opinion has been certified for publication in the Official Reports. It is being sent to assist the Court of Appeal in deciding whether to order the case transferred to the court on the court's own motion under rules 8.1000-8.1018.




This is an appeal by plaintiff HSBC Bank Nevada, N.A. from the signed order dismissing its complaint against defendant Lizet G. Aguilar.*fn1 As explained below, we reverse the order.


Plaintiff filed a complaint against defendant seeking money damages by alleging causes of action for breach of contract and common counts of open book account and account stated. The complaint sought damages in the amount of $2,290.37, interest at the rate of 10 percent per annum from the date of April 30, 2009, and attorney fees according to proof.

Plaintiff's complaint utilized the California Judicial Council-approved form for pleading its causes of action, and checked the appropriate boxes on the form to plead each count. The breach of contract cause of action alleged as follows: that plaintiff and defendant entered into a written credit card agreement; that defendant therein agreed, either by her signature or by her use of the credit card, to pay plaintiff for credit or monies provided by plaintiff; that the agreement provided that in the event of a default, plaintiff would be entitled to the unpaid balance, attorney fees, and costs; and that defendant had failed to make payment on the account as agreed and after demand by plaintiff. The cause of action for common counts alleged that, within the last four years, money was had and received by defendant, money was lent by plaintiff to defendant at defendant's request, and money was paid, laid out, or expended for defendant at defendant's special instance or request on an open book account or an account stated in writing.

The summons and complaint were filed on December 11, 2009, and the proof of service of summons was filed on December 30, 2009. The complaint was served via substituted service on December 28, 2009, by a registered process server. The proof of service was supported by a declaration of due diligence and a declaration of mailing. On May 10, 2009, after defendant failed to respond to the complaint, plaintiff sought entry of default and a clerk's judgment. In its request for entry of default and clerk's judgment, plaintiff sought $2,290.37 (the amount alleged in the complaint), as well as interest in the amount of $233.10, and costs in the amount of $264. Plaintiff did not seek attorney fees. The clerk entered defendant's default, but refused to enter judgment. The clerk's reject sheet referenced California Rules of Court, rule 3.1806,*fn2 and instructed plaintiff to submit either the "original promissory note or contract" or, if the original were not available, to submit "a declaration of lost original."

When plaintiff failed to comply with the clerk's instructions, the court set the matter for an order to show cause hearing. The order to show cause was based on plaintiff's failure to file a request for entry of default judgment as required by California Rules of Court, rule 3.740(f).*fn3 In response to the order to show cause, plaintiff submitted a declaration and argued therein that it had satisfied all statutory prerequisites to obtain a default judgment, that the clerk was required to enter the default judgment, and that the clerk lacked authority and the court lacked jurisdiction to require plaintiff to produce the "original promissory note." (Sic.) The order to show cause hearing was continued. Subsequently, plaintiff submitted a request for entry of default judgment that was rejected by the clerk. This was followed by plaintiff filing a motion on January 7, 2011, seeking a court order to compel the clerk to enter default judgment or, in the alternative, for a court order entering default judgment.

On February 3, 2011, the court denied plaintiff's motion and issued a written ruling setting forth three bases for its decision. First, the court relied upon Liberty Loan Corp. of North Park v. Petersen (1972) 24 Cal.App.3d 915, 918, for the proposition that the clerk is not required to enter default judgment in cases such as plaintiff's where an accounting was required. The court found that plaintiff's case required an accounting in order to determine, inter alia, whether any payments made by defendant had been properly applied to the outstanding balance. Second, the court found that plaintiff had the burden of proof but failed to present competent evidence to prove one or more of the following: (1) that there was an assignment of the debt to plaintiff; (2) that there was a contract between plaintiff's predecessor and defendant; (3) that defendant breached the contract; (4) that plaintiff gave defendant credit for all payments made; and (5) that the individual plaintiff served was the same person who entered into the agreement. Lastly, the court found that the unpublished decision in Appellate Division Case No. BS 122041, entitled Professional Collection Consultants v. the Honorable Randolph A. Rogers et al. rejected plaintiff's position while it also validated the court's interpretation of the law. According to the trial court, the Appellate Division in that case denied the writ petition, and the Court of Appeal denied a request to review the Appellate Division's order.

At no time did plaintiff submit any evidence in the trial court, or otherwise seek an evidentiary hearing in order to obtain a default judgment. Subsequently, on February 7, 2011, the court dismissed, without prejudice, plaintiff's complaint against defendant. After the court filed ...

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