Preview
I L E
F JUN ~52019
Cle of e Court
Superior my o!Santa Ciara
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BY EP UTY
l.ARMENTA
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
Case N0. 15CV283597
ALI AKBAR KALBALI,
Plaintiff,
vs.
MAHIN JOY ADEEB; ROUGEYAR LAALI
PARRY; JOUVAN LAALI; and DOES 1-50, TENTATIVE DECISION
inclusive,
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Defendants.
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This action came on regularly for a bench trial,the parties having waived a jury, on
January 15, 16, & 17, 2019, in Department 10 0f the court, the Honorable Helen E. Williams,
presiding. Brian A. Bamhorst of SAC Attorneys LLP appeared for plaintiff Ali Akbar Kalbali
and Anthony L. Perez 0f BoyesLegal APC appeared for defendants Mahin Joy Adeeb and
Jouvan Laali, defendant Rougeyar Laali Parry having been dismissed from the complaint without
prejudice before trial. The parties submitted their closing arguments through post-trial briefing,
the last of which was filed on March 6, 2019, when the matter was submitted for decision. After
consideration of the pleadings, the documentary and testimonial evidence, and the parties’
TENTATIVE DECISION
arguments, and the applicable law, the court now issues itstentative decision under Code of Civil
Procedure section 632 and rule 3.1 590 0f the California Rules of Court.
1. Background
The court observes that this case was made more factually complicated than itactually is.
Many factual details concerning the family business relations of the parties and their various
On
\OOOVONUI-bUJN
financial transactions are not actually relevant t0 the legally dispositive issues here. those, the
court finds the following facts from the evidence adduced at trial.
This action stems from plaintiff Kalbali having loaned his sister, defendant Adeeb, a total
of $1 87,493 in 2006, under an oral agreement. The two siblings, together with two other siblings,
10 Asghar and Amir,‘ had formed Rumi Group LLC in or around 2005, with the goal of the
11 business entity to develop a parcel of commercial property and sell itfor a profit, from which all
12 four members would enjoy a return on their investment. Asghar, a contractor 0r developer, had
13 the dominant 60 percent interest in the LLC. Plaintiff Kalbali and Adeeb each made initial
14 capital contributions of $420,000 to the LLC in exchange for their respective 15 percent
15 interests. Amir was assigned a 10 percent interest.
16 Neither Kalbali nor Adeeb, nor Amir, had all of the cash they needed on hand to make
l7 their required initial capital contributions to Rumi Group LLC in 2006. But Kalbali owned two
18 parcels of residential real property with equity available to tap, one of which was and remains his
l9 home (Spence property). Asghar had previously had an interest in the other, the Hounslow
20 property, but had conveyed the property to Kalbali by grant deed in 2002.2 Thus, by 2006, it
21 appears Kalbali was the sole legal owner of the Hounslow property, a side issue here. Adeeb, a
22 real estate agent and self-professed loan consultant, had knowledge of how to access that equity
23 in Kalbali’s two properties. And he was willing to borrow against his properties through equity
24 lines of credit (HELOCS) and lend money to his two siblings to fund their respective accounts in
25 '
whose name are not parties to the action. The court
These brothers, last is also Kalbali,
refers to them by their first names for clarity and means no disrespect.
26
27 2
This was apparently a sale, the terms of which are not clear but don’t matter in this case.
Kalbali obtained conventional financing for part of the purchase price and Asghar took back a
28
second note and deed of trust for an additional amount.
2
TENTATlVE DECISION
the LLC for the benefit of all of them, as long as he, an engineer lacking sophisticated
knowledge of real estate transactions, did not have to deal with the paperwork and transaction
in the position of having to account for the disbursements or collect
details and would not be put
the funds on a monthly basis from his siblings, in proportionate shares, to service the HELOCS.
\OWNOMADJNv—I
The basic terms of the oral agreement the three siblings entered into, at least between the
two parties to this case, is supported by documentary evidence and even more so by their
conduct, both when Kalbali loaned funds to Adeeb in 2006, and after, as the two HELOCs were
serviced and events unfolded. When they all initially agreed on the plan in 2006 to use Kalbali’s
equity in his properties to fund the LLC, Adeeb calculated available equity in each property,
shopped for loans, and filled out the applications for Kalbali for each property. He signed all the
paperwork, including second deeds of trust affecting each property, and drew on the HELOCS,
generating the funds not just to cover his own initial capital contributions to the LLC, but to lend
funds to his two siblings to cover theirs. The HELOC on the Spence property yielded
$421,632.18, and the one on the Hounslow property yielded $260,535.71. The money was put
into an account for Kalbali and then ultimately disbursed to the LLC for the benefit of Kalbali
and his two siblings, including Adeeb, in varying amounts according to their respective
membership interests
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and their need for cash. On this basis, Kalbali lent Adeeb a total of
$l87;493, of which $31,911 came from the Spence property HELOC and $1 55,582 came from
the Hounslow property HELOC.3
OOHQMAUJN—‘OOOONONMAWNF‘O
The evident terms of the agreement as acted on by the parties were, in sum, that Kalbali
would pull equity from his two properties by borrowing against them through the HELOCS;
Adeeb would arrange the loans and handle all the paperwork; Kalbali himself would use a
portion of these borrowed funds to make his own capital contributions to Rumi Group LLC; he
would lend to his two siblings portions of these borrowed funds in amounts they each needed to
fund their own capital contributions; so Kalbali would not sustain a loss from the arrangement or
3
It is not clear why but itappears some portion of this total was at one point assigned by
Adeeb to her daughter, Rougeyar Laali Parry. But it doesn’t matter for purposes of this case as
the parties appear to agree on the total amount that was lent to Adeeb by Kalbali, which includes
whatever amounts she later independently assigned to her daughter.
3
TENTATlVE DECISION
have the burden of managing the transactions, each sibling would contribute to the monthly
servicing of the two HELOCs, one of which (Hounslow) was interest only, in proportion to
amounts they had each borrowed from Kalbali, funded by the two HELOCS; from the monthly
statements, which she received directly at some point, Adeeb would calculate what each person
owed each month for that servicing and would communicate those amounts to the three others in
\OWNONMALRNH
a monthly email; each person would deposit their respective share directly into Kalbali’s bank
account from which the HELOC loan payments were made; each of the three siblings would pay
Kalbali back the principal amounts each had borrowed from him (the source of which was the
HELOCS) when Rumi Group LLC sold the commercial property it planned to develop, thus
providing a return on investment to‘each LLC member from which that member could in turn
repay his or her debt to Kalbali, whenever that event occurred. Both parties testified that the
mutual understanding at the start was that Kalbali would be paid back the funds he had lent to
Adeeb and Amir, the source of which was the HELOCS, when the LLC generated a return on
their investment and they each would have the money to pay.
There was no evidence of a specific conversation or specific words leading to this oral
agreement. But Kalbali and Adeeb acted on the agreement over the course of years, evidencing
its existence and terms. Indeed, the parties appeared initially to carry out the agreement as
planned. At some point though, different people were late in depositing their monthly amounts to
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service the HELOCS into Kalbali’s bank account, resulting in overdue amounts and late charges.
And disagreements ultimately arose in the management and business of Rumi Group LLC.
Asghar, the one in control, determined that additional capital calls to the members were required
in order for the LLC to pursue its business plans. At a certain point, neither Kalbali nor Adeeb
had the funds available to meet these calls and the HELOCs as a source of funds were exhausted.
And Amir stopped paying his monthly amounts to service the HELOCs. It appears others,
including Kalbali himself, were contributing irregularly. By 2010, on account of the recession,
the Hounslow property was upside-down, with itsencumbrances exceeding its value, and the
HELOC payments were not being fully or timely made. There was no evidence beyond
speculation about when HELOC loan payments by Kalbali to the lender stopped entirely,
4
TENTATIVE DECISION
whether Kalbali continued to pay on the first mortgage, or whether or when a lender actually
placed a loan affecting the property in default. It does appear that the second mortgage, which
Asghar had taken back as part of Kalbali’s purchase of the Hounslow property in 2002, was paid
off as part of the short sale, which suggests the first mortgage was paid off as well.
The evidence was in conflict about how the short sale came into play, but ultimately, at
\OOONONM-BWNH
some point, Kalbali decided to cut his losses with respect to the Hounslow property and agreed
with the HELOC lender to a short sale, which occurred on November 15, 2010. According to
Kalbali, this idea originated from either Adeeb or Asghar or both, as each were far more
experienced in real estate matters than he was. Adeeb denied this. But the evidence is that she
stopped making any contribution toward the monthly HELOC payment with respect to the
Hounslow property in July 2010, before the short sale the following November. It doesn’t really
matter for purposes of this case who arranged or agreed to the short sale. What does matter is
that it happened, through which Kalbali lost the property and any equity he previously had in it,
and which event had other consequential effects such as a negative impact on his credit.
After the short sale of the Hounslow property, no one made further monthly contribution
toward the HELOC payment, naturally, as there was no payment to make. And it appears that
with knowledge that the short sale was an inevitability, atsome point, everyone decided to cease
any further contributions toward the monthly HELOC payments at and Kalbali stopped making
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those payments to the lender.
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For some reason, Adeeb viewed the short sale of the Hounslow
property as partially discharging her own underlying debt obligation to Kalbali, although this
makes no rational sense and reflects a convenient misunderstanding of the economic realities in
play. She now says she had a telephone conversation with Kalbali in July 2010, preceding the
short sale in November, in which she conveyed both that she would stop her monthly
contributions toward the HELOC payment on Hounslow and that she considered the portion of
her debt to him that had been funded from the Hounslow HELOC to be discharged and would
not pay it,partly just because he was her brother and should give her “support.” She points to a
later email inNovember 201 3, in which that conversation, without specific content, is
referenced. Kalbali, for his part, says that he understood that Adeeb was telling him in 2010 that
5
TENTATIVE DECISION
she would no longer make any contribution toward the Hounslow HELOC payment, something
none of them would continue to do, but did not understand Adeeb to have communicated a
repudiation of any pan of the underlying debt to him. On the evidence, both testimonial and
documentary, the court finds Kalbali’s version of events on this issue to be more credible.
After the short sale of the Hounslow property in November 2010, Adeeb continued
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through some point in 2011 making contribution towards the Spence HELOC in the same
manner as before. By December 201 3, she had also paid Kalbali some $30,000 (the amount
stipulated) towards her debt to him, whether in cash or otherwise, which she allocates to the
funds having come from the Spence property HELOC, reducing the amount funded to her from
10 that loan to $1 ,91 1,which remains outstanding. In her mind, she says, because of the Hounslow
11 short sale that relieved Kalbali of the monthly HELOC payment, she owes no money for funds
12 that she borrowed from him that were sourced from the Hounslow HELOC—an undisputed
l3 principal amount of $155,582.
14 By mid-2013, as a result of both Kalbali and Adeeb having failed to meet capital calls to
15 Rumi Group LLC, they were declared in default under that entity’s operating agreement and the
16 LLC exercised its purported right to eliminate a defaulting member’s interest. Also in January of
17 that year, Adeeb was diagnosed with cancer and she underWent serious treatment, including
18 surgery in June, which affected her ability to work and caused her to want to settle her interest in
19 Rumi Group LLC, as well as her affairs generally. Although she thought the value of her interest
20 in the LLC was higher, she ultimately settled (with brother Asghar, essentially) for payment to
21 her of $755,000, which she ultimately received in cash as a return on her investment and in
22 exchange for her 15 percent membership interest in the LLC. 1n her August 2013 negotiations
23 with Asghar, written on her behalf and with her authorization, she credited the LLC with owing
24 $1 50,000 to Kalbali for the money she had borrowed from him that had come from the
25 Hounslow HELOC, as though she could, as debtor, assign what she was then acknowledging had
26 been her obligation to another for payment.
27
28
6
TENTATIVE DECISION
Adeeb did not pay Kalbali anything from her LLC buyout. Instead, in October 201 3, she
purchased a home on Shelley Avenue in Campbell with cash, except incurring an unsecured
$50,000 debt to a friend t0 compete the transaction.
In late November 201 3, there was an email exchange between Kalbali and Adeeb in
which Adeeb provided
\OOONOUIAUJNu—I
detail per his request as to whom or for whose benefit amounts of money
from the two HELOCS had gone. She first provided the information only as t0 the Spence
property HELOC, consistently with her mistaken view that the short sale of the Hounslow
property had magically discharged her and Amir’s underlying obligations to pay back Kalbali the
portions of their debts to him that had been funded through the Hounslow property HELOC.
Kalbali then asked for the additional information about where the money from the Hounslow
HELOC had gone. Adeeb then provided that information. In early January 2014, Adeeb asked
Kalbali in an email to confirm her having paid him back $30,000 of what she ascribed as coming
from the total of $3 1 ,911 she had borrowed from funds coming from the Spence property
HELOC, leaving a balance from that source 0f funds of $1 ,91 1.
On July 30, 2014, Adeeb informed Kalbali of the terms of her buy out by Rumi Group
LLC and implied that she would not be repaying him. Shortly after that, according to Kalbali, the
two had a conversation in which he asked her about the rest of the money she owed him,
meaning the $155,582 that had come from the Hounslow property HELOC. She responded by
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telling him, for the first time clearly, that
OONoM-hUJN—‘OCOONQMAWNt—‘O
she didn’t owe this money to him because he had sold
the property in a short sale, extinguishing his debt for the HELOC to the lender.
In the beginning of 2014, Adeeb set up an inter vivos trust, and transferred the Shelley
Avenue property she had purchased in cash in October 2013, into that trust.
Kalbali filed his complaint in this action on July 28, 201 5. Adeeb was served with
process by mid-August. Within days of her knowledge of the suit, she transferred her Campbell
property, where she continues to reside, to her daughters, Jouvan Laali and Rougeyar Laali
Parry, as a “gift” for no consideration. Adeeb claims that the transfer of her property was
unrelated to this lawsuit or any debt she owes to Kalbali. According to Adeeb, she now has
nothing. Rougeyar Laali Parry later quitclaimed her interest in the property to her sister,
7
TENTATIVE DECISION
defendant Jouvan Laali, who borrowed money against the property t0 pay back Adeeb’s friend
the $50,000 used for the purchase, plus additional amounts. Thus, the property is now owned by
defendant Jouvan Laali and it isencumbered by a deed of trust, though significant equity
remains.
II. The Operative Pleadings
Adeeb demurred to the original complaint, which had pleaded causes of action for breach
of contract and common counts only, contending, among other things, that enforcement of the
oral contract or common count is barred as the contract falls within the statute of frauds (Civil
Code, §§ 1622, 1624, subd. (a)(1)) in that it is an agreement which by its terms was not to be
performed within a year. The demurrer was overruled, as to this ground, on the basis that a
contract with no specified performance date is not one that “by its terms” is not to be performed
within a year.
Kalbali filed a first amended complaint on April 26, 201 6. Itnames Adeeb as a defendant
in the first cause of action for breach of oral contract and the second for an account stated, which
isin essence an implied contract. Kalbali appears to have abandoned the account stated theory,
not having addressed itin his closing argument briefing. Through the breach of oral contract
cause of action, Kalbali seek money damages for amounts he alleges remain owed to him by
Adeeb on account of her debt to him. The third cause of action is under what was formerly
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known as the Uniform
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Fraudulent Conveyance Act, now the Uniform Voidable Transactions
Act, at Civil Code sections 3439, et seq. (sometimes, the “Act”). The cause of action originally
named both Jouvan Laali and Rougeyar Laali Parry, to whom Adeeb gifted her property in 201 5,
as defendants. But, as noted, Rougeyar Laali Parry quitclaimed her interest in the property to
Jouvan Laali, and Rougeyar Laali Parry was dismissed as a defendant before trial.
Defendants answered the first amended complaint and pressed at trialthe affirmative
defenses that the underlying claim is barred by the statute of frauds, the statute of limitations, and
the equitable defense of laches.
8
TENTATIVE DECISION
1
1 DISCUSSION
2 I. Breach 0f0ral Contract
3
Based on the facts as found above, Kalbali has proven by a preponderance 0f the
4
evidence the elements of a claim for breach of oral contract. Adeeb does not appear to dispute
5
this, effectively, and wisely, abandoning her earlier claim that the short sale of the Hounslow
6
property somehow partially discharged her debt to Kalbali. And she appears to acknowledge still
7
owing him $1,911 from the total amount she borrowed, the source of which was the Spence
8
property HELOC. But she claims that enforcement of the oral contract isbarred by the
9
affirmative defenses of the statute of frauds and the statute of limitations, and laches.
10
For the same reason Adeeb’s demurrer to the initial complaint on the grounds of the
1 1
statute of frauds was overruled, the court finds against her on this issue. The only evidence
12
adduced at trialabout when her obligation to repay was to be performed isthat there were
13
discussions about, and everyone understood, that the source of funds t0 repay Kalbali would be
l4
from return on investment from each member’s capital contributions to Rumi Group LLC, and
15
that that was an undetermined time initially tied to the sale of the property that the LLC would
16
develop. Both parties testified to this understanding. As the court determined on demurrer, the
17
oral contract alleged is not one that “by its terms is not to be performed within a year of its
18
making.” (Civ. Code, 1624, subd. (a)(l ).)This provision precludes enforcement of oral
§
19
contracts that cannot possibly be performed within a year, meaning the contract is necessarily
20
incapable of performance within that time. (Abeyta v. Superior Court (1993) l7 Cal.App.4th
21
1037, 1041-1042; Burgermeister Brewing Corp. v. Bowman (1964) 227 Cal.App.2d 274, 281 .)
22
That is not the case here.
23
As to the statute of limitations, Adeeb contends Kalbali’s breach of oral contract claim is
24
barred by the two-year statute at Civil Code section 339, subdivision (l). As both sides agree, a
25
period of limitation does not begin to run until accrual of the cause of action. “Under Civil Code
26
section 3 12, a cause of action accrues ‘when the party owning it isentitled to begin and
27
prosecute an action thereon.’ [Citations] Stated differently, ‘a cause of action accrues “when
28
[it]is complete with all of its elements”—those elements being wrongdoing, harm, and
9
TENTATIVE DECISION
causation.’ [Citation.]” (City ofPasadena v. Superior Court (2017) 12 Cal.App.5th 1340, 1348.)
Here, based on the credible evidence that repayment of the debt to Kalbali was not expected or
would not be due until return on Adeeb’s investment in Rumi Group LLC, the cause of action
was not “complete” until late 2013, at the earliest, when she received her $755,000 in exchange
for her LLC interest. Adeeb argues that because no particular repayment date was specified here,
\DWNQUIAWNH
there is a presumption that payment was due upon demand, and therefore, the cause of action
accrued and the statute of limitations began to run in 2006, when Adeeb’s debt was incurred. But
the evidence does not support this characterization of the oral agreement and mutual
understanding of the parties. They both testified to their understanding from the beginning that
the source 0f repayment to Kalbali would be return on investment in the LLC, then anticipated to
be triggered by the future sale of the property the LLC was intending to develop.
Adeeb further contends that her alleged oral repudiation in July 2010, of a repayment
obligation on the borrowed funds that came from the Hounslow property HELOC triggered the
running of the statute of limitations at that time. Regardless of the legal analysis applicable to
this claim, the court rejects Adeeb’s testimony that she unequivocally told Kalbali in July 2010
that she was repudiating her agreement to repay her debt to him. It’s clear that she then told him
she would no longer make the monthly contribution to the Hounslow property HELOC
payments. But that is an entirely different matter from denying her independent obligation to
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funds
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repay principal she borrowed from Kalbali. The evidence is clear that Adeeb often
conflated these concepts or errantly understood that they were somehow tied together. And she
may have suffered this confusion during the course of the July 2010 conversation. But certainly,
Kalbali denies her having said that, and based on all the evidence as a whole, his testimony on
the point ismore credible. The court accepts that the November 2013 emails gave Kalbali
inquiry notice, for the first time, of her repudiation of her obligation. And he then followed up in
a conversation in July 2014, at the latest, in which she, for the first time, unequivocally stated
that she would not pay him what she owed. In any event, an express anticipatory repudiation
gives plaintiff a right to election to sue immediately or wait until performance is due; if the latter,
10
TENTATIVE DECISION
statute is tolled in the interim (See April Enterprises, Inc. v. KTTV(1983) 147 Cal.App.3d 805,
824, fn. 10.)
Kalbali also alternatively contends on the statute 0f limitations that Adeeb’s payments of
$30,000 over time on her total obligation to him operated as an acknowledgment of the total
debt, with each
\OOONOUI-DWN—I
payment statting a new limitations period. (See Code Civ. Proc., § 360;
Martindell v. Bodrero (1967) 256 Cal.App.2d 56, 59-60.) The undisputed evidence is that
Adeeb’s last payment towards the $30,000 acknowledged as having been repaid occurred on
December 21, 201 3. This, too, would defeat the bar 0f the statute of limitations. Adeeb argues
that after the limitations period had expired, she made no unconditional or unqualified
acknowledgement or new promise to pay that would revive the statute of limitations. But she
analyzes this issue only with respect to an acknowledgement or new promise in words or in a
writing, not with respect to part payment of the entire existing obligation. Moreover, her words
in her email to Kalbali in November 2013 did unconditionally acknowledge that she stillowed
him money—$l ,91 l—along with acknowledging the balance of what she had borrowed—
$155,582, despite her mistaken but unexpressed view that that amount of her debt had been
discharged, something she did not clearly say in that email. And as the court views it,these were
not two separate loans that Kalbali made to Adeeb, delineated by which HELOC the money
in 2006 on the same terms and
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came from. She borrowed a total of $187,493 from him
conditions
mfiomth~o©WNamAWNHo
and the particular source of the borrowed funds did not vary her overall obligation to
pay him back on the terms discussed and mutually understood.
Accordingly, on the evidence, the court finds that Adeeb has not established that the
affirmative defense of the statute of limitations bars the contract claim.
Kalbali is thus entitled to money damages against Adeeb in the principal amount of
$157,493 ($1 55,582 + $1,9l 1); plus pre-judgment interest at 10 percent per annum from July 31,
2014, at the latest, under Civil Code section 3289. subdivision (b) until entry ofjudgment.
II. Liability Under The Uniform Voidable Transactions Act
Kalbali seeks to void Adeeb’s transfer of her residential property to defendant Jouvan
Laali under the Act. The Act, “formerly known as the Uniform Fraudulent Transfer Act
11
TENTATIVE DECISION
[citation], ‘permits defrauded creditors to reach property in the hands of a transferee.’ (Mejia v.
Reed (2003) 31 Cal.4th 657, 663.) ‘A fraudulent conveyance is a transfer by the debtor of
property to a third person undertaken with the intent to prevent a creditor from reaching that
interest to satisfy its claim.’ [Citation.] The transferee ‘holds only an apparent title [tothe
transferred property], a mere cloak under which ishidden the hideous skeleton of deceit, the real
\OOONQUI-bUJN
owner being the scheming and shifty judgment debtor .’
[Citation.] The purpose of the
voidable transactions statute is
‘
“to prevent debtors from placing property which legitimately
’
.”
should be available for the satisfaction of demands of creditors beyond their reach
[Citation.]” (Lo v.Lee (2018) 24 Ca1.App.5th 1065, 1071-1072 (Lo).)
10 “A creditor seeking to set aside a transfer as fraudulent under [Civil Code] section
11 3439.04 may satisfy either subdivision (a)(1) by showing actual intent, or subdivision (a)(2) by
12 showing constructive fraud. [Citations] Under the [Act],
‘a transfer of assets made by a debtor is
13 fraudulent as to a creditor, whether the claim arose before 0r after the transfer, if the debtor made
14 the transfer (1) with actual intent to hinder, delay, or defraud any creditor, or (2) without
15 receiving reasonably equivalent value in return. and either (a) was engaged in or about to engage
16 in a business or transaction for which the debtor’s assets were unreasonably small, or (b)
17 intended t0, or reasonably believed, or reasonably should have believed that he or she would
18 incur debts beyond his or her ability to pay as they became due.’ [Citation.] The [Act] allows a
19 judgment to be entered against (1) the first transferee of the fraudulently transferred asset, (2) the
20 transfer beneficiary, and (3) any subsequent transferee other than a good faith transferee. ([Civ.
21 Code], § 3439.08, subds. (b)(l) & (b)(2).) [Civil Code s]ection 3439.08, subdivision (b)(l)
22 provides that ‘to the extent a transfer isvoidable, “the creditor may recover judgment” for the
23 lesser of the value of the asset or the amount needed to satisfy the creditor’s claim, and the
24 “judgment may be entered” against the person for whose benefit the transfer was made.
25 [Citation.]’
”
(L0, supra, 24 Ca1.App.5th at pp. 1071-1072, some italics omitted.) “As a remedy,
26 the creditor may obtain avoidance of the transfer, an attachment or other provisional remedy,
27 and, subject to applicable principles and rules, an injunction or a receiver. (Civ. Code, § 3439.07,
28
12
TENTATIVE DECISION
subd. (a).” (Chen v. Berenjian (2019) 33 Cal.App.5th 81 1, 817.) Other equitable relief is
available as circumstances require. (Civ. Code, § 3439.07.)
As to a present or future creditor, factors tending to show actual intent to hinder, delay or
defraud the creditor by a transfer of property, which must be proved by a preponderance of the
evidence,
\OWVQMAWN—d
include whether the transfer was to an insider or relative; whether the transferor
maintained possession or control over the asset after transfer; whether before the transfer was
made, the transferor had been sued or threatened with suit;whether the transfer was of
substantially all the debtor’s assets; whether the debtor received reasonably equivalent value in
exchange for the transfer; and whether the debtor was or became insolvent by or shortly after the
transfer. (Civ. Code § 3439.04.) Further as to a present creditor whose claim arose before the
transfer, the transfer is voidable on the basis of constructive fraud if itwas made without the
debtor receiving reasonably equivalent value in exchange for the transfer and the debtor was
insolvent at the time or became so as a result. These elements must also be proved by a
preponderance of the evidence. (Civ. Code, § 3439.05.)
This list 0f indicia of actual intent to hinder, delay, 0r defraud a creditor provided above
are allhere. Adeeb transferred her home, already in a trust for estate planning purposes, to her
daughters for no consideration and did so within days of being served with process in this case.
She remains in possession of the home and testified that her current financial worth is reduced to
nothing—words
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to the effect of insolvency. While she denies actual intent, and offers that she
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needed t0 pay back her friend the $50,000 she owed for the purchase of the property, which was
perhaps accomplished by her daughter borrowing against the property after the transfer, this fact
alone isinsufficient in the court’s eyes t0 outweigh the evidence of actual intent. Moreover, as
Adeeb’s debt t0 Kalbali pre-dated the transfer, it isvoidable on the basis of constructive fraud in
the absence of actual intent. Kalbali has thus demonstrated entitlement to relief under the Act
with respect to Adeeb’s transfer of her Shelley Avenue property in Campbell to her daughters in
August 201 5.
13
TENTATIVE DECISION
As to the remedy, and given the loan that now encumbers the property, presumably to a
bona fide lender, the court requests briefing from the parties before entering judgment, and
orders that briefing below.
CONCLUSION
This is the Court’s tentative decision under Code of Civil Procedure section 632 and rule
\OOONOMAUJNH
3.1590 of the California Rules of Court. Under rule 3. 1590(c)(4), this will become the court’s
statement of decision unless, within 10 days of service of this tentative decision, a party specifies
those principal controverted issues as to which the party isrequesting a statement of decision or
makes proposals not included in this tentative decision. Should a party request a statement of
decision, focus should be 0n resolution ofprincipal controverted issues (not evidentiary sub-
issues) presented by the pleadings and the trialevidence. As to simultaneous briefing on the
appropriate and equitable remedy under the Act, the parties should address Civil Code sections
3439.07 and 3439.08 and file that briefing within 15 days of service of this tentative decision.
Courtesy copies of all filings should be emailed to the court at Department] 0@scscourt.org with
c