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GLYNN & FINLEY, I.LP
CLEMENT L. GLYNN, Bar No. 57117
ROBERT C. PHELPS, Bar No. 106666
MORGAN K. LOPEZ, Bar No. 215513
ELECTRONICALLY
One Walnut Crcck Center
100 Pringle Avenue, Suite 500 F I L E D
Superior Court of California,
Walnut Creek, CA 94596 County of San Francisco
Email: cglynn glynnfinley.corn
bphelpsNglynnfinley,corn 12/11/2019
mlopez@glynnfinley.corn Clerk of the Court
BY: DAVID YUEN
Telephone: (925) 210-2800 Deputy Clerk
Facsimile: (925) 945-1975
Attorneys for Cross-Defendant/Plaintiff
Shirley Hwang
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE CITY AND COUNTY OF SAN FRANCISCO
10
11 Lead Case No. CGC-10-503332
COMMONWEALTH LAND TITLE (Consolidated for all purposes with
12 INSURANCE COMPANY, CGC-11-512102)
13 Plaintiff,
PLAINTIFF SHIRLEY S. HWANG'S
14 vs. REPLY BRIEF IN SUPPORT OF
MOTION FOR ASSIGNMENT ORDER
15 FEDEX OFFICE AND PRINT SERVICES AND FOR ORDFR RESTRAINING
INC.; WINSTON LUM; KAUSHAL JUDGMENT DEBTORS AND THEIR
16 NIROULA; JAY CHANDRAKANT AGENTS
SHAH; ELVIA PALOMINO; MORAD
17 AFRAIMI; MELVIN LEE EMERICH;
MARTINI CHNOOGLE; GRACHELLE Date: December 18, 2019
18 LANGUBAN;MERCHANTSBONDING Time: 9:30 a.m.
COMPANY, and DOES 1-24, Dept.: 303
19 Before: Hon. Newton Lam
Defendants.
20
21 SHIRLEY S. HWANG,
CASE NO. CGC-11-512102
22 Plaintiff,
23 vs.
24 FEDEX OFFICE AND PRINT SERVICES
INC., WINSTON LUM, KAUSHAL
25 NIROULA, JAY CHANDRAKANT SHAH,
MELVIN LEE EMERICH, GRACHELLE
26 LANGUBAN, and MARTINI k,
CHNOOGLE, and DOES 1-50,
27
Cross-Defendants.
28
REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER
I I. INTRODUCTION
Following this Court's entry of an Order (i) adding additional judgment debtors to the
judgment against defendant Jay Shah, and (ii) avoiding various fraudulent real property transfers
executed by those judgment debtors, Plaintiff Shirley Hwang moved for an order assigning to her
the rental proceeds from those properties, in partial satisfaction of the judgment. As it relates to
the three rental properties in Los Banos, Ms. Hwang's motion is unopposed and should be
granted. Although he lacks standing, Jay Shah's father, Chandrakant ("C.K.") Shah purports to
oppose assignment of the rental proceeds from the property located at 659 S. 15th Street, in San
Jose, California. The Court should refuse to consider this opposition from a non-party, especially
10 given C.K. Shah's concession that he has no ownership interest in the property.
As discussed more fully below, even were the Court to consider C.K. Shah's opposition,
12 each of his arguments is substantively flawed, For example, while he claims to have been
13 assigned the property's rental proceeds previously, the lone document he attaches to his
14 declaration shows no such right. Moreover, his argument that the Court may assign only the
15 property's "net rents" pursuant to Code of Civil Procedure section 708.510(c) is legally and
16 factually unsupported because, inter alia, he fails to establish that the property's mortgage is an
17 obligation of Jay Shah or that Jay would be unable to pay the mortgage were the rental proceeds
assigned to Ms. Hwang. Indeed, it would be illogical for the Shahs to continue to own a property
19 they contend is operating at a negative cash flow were it not appreciating in value or beneficial
20 for tax and other purposes. Finally, C.K. Shah has failed to support his assertions with the
21 documentation he discusses in his declaration and Ms. Hwang objects to the Court taking C.K.
22 Shah's word for any of the facts alleged therein—as the documents themselves are the best
23 evidence of their contents. For each of these reasons, Ms. Ilwang should be assigned the rental
24 income from the San Jose property beginning immediately.
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REPLY BRIEF ISO IIWANG'S MOT FOR ASSIGNMENT ORDER
I II. ARGUMENT
A. C.K. Shah's opposition to this motion is procedurally improper.
1. C.K. Shah does not have standing to oppose this motion.
C.K. Shah has no right to oppose the instant motion because he lacks standing. In the
first paragraph of his declaration C.K. Shah admits that he is not a party to this action, nor has he
moved to intervene in it. To the contrary, he has asserted repeatedly that he cannot be drawn into
the litigation. (See Sep. 18, 2019 Opposition Response and Objections by Third Parties
Chandrakant Shah and Mrudula Shah to Order to Show Cause Filed Aug 29 2019 at p. 2:20-22
[" Third parties were not named in [this] action. Third parties did not make a general appearance
10 in [this] action. And third parties have no liability to plaintiff Hwang with respect to the
judgment entered against their son."].) C.K. Shah's own words make clear that he is a non-party
12 who lacks standing to challenge Ms. Hwang's motion as a matter of law. Lohnes v.Astron
13 Computer Products (2001) 94 Cal.App.4th 1150, 1153 (" Whether intervention is permissive or
14 mandatory, a petition to seek leave is required; without permission from the court, a party lacks
15 any standing to the action" (citing C.C.P. $ 387)).
16 Indeed, the only grounds C.K. Shah provides for his appearance is that Ms. Hwang's
17 motion was served on his attorney, who is also Jay Shah's counsel of record and who was served
18 in that capacity. (C.K. Shah Declaration (" Shah Decl.") $ 1.) Jay Shah could have opposed this
19 motion but chose not to. Service on the judgment debtor plainly does not confer on a non-party
20 standing to contest the motion. Consequently, C.K. Shah's opposition should be disregarded.
21 2. C.K. Shah does not have an interest in the rents generated by the San
Jose property.
22
23 In an attempt to distance himself from this litigation, C.K. Shah previously admitted that
24 he does not have an ownership interest in the San Jose property. (See Sep. 18, 2019 Opposition
25 Response and Objections by Third Parties Chandrakant Shah and Mrudula Shah to Order to
26 Show Cause Filed Aug 29 2019 at p. 3:15-17 [" These third parties are not now owners of record
27 of any of the properties identified in the OSC (4 Los Banos properties and I San Jose property)
28 and never have been owners of any of these properties to their knowledge."].) He concedes that
REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER
the property is owned by Elvia Palomino (Jay Shah's wife) and Investment Property Management
2 LI.C. (Shah Decl. $
that he is not the property owner, C.K.
3.)'otwithstanding
Shah contends that he may
lawfully oppose an assignment of rents from the San Jose property to Ms. Hwang pursuant to a
Deed of Trust and Assignment of Rents recorded against the property on August 11, 2017.
(Shah Decl. tt 12.) Specifically, he asserts that he "holds a valid lien against this property which
is not satisfied and which also includes an assignment of rents which is superior to the claim by
Hwang." (Opp. at 2:9-10.) C.K. Shah's position is meritless for at least two reasons.
First, Ms. Hwang holds an interest in the property superior to his. Following Judge
10 Kiesselbach's award of criminal restitution in Ms. Hwang's favor, Ms. Hwang filed an Abstract
of Judgment — Restitution in Santa Clara County on September 14, 2015, when Jay Shah was
12 the owner of record. (Declaration of Morgan K, Lopez (" Lopez Decl."), Ex. 1.) Thus, her lien is
13 senior to C,K. Shah's alleged lien by almost two years. Azadozy v. Nikoghosian (2005) 128
14 Cal.App.4th 1369, 1374 — 1375 (" The recording statutes only protect the interest of a bona fide
15 purchaser or encumbrancer that is created by a recorded instrument, by granting priority over all
16 prior unrecorded and unknown interests. Thus, priority is given only to a bona fide purchaser
17 or encumbrancer who first duly records the instrument creating the interest.") (internal
18 citations and quotation marks omitted) (emphasis added).
19 Second, there is no evidence that C.K. Shah is currently entitled to receive the San Jose
20 property's rents. The trust deed*a rent assignment provision, on which he relies, provides that thc
21 beneficiary's right to collect the rents is only triggered when the trustor defaults "in payment of
22
The Court's November 13, 2019 Order avoided Jay Shah's purported transfer of his ownership
23
interest to Investment Property Management LLC. Thus, the property is presently owned by Jay
Shah and Elvia Palomino.
24 'he referenced trust deed is suspect; it was purportedly executed in 2013 but not recorded until
25
almost 4 years later. (Shah Decl., Ex. A.) In fact, the document was recorded on August 11,
2017, a day when the parties were before this Court for their bench trial. (See Lopez Decl. Ex.
26 2). This timing strongly suggests that the true motivation for recordation was to keep this
property out of the hands of the Shah family's creditors. As Plaintiff has shown repeatedly, the
27 Shah family has a history of recording intramural transfers to encumber and cloud title to real
property. This illicit practice is underscored by the fact that here C.K. Shah encumbered a
28 property in which he otherwise has disavowed any interest, to ensure it could not be used by Ms.
Hwang to satisfy her judgment.
REPLY BRIEF ISO IIWANG'S MOT FOR ASSIGNMENT ORDER
any indebtedness secured hereby or in performance of any agreement hereunder to collect and
retain such rents, issues and profits as they become due and payable." (Lopez Decl., Ex. 4 at $
10.)'.K. Shah submits no evidence establishing that Jay Shah defaulted on his obligations
under the trust dccd. Thus, his contention that the rents generated by the San Jose property have
already been assigned to him (Shah Decl. f 14) is without support and should be rejected.
B. C.K. Shah fails to show that Jay Shah reasonably requires the rental
proceeds from the San Jose property.
C.K. Shah argues that only "net rents" inay be assigned to Ms. Hwang pursuant to the
pending motion. (Opp. at 2:6-22.) His argument relies solely on a fallacious interpretation of the
10 text of Code of Civil Procedure section 708.150(c). (Jbid.) His position is meritless.
The plain language of thc statute provides that the Court may, but is not required to,
12 consider "tp]ayments the judgment debtor is required to make." Code Civ. Proc. II708.150(c).
13 As an initial matter, C.K. Shah's declaration is silent regarding who is obligated to pay the
14 alleged Wells Fargo mortgage. (Shah Decl, ti6.) Thus, there is no evidence whatsoever
15 establishing that Jay Shah is required to inake these payments. In any event, C.K. Shah cites no
16 authority holding that an assignment of rents can only be ordered when a property is cash-flow
17 positive, nor is Ms. Hwang aware of any such authority.
18 The legislative history explains that Section 708.150(c) "is based on the standard for
fixing the amount of payments under the New York installment payment order procedure, See
20 N.Y,Civ.Proc. Law X R. Ij5226 (McKinney 1978)." Legis. Com., corn. 17 West's Ann. Code
21 Civ. Proc. (2009 ed.) foll. f 708.510, p. 383. In relevant part, the New York statute provides:
22 In fixing the amount of the payments, the court shall take into consideration the
reasonable requirements of the judgment debtor and his dependents, any payments
23 required to be made by him or deducted from the money he would otherwise
receive in satisfaction of other judgments and wage assigninents, the amount due
24 on the judgment, and the amount being or to be received....
25 N.Y. C.P.L.R. 5226 (McKinney). As shown above, C.K. Shah wholly fails to submit evidence
26 demonstrating the "reasonable requirements of the judginent debtor and his dependents," which
27 'he trust deed attached to C.K. Shah's declaration is incomplete — it is missing "Page 2 of 4" of
the printed document. The missing page contains the quoted default provision. Hence, Ms.
28
Hwang submits as Exhibit 4 to the Lopez Declaration a complete copy of the trust deed, which
C.K. Shah authenticated at his examination in a related matter, (Lopez Decl,, Ex. 3.)
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REPI, Y BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER
he has the burden to establish. Lowy v. Bobker (S.D.N.Y. 2005) 383 F.Supp.2d 606, 615.
Rather, C.K. Shah opposes the assignment of rents from this rental property solely because it
would allegedly harm his own interests: "Hwang does not get to skim the cream off of this real
property for a time and then cause it to go into foreclosure resulting in a forfeiture of equity and
a disaster to the junior lien holder Chandrakant K. Shah." (Opp. at 2:18-20 (emphasis
added).) The Court is not required to consider the impact of the requested assignment on Jay
Shah's parents and should not do so. See Lowy, 383 F.Supp.2d at p. 615 (finding evidence
insufficient to establish defendant's "reasonable requirements, as opposed to luxuries.").
C. C,K. Shah's opposition fails to present sufficient evidence to defeat the
motion.
10
Finally, even were the Court to consider C.K. Shah's argmnents it should find that the
12 evidence submitted is insufficient to defeat Ms. Hwang's motion. His declaration is littered with
13 hearsay statements, including but not limited to:
14 ~ the identity of the property owners ($ 3);
15 ~ the terms, outstanding principal, and monthly installment obligation of the alleged
16 Wells Fargo mortgage ($ 6);
17 ~ the amount of the property's annual property tax ($ 7);
~ the amount of monthly gross rent received ($ 8); and
19 ~ the amount of the property's annual hazard insurance (f 9).
20 Ms. Hwang objects to these unsupported statements, for which C.K. Shah could have, but chose
21 not to, submit documentary
evidence.'2
23
C.K. Shah's declaration contradicts his argument that he would be harmed by a foreclosure
24
sale. Specifically, he estimates that the San Jose property's fair market value is $ 1.35 million ($
25 4) and asserts that the principal owed on the Wells Fargo mortgage is $ 787,653.93 ($ 6). Thus,
even were the Court to find that his lien is senior to Ms. Hwang's (and it decidedly is not), a sale
26 of the property would be more than enough to satisfy the $ 300,000 debt memorialized in the trust
deed (tt 13), as well as the additional, unsecured amounts he claims to have spent on maintenance
27 and repairs (t[ 11).
Ms. Hwang also objects to the opinions set forth in C.K. Shah's declaration, which relate to,
28
among other things, the validity of the trust deed ($ 13) and the alleged "valid" assignment of
rents to him and Wells Fargo (tt 14). See Evid. Code, ) 800.
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REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER
C.K. Shah's unsupported assertions regarding the priority and effect of the alleged trust
deed demonstrate that he is not a credible witness. (See e.g., Sec. II.A.2 supra.) Nor does he
contend that documents supporting the assertions in his declaration are unavailable. Hcncc, the
Court should refuse to take his word on any matter for which better, documentary evidence is
available. Evid. Code, ) 1523 (" Except as otherwise provided by statute, oral testimony is not
admissible to prove the content of a writing"); scc also Evid. Code, $ 1521.
Belatedly, C.K. Shah filed a request for judicial notice, to which hc attached what
purports to be a deed of trust recorded against the property in September 2007 by World Savings
Bank. The attached document is not authenticated, nor does it appear to be a certified record.
10 Thus, the Court should not consider it. But even were the Court to consider the document, it
does not support any of C.K. Shah's arguments because: (i) the inortgage agreement is between
12 Jay and Elvia Shah and World Savings Bank, not Wells Fargo, and there is no evidence of the
13 alleged assignment from World Savings Bank to Wells Fargo or that Jay Shah is the Wells Fargo
14 mortgagee; (ii) the document does not substantiate any of the amounts alleged in C.K. Shah's
15 declaration (e.g., the current mortgage amount or the monthly mortgage payments), and; (iii) the
16 agrecmcnt does not provide for an assignment of rents to World Savings Bank except if "Lender
17 requires immediate payment in full or if [borrowers] abandon the Property" ($ 17), and there is no
18 evidence that either condition occurred and thus no support for the claim that the property's "net
19 rents" have "already been validly assigned to Wells Fargo Bank...*'Shah Decl. f~14). Hence,
20 the Court should disregard C.K. Shah's untimely attempt to salvage his opposition.
21 III. CONCLUSION
22 For the reasons stated above and in Ms. Hwang's opening brief, the Court should assign
23 to Ms. Hwang the rental proceeds from 530 Adams Ave., Los Banos, CA; 317 Crescent Drive,
24 Los Banos, CA; 732 Bluff Drive, Los Banos, CA; and 659 S. 15th Street, San Jose CA, which
25 are all rental properties owned in whole or part by the judgment debtors. To ensure compliance
26 with this order, the Court should also grant Ms. Hwang's request for an order restraining the
27 judgment debtors and any servant, agent, employee or attorney for thc judgment debtors and any
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REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER
person(s) in active concert and participating with the judgment debtors from assigning, disposing
of, or spending the rental proceeds. A form of order so providing is submitted herewith.
Dated: December 11, 2019 GLYNN &, FINLEY, LLP
CLEMENT L. GLYNN
ROBERT C. PHELPS
MORGAN K. LOPEZ
Attorneys Tj&r Plaintiff
Shirley S. Hwang
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REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER
Preview
GLYNN & FINLEY, I.LP CLEMENT L. GLYNN, Bar No. 57117 ROBERT C. PHELPS, Bar No. 106666 MORGAN K. LOPEZ, Bar No. 215513 ELECTRONICALLY One Walnut Crcck Center 100 Pringle Avenue, Suite 500 F I L E D Superior Court of California, Walnut Creek, CA 94596 County of San Francisco Email: cglynn glynnfinley.corn bphelpsNglynnfinley,corn 12/11/2019 mlopez@glynnfinley.corn Clerk of the Court BY: DAVID YUEN Telephone: (925) 210-2800 Deputy Clerk Facsimile: (925) 945-1975 Attorneys for Cross-Defendant/Plaintiff Shirley Hwang SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE CITY AND COUNTY OF SAN FRANCISCO 10 11 Lead Case No. CGC-10-503332 COMMONWEALTH LAND TITLE (Consolidated for all purposes with 12 INSURANCE COMPANY, CGC-11-512102) 13 Plaintiff, PLAINTIFF SHIRLEY S. HWANG'S 14 vs. REPLY BRIEF IN SUPPORT OF MOTION FOR ASSIGNMENT ORDER 15 FEDEX OFFICE AND PRINT SERVICES AND FOR ORDFR RESTRAINING INC.; WINSTON LUM; KAUSHAL JUDGMENT DEBTORS AND THEIR 16 NIROULA; JAY CHANDRAKANT AGENTS SHAH; ELVIA PALOMINO; MORAD 17 AFRAIMI; MELVIN LEE EMERICH; MARTINI CHNOOGLE; GRACHELLE Date: December 18, 2019 18 LANGUBAN;MERCHANTSBONDING Time: 9:30 a.m. COMPANY, and DOES 1-24, Dept.: 303 19 Before: Hon. Newton Lam Defendants. 20 21 SHIRLEY S. HWANG, CASE NO. CGC-11-512102 22 Plaintiff, 23 vs. 24 FEDEX OFFICE AND PRINT SERVICES INC., WINSTON LUM, KAUSHAL 25 NIROULA, JAY CHANDRAKANT SHAH, MELVIN LEE EMERICH, GRACHELLE 26 LANGUBAN, and MARTINI k, CHNOOGLE, and DOES 1-50, 27 Cross-Defendants. 28 REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER I I. INTRODUCTION Following this Court's entry of an Order (i) adding additional judgment debtors to the judgment against defendant Jay Shah, and (ii) avoiding various fraudulent real property transfers executed by those judgment debtors, Plaintiff Shirley Hwang moved for an order assigning to her the rental proceeds from those properties, in partial satisfaction of the judgment. As it relates to the three rental properties in Los Banos, Ms. Hwang's motion is unopposed and should be granted. Although he lacks standing, Jay Shah's father, Chandrakant ("C.K.") Shah purports to oppose assignment of the rental proceeds from the property located at 659 S. 15th Street, in San Jose, California. The Court should refuse to consider this opposition from a non-party, especially 10 given C.K. Shah's concession that he has no ownership interest in the property. As discussed more fully below, even were the Court to consider C.K. Shah's opposition, 12 each of his arguments is substantively flawed, For example, while he claims to have been 13 assigned the property's rental proceeds previously, the lone document he attaches to his 14 declaration shows no such right. Moreover, his argument that the Court may assign only the 15 property's "net rents" pursuant to Code of Civil Procedure section 708.510(c) is legally and 16 factually unsupported because, inter alia, he fails to establish that the property's mortgage is an 17 obligation of Jay Shah or that Jay would be unable to pay the mortgage were the rental proceeds assigned to Ms. Hwang. Indeed, it would be illogical for the Shahs to continue to own a property 19 they contend is operating at a negative cash flow were it not appreciating in value or beneficial 20 for tax and other purposes. Finally, C.K. Shah has failed to support his assertions with the 21 documentation he discusses in his declaration and Ms. Hwang objects to the Court taking C.K. 22 Shah's word for any of the facts alleged therein—as the documents themselves are the best 23 evidence of their contents. For each of these reasons, Ms. Ilwang should be assigned the rental 24 income from the San Jose property beginning immediately. 25 26 27 -I- REPLY BRIEF ISO IIWANG'S MOT FOR ASSIGNMENT ORDER I II. ARGUMENT A. C.K. Shah's opposition to this motion is procedurally improper. 1. C.K. Shah does not have standing to oppose this motion. C.K. Shah has no right to oppose the instant motion because he lacks standing. In the first paragraph of his declaration C.K. Shah admits that he is not a party to this action, nor has he moved to intervene in it. To the contrary, he has asserted repeatedly that he cannot be drawn into the litigation. (See Sep. 18, 2019 Opposition Response and Objections by Third Parties Chandrakant Shah and Mrudula Shah to Order to Show Cause Filed Aug 29 2019 at p. 2:20-22 [" Third parties were not named in [this] action. Third parties did not make a general appearance 10 in [this] action. And third parties have no liability to plaintiff Hwang with respect to the judgment entered against their son."].) C.K. Shah's own words make clear that he is a non-party 12 who lacks standing to challenge Ms. Hwang's motion as a matter of law. Lohnes v.Astron 13 Computer Products (2001) 94 Cal.App.4th 1150, 1153 (" Whether intervention is permissive or 14 mandatory, a petition to seek leave is required; without permission from the court, a party lacks 15 any standing to the action" (citing C.C.P. $ 387)). 16 Indeed, the only grounds C.K. Shah provides for his appearance is that Ms. Hwang's 17 motion was served on his attorney, who is also Jay Shah's counsel of record and who was served 18 in that capacity. (C.K. Shah Declaration (" Shah Decl.") $ 1.) Jay Shah could have opposed this 19 motion but chose not to. Service on the judgment debtor plainly does not confer on a non-party 20 standing to contest the motion. Consequently, C.K. Shah's opposition should be disregarded. 21 2. C.K. Shah does not have an interest in the rents generated by the San Jose property. 22 23 In an attempt to distance himself from this litigation, C.K. Shah previously admitted that 24 he does not have an ownership interest in the San Jose property. (See Sep. 18, 2019 Opposition 25 Response and Objections by Third Parties Chandrakant Shah and Mrudula Shah to Order to 26 Show Cause Filed Aug 29 2019 at p. 3:15-17 [" These third parties are not now owners of record 27 of any of the properties identified in the OSC (4 Los Banos properties and I San Jose property) 28 and never have been owners of any of these properties to their knowledge."].) He concedes that REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER the property is owned by Elvia Palomino (Jay Shah's wife) and Investment Property Management 2 LI.C. (Shah Decl. $ that he is not the property owner, C.K. 3.)'otwithstanding Shah contends that he may lawfully oppose an assignment of rents from the San Jose property to Ms. Hwang pursuant to a Deed of Trust and Assignment of Rents recorded against the property on August 11, 2017. (Shah Decl. tt 12.) Specifically, he asserts that he "holds a valid lien against this property which is not satisfied and which also includes an assignment of rents which is superior to the claim by Hwang." (Opp. at 2:9-10.) C.K. Shah's position is meritless for at least two reasons. First, Ms. Hwang holds an interest in the property superior to his. Following Judge 10 Kiesselbach's award of criminal restitution in Ms. Hwang's favor, Ms. Hwang filed an Abstract of Judgment — Restitution in Santa Clara County on September 14, 2015, when Jay Shah was 12 the owner of record. (Declaration of Morgan K, Lopez (" Lopez Decl."), Ex. 1.) Thus, her lien is 13 senior to C,K. Shah's alleged lien by almost two years. Azadozy v. Nikoghosian (2005) 128 14 Cal.App.4th 1369, 1374 — 1375 (" The recording statutes only protect the interest of a bona fide 15 purchaser or encumbrancer that is created by a recorded instrument, by granting priority over all 16 prior unrecorded and unknown interests. Thus, priority is given only to a bona fide purchaser 17 or encumbrancer who first duly records the instrument creating the interest.") (internal 18 citations and quotation marks omitted) (emphasis added). 19 Second, there is no evidence that C.K. Shah is currently entitled to receive the San Jose 20 property's rents. The trust deed*a rent assignment provision, on which he relies, provides that thc 21 beneficiary's right to collect the rents is only triggered when the trustor defaults "in payment of 22 The Court's November 13, 2019 Order avoided Jay Shah's purported transfer of his ownership 23 interest to Investment Property Management LLC. Thus, the property is presently owned by Jay Shah and Elvia Palomino. 24 'he referenced trust deed is suspect; it was purportedly executed in 2013 but not recorded until 25 almost 4 years later. (Shah Decl., Ex. A.) In fact, the document was recorded on August 11, 2017, a day when the parties were before this Court for their bench trial. (See Lopez Decl. Ex. 26 2). This timing strongly suggests that the true motivation for recordation was to keep this property out of the hands of the Shah family's creditors. As Plaintiff has shown repeatedly, the 27 Shah family has a history of recording intramural transfers to encumber and cloud title to real property. This illicit practice is underscored by the fact that here C.K. Shah encumbered a 28 property in which he otherwise has disavowed any interest, to ensure it could not be used by Ms. Hwang to satisfy her judgment. REPLY BRIEF ISO IIWANG'S MOT FOR ASSIGNMENT ORDER any indebtedness secured hereby or in performance of any agreement hereunder to collect and retain such rents, issues and profits as they become due and payable." (Lopez Decl., Ex. 4 at $ 10.)'.K. Shah submits no evidence establishing that Jay Shah defaulted on his obligations under the trust dccd. Thus, his contention that the rents generated by the San Jose property have already been assigned to him (Shah Decl. f 14) is without support and should be rejected. B. C.K. Shah fails to show that Jay Shah reasonably requires the rental proceeds from the San Jose property. C.K. Shah argues that only "net rents" inay be assigned to Ms. Hwang pursuant to the pending motion. (Opp. at 2:6-22.) His argument relies solely on a fallacious interpretation of the 10 text of Code of Civil Procedure section 708.150(c). (Jbid.) His position is meritless. The plain language of thc statute provides that the Court may, but is not required to, 12 consider "tp]ayments the judgment debtor is required to make." Code Civ. Proc. II708.150(c). 13 As an initial matter, C.K. Shah's declaration is silent regarding who is obligated to pay the 14 alleged Wells Fargo mortgage. (Shah Decl, ti6.) Thus, there is no evidence whatsoever 15 establishing that Jay Shah is required to inake these payments. In any event, C.K. Shah cites no 16 authority holding that an assignment of rents can only be ordered when a property is cash-flow 17 positive, nor is Ms. Hwang aware of any such authority. 18 The legislative history explains that Section 708.150(c) "is based on the standard for fixing the amount of payments under the New York installment payment order procedure, See 20 N.Y,Civ.Proc. Law X R. Ij5226 (McKinney 1978)." Legis. Com., corn. 17 West's Ann. Code 21 Civ. Proc. (2009 ed.) foll. f 708.510, p. 383. In relevant part, the New York statute provides: 22 In fixing the amount of the payments, the court shall take into consideration the reasonable requirements of the judgment debtor and his dependents, any payments 23 required to be made by him or deducted from the money he would otherwise receive in satisfaction of other judgments and wage assigninents, the amount due 24 on the judgment, and the amount being or to be received.... 25 N.Y. C.P.L.R. 5226 (McKinney). As shown above, C.K. Shah wholly fails to submit evidence 26 demonstrating the "reasonable requirements of the judginent debtor and his dependents," which 27 'he trust deed attached to C.K. Shah's declaration is incomplete — it is missing "Page 2 of 4" of the printed document. The missing page contains the quoted default provision. Hence, Ms. 28 Hwang submits as Exhibit 4 to the Lopez Declaration a complete copy of the trust deed, which C.K. Shah authenticated at his examination in a related matter, (Lopez Decl,, Ex. 3.) -4- REPI, Y BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER he has the burden to establish. Lowy v. Bobker (S.D.N.Y. 2005) 383 F.Supp.2d 606, 615. Rather, C.K. Shah opposes the assignment of rents from this rental property solely because it would allegedly harm his own interests: "Hwang does not get to skim the cream off of this real property for a time and then cause it to go into foreclosure resulting in a forfeiture of equity and a disaster to the junior lien holder Chandrakant K. Shah." (Opp. at 2:18-20 (emphasis added).) The Court is not required to consider the impact of the requested assignment on Jay Shah's parents and should not do so. See Lowy, 383 F.Supp.2d at p. 615 (finding evidence insufficient to establish defendant's "reasonable requirements, as opposed to luxuries."). C. C,K. Shah's opposition fails to present sufficient evidence to defeat the motion. 10 Finally, even were the Court to consider C.K. Shah's argmnents it should find that the 12 evidence submitted is insufficient to defeat Ms. Hwang's motion. His declaration is littered with 13 hearsay statements, including but not limited to: 14 ~ the identity of the property owners ($ 3); 15 ~ the terms, outstanding principal, and monthly installment obligation of the alleged 16 Wells Fargo mortgage ($ 6); 17 ~ the amount of the property's annual property tax ($ 7); ~ the amount of monthly gross rent received ($ 8); and 19 ~ the amount of the property's annual hazard insurance (f 9). 20 Ms. Hwang objects to these unsupported statements, for which C.K. Shah could have, but chose 21 not to, submit documentary evidence.'2 23 C.K. Shah's declaration contradicts his argument that he would be harmed by a foreclosure 24 sale. Specifically, he estimates that the San Jose property's fair market value is $ 1.35 million ($ 25 4) and asserts that the principal owed on the Wells Fargo mortgage is $ 787,653.93 ($ 6). Thus, even were the Court to find that his lien is senior to Ms. Hwang's (and it decidedly is not), a sale 26 of the property would be more than enough to satisfy the $ 300,000 debt memorialized in the trust deed (tt 13), as well as the additional, unsecured amounts he claims to have spent on maintenance 27 and repairs (t[ 11). Ms. Hwang also objects to the opinions set forth in C.K. Shah's declaration, which relate to, 28 among other things, the validity of the trust deed ($ 13) and the alleged "valid" assignment of rents to him and Wells Fargo (tt 14). See Evid. Code, ) 800. -\- REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER C.K. Shah's unsupported assertions regarding the priority and effect of the alleged trust deed demonstrate that he is not a credible witness. (See e.g., Sec. II.A.2 supra.) Nor does he contend that documents supporting the assertions in his declaration are unavailable. Hcncc, the Court should refuse to take his word on any matter for which better, documentary evidence is available. Evid. Code, ) 1523 (" Except as otherwise provided by statute, oral testimony is not admissible to prove the content of a writing"); scc also Evid. Code, $ 1521. Belatedly, C.K. Shah filed a request for judicial notice, to which hc attached what purports to be a deed of trust recorded against the property in September 2007 by World Savings Bank. The attached document is not authenticated, nor does it appear to be a certified record. 10 Thus, the Court should not consider it. But even were the Court to consider the document, it does not support any of C.K. Shah's arguments because: (i) the inortgage agreement is between 12 Jay and Elvia Shah and World Savings Bank, not Wells Fargo, and there is no evidence of the 13 alleged assignment from World Savings Bank to Wells Fargo or that Jay Shah is the Wells Fargo 14 mortgagee; (ii) the document does not substantiate any of the amounts alleged in C.K. Shah's 15 declaration (e.g., the current mortgage amount or the monthly mortgage payments), and; (iii) the 16 agrecmcnt does not provide for an assignment of rents to World Savings Bank except if "Lender 17 requires immediate payment in full or if [borrowers] abandon the Property" ($ 17), and there is no 18 evidence that either condition occurred and thus no support for the claim that the property's "net 19 rents" have "already been validly assigned to Wells Fargo Bank...*'Shah Decl. f~14). Hence, 20 the Court should disregard C.K. Shah's untimely attempt to salvage his opposition. 21 III. CONCLUSION 22 For the reasons stated above and in Ms. Hwang's opening brief, the Court should assign 23 to Ms. Hwang the rental proceeds from 530 Adams Ave., Los Banos, CA; 317 Crescent Drive, 24 Los Banos, CA; 732 Bluff Drive, Los Banos, CA; and 659 S. 15th Street, San Jose CA, which 25 are all rental properties owned in whole or part by the judgment debtors. To ensure compliance 26 with this order, the Court should also grant Ms. Hwang's request for an order restraining the 27 judgment debtors and any servant, agent, employee or attorney for thc judgment debtors and any 28 -6- REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER person(s) in active concert and participating with the judgment debtors from assigning, disposing of, or spending the rental proceeds. A form of order so providing is submitted herewith. Dated: December 11, 2019 GLYNN &, FINLEY, LLP CLEMENT L. GLYNN ROBERT C. PHELPS MORGAN K. LOPEZ Attorneys Tj&r Plaintiff Shirley S. Hwang 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- REPLY BRIEF ISO HWANG'S MOT FOR ASSIGNMENT ORDER