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1 Gary M. Kaplan (State Bar No. 155530)
gkaplan@fbm.com
2 Farella Braun + Martel LLP ELECTRONICALLY
235 Montgomery Street, 17th Floor
3 San Francisco, California 94104 F I L E D
Superior Court of California,
Telephone: (415) 954-4400 County of San Francisco
4 Facsimile: (415) 954-4480
07/05/2022
Clerk of the Court
5 Attorneys for Plaintiffs BY: SANDRA SCHIRO
CRYSTAL LEI and BRYANT FU Deputy Clerk
6
7
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 COUNTY OF SAN FRANCISCO
10
11 CRYSTAL LEI and BRYANT FU, Case No. CGC-17-556769
12 Plaintiffs, PLAINTIFFS’ NOTICE OF RENEWED
MOTION AND RENEWED MOTION
13 vs. FOR SUMMARY ADJUDICATION ON
FIRST CAUSE OF ACTION
14 TINA YAN, individually and as personal (AVOIDANCE AND RECOVERY OF
representative of the estate of CHEUK TIN FRAUDULENT TRANSFERS);
15 YAN, deceased; THAI MING CHIU; SUPPORTING MEMORANDUM OF
KAMAN LIU; and DOES 1-20 inclusive, POINTS AND AUTHORITIES
16
Defendants.
17 [Concurrently Filed:
Separate Statement
18 Supporting Request For Judicial Notice]
19 Date: July 29, 2022
Time: 9:30 am
20 Dept.: 501
The Hon. Charles F. Haines
21
[HEARING TO BE CONDUCTED VIA
22 ZOOM VIDEO CONFERENCE
PURSUANT TO COURT DIRECTION]
23
24 NOTICE OF MOTION AND MOTION
25 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
26 NOTICE IS HEREBY GIVEN that on the above-mentioned date, place, and time or as
27 soon thereafter as the matter may be heard, Plaintiffs Bryant Fu and Crystal Lei (“Plaintiffs”) will
28
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RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER
Case No. CGC-17-556769
1 and hereby do renew their motion for summary adjudication1 of their first cause of action on their
2 fraudulent transfer claim against Defendants Tina Yan2, individually and as personal representative
3 of the estate of Cheuk Tin Yan, Thai Ming Chiu (“Chiu”) and Kaman Liu (“Liu”) (collectively
4 “Transferee Defendants”) pursuant to California Code of Civil Procedure Section 437c, on the
5 grounds that Transferee Defendants are liable for Demas Yan’s (“Yan”) fraudulent transfer of the
6 subject property to them with the intent to hinder, delay or defraud Yan’s creditors, and that
7 Transferee Defendants are collaterally estopped from contesting their transferee liability, such that
8 Plaintiffs are entitled to judgment on such claim as a matter of law.
9 Pursuant to Court direction, such hearing will be conducted by Zoom video conference,
10 which can be accessed as follows:
11 https://sfsuperiorcourt-org.zoom.us/webinar/register/WN_GddZiBrxR62vLWy46L-wjQ.
12 If unable to join using the link above, the hearing may be joined by telephone by dialing: 415-762-
13 9988 and entering Meeting ID: 836 2280 0051 and Password: 613303.
14 The Motion will be based on this notice of motion, the accompanying memorandum of
15 points and authorities, and on the supporting separate statement ("Separate Statement") and request
16 for judicial notice ("RJN") submitted herewith, all pleadings and documents filed in this matter,
17 and upon such other oral and documentary evidence and arguments of counsel at the hearing as the
18 Court may wish to consider.
19 Dated: July 5, 2022 FARELLA BRAUN + MARTEL LLP
20
By:
21 Gary M. Kaplan
22 Attorneys for PLAINTIFFS
23
24
25 1
Plaintiffs initially filed a motion for summary adjudication regarding the same issue (the “Initial
26 Motion”) on April 8, 2022. At a hearing on June 27, 2022, the Court denied the Initial Motion
based on non-compliance with California Rule of Court (“CRC”) 3.1350(b). This renewed
27 Motion seeks to correct such defect.
2
28 Tina Yan is a relief defendant for purposes of the first cause of action for fraudulent transfer.
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RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER
Case No. CGC-17-556769
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 The pending action arises from the fact that vexatious litigant and disbarred attorney Demas
4 Yan a/k/a Dennis Yan (“Yan”) sought to make himself judgment proof while maliciously harassing
5 Plaintiffs and pursuing bad faith litigation with impunity. Plaintiffs have obtained over $1 million
6 in numerous orders and sanctions awards against Yan meant to stop him from continuing to multiply
7 the more than 40 bad-faith lawsuits and appeals he has directed against Plaintiffs for over 16 years.
8 See RJN Exhibits N – V. However, Yan refuses to pay anything, and has rendered himself insolvent
9 to prevent Plaintiffs from recovering on their judgments and sanctions awards, including by
10 fraudulently transferring his ownership of the real property located at 547 23rd Avenue in San
11 Francisco (referred hereafter as the “Subject Property”).
12 Co-defendants Tina Yan, Thai Ming Chiu (“Chiu”), Kaman Liu (“Liu”) (collectively, the
13 “Transferee Defendants”) aided and assisted Yan in such fraudulent transfers, as this Court has
14 previously determined and the Court of Appeal has affirmed, finding that the Transferee Defendants
15 were complicit in effectuating the fraudulent transfer of the Subject Property to hinder, delay and
16 defraud Yan’s creditors, including Plaintiffs. In light of this Court and the Court of Appeal in related
17 cases having fully determined and affirmed the finding that the Transferee Defendants are liable for
18 fraudulent transfer with respect to the Subject Property, such determinations are binding on the
19 Transferee Defendants. Therefore, Plaintiffs are entitled to judgment on their first cause of action
20 (fraudulent transfer) against the Transferee Defendants as a matter of law under principles of
21 collateral estoppel.
22 II. FACTUAL AND PROCEDURAL HISTORY
23 In April 2004, Yan transferred the Subject Property to his parents and co-defendants Tina
24 Yan and Cheuk Tin Yan, and soon thereafter filed for bankruptcy protection in December 2004.
25 Since then, Yan and his proxies have maliciously prosecuted over 40 bad faith lawsuits and appeals
26 against Plaintiffs. Yan is a disbarred attorney and has been declared a vexatious litigant in state and
27 federal courts, and his abuses are well documented in numerous court memoranda and judicial
28
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Case No. CGC-17-556769
1 decisions. See Memorandum Decision Determining Demas Yan a Vexatious Litigant (RJN Exhibit
2 B).
3 After his earlier fraudulent transfers of the Subject Property were undone, in 2007, Yan
4 transferred his ownership of the Subject Property to 547 23rd Avenue, LLC, a shell company wholly
5 owned by Yan. See RJN Exhibit E at 3-4. The membership interests in the LLC were then
6 transferred to the Defendants who in November 2013 subsequently transferred title of the Subject
7 Property to 547 Investments, LLC, another LLC wholly owned by Yan. Id. The membership
8 interests in 547 Investments, LLC were then transferred to Defendants. Id. In 2016, this Court
9 rendered judgment (based on a jury verdict) in the case styled Charles Li v. Thai Ming Chiu, et al.,
10 Case no. CGC-14-537574 (hereafter the "Li v. Chiu Action") rejecting Transferee Defendants'
11 asserted interests in the Subject Property, finding that the transfer of the Subject Property to them
12 was fraudulent. See RJN Exhibits C & D. Such judgment was affirmed by the Court of Appeal in
13 2018, and again in 2020 after Transferee Defendants unsuccessfully challenged this Court's
14 amended judgment entered pursuant to the 2018 Court of Appeal decision (see RJN Exhibits E &
15 F). The Supreme Court denied Transferee Defendants’ subsequent writ petitions with respect to the
16 Court of Appeal's 2020 decision (see RJN Exhibit Y).
17 On September 26, 2014, Plaintiffs filed an action in this Court against Yan for malicious
18 prosecution and related transferees for fraudulent transfer with respect to the Subject Property,
19 assigned Case No. CGC-14-565831 (the "2014 Action"). The Court awarded judgment in Plaintiffs'
20 favor on their malicious prosecution claim in August 2019 and (ultimately, after a remand on appeal
21 from the Court of Appeal) on their fraudulent transfer claims (including against Defendant Tina
22 Yan) on December 1, 2021 in the 2014 Action. See RJN Exhibit V; Exhibit M. The Court denied
23 Tina Yan’s motion for a new trial in the 2014 Action on January 28, 2022 (see RJN Exhibit X).
24 On January 31, 2017, Plaintiffs filed their complaint in the instant action based on fraudulent
25 transfer and conspiracy to defraud claims. Plaintiffs filed their First Amended Complaint on April
26 7, 2022 (see RJN Exhibit A) to correct the scope of damages, after receiving leave of the Court by
27 Order entered April 7, 2022. The fraudulent transfer claim in this action is substantively similar to
28 the fraudulent transfer claims resulting in judgment for Plaintiffs in the 2014 Action against Yan
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RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER
Case No. CGC-17-556769
1 and (Defendant) Tina Yan, and was filed to obtain relief against the Transferee Defendants who also
2 were transferees with respect to the transfers that were previously determined to be fraudulent
3 transfers.
4 III. LEGAL STANDARDS ON SUMMARY ADJUDICATION
5 California Code of Civil Procedure Section 437c(c) permits summary adjudication of a cause
6 of action when “all the papers submitted show that there is no triable issue as to any material fact
7 and that the moving party is entitled to judgment as a matter of law.” “The moving party must
8 support the motion with evidence including affidavits, declarations, admissions, answers to
9 interrogatories, depositions, and matters of which judicial notice must or may be taken” (Aguilar v.
10 Atlantic Richfield Co. (2001) 25 Cal.4th 826, 844, citing Cal. Civ. Proc. Section 437c(b).) On
11 summary judgment, “the moving party bears the burden of persuasion that there is no genuine issue
12 of material fact and that he is entitled to judgment as a matter of law. However, there is only a
13 genuine issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to
14 find the underlying fact in favor of the party opposing the motion in accordance with the applicable
15 standard of proof.” (Aguilar, supra, 25 Cal.4th at 845.)
16 California Code of Civil Procedure Section 437c(f) permits summary adjudication as to a
17 single cause of action within an action, and “a motion for summary adjudication may be made by
18 itself or as an alternative to a motion for summary judgment and shall proceed in all procedural
19 respects as a motion for summary judgment.” (Cal. Civ. Proc. § 437c(f)(2).)
20 California Code of Civil Procedure Section 1008(b) permits a party to renew a request for
21 relief that was previously denied based on a showing of new or different facts or circumstances.”3
22 IV. ARGUMENT
23 Plaintiffs, as creditors of Yan at all relevant times, are entitled to summary adjudication of
24 their fraudulent transfer claim as a matter of law under principles of collateral estoppel. As
25
3
26 Section 1008(b) provides in relevant part: “A party who originally made an application for an
order which was refused in whole or part . . . may make a subsequent application for the same
27 order upon new or different facts, circumstances, or law, in which case it shall be shown by
affidavit what application was made before, when and to what judge, what order or decisions were
28 made, and what new or different facts, circumstances, or law are claimed to be shown.”
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RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER
Case No. CGC-17-556769
1 discussed above, Yan and the Transferee Defendants have been determined by final judgment to be
2 liable for the fraudulent transfer of the Subject Property in the Li v. Chiu Action. The transfer of
3 the Subject Property to Defendant Tina Yan likewise was determined to be a fraudulent transfer in
4 the 2014 Action, in which the Transferee Defendants were also transferees. California courts have
5 established that collateral estoppel is grounds for summary adjudication to resolve a claim. See,
6 e.g., Santor v. Superior Court (1982) 136 Cal.App.3d 322, 327 (“Summary judgment is an
7 appropriate remedy when the doctrine of res judicata in its subsidiary form of collateral estoppel
8 refutes all triable issues of fact suggested by the pleadings and supporting documents.”)
9
A. Identical Issues of Fraudulent Transfer Have Been Fully Litigated to Finality
10 in the Li v. Chiu Action.
11 Here, as to Plaintiffs’ fraudulent transfer claim, the same identical factual matters regarding
12 Transferee Defendants’ fraudulent transfer of the Subject Property have been litigated and clearly
13 established in the Li v Chiu Action. In that case, this Court determined that creditor Charles Li
14 (“Li”) established that Yan and the Transferee Defendants effectuated the transfer of the Subject
15 Property to defraud Yan’s creditors (see Statement of Decision, RJN Exhibit C), and rejected their
16 challenge to the Jury's Verdict (RJN Exhibit D).
17 Specifically, in its April 14, 2016 verdict (the “April 2016 Jury Verdict), the jury found that
18 the transfer of the Subject Property (the “Subject Transfer”) to Defendants (including Transferee
19 Defendants) was a fraudulent transfer, with the intent to hinder, delay or defraud Yan’s creditors.
20 RJN Exhibit D. On June 24, 2016, this Court filed its Statement of Decision adopting the April
21 2016 Jury Verdict that the Subject Transfer to Defendants (including Transferee Defendants) was a
22 fraudulent transfer, with the intent to hinder, delay or defraud Yan’s creditors (the “June 2016
23 Judgment”). RJN Exhibit C at 2-3. In its June 2016 Judgment, this Court found that Yan failed to
24 receive reasonable equivalent value in exchange for the Subject Transfer. Id. at 2-3. In its June
25 2016 Judgment, this Court also found that Yan was insolvent at the time of the Subject Transfer, or
26 became insolvent as a result of the Subject Transfer. Id. at 2-3. In its June 2016 Judgment, this
27 Court further found that the Defendants (including Transferee Defendants) did not establish any
28 equitable grounds for altering the April 2016 Jury Verdict, and confirmed Defendants’ fraudulent
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RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER
Case No. CGC-17-556769
1 transfer liability with respect to the Subject Transfer. Id. at 3-5.
2 The judgment in favor of Li and this Court's related findings in the June 2016 Judgement
3 regarding the fraudulent transfer were affirmed by the Court of Appeal in May 2018. See RJN
4 Exhibit E at 1, 22. In its May 2018 decision, the Court of Appeal recognized that “[t]he jury returned
5 special verdicts against all of the defendants finding each defendant liable for actual as well as
6 constructive fraud.” See RJN Exhibit E at 9. In affirming this Court's judgment, the Court of
7 Appeal recounted the substantial evidence establishing that Transferee Defendants fraudulently
8 transferred the Subject Property as follows:
9 Shortly after the conclusion of the trial testimony in Li v. Yan II, in July 2012, Yan
transferred his ownership in 547 23rd Avenue, LLC to his mother and his
10 brothers-in-law, Chiu and Liu. He justified the timing of the transfer by claiming
that his bankruptcy case had concluded and there was no longer any restriction on
11
his ability to dispose of the property. Yan’s mother received a 68.43 ownership
12 interest in the LLC, with Chiu receiving 25.83 percent and Liu receiving 5.74
percent. At the time Yan transferred his interest in the LLC to his relatives, he had
13 no assets and virtually no income.
14 In September 2013, Yan, as agent for 547 23rd Avenue, LLC, failed to appear for
an examination in connection with Li’s attempts to enforce the judgment in Li v.
15 Yan II. The court issued an order to show cause and a warrant for Yan’s arrest.
16 Shortly thereafter, in November 2013, the property was transferred to another
business entity, 547 Investments LLC, that Yan had formed. The newly formed
17 entity, 547 Investments, LLC, was owned by the same individuals, with the
same percentage interests, as the pre-existing entity, 547 23rd Avenue, LLC. Yan
18 justified creating the new LLC with the same owners because the books from 2007
were “not clear” and he wanted to start with a “clean slate.” Despite the facts that
19
the property was owned by an LLC since 2007 and Yan purportedly had no
20 ownership interest in the business entities that held title to the property after July
2012, until at least May 2014 Yan continued to receive rent checks made out to his
21 name from tenants at the property. At around the time the property was transferred
to 547 Investments LLC in December 2013, it was publicly offered for sale at an
22 asking price of $1,925,000.
23 Yan’s brother-in-law, Liu, testified that he wrote a $40,000 check as an investment
24 in the property in 2000. He also claimed he loaned $40,000 to Yan a few years
later, in 2005 or 2006. Liu admitted that the second $40,000 purportedly given to
25 Yan was in the form of a check made out to Yan’s father. In 2009, Liu filed a claim
for $40,000 in Yan’s bankruptcy proceeding. He testified that the only evidence of
26 the loan was an email; there was no promissory note and the parties did not fix an
amount of interest or repayment schedule. In the court trial phase, outside the
27 presence of the jury, Liu authenticated emails purporting to document his
28 investment. In the emails, Liu was given the option to have his contribution treated
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Case No. CGC-17-556769
1 as a loan or as an ownership stake in the property. Liu never asked to be a part
owner of the property or to be placed on the title prior to his receipt of an
2 ownership share in 547 23rd Avenue, LLC, in 2012.
3 Chiu, Yan’s other brother-in-law, also testified. He claimed that Yan asked family
members to make an investment in the property in 2000. There was no written
4
agreement memorializing the investment because, according to Chiu, Yan was a
5 “family member.” Chiu claimed to have invested $100,000 in the property. He
admitted filing a claim in Yan’s bankruptcy but acknowledged it was disallowed.
6 His claim in the bankruptcy was for $180,000. In the court trial phase, outside the
presence of the jury, Chiu authenticated emails purporting to establish his
7 investment. Like Liu, Chiu was given the option to treat the sums he gave to Yan as
either a loan or an equity stake in the property. He explained that he made a claim
8
for $180,000 in Yan’s bankruptcy because he had loaned Yan $80,000 in addition
9 to the $100,000 investment he made in the property. Chiu testified that if the
bankruptcy court had allowed his $180,000 claim to be satisfied, he would have
10 relinquished any claim of ownership in the property. He was aware that Yan had
transferred the property to Yan's parents in 2004 but acknowledged he did not ask
11 to be placed on the title at that time.
12 Id. at 7-9. (emphasis added)
13 On November 16, 2018, this Court entered an amended judgment (the “November 2018
14 Judgment”) in the Li v. Chiu Action based on the direction in the May 2018 Court of Appeal
15 Decision. See RJN Exhibit F at 4. In its November 2018 Judgment, this Court found that the Subject
16 Transfer to Defendants (including Transferee Defendants) was “made with the intent to hinder,
17 delay, or defraud plaintiff; was received without good faith and not in exchange for reasonably
18 equivalent value” See RJN Exhibit F at 4-5. In its November 2018 Judgment, this Court ruled that
19 Defendants (including Transferee Defendants) were liable for fraudulent transfer with respect to the
20 Subject Transfer. See RJN Exhibit F at 5.
21 On February 6, 2019, this Court filed its order denying Defendants’ (including Transferee
22 Defendants) motion to amend the June 2016 Judgment and November 2018 Judgment (the
23 “February 2019 Order”). See RJN Exhibit F at 7. On December 22, 2020, the California Court of
24 Appeal affirmed this Court’s February 2019 Order. See RJN Exhibit F at 1, 13.
25 Because the same issues in the instant action regarding Transferee Defendants’ culpability
26 for the fraudulent transfer of the Subject Property have been fully litigated to finality in the Li v.
27 Chiu Action, Transferee Defendants are precluded from relitigating such issues in this case, under
28 principles of collateral estoppel, as further discussed below.
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Case No. CGC-17-556769
1 B. Collateral Estoppel Precludes Transferee Defendants from Relitigating Their
Conclusively Determined Fraudulent Transfer Liability.
2
3 Collateral estoppel precludes relitigation of issues argued and decided in prior proceedings.
4 Lucido v. Superior Court (1990) 51 Cal.3d 335, 341 (Lucido). “Collateral estoppel applies when
5 (1) the party against whom the plea is raised was a party . . . to the prior adjudication, (2) there was
6 a final judgment on the merits in the prior action and (3) the issue necessarily decided in the prior
7 adjudication is identical to the one that is sought to be relitigated.” Roos v. Red (2005) 130
8 Cal.App.4th 870, 879. Where collateral estoppel is asserted “ ‘offensively’ ” to preclude a defendant
9 from relitigating an issue he or she previously litigated and lost, the courts consider whether that
10 defendant had a “ ‘full and fair’ ” opportunity to litigate the issue. Id. at 880.
11 Here, (1) Transferee Defendants Chiu and Liu are the same defendants that appeared and
12 defended in the Li v. Chiu Action on the same fraudulent transfer issue, (2) they have each received
13 full and fair opportunities to litigate such issue, through jury trial, court trial, and multiple appeals,
14 resulting in final judgment against them, and (3) they were found to have fraudulently transferred
15 the Subject Property to defraud Yan’s creditors. Thus, all requirements have been met for the
16 application of collateral estoppel to the issue of fraudulent transfer of the Subject Property, in view
17 of the facts discussed above and established by the Separate Statement.
18 Collateral estoppel is applicable with respect to Defendant Transferees’ fraudulent transfer
19 of the Subject Property. Indeed, the Court of Appeal applied this doctrine to preclude co-Defendants
20 Tina Yan and Cheuk Tin Yan from relitigating their defense in the related 2014 Action involving
21 the same issues as those present here. In reversing the lower court’s initial judgment denying
22 Plaintiffs’ use of collateral estoppel as to the fraudulent transfer of the Subject Property the Court
23 of Appeal found: “[t]here is no dispute that the codefendants were parties to the Li [v. Chiu]
24 [A]ction, that there was a judgment on the merits, and that the Li [v. Chiu] [A]ction afforded the
25 codefendants a fair and full opportunity to defend against plaintiffs’ UVTA4 claim with regard to
26 the 23rd Avenue property.” See RJN Exhibit G at 13.
27
4
28 UVTA is a reference to the Uniform Voidable Transactions Act (Civ. Code, §§ 3439 et seq.).
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Case No. CGC-17-556769
1 The Court of Appeal further determined that collateral estoppel applied because Plaintiffs
2 were creditors (within the meaning of the UVTA) defrauded by Transferee Defendants’ fraudulent
3 transfer of the Subject Property: “Future creditors as well as present creditors are protected by the
4 legislation relating to fraudulent conveyances, and [P]laintiffs, as tort claimants harmed by Yan’s
5 meritless prosecutions in 2010 and 2012, were ‘creditors’ within the meaning of the UVTA. Thus,
6 when Yan and the codefendants transferred the 23rd Avenue property in 2012 and 2013 to defraud
7 Yan’s creditors, this adversely impacted the claims of Li and [P]laintiffs.” RJN Exhibit G, at 14-
8 15. (citations and internal quotes omitted). Thus, at all relevant times, (including at the time of the
9 Subject Transfer), Plaintiffs have been “creditors” of Yan within the meaning of the UVTA.5
10 Pursuant to principles of collateral estoppel, it thus has been conclusively determined that:
11 the Subject Transfer to Transferee Defendants was “made with the intent to hinder, delay, or defraud
12 Plaintiffs; the Subject Transfer “was received without good faith and not in exchange for reasonably
13 equivalent value”; Yan was insolvent at the time of the Subject Transfer, or became insolvent as a
14 result of the Subject Transfer; Transferee Defendants have no equitable grounds for altering their
15 fraudulent transfer liability with respect to the Subject Transfer. Each Transferee Defendant
16 accordingly is conclusively “liable for actual as well as constructive fraud” with respect to the
17 Subject Transfer, pursuant to California Civil Code Sections 3439.046 and 3439.057.
18 C. Subject Property Rendered Unavailable For Judgment Enforcement
19 It is indisputable that Plaintiffs have been harmed by the fraudulent transfer of the Subject
20 Property, for which the Defendants (including Transferee Defendants) have been determined to be
21
22 5
Specifically, each Plaintiff is a “creditor” of Yan as defined in California Civil Code Section
3439.01(c), because each Plaintiff is a “person that has a claim” [as defined in Civil Code Section
23 3439.01(b)], as each Plaintiff has a “right to payment” against Yan.
6
24 Section 3439.04(a)(1) provides in relevant part: “A transfer made or obligation incurred by a
debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer
25 was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation
. . . [w]ith actual intent to hinder, delay, or defraud any creditor of the debtor.”
26 7
Section 3439.05(a) provides:” A transfer made or obligation incurred by a debtor is voidable as
to a creditor whose claim arose before the transfer was made or the obligation was incurred if the
27 debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value
in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor
28 became insolvent as a result of the transfer or obligation.”
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Case No. CGC-17-556769
1 liable. See RJN Exhibit E at 1, 22; Exhibit G at 15.
2 The Subject Property is not available to be used to satisfy the judgment and sanctions
3 previously awarded because Yan subsequently transferred the property shortly after this Court’s
4 judgment avoiding the earlier transfer became final on May 31, 2018 upon the Court of Appeal’s
5 affirmance in the Li v. Chiu Action. The current record holder of title to the Subject Property is
6 Shuzhen Tu. See RJN Exhibit K. Because the Subject Property is not available for collection, both
7 common law and UVTA remedies prescribe a monetary judgment for such circumstances.8
8 D. Money Judgment on Fraudulent Transfer is Proper
9 A money judgment against the Transferee Defendants is permitted under the UVTA pursuant
10 to Civil Code Section 3439.08(b)(1), which provides in relevant part:
11 The creditor may recover judgment for the value of the asset transferred . . . or the
amount necessary to satisfy the creditor’s claim, whichever is less. The judgment
12 may be entered against the following:
(A) The first transferee of the asset or the person for whose benefit the transfer was
13 made.
(B) An immediate or mediate transferee of the first transferee, other than either of
14 the following:
(i) A good faith transferee that took for value.
15 (ii) An immediate or mediate good faith transferee of a person described in
clause (i).
16
8
The subsequent transfer of the Subject Property to Shuzhen Tu is apparently fraudulent, and was
17 made based on a foreclosure sale pursuant to a Deed of Trust securing a purported $1.5 million
loan from Mei Ling Fang a/k/a Lily Yan (Yan’s wife) to Yan. See RJN Exhibits H, I & J. In
18 fact, Yan has disavowed this Deed of Trust, and admitted under penalty of perjury that it is invalid
and that there was no consideration to support it. An excerpt of the direct examination of Yan in
19 the Liu v. Chiu Action includes the following:
20 Q. And Exhibit 27 is a deed of trust that is now held by your wife, Meiling Fang,
right?
21 A. Yes.
Q. It is a deed of trust over the property 547 23rd Avenue, San Francisco,
22 California, right?
A. Yes.
23 Q. And it is - - it says near the bottom, “For the purpose of securing payment of the
sum of $1,500,000,” right?
24 A. Yes.
Q. Thank you. So, this deed of trust would give your wife the right to foreclose on
25 this building, right?
A. My understanding today is that this document would be a useless piece of
26 document. It's not enforceable.
Q. And you say it's unenforceable, because there was no such $1,500,000 debt,
27 correct?
A. Correct.
28 See RJN Exhibit L at 149-151.
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1 Cal. Civ. Code § 3439.08(b)(1).
2 The Transferee Defendants are indisputably immediate or mediate transferees, and, in view
3 of their previously determined participation with Yan in the scheme to fraudulently transfer the
4 Subject Property, are not good faith transferees that took for value, as this Court and the Court of
5 Appeal have previously determined. Therefore, entry of a money judgment against the Transferee
6 Defendants is appropriate. Indeed, under these same circumstances, this Court entered a money
7 judgment in the 2014 Action against co-Defendant Tina Yan, based on her receipt of the same
8 transfers as those received by Transferee Defendants, in view of her knowing participation in such
9 fraudulent transfer with the intention of defrauding creditors (including Plaintiffs). See RJN
10 Exhibit M at 8-9. As this Court found:
11 A money judgment against the Transferee Defendants is permitted under the
UVTA. [citing Cal. Civ. Code § 3439.08(b)(1)] . . . A money judgment against the
12 transferee may be had when [the transferee] knowingly participates in the
fraudulent conveyance with the intention of defrauding creditors. [citations and
13 internal quotes omitted] . . . The Defendants have manipulated various assets,
particularly the Subject Property to avoid satisfying Yan's substantial debts.
14
Id. at 8-9.
15
16 Transferee Defendants similarly knowingly participated in the same fraudulent transfer
17 with the same intention of defrauding Yan’s creditors (including Plaintiffs).
18 A money judgment against Transferee Defendants is accordingly proper. See, e.g.,
19 Flowers & Sons Dev. Corp. v. Mun. Court (1978) 86 Cal. App. 3d 818, 825 (“During oral
20 argument of this case, we were informed by both parties that appellants no longer have a
21 possessory interest in the Edgewater property. They have sold the property. … However,
22 [plaintiff] may obtain a money judgment against appellants as prayed.”); Filip v. Bucurenciu, 129
23 Cal. App. 4th (2005) 825, 839-840 (allowing both avoidance of fraudulent transfers and money
24 judgments as relief under the UFTA, predecessor of the UVTA) ; Renda v. Nevarez (2014)
Preview
1 Gary M. Kaplan (State Bar No. 155530) gkaplan@fbm.com 2 Farella Braun + Martel LLP ELECTRONICALLY 235 Montgomery Street, 17th Floor 3 San Francisco, California 94104 F I L E D Superior Court of California, Telephone: (415) 954-4400 County of San Francisco 4 Facsimile: (415) 954-4480 07/05/2022 Clerk of the Court 5 Attorneys for Plaintiffs BY: SANDRA SCHIRO CRYSTAL LEI and BRYANT FU Deputy Clerk 6 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF SAN FRANCISCO 10 11 CRYSTAL LEI and BRYANT FU, Case No. CGC-17-556769 12 Plaintiffs, PLAINTIFFS’ NOTICE OF RENEWED MOTION AND RENEWED MOTION 13 vs. FOR SUMMARY ADJUDICATION ON FIRST CAUSE OF ACTION 14 TINA YAN, individually and as personal (AVOIDANCE AND RECOVERY OF representative of the estate of CHEUK TIN FRAUDULENT TRANSFERS); 15 YAN, deceased; THAI MING CHIU; SUPPORTING MEMORANDUM OF KAMAN LIU; and DOES 1-20 inclusive, POINTS AND AUTHORITIES 16 Defendants. 17 [Concurrently Filed: Separate Statement 18 Supporting Request For Judicial Notice] 19 Date: July 29, 2022 Time: 9:30 am 20 Dept.: 501 The Hon. Charles F. Haines 21 [HEARING TO BE CONDUCTED VIA 22 ZOOM VIDEO CONFERENCE PURSUANT TO COURT DIRECTION] 23 24 NOTICE OF MOTION AND MOTION 25 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 26 NOTICE IS HEREBY GIVEN that on the above-mentioned date, place, and time or as 27 soon thereafter as the matter may be heard, Plaintiffs Bryant Fu and Crystal Lei (“Plaintiffs”) will 28 Farella Braun + Martel LLP 41312\14905688.2 235 Montgomery Street, 17th Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 and hereby do renew their motion for summary adjudication1 of their first cause of action on their 2 fraudulent transfer claim against Defendants Tina Yan2, individually and as personal representative 3 of the estate of Cheuk Tin Yan, Thai Ming Chiu (“Chiu”) and Kaman Liu (“Liu”) (collectively 4 “Transferee Defendants”) pursuant to California Code of Civil Procedure Section 437c, on the 5 grounds that Transferee Defendants are liable for Demas Yan’s (“Yan”) fraudulent transfer of the 6 subject property to them with the intent to hinder, delay or defraud Yan’s creditors, and that 7 Transferee Defendants are collaterally estopped from contesting their transferee liability, such that 8 Plaintiffs are entitled to judgment on such claim as a matter of law. 9 Pursuant to Court direction, such hearing will be conducted by Zoom video conference, 10 which can be accessed as follows: 11 https://sfsuperiorcourt-org.zoom.us/webinar/register/WN_GddZiBrxR62vLWy46L-wjQ. 12 If unable to join using the link above, the hearing may be joined by telephone by dialing: 415-762- 13 9988 and entering Meeting ID: 836 2280 0051 and Password: 613303. 14 The Motion will be based on this notice of motion, the accompanying memorandum of 15 points and authorities, and on the supporting separate statement ("Separate Statement") and request 16 for judicial notice ("RJN") submitted herewith, all pleadings and documents filed in this matter, 17 and upon such other oral and documentary evidence and arguments of counsel at the hearing as the 18 Court may wish to consider. 19 Dated: July 5, 2022 FARELLA BRAUN + MARTEL LLP 20 By: 21 Gary M. Kaplan 22 Attorneys for PLAINTIFFS 23 24 25 1 Plaintiffs initially filed a motion for summary adjudication regarding the same issue (the “Initial 26 Motion”) on April 8, 2022. At a hearing on June 27, 2022, the Court denied the Initial Motion based on non-compliance with California Rule of Court (“CRC”) 3.1350(b). This renewed 27 Motion seeks to correct such defect. 2 28 Tina Yan is a relief defendant for purposes of the first cause of action for fraudulent transfer. Farella Braun + Martel LLP 2 41312\14905688.2 235 Montgomery Street, 17th Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 The pending action arises from the fact that vexatious litigant and disbarred attorney Demas 4 Yan a/k/a Dennis Yan (“Yan”) sought to make himself judgment proof while maliciously harassing 5 Plaintiffs and pursuing bad faith litigation with impunity. Plaintiffs have obtained over $1 million 6 in numerous orders and sanctions awards against Yan meant to stop him from continuing to multiply 7 the more than 40 bad-faith lawsuits and appeals he has directed against Plaintiffs for over 16 years. 8 See RJN Exhibits N – V. However, Yan refuses to pay anything, and has rendered himself insolvent 9 to prevent Plaintiffs from recovering on their judgments and sanctions awards, including by 10 fraudulently transferring his ownership of the real property located at 547 23rd Avenue in San 11 Francisco (referred hereafter as the “Subject Property”). 12 Co-defendants Tina Yan, Thai Ming Chiu (“Chiu”), Kaman Liu (“Liu”) (collectively, the 13 “Transferee Defendants”) aided and assisted Yan in such fraudulent transfers, as this Court has 14 previously determined and the Court of Appeal has affirmed, finding that the Transferee Defendants 15 were complicit in effectuating the fraudulent transfer of the Subject Property to hinder, delay and 16 defraud Yan’s creditors, including Plaintiffs. In light of this Court and the Court of Appeal in related 17 cases having fully determined and affirmed the finding that the Transferee Defendants are liable for 18 fraudulent transfer with respect to the Subject Property, such determinations are binding on the 19 Transferee Defendants. Therefore, Plaintiffs are entitled to judgment on their first cause of action 20 (fraudulent transfer) against the Transferee Defendants as a matter of law under principles of 21 collateral estoppel. 22 II. FACTUAL AND PROCEDURAL HISTORY 23 In April 2004, Yan transferred the Subject Property to his parents and co-defendants Tina 24 Yan and Cheuk Tin Yan, and soon thereafter filed for bankruptcy protection in December 2004. 25 Since then, Yan and his proxies have maliciously prosecuted over 40 bad faith lawsuits and appeals 26 against Plaintiffs. Yan is a disbarred attorney and has been declared a vexatious litigant in state and 27 federal courts, and his abuses are well documented in numerous court memoranda and judicial 28 Farella Braun + Martel LLP 3 41312\14905688.2 235 Montgomery Street, 17th Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 decisions. See Memorandum Decision Determining Demas Yan a Vexatious Litigant (RJN Exhibit 2 B). 3 After his earlier fraudulent transfers of the Subject Property were undone, in 2007, Yan 4 transferred his ownership of the Subject Property to 547 23rd Avenue, LLC, a shell company wholly 5 owned by Yan. See RJN Exhibit E at 3-4. The membership interests in the LLC were then 6 transferred to the Defendants who in November 2013 subsequently transferred title of the Subject 7 Property to 547 Investments, LLC, another LLC wholly owned by Yan. Id. The membership 8 interests in 547 Investments, LLC were then transferred to Defendants. Id. In 2016, this Court 9 rendered judgment (based on a jury verdict) in the case styled Charles Li v. Thai Ming Chiu, et al., 10 Case no. CGC-14-537574 (hereafter the "Li v. Chiu Action") rejecting Transferee Defendants' 11 asserted interests in the Subject Property, finding that the transfer of the Subject Property to them 12 was fraudulent. See RJN Exhibits C & D. Such judgment was affirmed by the Court of Appeal in 13 2018, and again in 2020 after Transferee Defendants unsuccessfully challenged this Court's 14 amended judgment entered pursuant to the 2018 Court of Appeal decision (see RJN Exhibits E & 15 F). The Supreme Court denied Transferee Defendants’ subsequent writ petitions with respect to the 16 Court of Appeal's 2020 decision (see RJN Exhibit Y). 17 On September 26, 2014, Plaintiffs filed an action in this Court against Yan for malicious 18 prosecution and related transferees for fraudulent transfer with respect to the Subject Property, 19 assigned Case No. CGC-14-565831 (the "2014 Action"). The Court awarded judgment in Plaintiffs' 20 favor on their malicious prosecution claim in August 2019 and (ultimately, after a remand on appeal 21 from the Court of Appeal) on their fraudulent transfer claims (including against Defendant Tina 22 Yan) on December 1, 2021 in the 2014 Action. See RJN Exhibit V; Exhibit M. The Court denied 23 Tina Yan’s motion for a new trial in the 2014 Action on January 28, 2022 (see RJN Exhibit X). 24 On January 31, 2017, Plaintiffs filed their complaint in the instant action based on fraudulent 25 transfer and conspiracy to defraud claims. Plaintiffs filed their First Amended Complaint on April 26 7, 2022 (see RJN Exhibit A) to correct the scope of damages, after receiving leave of the Court by 27 Order entered April 7, 2022. The fraudulent transfer claim in this action is substantively similar to 28 the fraudulent transfer claims resulting in judgment for Plaintiffs in the 2014 Action against Yan Farella Braun + Martel LLP 4 41312\14905688.2 235 Montgomery Street, 17th Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 and (Defendant) Tina Yan, and was filed to obtain relief against the Transferee Defendants who also 2 were transferees with respect to the transfers that were previously determined to be fraudulent 3 transfers. 4 III. LEGAL STANDARDS ON SUMMARY ADJUDICATION 5 California Code of Civil Procedure Section 437c(c) permits summary adjudication of a cause 6 of action when “all the papers submitted show that there is no triable issue as to any material fact 7 and that the moving party is entitled to judgment as a matter of law.” “The moving party must 8 support the motion with evidence including affidavits, declarations, admissions, answers to 9 interrogatories, depositions, and matters of which judicial notice must or may be taken” (Aguilar v. 10 Atlantic Richfield Co. (2001) 25 Cal.4th 826, 844, citing Cal. Civ. Proc. Section 437c(b).) On 11 summary judgment, “the moving party bears the burden of persuasion that there is no genuine issue 12 of material fact and that he is entitled to judgment as a matter of law. However, there is only a 13 genuine issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to 14 find the underlying fact in favor of the party opposing the motion in accordance with the applicable 15 standard of proof.” (Aguilar, supra, 25 Cal.4th at 845.) 16 California Code of Civil Procedure Section 437c(f) permits summary adjudication as to a 17 single cause of action within an action, and “a motion for summary adjudication may be made by 18 itself or as an alternative to a motion for summary judgment and shall proceed in all procedural 19 respects as a motion for summary judgment.” (Cal. Civ. Proc. § 437c(f)(2).) 20 California Code of Civil Procedure Section 1008(b) permits a party to renew a request for 21 relief that was previously denied based on a showing of new or different facts or circumstances.”3 22 IV. ARGUMENT 23 Plaintiffs, as creditors of Yan at all relevant times, are entitled to summary adjudication of 24 their fraudulent transfer claim as a matter of law under principles of collateral estoppel. As 25 3 26 Section 1008(b) provides in relevant part: “A party who originally made an application for an order which was refused in whole or part . . . may make a subsequent application for the same 27 order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were 28 made, and what new or different facts, circumstances, or law are claimed to be shown.” Farella Braun + Martel LLP 5 41312\14905688.2 th 235 Montgomery Street, 17 Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 discussed above, Yan and the Transferee Defendants have been determined by final judgment to be 2 liable for the fraudulent transfer of the Subject Property in the Li v. Chiu Action. The transfer of 3 the Subject Property to Defendant Tina Yan likewise was determined to be a fraudulent transfer in 4 the 2014 Action, in which the Transferee Defendants were also transferees. California courts have 5 established that collateral estoppel is grounds for summary adjudication to resolve a claim. See, 6 e.g., Santor v. Superior Court (1982) 136 Cal.App.3d 322, 327 (“Summary judgment is an 7 appropriate remedy when the doctrine of res judicata in its subsidiary form of collateral estoppel 8 refutes all triable issues of fact suggested by the pleadings and supporting documents.”) 9 A. Identical Issues of Fraudulent Transfer Have Been Fully Litigated to Finality 10 in the Li v. Chiu Action. 11 Here, as to Plaintiffs’ fraudulent transfer claim, the same identical factual matters regarding 12 Transferee Defendants’ fraudulent transfer of the Subject Property have been litigated and clearly 13 established in the Li v Chiu Action. In that case, this Court determined that creditor Charles Li 14 (“Li”) established that Yan and the Transferee Defendants effectuated the transfer of the Subject 15 Property to defraud Yan’s creditors (see Statement of Decision, RJN Exhibit C), and rejected their 16 challenge to the Jury's Verdict (RJN Exhibit D). 17 Specifically, in its April 14, 2016 verdict (the “April 2016 Jury Verdict), the jury found that 18 the transfer of the Subject Property (the “Subject Transfer”) to Defendants (including Transferee 19 Defendants) was a fraudulent transfer, with the intent to hinder, delay or defraud Yan’s creditors. 20 RJN Exhibit D. On June 24, 2016, this Court filed its Statement of Decision adopting the April 21 2016 Jury Verdict that the Subject Transfer to Defendants (including Transferee Defendants) was a 22 fraudulent transfer, with the intent to hinder, delay or defraud Yan’s creditors (the “June 2016 23 Judgment”). RJN Exhibit C at 2-3. In its June 2016 Judgment, this Court found that Yan failed to 24 receive reasonable equivalent value in exchange for the Subject Transfer. Id. at 2-3. In its June 25 2016 Judgment, this Court also found that Yan was insolvent at the time of the Subject Transfer, or 26 became insolvent as a result of the Subject Transfer. Id. at 2-3. In its June 2016 Judgment, this 27 Court further found that the Defendants (including Transferee Defendants) did not establish any 28 equitable grounds for altering the April 2016 Jury Verdict, and confirmed Defendants’ fraudulent Farella Braun + Martel LLP 6 41312\14905688.2 235 Montgomery Street, 17th Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 transfer liability with respect to the Subject Transfer. Id. at 3-5. 2 The judgment in favor of Li and this Court's related findings in the June 2016 Judgement 3 regarding the fraudulent transfer were affirmed by the Court of Appeal in May 2018. See RJN 4 Exhibit E at 1, 22. In its May 2018 decision, the Court of Appeal recognized that “[t]he jury returned 5 special verdicts against all of the defendants finding each defendant liable for actual as well as 6 constructive fraud.” See RJN Exhibit E at 9. In affirming this Court's judgment, the Court of 7 Appeal recounted the substantial evidence establishing that Transferee Defendants fraudulently 8 transferred the Subject Property as follows: 9 Shortly after the conclusion of the trial testimony in Li v. Yan II, in July 2012, Yan transferred his ownership in 547 23rd Avenue, LLC to his mother and his 10 brothers-in-law, Chiu and Liu. He justified the timing of the transfer by claiming that his bankruptcy case had concluded and there was no longer any restriction on 11 his ability to dispose of the property. Yan’s mother received a 68.43 ownership 12 interest in the LLC, with Chiu receiving 25.83 percent and Liu receiving 5.74 percent. At the time Yan transferred his interest in the LLC to his relatives, he had 13 no assets and virtually no income. 14 In September 2013, Yan, as agent for 547 23rd Avenue, LLC, failed to appear for an examination in connection with Li’s attempts to enforce the judgment in Li v. 15 Yan II. The court issued an order to show cause and a warrant for Yan’s arrest. 16 Shortly thereafter, in November 2013, the property was transferred to another business entity, 547 Investments LLC, that Yan had formed. The newly formed 17 entity, 547 Investments, LLC, was owned by the same individuals, with the same percentage interests, as the pre-existing entity, 547 23rd Avenue, LLC. Yan 18 justified creating the new LLC with the same owners because the books from 2007 were “not clear” and he wanted to start with a “clean slate.” Despite the facts that 19 the property was owned by an LLC since 2007 and Yan purportedly had no 20 ownership interest in the business entities that held title to the property after July 2012, until at least May 2014 Yan continued to receive rent checks made out to his 21 name from tenants at the property. At around the time the property was transferred to 547 Investments LLC in December 2013, it was publicly offered for sale at an 22 asking price of $1,925,000. 23 Yan’s brother-in-law, Liu, testified that he wrote a $40,000 check as an investment 24 in the property in 2000. He also claimed he loaned $40,000 to Yan a few years later, in 2005 or 2006. Liu admitted that the second $40,000 purportedly given to 25 Yan was in the form of a check made out to Yan’s father. In 2009, Liu filed a claim for $40,000 in Yan’s bankruptcy proceeding. He testified that the only evidence of 26 the loan was an email; there was no promissory note and the parties did not fix an amount of interest or repayment schedule. In the court trial phase, outside the 27 presence of the jury, Liu authenticated emails purporting to document his 28 investment. In the emails, Liu was given the option to have his contribution treated Farella Braun + Martel LLP 7 41312\14905688.2 235 Montgomery Street, 17th Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 as a loan or as an ownership stake in the property. Liu never asked to be a part owner of the property or to be placed on the title prior to his receipt of an 2 ownership share in 547 23rd Avenue, LLC, in 2012. 3 Chiu, Yan’s other brother-in-law, also testified. He claimed that Yan asked family members to make an investment in the property in 2000. There was no written 4 agreement memorializing the investment because, according to Chiu, Yan was a 5 “family member.” Chiu claimed to have invested $100,000 in the property. He admitted filing a claim in Yan’s bankruptcy but acknowledged it was disallowed. 6 His claim in the bankruptcy was for $180,000. In the court trial phase, outside the presence of the jury, Chiu authenticated emails purporting to establish his 7 investment. Like Liu, Chiu was given the option to treat the sums he gave to Yan as either a loan or an equity stake in the property. He explained that he made a claim 8 for $180,000 in Yan’s bankruptcy because he had loaned Yan $80,000 in addition 9 to the $100,000 investment he made in the property. Chiu testified that if the bankruptcy court had allowed his $180,000 claim to be satisfied, he would have 10 relinquished any claim of ownership in the property. He was aware that Yan had transferred the property to Yan's parents in 2004 but acknowledged he did not ask 11 to be placed on the title at that time. 12 Id. at 7-9. (emphasis added) 13 On November 16, 2018, this Court entered an amended judgment (the “November 2018 14 Judgment”) in the Li v. Chiu Action based on the direction in the May 2018 Court of Appeal 15 Decision. See RJN Exhibit F at 4. In its November 2018 Judgment, this Court found that the Subject 16 Transfer to Defendants (including Transferee Defendants) was “made with the intent to hinder, 17 delay, or defraud plaintiff; was received without good faith and not in exchange for reasonably 18 equivalent value” See RJN Exhibit F at 4-5. In its November 2018 Judgment, this Court ruled that 19 Defendants (including Transferee Defendants) were liable for fraudulent transfer with respect to the 20 Subject Transfer. See RJN Exhibit F at 5. 21 On February 6, 2019, this Court filed its order denying Defendants’ (including Transferee 22 Defendants) motion to amend the June 2016 Judgment and November 2018 Judgment (the 23 “February 2019 Order”). See RJN Exhibit F at 7. On December 22, 2020, the California Court of 24 Appeal affirmed this Court’s February 2019 Order. See RJN Exhibit F at 1, 13. 25 Because the same issues in the instant action regarding Transferee Defendants’ culpability 26 for the fraudulent transfer of the Subject Property have been fully litigated to finality in the Li v. 27 Chiu Action, Transferee Defendants are precluded from relitigating such issues in this case, under 28 principles of collateral estoppel, as further discussed below. Farella Braun + Martel LLP 8 41312\14905688.2 235 Montgomery Street, 17th Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 B. Collateral Estoppel Precludes Transferee Defendants from Relitigating Their Conclusively Determined Fraudulent Transfer Liability. 2 3 Collateral estoppel precludes relitigation of issues argued and decided in prior proceedings. 4 Lucido v. Superior Court (1990) 51 Cal.3d 335, 341 (Lucido). “Collateral estoppel applies when 5 (1) the party against whom the plea is raised was a party . . . to the prior adjudication, (2) there was 6 a final judgment on the merits in the prior action and (3) the issue necessarily decided in the prior 7 adjudication is identical to the one that is sought to be relitigated.” Roos v. Red (2005) 130 8 Cal.App.4th 870, 879. Where collateral estoppel is asserted “ ‘offensively’ ” to preclude a defendant 9 from relitigating an issue he or she previously litigated and lost, the courts consider whether that 10 defendant had a “ ‘full and fair’ ” opportunity to litigate the issue. Id. at 880. 11 Here, (1) Transferee Defendants Chiu and Liu are the same defendants that appeared and 12 defended in the Li v. Chiu Action on the same fraudulent transfer issue, (2) they have each received 13 full and fair opportunities to litigate such issue, through jury trial, court trial, and multiple appeals, 14 resulting in final judgment against them, and (3) they were found to have fraudulently transferred 15 the Subject Property to defraud Yan’s creditors. Thus, all requirements have been met for the 16 application of collateral estoppel to the issue of fraudulent transfer of the Subject Property, in view 17 of the facts discussed above and established by the Separate Statement. 18 Collateral estoppel is applicable with respect to Defendant Transferees’ fraudulent transfer 19 of the Subject Property. Indeed, the Court of Appeal applied this doctrine to preclude co-Defendants 20 Tina Yan and Cheuk Tin Yan from relitigating their defense in the related 2014 Action involving 21 the same issues as those present here. In reversing the lower court’s initial judgment denying 22 Plaintiffs’ use of collateral estoppel as to the fraudulent transfer of the Subject Property the Court 23 of Appeal found: “[t]here is no dispute that the codefendants were parties to the Li [v. Chiu] 24 [A]ction, that there was a judgment on the merits, and that the Li [v. Chiu] [A]ction afforded the 25 codefendants a fair and full opportunity to defend against plaintiffs’ UVTA4 claim with regard to 26 the 23rd Avenue property.” See RJN Exhibit G at 13. 27 4 28 UVTA is a reference to the Uniform Voidable Transactions Act (Civ. Code, §§ 3439 et seq.). Farella Braun + Martel LLP 9 41312\14905688.2 235 Montgomery Street, 17th Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 The Court of Appeal further determined that collateral estoppel applied because Plaintiffs 2 were creditors (within the meaning of the UVTA) defrauded by Transferee Defendants’ fraudulent 3 transfer of the Subject Property: “Future creditors as well as present creditors are protected by the 4 legislation relating to fraudulent conveyances, and [P]laintiffs, as tort claimants harmed by Yan’s 5 meritless prosecutions in 2010 and 2012, were ‘creditors’ within the meaning of the UVTA. Thus, 6 when Yan and the codefendants transferred the 23rd Avenue property in 2012 and 2013 to defraud 7 Yan’s creditors, this adversely impacted the claims of Li and [P]laintiffs.” RJN Exhibit G, at 14- 8 15. (citations and internal quotes omitted). Thus, at all relevant times, (including at the time of the 9 Subject Transfer), Plaintiffs have been “creditors” of Yan within the meaning of the UVTA.5 10 Pursuant to principles of collateral estoppel, it thus has been conclusively determined that: 11 the Subject Transfer to Transferee Defendants was “made with the intent to hinder, delay, or defraud 12 Plaintiffs; the Subject Transfer “was received without good faith and not in exchange for reasonably 13 equivalent value”; Yan was insolvent at the time of the Subject Transfer, or became insolvent as a 14 result of the Subject Transfer; Transferee Defendants have no equitable grounds for altering their 15 fraudulent transfer liability with respect to the Subject Transfer. Each Transferee Defendant 16 accordingly is conclusively “liable for actual as well as constructive fraud” with respect to the 17 Subject Transfer, pursuant to California Civil Code Sections 3439.046 and 3439.057. 18 C. Subject Property Rendered Unavailable For Judgment Enforcement 19 It is indisputable that Plaintiffs have been harmed by the fraudulent transfer of the Subject 20 Property, for which the Defendants (including Transferee Defendants) have been determined to be 21 22 5 Specifically, each Plaintiff is a “creditor” of Yan as defined in California Civil Code Section 3439.01(c), because each Plaintiff is a “person that has a claim” [as defined in Civil Code Section 23 3439.01(b)], as each Plaintiff has a “right to payment” against Yan. 6 24 Section 3439.04(a)(1) provides in relevant part: “A transfer made or obligation incurred by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer 25 was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation . . . [w]ith actual intent to hinder, delay, or defraud any creditor of the debtor.” 26 7 Section 3439.05(a) provides:” A transfer made or obligation incurred by a debtor is voidable as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the 27 debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor 28 became insolvent as a result of the transfer or obligation.” Farella Braun + Martel LLP 10 41312\14905688.2 235 Montgomery Street, 17th Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 liable. See RJN Exhibit E at 1, 22; Exhibit G at 15. 2 The Subject Property is not available to be used to satisfy the judgment and sanctions 3 previously awarded because Yan subsequently transferred the property shortly after this Court’s 4 judgment avoiding the earlier transfer became final on May 31, 2018 upon the Court of Appeal’s 5 affirmance in the Li v. Chiu Action. The current record holder of title to the Subject Property is 6 Shuzhen Tu. See RJN Exhibit K. Because the Subject Property is not available for collection, both 7 common law and UVTA remedies prescribe a monetary judgment for such circumstances.8 8 D. Money Judgment on Fraudulent Transfer is Proper 9 A money judgment against the Transferee Defendants is permitted under the UVTA pursuant 10 to Civil Code Section 3439.08(b)(1), which provides in relevant part: 11 The creditor may recover judgment for the value of the asset transferred . . . or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment 12 may be entered against the following: (A) The first transferee of the asset or the person for whose benefit the transfer was 13 made. (B) An immediate or mediate transferee of the first transferee, other than either of 14 the following: (i) A good faith transferee that took for value. 15 (ii) An immediate or mediate good faith transferee of a person described in clause (i). 16 8 The subsequent transfer of the Subject Property to Shuzhen Tu is apparently fraudulent, and was 17 made based on a foreclosure sale pursuant to a Deed of Trust securing a purported $1.5 million loan from Mei Ling Fang a/k/a Lily Yan (Yan’s wife) to Yan. See RJN Exhibits H, I & J. In 18 fact, Yan has disavowed this Deed of Trust, and admitted under penalty of perjury that it is invalid and that there was no consideration to support it. An excerpt of the direct examination of Yan in 19 the Liu v. Chiu Action includes the following: 20 Q. And Exhibit 27 is a deed of trust that is now held by your wife, Meiling Fang, right? 21 A. Yes. Q. It is a deed of trust over the property 547 23rd Avenue, San Francisco, 22 California, right? A. Yes. 23 Q. And it is - - it says near the bottom, “For the purpose of securing payment of the sum of $1,500,000,” right? 24 A. Yes. Q. Thank you. So, this deed of trust would give your wife the right to foreclose on 25 this building, right? A. My understanding today is that this document would be a useless piece of 26 document. It's not enforceable. Q. And you say it's unenforceable, because there was no such $1,500,000 debt, 27 correct? A. Correct. 28 See RJN Exhibit L at 149-151. Farella Braun + Martel LLP 11 41312\14905688.2 th 235 Montgomery Street, 17 Floor San Francisco, California 94104 (415) 954-4400 RENEWED MOTION FOR SUMMARY ADJUDICATION RE FRAUDULENT TRANSFER Case No. CGC-17-556769 1 Cal. Civ. Code § 3439.08(b)(1). 2 The Transferee Defendants are indisputably immediate or mediate transferees, and, in view 3 of their previously determined participation with Yan in the scheme to fraudulently transfer the 4 Subject Property, are not good faith transferees that took for value, as this Court and the Court of 5 Appeal have previously determined. Therefore, entry of a money judgment against the Transferee 6 Defendants is appropriate. Indeed, under these same circumstances, this Court entered a money 7 judgment in the 2014 Action against co-Defendant Tina Yan, based on her receipt of the same 8 transfers as those received by Transferee Defendants, in view of her knowing participation in such 9 fraudulent transfer with the intention of defrauding creditors (including Plaintiffs). See RJN 10 Exhibit M at 8-9. As this Court found: 11 A money judgment against the Transferee Defendants is permitted under the UVTA. [citing Cal. Civ. Code § 3439.08(b)(1)] . . . A money judgment against the 12 transferee may be had when [the transferee] knowingly participates in the fraudulent conveyance with the intention of defrauding creditors. [citations and 13 internal quotes omitted] . . . The Defendants have manipulated various assets, particularly the Subject Property to avoid satisfying Yan's substantial debts. 14 Id. at 8-9. 15 16 Transferee Defendants similarly knowingly participated in the same fraudulent transfer 17 with the same intention of defrauding Yan’s creditors (including Plaintiffs). 18 A money judgment against Transferee Defendants is accordingly proper. See, e.g., 19 Flowers & Sons Dev. Corp. v. Mun. Court (1978) 86 Cal. App. 3d 818, 825 (“During oral 20 argument of this case, we were informed by both parties that appellants no longer have a 21 possessory interest in the Edgewater property. They have sold the property. … However, 22 [plaintiff] may obtain a money judgment against appellants as prayed.”); Filip v. Bucurenciu, 129 23 Cal. App. 4th (2005) 825, 839-840 (allowing both avoidance of fraudulent transfers and money 24 judgments as relief under the UFTA, predecessor of the UVTA) ; Renda v. Nevarez (2014)