Madrone Homeowners Association vs. Stephanie Stapleton

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.

Cross-defendant and cross-complainant 37 Construction Specialists Inc.’s (“Cross-Defendant”) motion to set aside default and cross-complainants Stephanie Stapleton’s (“Stapleton”) and John Duarte’s (“Duarte”; jointly, “Cross-Complainants”) motion to strike Cross-Defendant’s Answer to Cross-Complainants’ Second Amended Cross-Complaint (“2AXC”) are jointly ruled on herein.

Cross-Defendant’s and Cross-Complainants’ requests for judicial notice are UNOPPOSED and GRANTED. The Court only takes judicial notice of the existence of the documents and not the truth of their contents. (See Professional Engineers v. Dept. of Transportation (1997) 15 Cal.4th 543, 590; Searles Valley Minerals Operations, Inc. v. State Board of Equalization (2008) 160 Cal.App.4th 514, 519.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00311585-CU-BC-GDS: Madrone Homeowners Association vs. Stephanie Stapleton 03/09/2026 Hearing on Motion to Set Aside/Vacate Default (CCP 473.5) in Department 28

Background

This case arises out of alleged construction defects in condominium units of a California common interest development known as the Madrone Development (“Development”). On April 1, 2022, plaintiff and cross-defendant Madrone Homeowners Association (“HOA”) filed its operative First Amended Complaint against defendant and cross-complainant Stapleton alleging (1) breach of governing documents and (2) negligence. On May 24, 2022, Stapleton filed a Cross-Complaint against the HOA and others. On September 18, 2023, Stapleton and crosscomplainant Duarte filed a First Amended Cross Complaint (“1AXC”) naming Cross-Defendant as a defendant.

The 1AXC alleges that during the construction of Cross-Complainants’ units, cross-defendant Madrone Attached Homes, L.P. improperly installed and/or installed defective HVAC units, failed to install a secondary overflow drain line, and failed to install, improperly installed, or installed a defective float switch that was intended to shut off the HVAC units if the condensation drain line failed. (1AXC, ¶ 24.) Cross-Complainants allege that all crossdefendants have been aware of the defects existing within the Development for years prior to the discovery of the defects by Cross-Complainants. (Id. at ¶ 28.)

The causes of action set forth in the 1AXC include the following: (1) construction negligence; (2) strict liability; (3) breach of contract; (4) negligence; (5) nuisance; (6) breach of fiduciary duty; (7) unfair business practices; and (8) fraudulent concealment. As relevant here, both Cross-Complainants assert only the fifth, sixth, and seventh causes of action against Cross-Defendant. Only Stapleton asserts the eighth cause of action against Cross-Defendant. The 1AXC prays for damages “in an amount according to proof” as well as exemplary or punitive damages for the fifth, sixth, and eighth causes of action, and prays for restitution and attorney’s fees in an amount according to proof for the seventh cause of action. (Id. at ¶ 112.)

After Cross-Defendant did not file a responsive pleading, Cross-Complainants requested entry of default against Cross-Defendant, and the Court entered default on December 28, 2023. On July 25, 2025, Cross-Complainants filed an Application for Default Judgment against Cross- Defendant, wherein Stapleton estimates her damages as follows: (1) $106,888.50 for property damage; (2) $22,546 for alternative housing; (3) $105,652.45 for loss of use of her property; (4) $300,000 for lost wages due to toxic mold exposure (5) $20,364.39 for medical expenses due to toxic mold exposure; (6) $200,000 for pain and suffering; and (7) $300,000 for emotional distress. (Cross-Complainants’ RJN, Stapleton Decl., ¶ 17.) Duarte estimates his damages in the amount of $61,604 for repair costs. (Id., Duarte Decl., ¶ 5.)

On September 8, 2025, the Court denied Cross-Defendant’s ex parte application for an Order Setting Aside Entry of Default, noting that Cross-Defendant did not present any legal authority allowing the Court to set aside an entry of default in the absence of a noticed motion or stipulation of the parties. On September 9, 2025, Cross-Complainants filed its 2AXC, to which

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00311585-CU-BC-GDS: Madrone Homeowners Association vs. Stephanie Stapleton 03/09/2026 Hearing on Motion to Set Aside/Vacate Default (CCP 473.5) in Department 28

Cross-Defendant filed its Answer on October 1, 2025. Thereafter, the parties met and conferred regarding whether or not the filing of the 2AXC and Cross-Defendant’s Answer to the same permitted Cross-Defendant to appear in the case, notwithstanding the entry of default against it. (Cronican Decl., ¶ 9.) As a result of such meet and confer efforts, Cross-Complainants have filed a motion to strike Cross-Defendant’s Answer to the 2AXC. (Ibid.) Cross-Defendant opposes. Cross-Defendant moves to set aside default. Cross-Complainants oppose.

Legal Standard

In an action for personal injuries, the plaintiff must serve a statement of damages on the defendant before a default may be taken. (Code Civ. Proc., § 425.11, subd. (c).) Where the defendant has not appeared in the action, “the statement shall be served in the same manner as a summons.” (Code Civ. Proc., § 425.11, subd. (d)(1).)

A default is void if defendant has not been given notice of the amount of damages sought. (Plotitsa v. Superior Court (1983) 140 Cal.App.3d 755, 759; Stein v York (2010) 181 Cal.App.4th 320, 327.) “A default that is void on the face of the record when entered is subject to challenge at any time irrespective of lack of diligence in seeking to set it aside within the sixmonth period of [Code of Civil Procedure] section 473.” (Plotitsa v. Superior Court, supra, 140 Cal.App.3d 755 at p. 761; see also Stevenson v.

Turner (1979) 94 Cal.App.3d 315, 318, Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 862.) A statement of damages under Code of Civil Procedure section 425.11 is the functional equivalent of an amendment to a complaint that increases the amount of damages sought. (Plotitsa v. Superior Court, supra, 140 Cal.App.3d 755 at p. 759.) A failure to provide notice prior to default of the amount of damages sought precludes the recovery of damages pursuant to a default judgment. (See Stein v York, supra, 181 Cal.App.4th 320 at p. 327.)

Discussion

Cross-Defendant argues that the default entered against it should be set aside because Stapleton failed to serve on Cross-Defendant a statement of damages prior to requesting the entry of default, as required under Code of Civil Procedure section 425.11, for her claimed personal injury damages. Cross-Defendant also argues that Cross-Complainants failed to serve a statement of punitive damages on Cross-Defendant prior to requesting entry of default, as required under Code of Civil Procedure section 425.115.

In opposition, Cross-Complainants concede that Stapleton did not prepare or serve a statement of damages before default was entered against Cross-Defendant (Opp., 6:6-9.); however, citing Barragan v. Banco BCH (1986) 188 Cal.App.3d 283, Cross-Complainants argue that the “clear

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00311585-CU-BC-GDS: Madrone Homeowners Association vs. Stephanie Stapleton 03/09/2026 Hearing on Motion to Set Aside/Vacate Default (CCP 473.5) in Department 28

distinction” between their damages for personal injury and those for non-personal injury render Code of Civil Procedure section 425.11 inapplicable here. Specifically, Cross-Complainants argue that Stapleton’s claims for fraud, breach of fiduciary duty, and nuisance against Cross- Defendant resulted in economic losses unrelated to Stapleton’s claims for personal injury, such that Code of Civil Procedure section 425.11 is not applicable to her economic loss claims. Cross- Complainants also argue that, since Duarte does not seek damages for personal injury, his claim cannot be considered a personal injury action under section 425.11.

Alternatively, Cross-Complainants argue that any discretionary relief that the Court may grant under Code of Civil Procedure section 473 should be conditioned upon Cross-Defendant paying Cross-Complainants attorney’s fees and costs. Cross-Complainants assert that Cross-Defendant caused delays by failing to bring the present motion until nearly two years after default was entered, that Cross-Defendant also waited until after Cross-Complainants filed their Application for Default Judgment to file the present motion, which caused Cross-Complainants to incur additional attorney’s fees. Cross-Complainants also assert that Cross-Defendant’s default and lack of participation in this matter have prejudiced Cross-Complainants’ ability to litigate their cross-claims and defend the claims asserted by the HOA in this matter.

In reply, Cross-Defendant asserts that Cross-Complainants’ 1AXC provides no indication that the personal injury claims are separate from the non-personal injury claims. Cross-Defendant also argues that Cross-Complainants’ request for attorney’s fees is improper.

Here, there is no dispute that Cross-Complainants did not serve on Cross-Defendant a statement of damages before requesting entry of default. Cross-Complainants insist that their 1AXC is not subject to the notice requirements under Code of Civil Procedure section 425.11 because their claims for personal injury are incidental to their economic loss claims. “Indeed, we have observed in another context that where an emotional distress claim is ‘incidental’ to the cause of action, the cause of action will not be considered an action ‘to recover damages for personal injury.’ [Citation.]” (Schwab v.

Rondel Homes (1991) 53 Cal.3d 428, 432.) Although Cross- Complainants’ 1AXC generally only requests damages “in an amount according to proof” (and punitive damages) in the causes of action asserted against Cross-Defendant, in Cross- Complainants’ Application for Default Judgment, Stapleton estimates general damages of $500,000, consisting of $200,000 for pain and suffering and $300,000 for emotional distress. (Cross-Complainants’ RJN, Stapleton Decl., ¶ 17.) Stapleton also requests special damages of $20,364.39 for medical expenses due to toxic mold exposure and $300,000 in lost wages due to the same. (Ibid.)

When compared to Stapleton’s asserted damages of $106,888.50 for property damage, $22,546 for alternative housing, and $105,652.45 for loss of use of her property, Stapleton’s claims for personal injury are more than incidental to the alleged causes of action. Taken together, Cross-Complainant Stapleton’s 1AXC and Application for Default Judgment

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00311585-CU-BC-GDS: Madrone Homeowners Association vs. Stephanie Stapleton 03/09/2026 Hearing on Motion to Set Aside/Vacate Default (CCP 473.5) in Department 28

undermines her assertion that personal injury claims do not form the basis of her action. Thus, the Court finds that Cross-Complainant Stapleton’s action is an action to recover actual or punitive damages for personal injury or wrongful death under Code of Civil Procedure section 425.10, such that Cross-Complainant Stapleton is subject to the notice provisions under section 425.11.

Cross-Complainants rely on Barragan v. Banco BCH, supra 188 Cal.App.3d 283 to support their argument that their nonpersonal injury claims are separate and apart from their economic loss claims. In that case, the plaintiff brought actions for conversion, fraud and deceit, conspiracy, negligence, breach of contract, and false imprisonment. (Id. at p. 290.) The first five causes of action were brought against the defendant for its role in permitting unauthorized withdrawals from the plaintiff’s checking account held at the defendant’s institution. (Id. at p. 305.)

The sixth cause of action for false imprisonment arose from the defendant’s reporting of one of the plaintiffs to the Mexican police, resulting in that plaintiff’s arrest and subsequent imprisonment. (Id. at pp. 290, 292.) The Court of Appeal held that the damages attributable to the false imprisonment claim were “not so intertwined with the economic loss sustained by both plaintiffs to void the [default] judgment,” and that specific damage allegations in the plaintiffs’ prayer for relief and request to enter default provided the defendant with actual notice of its potential liability. (Id. at p. 304.)

In this case, Cross-Complainants fail to specify the types of damages sought in their prayer for relief, nor is it clear in the Application for Default Judgment how Stapleton has allocated her alleged personal injury damages among the causes of action asserted against Cross-Defendant. For similar reasons, the Court finds Cross-Complainants’ citation to Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294 to be unpersuasive, as the plaintiff’s complaint in that case “expressly apprised defendant of the amount demanded,” such that “[a] statement of damages would have been superfluous ” (Id. at p. 1302.)

Indeed, considering Cross-Complainants’ lack of specificity in their prayer for relief, it would appear that the decision in Sporn supports Cross-Defendant’s position in this motion. Based on the foregoing, the Court finds that Cross-Complainant Stapleton’s failure to comply with the notice provisions under Code of Civil Procedure section 425.11 renders void the default entered against Cross-Defendant as to Stapleton’s claims. Accordingly, Cross-Defendant’s motion to set aside entry of default as to Cross-Complainant Stapleton’s claims is GRANTED.

However, the Court finds that the notice requirements of section 425.11 are not applicable to Cross-Complainant Duarte, who does not claim personal injury damages. The only other basis for relief cited by Cross-Defendant as to Cross-Complainant Duarte’s claims is section 580.[1] However, that section only provides a basis for relief from default judgment, see Dhawan v. Biring (2015) 241 Cal.App.4th 963, 968 [“Section 580, subdivision (a), limits a trial court's jurisdiction to grant relief on a default judgment to the amount stated in the complaint”], and no default judgment has been entered against Cross-Defendant as to Cross-Complainant Duarte’s

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00311585-CU-BC-GDS: Madrone Homeowners Association vs. Stephanie Stapleton 03/09/2026 Hearing on Motion to Set Aside/Vacate Default (CCP 473.5) in Department 28

claims. Accordingly, Cross-Defendant’s motion to set aside entry of default as to Cross- Complainant Duarte’s claims is DENIED.

Lastly, the Court notes that to the extent Cross-Complainants assert that Cross-Defendant’s motion to set aside default is governed by Code of Civil Procedure section 473 and that Cross- Complainants should receive fees incurred by Cross-Defendant’s alleged delay in seeking to set aside the default (Opp., pp. 5, 8-10), the requirements of section 473 are inapplicable to requests to set aside a default that is void on its face. (See Plotitsa v. Superior Court, supra, 140 Cal.App.3d 755 at p. 761, Heidary v. Yadollahi, supra, 99 Cal.App.4th 857 at p. 862, Stevenson v. Turner, supra, 94 Cal.App.3d 315 at p. 318.) Accordingly, the Court denies Cross- Complainant’s request for equitable relief under section 473.

Disposition

The entry of default on December 28, 2023, as to Cross-Complainant Stapleton’s claims was improper and is hereby stricken as void. As there is no longer a default on file, the Answer filed by Cross-Defendant in response to Cross-Complainant Stapleton’s 2AXC on October 1, 2025 is proper. Accordingly, Cross-Complainants’ motion to strike Cross-Defendant’s October 1, 2025 Answer as to Cross-Complainant Stapleton’s claims is DENIED.

Cross-Defendant’s motion to set aside entry default as to Cross-Complainant Duarte’s claims is DENIED. Accordingly, Cross-Complainants’ motion to strike Cross-Defendant’s October 1, 2025 Answer as to Cross-Complainant Duarte’s claims is GRANTED.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc., § 1019.5; Cal. Rules of Court, rule 3.1312.)

[1] The Court notes that while Cross-Defendant cites to section 425.115 as an alternative basis for relief as to Cross-

Complainant Stapleton, it does not argue for the application of that section as a basis to set aside entry of default as to Cross-Complainant Duarte. (See MPA, p. 6:7-14.) Even if Cross-Defendant had invoked section 425.115 as a basis to set aside the entry of default as to Cross-Complainant Duarte’s claims, the Court would have rejected that argument for two reasons. First, although the prayer for relief of the 1AXC indicates that both Cross-Complainants seek punitive damages (1AXC, ¶ 112), in his Application for Default Judgment, Duarte estimates his damages in the amount of $61,604 for repair costs only and does not request punitive damages. (Cross-Complainants’ RJN, Duarte Decl., ¶ 5.)

Second, and more critically, while Cross-Defendant cites to Code of Civil Procedure section 425.115 for the proposition that for complaints seeking punitive damages, a statement of damages must be served “before default may be taken,” that citation to section 425.115 is incomplete. The full language from section 425.115 states that a statement must be served “before a default may be taken, if the motion for default judgment includes a request for punitive damages.” (Italics added.) Further, section 425.115 is entitled “Preservation of right to seek punitive damages on default judgment.” (Italics added.)

This indicates to the Court that section 425.115 applies to default judgment, not the preceding entry of default, and Cross-Defendant has cited no authority applying section 425.115 to a request to set aside an entry of default where default judgment has not been entered.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00311585-CU-BC-GDS: Madrone Homeowners Association vs. Stephanie Stapleton 03/09/2026 Hearing on Motion to Set Aside/Vacate Default (CCP 473.5) in Department 28