Grados v. Shiau
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Defendant appealed the trial court's order denying his motion to set aside a default and default judgment in an action on a promissory note. The Court of Appeal concluded that both the award of the earn-out payment, as well as the award of interest on the earn-out payment, are contrary to law and rendered those portions of the default judgment void.
In this case, defendant's challenge as to the default judgment does not run afoul of any timing limitation under Code of Civil Procedure section 473; consideration of defendant's motion to set aside the default judgment is not an "idle" act; the trial court erred in failing to determine that the default judgment was void on its face, as to the award of the $100,000 earn-out amount; and the trial court abused its discretion in denying defendant's motion as to the award of interest, to the extent that the interest exceeded the amount that had accrued on the $100,000 principal at the constitutionally allowable maximum rate. Accordingly, the court reversed the order on defendant's motion as to these two awards, and modified the default judgment to exclude the $100,000 earn-out payment and reduced the award of interest to $8,081.53.
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