Unreported / Non-Citable
Background
Unit 53, Inc. sued Run Roadlines, Inc. (RRI), Manpreet Randhawa, and 3515 Hwy 99, LLC over a lease of 650 shipping containers and related real-property transactions. The complaint alleged that RRI made no lease payments, that Randhawa executed a personal guaranty, and that property was subsequently transferred to 3515 Hwy 99. These were allegations and supporting submissions, not a merits trial record. After discovery disputes, the magistrate judge recommended sanctions striking the defendants’ answers, and the district court adopted that recommendation. The present October 19, 2026 findings and recommendations address the proposed terms of default judgment in ECF No. 85; they are recommendations to the assigned district judge, not a final judgment.
The supplemental briefing highlighted breach of contract against RRI, guaranty liability against Randhawa, and avoidance of an intentional fraudulent transfer against 3515 Hwy 99, while also requesting punitive damages on the civil-conspiracy claim. Intervention proceedings delayed consideration of the proposed judgment, but the district court later permitted the intervenors to withdraw and dismissed them as parties. The magistrate judge then gave the defendants 21 days to respond and warned that silence would be treated as non-opposition. They did not respond. The recommendations therefore rest on the defaulted posture, the lease and guaranty materials, and Plaintiff’s declarations and supporting documents.
The Court’s Holding
For the contract claim, the court found the requested lease figures supported by Plaintiff’s affidavit and documents. It recommended $7,829,775 in principal through August 27, 2025, $1,928,173 in contractual prejudgment interest, and $6,630,000 for the remainder of the lease term, totaling $16,387,948. Although Plaintiff identified continuing per-diem interest, the court declined to add it because intervention and withdrawal-of-counsel issues delayed the default-judgment proceedings. The court also concluded that Randhawa was jointly and severally liable as guarantor for the same $16,387,948, citing California Civil Code section 2807 and the signed guaranty.
The court recommended declaring the transfer of the subject real property between RRI and 3515 Hwy 99 void under California Civil Code section 3439.07(a), deeming the property transferred back to RRI, and permitting an order to be recorded with the county recorder. It treated that relief as also applicable to the constructive-fraudulent-transfer and constructive-trust claims described in Plaintiff’s footnote. By contrast, it recommended denying the remaining $505,114.45 in attorneys’ fees because Plaintiff supplied no documentation from which to assess reasonable hours and rates under the lodestar method; the previously awarded $94,885.55 was not at issue. It also recommended denying punitive damages because neither the complaint nor supplemental briefing supplied information needed to calculate them. Finally, it recommended that the Clerk close the case, subject to the district court’s review and the stated objection process.
Key Takeaways
- The recommended contract and guaranty recovery is $16,387,948, comprising lease principal, prejudgment interest, and the remaining lease-term amount.
- The court supported avoidance and reconveyance of the subject property, including a recordable order, but did not itself enter final judgment.
- Additional attorneys’ fees failed for lack of substantiation, even though the lease’s fee clause and California Civil Code section 1717 authorized contractual fees.
- Punitive damages were recommended for denial because the record lacked information to apply the governing guideposts and calculate an award.
- Any party has 14 days after service to object, with replies due within 14 days after service of objections; failure to object may waive appellate review of the district court’s order.
Why It Matters
The recommendations distinguish a well-documented damages request from requests that lack the proof needed for judicial review. Declarations and exhibits supported the lease accounting and remaining balance, but labels such as contractual authorization or civil conspiracy did not substitute for billing records or a factual basis for punitive damages. The interest ruling also shows that a requested contractual calculation need not be expanded automatically where case-management events delayed resolution.
The property relief is potentially significant beyond the monetary award: the court recommended both voiding the transfer and restoring title to RRI through a recordable order. That remedy would make the property available in connection with satisfying the creditor’s claim, while the guaranty recommendation would extend liability for the contract judgment to Randhawa. All of these outcomes remain contingent on adoption by the district judge.