Judge: Armen Tamzarian, Case: 22STCV05815, Date: 2023-02-01 Tentative Ruling

Please notify Department 52 via email at smcdept52@lacourt.org and indicate that the parties are submitting on the tentative ruling. Please provide the attorney's name and represented party. Please notify the opposing side via email if submitting on the Court's tentative ruling.

Case Number: 22STCV05815    Hearing Date: February 1, 2023    Dept: 52

Defendant Howard Park’s Motion for Summary Judgment, or in the Alternative, Summary Adjudication

Defendant Howard Park moves for summary judgment of the complaint by plaintiff Dana Moon. 

Evidentiary Objections

            Defendant makes 12 objections to plaintiff’s evidence.  All 12 objections are overruled.

Merits

Summary judgment should be granted where no triable issues of fact exist and the moving party is entitled to judgment as a matter of law.  (CCP § 437c(c); Villa v. McFerren (1995) 35 Cal.App.4th 733, 741.)  A moving defendant must show “that one or more elements of the cause of action… cannot be established, or that there is a complete defense to the cause of action.”  (CCP § 437c(p)(2).)  Courts use a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)

Defendant Howard Park contends he is entitled to summary judgment because he “never owned the properties that Plaintiff is alleging he ‘fraudulently transferred’ ”, and the conspiracy claim cannot stand on its own.  (Motion, p. 2.)  Park’s evidence—which is undisputed—fails to meet his initial burden.  Accepting those facts as true neither establishes a complete defense nor shows plaintiff cannot meet the elements of her claims. 

Plaintiff alleges two causes of action in her complaint: (1) fraudulent transfer and (2) conspiracy.  Defendant’s motion relies on a misinterpretation of what plaintiff must prove in her cause of action for fraudulent transfer and of precisely what property plaintiff alleges was fraudulently transferred.

The Uniform Voidable Transactions Act (UVTA) “applies on its face to all transfers.”  (Chen v. Berenjian (2019) 33 Cal.App.5th 811, 817.)  “Civil Code section 3439.01, subdivision (m) broadly defines ‘transfer’ to mean ‘every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance.’ ”  (Ibid.) 

“Courts are to liberally construe” the UVTA’s provisions “ ‘with a view to effecting their purpose.’ ”  (Tatung Company, Ltd. v. Shu Tze Hsu (C.D. Cal. 2016) 217 F.Supp.3d 1138, 1186.)  “Their purpose ‘undoubtedly is to prevent debtors from placing property which legitimately should be available for the satisfaction of demands of creditors beyond [creditors’] reach.’ ”  (Ibid.)  The UVTA permits judgment against not just “the first transferee of the fraudulently transferred asset,” but also “the transfer beneficiary” and “any subsequent transferee other than a good faith transferee.”  (Lo v. Lee (2018) 24 Cal.App.5th 1065, 1071.) 

Plaintiff’s complaint alleges that the properties owned by the other defendants “were purchased with Father [Howard] Park’s funds.”  (Comp., ¶ 25.)  In 2021, “Plaintiff learned of Father Park’s purchase of real properties in Son Park’s name and Son Park’s company’s name.”  (Id., ¶ 31.)  Plaintiff further alleges, “Father Park did not receive reasonably equivalent value in exchange for the purchase of these properties in his son, and his son’s company names.”  (Id., ¶ 32.)  “Father Park purchased these properties in his son, daughter, and his son’s company names with intent to hinder, delay, or defraud the collection of Plaintiff’s aforementioned claim.”  (Id., ¶ 33.)  The complaint prays for relief including “[t]hat an order be made declaring that Defendants hold the properties at issue that were purchased with Father Park’s funds in trust for Plaintiff.”  (Id., p. 6, prayer ¶ 7.)

The complaint thus does not allege defendant Howard Park owned these real properties and fraudulently transferred them to his children or to their companies.  It alleges he bought the properties for his children.  An “asset” is any “property of a debtor,” not just real property.  (Civ. Code, § 3439.01.)  The “asset” Howard Park allegedly transferred was his money.  He allegedly exchanged it for the real property. 

The undisputed fact that Howard Park never held legal title to the properties fits plaintiff’s theory of the case: that he strategically chose to put these properties in his children’s or his children’s entities’ names because he wanted to prevent creditors from reaching the properties.  Skipping the intermediate step of temporarily holding title in his own name before transferring the properties to his children does not protect him from liability for fraudulent transfer.

Plaintiff’s opposition cites Sturm v. Moyer (2019) 32 Cal.App.5th 299 (Sturm), which supports her theory of liability.  There, the Court of Appeal held the UVTA “can apply to premarital agreements in which the prospective spouses agree that each spouse’s earnings, income, and property acquired during marriage will be that spouse’s separate property.”  (Id. at p. 315.)  The plaintiff creditor sought to enforce a judgment against the debtor’s community property interest in his wife’s earnings.  (Id. at p. 304.)  The defendant argued that “no transfer [took] place because, by the premarital agreement the spouses altered the applicability of the community property laws such that neither spouse obtains any interest in community property upon marriage.”  (Id. at p. 308.)  The Court of Appeal rejected that argument and held that such an agreement could constitute a fraudulent transfer.

Defendant Howard Park’s argument is analogous to that of the defendant debtor in Sturm.  There, the defendant never acquired an interest in his wife’s future earnings.  Here, Park argues he never held title to the real properties his children (or their entities) own.  Both defendants’ arguments amount to stating they never owned it, so they could not have transferred it.  Just as the debtor spouse allegedly made an agreement to prevent himself from acquiring an interest in his wife’s earnings later, Park allegedly orchestrated these real property transactions in a way that he never got title, and instead conferred that benefit on his children and their entities.  Under UVTA’s broad definition of “transfer,” that is an indirect mode of disposing of property. 

In his reply, defendant argues plaintiff has not been injured because defendant never held title to the properties.  That does not negate the alleged injury.  The injury alleged is that defendant owes plaintiff over $100,000, and plaintiff cannot collect it because defendant disposed of it in a way to put it beyond her reach.  Defendant’s evidence does not negate any of the elements of the fraudulent transfer alleged in the complaint. 

Defendant Howard Park’s motion for summary judgment or summary adjudication is denied.