Hermanson v. Patterson CA4/3

Filed 9/6/13 Hermanson v. Patterson CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

BARRY HERMANSON et al.,

Plaintiffs and Respondents, G047401

v. (Super. Ct. No. 30-2009-00125179)

SCOTT PATTERSON et al., OPINION

Defendants and Appellants.

Appeal from a judgment of the Superior Court of Orange County, William M. Monroe, Judge. Reversed and remanded. Timothy A. Hootman; Cristobol M. Galindo, for Defendants and Appellants. Robert S. Lewin for Plaintiffs and Respondents.

INTRODUCTION Appellant Scott Patterson and respondent Barry Hermanson entered into a joint venture involving the importation and sale of merchandise from China. They fell out, and respondent Hermanson sued Patterson in superior court. The parties settled the lawsuit, entering into a settlement agreement that required Patterson to pay off a promissory note over three years. The parties also stipulated to the entry of judgment if appellant Patterson defaulted. As the three-year period was about to end, respondent accused appellant of defaulting on the note. Appellant disagreed. Respondent applied ex parte to the superior court for entry of his stipulated judgment, a proceeding respondent opposed. The court granted the ex parte application and entered judgment for $50,660.75, exclusive of attorney fees and costs. It later denied appellant’s request to set aside the judgment. Although it appears that respondent was entitled to judgment in some amount, we are sending the case back to recalculate this amount. We perceive a significant discrepancy between what the evidence showed appellant still owed on the note at the time of default and the amount of the judgment entered against him. If this is so, then the judgment would constitute an unlawful penalty. The court must revisit the evidence presented regarding the payments on the note to ensure that respondent is not collecting far more than his due. It should also look more closely at the attorney fee award. FACTS Appellant and respondent entered into a written settlement agreement, which included a promissory note in the principal amount of $111,500. Appellant was to pay off the note, plus 7 percent interest, in monthly installments over three years, beginning on August 5, 2009. If any payment was not received within five days of the due date, respondent could accelerate the entire balance.