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  • COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS) FRAUD document preview
  • COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS) FRAUD document preview
  • COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS) FRAUD document preview
  • COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS) FRAUD document preview
  • COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS) FRAUD document preview
  • COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS) FRAUD document preview
  • COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS) FRAUD document preview
  • COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS) FRAUD document preview
						
                                

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I GLYNN & FINLEY, LLP CLEMENT L. GLYNN, Bar No. 57117 2 ROBERT C. PHELPS, Bar No. 106666 MORGAN K. LOPEZ, Bar No. 215513 3 One Walnut Creek Center ELECTRONICALLY 100 Pringle Avenue, Suite 500 F I L E D 4 Walnut Creek, CA 94596 Superior Court of California, County of San Francisco Email: cglynn@glynnfinley.corn 5 bphelps@glynnfinley.corn 09/24/2019 mlopez glynnfinley.corn Clerk of the Court BY: YOLANDA TABO-RAMIREZ 6 Telephone: (925) 210-2800 Deputy Clerk Facsimile: (925) 945-1975 7 Attorneys for Cross-Defendant/Plaintiff 8 Shirley Hwang SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 FOR THE CITY AND COUNTY OF SAN FRANCISCO ) Lead Case No. CGC-10-503332 12 COMMONWEALTH LAND TITLE ) (Consolidated for all purposes with INSURANCE COMPANY, ) CGC-11-512102) 13 ) Plaintiff, ) 14 ) PLAINTIFF SHIRLEY S. HWANG'S vs. ) REPLY IN SUPPORT OF MOTION TO 15 ) AMEND THE JUDGMENT TO ADD FEDEX OFFICE AND PRINT SERVICES ) ,IUDGMENT DEBTORS 16 INC.; WINSTON LUM; KAUSHAL ) NIROULA; JAY CHANDRAKANT ) 17 SHAH; ELVIA PALOMINO; MORAD ) Date: October 1, 2019 AFRAIMI; MELVIN LEE EMERICH; ) Time: 10:00 a.m. 18 MARTINI CIMOOGLE GRACHELLE ) Dept.: 303 LANGUBAN; MERCHANTS BONDEVG ) 19 COMPANY, and DOES 1-24, ) ) 20 Defendants. ) 21 CASE NO. CGC-11-512102 SHIRLEY S. HWANG, ) 22 ) Plaintiff, ) 23 ) vs. 24 FEDEX OFFICE AND PRINT SERVICES ) 25 INC WINSTON LUM KAUSHAL ) NIROULA, JAY CHANDRAKANT SHAH, ) 26 MELVIN LEE EMERICH, GRACHELLE ) LANGUBAN, arid MARTINI & ) CHNOOGLE, and DOES 1-50, ) ) 28 Cross-Defendants. ) ) REPLY IN SUPPORT OF PLAINTIFF'S MOTION TO ADD JUDGMENT DEBTORS I Plaintiff, SHIRLEY HWANG, submits the following Reply in Support of her Motion to 2 Amend the Judgment to Add Judgment Debtors. This brief addresses (i) the Objections filed by 3 third parties Chandrakant Shah and Mrudula Shah (hereinafter, "Objectors"), (ii) the objection to 4 service filed by Defendant Jay Shah's attorney of record, Craig Bassett, and (iii) objections to the 5 OSC filed by counsel for non-parties Michael Flores, EZRESOURCE, Inc. and Investment 6 Property Management LLC (collectively, the "Flores Entities" ). In a separate memo, served and 7 filed on September 19, 2019, we have responded to the purported section 170.6 challenge to this 8 Court filed by the Flores Entities. 9 I. INTRODUCTION AND SUMMARY OF ARGUMENT. 10 The Objections are significant for what they omit: No individual—including Objectors— 11 has challenged this Court's statutory authority to amend the judgment. Nor do they contest any 12 of the factual record presented in support of Plaintiff s motion. That extensive showing of Jay 13 Shah's use of real estate to launder money he stole from Plaintiff is unrebutted. 14 Instead, Objectors make fanciful claims that this Court cannot apply the Uniform 15 Voidable Transfer Act unless Plaintiff files a new lawsuit. Objectors and the Flores Entities also 16 claim they were not timely served with the relevant moving papers. And Jay Shah's counsel of 17 record (Mr. Bassett) now argues— contrary to the Court's records—that he does not represent Jay 18 Shah and thus service on Mr. Bassett as counsel was ineffective. 19 The Court should summarily reject all of these contentions. To begin, Objectors lack 20 standing to complain. Plaintiff's current motion does not seek to add them as judgment debtors. 21 Instead, they were served with the motion papers to give them notice that they were prohibited 22 from changing the current ownership of the properties identified in Plaintiff s motion. 23 Second, the Flores Entities have been on notice since mid-March that Plaintiff disputes 24 the transfer of the Los Banos properties to Mr. Flores's shell companies. At that time, Mr. Flores 25 was personally served with an Order for Examination setting forth the basis of Plaintiff s 26 contention that the purported real estate transfers were fraudulent. He refused to appear for the 27 examination and thus a bench warrant was issued for his arrest. Mem. In Support of TRO, filed 28 August 15, 2019, pp. 2:20-3:3. Now he attempts to avoid unwinding of the fraudulent - I- REPLY IN SUPPORT OF NOTICE OF PLAINTIFF'S MOTION TO ADD JUDGMENT DEBTORS I transactions by delaying the hearing and challenging Judge Lam's ability to hear it. These 2 attempts to forestall justice should be rejected. 3 Third, Obj ectors'rgument regarding notice is belied by the record. Objectors were 4 personally served with the relevant papers on August 30, 2019 (Mrudula Shah) and September 5 I, 2019 (Chandrakant Shah), well in advance of the service deadline set by the Court. That 6 Objectors may have ignored their legal obligations under this Court's Order to Show Cause and 7 TRO and delayed turning to this matter simply does not matter. Moreover, Mr. Bassett's claim 8 that he is not Jay Shah's lawyer is contrary to the Court's Register of Actions, listing him as Jay 9 Shah's lawyer. That Mr. Bassett now claims he is representing Jay Shah's parents does not mean 10 he has withdrawn as Jay Shah's lawyer.'1 Finally, even if the Court finds Objectors have standing to be heard, their argument 12 regarding the UVTA is based on an unreasonable and legally unsupported reading of the statute. 13 Accordingly, Plaintiff s request for relief should be granted. 14 II. ARGUMENT. 15 A. Objectors Lack Standing to Object to This Motion. 16 The Objections filed by Chandrakant and Mrudula Shah fundamentally inisconstrue the 17 pending motion. The Objections are premised on the false assumption that Plaintiff s current 18 motion seeks to add them as judgment debtors. Thus, they argue, at page 3 of their Objections: 19 Plaintiff Hwang is treating defendant Jay Shah's parents...as if they are de facto liable to her for the entire judgment of about 20 $ 2.8M simply because of their status as his natural parents, and for no other discernable reason than that. 21 22 But this is simply not the case. Plaintiff's current motion to amend the judgment does 23 not seek to add Chandrakant Shah or Mrudula Shah as judgment debtors. Plaintiff s motion is 24 explicit that the only parties she is seeking to add as judgment debtors via the pending motion are 25 entities created and controlled by the judgment debtor: Megan & Kasi Properties, LLC, M& K 26 Properties, LLC, and Martini & Chnoogle. Notice of motion, p.2, lines 13-14. 27 i Mr. Bassett never filed a motion to withdraw as Jay Shah's lawyer. Nor did he ever advise Plaintiff s counsel that he was no longer representing Jay Shah. Declaration of Robert C. Phelps, served and field herewith, $ 11. And, Mr. Bassett remains Jay Shah's attorney of record on the appeal. This hide and go seek approach to representation is Mr. Bassett's modus operandi. -2- REPLY IN SUPPORT OF NOTICE OF PLAINTIFF'S MOTION TO ADD JUDGMENT DEBTORS I In addition, the pending motion relates solely to rental properties in Los Banos and San 2 Jose. Objectors unequivocally disclaim any ownership interest in the properties subject to the 3 current motion; These third parties are not now owners of record of any of the properties identified in the OSC (4 Los Banos properties and I San Jose property) and never have been owners of any of these properties to their knowledge. 7 Third Party Objections, page 3, lines 15-17. 8 Nowhere in Plaintiff s current Motion does she argue to the contrary. She makes no 9 claim that Chandrakant and Mrudula Shah own or owned the properties subject to the motion. 10 The sole reason for including Mr. and Mrs. Shah within the Temporary Restraining Order is their 11 documented history of transferring properties to and from other family members. Pltf s Opening 12 Mem., p. 13, fn. 13. The purpose of the TRO was to prevent Mr. and Mrs. Shah from taking 13 control of the properties subject to this motion, before the hearing date. The criminal court used 14 this same approach when it included Mr. and Mrs. Shah in a preliminary injunction relating in 15 part to the Los Banos properties. Phelps Decl., $ 12, Ex. K. 16 Objectors, by their own admission, have no interest in the properties subject to Plaintiff's 17 current motion and the motion in no way seeks to alter or change any current ownership they may 18 have as to the subject properties. They have no grounds to object here. 19 B. Jay Shah and the Flores Entitics Have Raised no Substantive Objections to the Requested Relief 20 21 As set forth in Plaintiff s Opening Brief, the majority of the properties at issue were 22 transferred by entities controlled by Jay Shah to entities controlled by Michael Flores. Pltf s 23 Opening Mem., pp. 6-7. But, like the Objectors, neither Defendant Shah nor Mr. Flores have 24 raised substantive challenges to the relief sought by the Court. 25 1. The objections of the Flores Entities should be overruled. 26 After filing their 170.6 challenge the Flores entities objected to the OSC via an attorney 27 affidavit from Jason Estavillo. The affidavit does not respond substantively to the motion but 28 rather "request[s] additional time to research the issues and the procedure involved in a judgment REPLY IN SUPPORT OF NOTICE OF PLAINTIFF'S MOTION TO ADD JUDGMENT DEBTORS I creditor seeking to add additional parties to be bound by a previously entered judgment after trial 2 in which Third Parties did not participate." Flores Obj. $ 6. The Court should overrule these 3 meritless objections for at least two reasons. 4 First, the objections are based on a false premise — that Plaintiff is seeking to add the 5 Flores entities "to thc Judgment as judgment debtors after trial." Flores Obj., $ 1. As Plaintiff s 6 counsel explained to counsel for the Flores entities, Plaintiff is not seeking to add those entities 7 as judgment debtors. Declaration of Morgan K. Lopez in Support of Plaintiff Shirley S. Hwang's 8 Opposition to Third Parties/Proposed Judgment Debtors'eremptory Disqualification of Judge 9 Newton J. Lam, filed September 19, 2019, $ 2. 10 Second, like the Objectors, the Flores Entities have had abundant opportunity to address 11 the pending motion substantively. Mr. Estavillo's declaration concedes that the entities were 12 served on September 4, 2019, but Mr. Flores waited almost two weeks to engage counsel. More 13 importantly, Mr. Flores has known since at least March 15, 2019 that Plaintiff contends that his 14 entities control property of the judgment debtor because he was personally served with an Order 15 to Appear for Examination pursuant to Code of Civil Procedure section 708.120 on that day. 16 Declaration of Morgan Lopez In Support of Motion to Add Judgment Debtors, filed August 15, 17 2019, $ 9, Ex. II. That Mr. Flores waited until September 16 to hire counsel does not constitute 18 good cause for a continuance. 19 2. The Court should reject any assertion that Jay Shah was Not Properly Served 20 21 Likewise, the Court should reject Mr. Bassett's belated attempt to object to service on 22 Defendant Jay Shah. As Mr, Shah's counsel of record, Mr. Bassett was served with Plaintiff s 23 moving papers and TRO papers on August 15, 2019, the notice of entry of the TRO on August 24 20, 2019, and the OSC order and Plaintiff s notice of continuance of the hearing date on August 25 29, 2019. Phelps Decl., tt 10, Exhs. G-J. Yet he waited until September 19, 2019, to object to 26 service. Mr. Bassett also participated in meet and confer discussions regarding the continued 27 hearing date. Declaration of Morgan K. Lopez Decl., served and filed herewith, $ 2, Exh. 1. Mr. 28 Bassett's objections are untimely and should be disregarded for that threshold matter. 4 REPLY IN SUPPORT OF NOTICE OF PLAINTIFF'S MOTION TO ADD JUDGMENT DEBTORS I In any event, it is well settled that Plaintiff may serve Defendant Shah through his counsel 2 of record. Mr. Bassett cites Code of Civil Procedure section 684.020(a) for rules regarding 3 service on a judgment debtor's former attorney. However, those rules are inapplicable on their 4 face because Mr. Bassett is Defendant Shah's current counsel of record. The objections cite no 5 authority for the proposition that these rules apply under the circumstances, and for good reason; 6 they do not. 7 C. The Objection to Application of the UVTA Is Contrary to Law. 8 Even if Objectors did have standing to complain here, the Court should similarly reject 9 Objectors'ontention that the Court may only apply the Uniform Voidable Transfers Act 10 ("UVTA") in the context of a separate lawsuit, and not following the issuance of an Order to 11 Show Cause. This argument is based on a misreading of the UVTA and ignores that the UVTA 12 and amending the judginent to add additional judgment debtors both serve the same purpose—to 13 permit Plaintiff to satisfy the judgment in her favor by liquidating the real property Jay Shah used 14 to hide the money he stole from Plaintiff. 1. Objectors misread the UVTA. 16 Objectors rely on a single word in the UVTA —"action"— for the proposition that the 17 UVTA can only be applied in a separate lawsuit. Before examining the statutory text, we note 18 that Objectors cite no case holding that the UVTA can only be applied in a separate lawsuit. 19 Objectors'rgument assumes—incorrectly—that the tenn "action" in Civil Code, section 20 3429.07(a), is synonymous with a separate lawsuit. Nothing in the UVTA states that. In 21 addition, Objectors'osition is contrary to the basic legal definition of an "action." 22 According to Black's Law Dictionary (11th Edition, 2019): 23 24 Mr. Bassett's objections to service also accuse Plaintiff of attempting to effectuate service of Elvia Palomino through Mr. Bassett. Plaintiff is not seeking to serve Ms. Palomino through Mr. Bassett. Plaintiff is not seeking to divest Ms. Palomino of any ownership interest through the motion to add judgment debtors; rather, like Mr. and Mrs. Shah Plaintiff sought to serve her in an abundance of caution. 27 'bjectors'itation to Civil Code, section 3439.09 is similarly misplaced. That statute simply provides a limitation period to be applied in UVTA analysis. Itnowhere states that a claiin under the UVTA inust be brought in a separate lawsuit. REPLY IN SUPPORT OF NOTICE OF PLAINTIFF'S MOTION TO ADD JUDGMENT DEBTORS An action has been defined to be an ordinary proceeding in a court of justice, by which one party prosecutes another party for the enforcement or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense. But in some sense this definition is equally applicable to special proceedings. More accurately, it is defined to be any judicial proceeding, which, if conducted to a determination, will result in a judgment or decree. The action is said to terminate at judgment. I Morris M. Estee, Estec's Pleadings, Practice, and Forms $ 3, at I (Carter P. Pomeroy ed., 3d ed. 1885). Plaintiff s motion meets the long-standing definition of "action." It is an "ordinary proceeding" in this Court, seeking "protection of a right." It is a "judicial proceeding" which will "result in a judgment or decree." 2. The Court has the authority to adopt necessary procedures to see that 10 justice is done. Objectors'rguments also ignore that PlaintifFs motion to amend the judgment in this 12 action is made pursuant to the well-settled law under section 187 of the Code of Civil Procedure. 13 Under that provision, it is axiomatic that this Court "has jurisdiction to modify a judgment to 14 add additional judgment debtors." McClellan v. Northridge Park Townhome Owners Ass 'n 15 (2001) 89 Cal. App. 4th 746, 752. Settled law establishes that this Court must not be reluctant to 16 exercise its powers under section 187. "The greatest liberality is to be encouraged in the 17 allowance of such amendments in order to see that justice is done." Carrnen v. Athearn (1947) 18 77 Cal. App. 2d 585, 594. Accord: Carr v. Barnaby's Hotel Corp. (1994) 23 Cal. App. 4th 14, 19 20. 20 To the extent there is any question regarding the interplay of Code of Civil Procedure, 21 section 187 and the UVTA, it is answered by section 187: 22 When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means 23 necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically 24 pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most 25 conformable to the spirit of this Code. 26 The Court plainly has the authority to amend the judgment. Section 187 gives the Court 27 authority to adopt "any suitable process or mode of proceeding." Applying the UVTA in the 28 context of this motion is within the Court's authority. -6- REPLY IN SUPPORT OF NOTICE OF PLAINTIFF'S MOTION TO ADD IUDGMENT DEBTORS 3, Applying the UVTA in this proceeding is consistent with the purpose of both the UVTA and CCP section 187. There is no question that the Court's vast power to add judgment debtors under Code of Civil Procedure, section 187 derives from the desire to see that justice is done for judgment creditors and to avoid allowing judgment debtors to escape payment. That is the essence of the alter ego doctrine. See, e.g., Greenspan v. LADT, LLC (2010) 191 Cal. App. 4th 486, 508 (liberality in amending judgments under section 187 encouraged "in order to see that justice is done"). The UVTA has a similar objective: 10 The purpose of the UVTA is to prevent debtors from placing, beyond the reach of creditors, property that should be made available to satisfy a debt. 12 Chen v. Berenj ian (2019) 33 Cal. App. 5th 811, 817. Moreover, it is well established that the 13 UVTA is not an exclusive remedy for frustrated creditors. To the contrary, the UVTA does not 14 preclude common law claims and is meant to be a supplemental or cumulative remedy. See 15 Berger v. Varum (2019) 35 Cal. App. 5th 1013, 1019; see also Legislative Committee Comments 16 to Civil Code, section 3439.07 ("The remedies specified in this statute or not exclusive" and 17 "[t]he remedies specified in this section...are cumulative.") The UVTA is entirely in harmony with this Court's authority to amend the judgment to 19 add additional judgment debtors. The Court should not allow Objectors to twist statutory 20 language to make the process of satisfying the judgment more expensive, more drawn out, and 21 more difficult. 22 4. Objectors'heory creates an anomalous result, allowing debtors to delay paying by forcing a new lawsuit every time they managed to 23 illegally transfer property. 24 Finally, the Court should reject Objectors'rgument because it creates an anomalous 25 result. Under Objectors'eading of the UVTA, a debtor could delay payment by forcing the 26 judgment creditor to file a new lawsuit every time the debtor was able successfully to convert 27 stolen money into real property and convey that property to a third party. There is no reason, 28 either in law or equity, to countenance such a result. California law is clear that a judgment -7- REPLY IN SUPPORT OF NOTICE OF PLAINTIFF'S MOTION TO ADD JUDGMENT DEBTORS I creditor may seek to add additional parties as judgment debtors via the streamlined process 2 available here. See 15 Amending Judgment to Add Nonparty Alter Egos as Judgment Debtors, 3 Cal. Prac. Guide Enf. J. & Debt (2019) Ch. 6G-15 (citing Farenbaugh d'cSon v. Belmont Const., 4 Inc. (1987) 194 Cal. App. 3d 1023, 1027-1029; Wells Fargo Bank, Nat'1 Ass'n v. Weinberg 5 (2014) 227 Cal.App.4th I, 9; Brenelli Amedeo, S.P.A., v. Bakara Furn., Inc. (1994) 29 Cal. App. 6 4th 1828, 1839-1840). It would be illogical to offer creditors this remedy but simultaneously 7 allow judgment debtors to easily defeat it by transferring assets out of the control of the newly 8 added judgment debtors. 9 There is no question that Jay Shah stole millions of dollars from Plaintiff and laundered 10 some proceeds by investing them in real estate that Jay Shah then moved multiple times, to new 11 "straw man" owners. The demonstratives attached to Plaintiff s opening memorandum 12 summarize this clearly. For example, Exhibit 2 shows Jay Shah's purchase of 317 Crescent 13 Drive in September 2009 (with money stolen from Plaintiff), and the subsequent transfer of that 14 property 6 times thereafter to different entities or family members, including transfers made 15 while he was incarcerated. Under Objectors'eading of the UVTA, Plaintiff would be forced 16 to file a new lawsuit each time the property was transferred to a different entity, because the 17 Court could not apply alter ego law and the UVTA in the same proceeding. This makes no sense 18 and stands the law on its head. 19 D. The Court Should Reject Any Claim that Third Parties Were Deprived of Notice and Opportunity to Respond. 20 21 Additionally, the Court should reject the assertion that Objectors somehow lacked 22 sufficient notice or opportunity to respond, because they were vacationing in Alaska and only 23 hired Mr. Bassett on September 18, 2019. 24 Both Objectors and their lawyer (Mr. Bassett) had ample notice of this proceeding. The 25 Court will recall that Mr. Bassett in fact appeared for the hearing on the Temporary Restraining 26 Order. At no time did he object to the schedule established by the Court. Mrudula and 27 Again, we note that Objectors do not contest any of the factual showing underlying Plaintiff s current motion. - It- REPLY IN SUPPORT OF NOTICE OF PLAINTIFF'S MOTION TO ADD JUDGMENT DEBTORS 1 Chandrakant Shah were personally served with the TRO and Order to Show Cause on August 2 30,2019 and September 1,2019, respectively. Phelps Decl., $ 8, Exhs. D and E. 3 Notwithstanding Mr. Bassett's unsworn assertion that Chandrakant and Mrudula Shah were on 4 vacation in Alaska, it is plain they had ample notice prior to this hearing. Plaintiff should not 5 suffer because Objectors delayed consulting legal counsel following proper personal service of 6 process on them. This is especially true given that Chandrakant and Mrudula Shah have 7 disclaimed any interest in the assets. 8 III. CONCLUSION. 9 For the foregoing reasons, Plaintiff Shirley Hwang respectfully submits that her Motion 10 to Amend the Judgment to Add Judgment Debtors should be granted. Dated: September 24, 2019 GLYNN & FINLEY, LLP CLEMENT L. GLYNN 12 ROBERT C.PHELPS MORGAN K. LOPEZ 13 One Walnut Creek Center 100 Pringle Avenue, Suite 500 14 Walnut Creek, CA 94596 15 16 Attorneys for Plaintiff 17 Shirley S. Hwang 18 19 20 21 22 23 24 25 26 27 28 REPLY IN SUPPORT OF NOTICE OF PLAINTIFF'S MOTION TO ADD JUDGMENT DEBTORS