Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC231126. Marvin Lager, Judge.
Robinson & Schmidt, David M. Robinson, Polly M. Wang and Manee Pazargad for Plaintiff and Appellant.
Liner Yankelevitz Sunshine & Regenstreif, Ellyn S. Garofalo and Jennifer Gin Lee for Defendants and Respondents.
Judge of the Los Angeles Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
INTRODUCTION
Plaintiff Felicia MacDonald, now known as Felicia Gordon, appeals from a judgment in her lawsuit alleging her former husband, defendant Robert MacDonald, now deceased, engaged in fraudulent transfers of shares of stock in order to deprive her of the ability to collect a 1989 judgment granted to her in an action to dissolve their marriage. She alleged the transfers were made to an irrevocable trust for which his daughter, defendant Leslie Anne MacDonald Veje, was the initial beneficiary and, for several years, defendant Terrence Goggin was trustee. We reverse that portion of the judgment denying prevailing party status and costs recovery to plaintiff and affirm the judgment in all other respects.
FACTUAL AND PROCEDURAL BACKGROUND
On August 17, 1989, plaintiff received a judgment of support arrearages in her dissolution proceeding against Robert MacDonald (MacDonald). (In re Marriage of MacDonald (Super. Ct. L.A. County, 1989, No. D72908).) The judgment, in the amount of $1,495,293.46, accrued post-judgment interest of 10 percent per annum. She renewed the judgment on March 29, 2000. As of that date, the outstanding balance was $1,524,719.22, still accruing interest of 10 percent per annum.
Also in 1989, MacDonald purported to create the LAM Irrevocable Trust (LAM Trust), whose sole beneficiary was his daughter, Leslie Anne MacDonald Veje (Veje). It is unclear whether MacDonald signed the trust instrument at that time, however, and there was no trust corpus.
The version of the LAM Trust in effect in 1995 was funded in 1995. Carole Midlin Crotty (Crotty) was a trustee of the trust at the time. She was an attorney in California whom MacDonald never met but knew about from Richard Karch, the California attorney who assisted him in setting up the LAM Trust.
MacDonald testified that the 1989, 1995 and 1998 LAM Trust instruments basically had the same terms, but he did not have possession of the 1995 trust instrument and did not recall who signed it. No copy of the 1995 trust instrument was made available at trial.
Crotty was never named as a defendant in the action but was called as a witness by plaintiff.
MacDonald and two other individuals founded MCC in 1994 to engage in the business of financing medical receivables. Each of them owned one-third of the corporation’s shares. Using funds raised by investors and lenders, the corporation was in the business of purchasing health care receivables at a discount of face value. The receivables secured loans used to purchase them. Special purpose corporations were formed to collect the receivables. The special purpose corporations paid all amounts collected in excess of the purchase price of a receivable to MCC for its services as the administrator of the affiliate corporations. The founders formed the first special purpose corporation, MCC Special Purpose Corporation I, in January 1995.
In 1996, MCC was reorganized as Medical Capital Holdings, Inc. and the outstanding MCC shares, including those held by the LAM Trust, were exchanged for an equal number of Medical Capital Holdings shares. To be consistent with terminology used by the parties in their briefs on appeal, however, the corporation will be referred to herein as “MCC.”
MacDonald was issued 3,333,333 shares of MCC by certificate dated June 25, 1994. On February 10, 1995, MacDonald funded the LAM Trust by transferring his MCC shares to then trustee Crotty. At the time of the transfer, MCC was a fledgling company with no assets, and it had yet to acquire any receivables or raise any financing. MacDonald and Field testified that, as a result, the MCC stock had no value.
On February 10, 1995, MacDonald also transferred to Crotty, as trustee 8,233 shares of stock from a Calusa corporation that he and the other MCC shareholders purchased in January 1995. Based upon on the total price paid and relevant ownership percentages, the purchase price of MacDonald’s shares was $259,666.66. Neither plaintiff nor defendants dispute the judgment with respect to the relief granted to plaintiff in the form of requiring Veje to assign funds to be disbursed to her by the LAM Trust in an amount equal to the value of the Calusa stock as of the February 10, 1995 transfer date, that is, $259,666.66 plus interest from the time of the transfer until paid. Hence, we have omitted detailed facts regarding the Calusa stock. At the time judgment was entered herein, the LAM Trust no longer owned any Calusa stock. In 1996, MCC purchased each shareholder’s shares, Crotty returned the Trust’s stock certificate to MCC and thereafter, MCC made installment payments to the LAM Trust and each of the other shareholders.
In January 1995, MacDonald was unable to meet his financial obligations. He filed for bankruptcy in 1996.
Crotty transferred the MCC stock to Terence Goggin (Goggin) as successor trustee for the LAM Trust in a writing dated April 1, 1998, which was also the date written next to Crotty’s notarized signature on the LAM Trust.
Goggin was MacDonald’s longtime friend. He was also MacDonald’s attorney for several matters over the years. During their respective tenures as trustee, Crotty and Goggin made loans to MacDonald from the trust from time to time. At MacDonald’s request, Veje sent Goggin a letter ratifying and approving the loans he had made to MacDonald from the trust assets. MacDonald also held a proxy to vote the MCC stock during their tenures.
MacDonald moved to the Bahamas, and Goggin notified him of his desire to resign as trustee. MacDonald selected The Private Trust Corporation in the Bahamas as best qualified to be the successor trustee. In response to MacDonald’s request, Veje asked Goggin to have the trust transferred to the Bahamian corporation. Goggin resigned as trustee on April 21, 2000 and designated The Private Trust Corporation as the successor trustee. Some time later, at MacDonald’s request, the trust was transferred to Anglo Irish Trustee Limited (Anglo Irish), another Bahamian company, as successor trustee.
Soon after the LAM Trust was transferred to The Private Trust Corporation as trustee, plaintiff filed the instant action on June 5, 2000, by her complaint to set aside fraudulent transfers and for damages. On August 14, 2000, she filed the first amended complaint.
Plaintiff later filed an amendment to the first amended complaint, making only slight changes to paragraph 16. The first amended complaint, incorporating the amended paragraph 16, is the operative complaint in the instant action.
The named defendants initially included MacDonald, Goggin and Veje, as well as other individuals and several corporate entities with which MacDonald had business dealings. Among these defendants were MCC, several MCC-related corporations and Sidney Field, CEO of MCC (the MCC defendants). Plaintiff named The Private Trust Corporation as a defendant, in the capacity as trustee of the LAM Trust, and filed a purported proof of service. Before plaintiff purportedly served the corporation, however, the trustee had been changed to Anglo Irish. After learning of the trustee change, plaintiff filed an amendment to the first amended complaint to add Anglo Irish as a defendant but never served the company with the summons and complaint. Thus, neither the LAM Trust nor its trustee was made a party to the instant action. Crotty, the first transferee of the MCC stock, was not named as a defendant.
Doreen Babbitt, ostensibly MacDonald’s significant other, was one of the individuals named, but plaintiff’s allegations against her were unrelated to the LAM Trust or the MCC stock. The Private Trust Corporation, Valley Medical Management and Babbitt, named defendants, never appeared, but plaintiff never caused their defaults to be entered. Three other corporate defendants, Cygnet Financial Corporation, Provider Holding Corporation and Medical Management & Acquisitions Corporation, also did not appear and their defaults were entered, but plaintiff did not proceed with default judgments.
The MCC defendants included Sidney M. Field; MCC; Medical Capital Holdings, Inc.; MCC Special Purpose Corporation I; MCC Special Purpose Corporation II; MCC Special Purpose Corporation III; MCC Special Purpose Corporation IV; MCC Special Purpose Corporation V; MCC Special Purpose Corporation VI; Calusa Financial Medical, Inc.; Medical Tracking Services; Carlmont Capital Special Purpose Corporation I; and Carlmont Capital Special Purpose Corporation II.
The first amended complaint alleged that MacDonald transferred his MCC stock to Goggin as trustee of the LAM Trust, and that Goggin later transferred the stock to The Private Trust Corporation, as successor trustee. It further alleged that the MCC defendants fraudulently transferred other assets belonging to MacDonald and that MacDonald, Goggin, Veje, the MCC defendants and The Private Trust Corporation conspired to accomplish the fraudulent transfer of MacDonald’s assets. The prayer was for avoidance of the alleged transfers, compensatory and punitive damages, the imposition of a constructive trust, and appointment of a receiver.
Prior to trial, the MCC defendants moved for summary judgment. On February 8, 2002, the trial court granted summary judgment in their favor. Plaintiff appealed. We affirmed the trial court’s decision in a nonpublished opinion, MacDonald v. Field (Feb. 28, 2003, B157398).
After summary judgment was entered as to the MCC defendants, the only defendants who remained were MacDonald, Goggin and Veje. Proceedings were not stayed pending the prior appeal. Trial commenced against the remaining three defendants on June 25, 2002. It was conducted on 13 days over a period of three years. During that time, and after his testimony had been taken, MacDonald died, and on June 29, 2004, a representative of his estate, Kyle MacDonald, was substituted as a defendant.
On May 17, 2005, the trial court issued its tentative decision, which later became its statement of decision. Pursuant to the statement of decision, the trial court made the factual findings and conclusions of law on which the judgment was based, which are summarized as follows: The transfer of the MCC and Calusa stock was made to hinder, delay and defraud plaintiff. The value of the Calusa stock at the time of transfer to the LAM Trust was $259,666.66. On this basis, Veje must assign to plaintiff the right to receive the first $259,666.66 distributed to Veje by the LAM Trust. The MCC stock had no value on its date of transfer to the LAM Trust. Plaintiff failed to meet her burden of establishing the value of the MCC stock. Goggin can have no liability for the transfer of the stock beyond the jurisdiction of the court.
Having received no objection to the tentative decision, the trial court declared the tentative decision to be the order of the court in its November 15, 2005 minute order.
The trial court rendered judgment as proposed by defendants, rather than by plaintiff. The judgment was entered on November 7, 2005. The judgment provides as follows: “After a non-jury trial in this matter, the Court enters the following Judgment: 1. Defendant Veje shall assign to Plaintiff Felicia Gordon the right to receive the first $259,666.66 (plus simple interest at 10% from February 10, 1995 until paid) due her by the LAM Irrevocable Trust or any successor. 2. All other relief sought by Plaintiff Felicia Gordon is denied. 3. There is no prevailing party under Code of Civil Procedure § 1032.”
DISCUSSION
Plaintiff raises the following issues on appeal: (1) the failure of the trial court to designate plaintiff as the prevailing party; (2) the failure of the trial court to award punitive damages to plaintiff; (3) the defense verdict in favor of Goggin; and (4) the validity of the transfer of 3,333,333 shares of MCC stock from MacDonald to Crotty. Integral to the analysis of plaintiff’s other contentions are the implied findings and related conclusions of law regarding whether MacDonald’s transfer of the MCC stock was fraudulent. Thus, we will consider the contentions in reverse order, beginning with the MCC stock transfer.
As a preliminary matter, defendants claim that plaintiff did not obtain a statement of decision and cannot rely on the tentative decision as a statement of the trial court’s findings and conclusions of law. We note that the trial court ultimately declared the tentative decision to be the order of the court. Hence, the document originally designated as the tentative decision effectively was made the statement of decision. Accordingly, we will rely on it as the trial court’s findings of fact and conclusions of law and refer to it hereinafter as the court’s statement of decision.
In any event, for the purposes of review on appeal, “all intendments will favor the trial court’s ruling and it will be presumed on appeal that the trial court found all facts necessary to support the judgment” (In re Marriage of Ditto (1988) 206 Cal.App.3d 643, 649), provided that substantial evidence exists in the record as to each fact (Tusher v. Gabrielsen (1998) 68 Cal.App.4th 131, 140). We “‘must view the whole record in a light most favorable to the judgment, resolving all evidentiary conflicts and drawing all reasonable inferences in favor of the decision of the trial court. [Citation.] We may not substitute our view of the correct findings for those of the trial court; rather we must accept any reasonable interpretation of the [substantial] evidence which supports the trial court’s decision.’” (Filip v. Bucurenciu (2005) 129 Cal.App.4th 825, 833.)
1. Validity of MCC Stock Transfer
Plaintiff contends that she has established that the transfer of the MCC stock was fraudulent, in that the trial court found that MacDonald transferred the MCC stock with the intent to hinder, delay or defraud her in satisfying the 1989 judgment, and that she provided substantial evidence that the MCC stock had value at the time of the transfer.
Relief from a fraudulent transfer may be sought under the Uniform Fraudulent Transfer Act (Civ. Code, § 3439.01 et seq.) and the common law of fraudulent transfers (Wisden v. Superior Court (2004) 124 Cal.App.4th 750, 758). A transfer of an asset is actually fraudulent as to a creditor if the debtor made the transfer with actual intent to hinder, delay, or defraud the creditor and without receiving reasonably equivalent value for the asset, when the debtor reasonably should have believed that he would then not be able to pay debts he subsequently incurred or the debtor was, or was about to be, engaged in some business or transaction for which his remaining assets were unreasonably small in comparison. (§ 3439.04, subd. (a) ; Filip v. Bucurenciu, supra, 129 Cal.App.4th at p. 829.) If the creditor’s claim arose prior to the transfer, the transfer is constructively fraudulent without regard to the debtor’s intent, “if the 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 became insolvent as a result of the transfer or obligation.” (§ 3439.05; Mejia v. Ree (2003) 31 Cal.4th 657, 669-670.)
Unless otherwise stated, all further section references are to the Civil Code.
Section 3439.04, subdivision (a) provides: “A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation as follows: [¶] (1) With actual intent to hinder, delay, or defraud any creditor of the debtor. [¶] (2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor either: [¶] (A) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction. [¶] (B) Intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due.”
In sum, in order to establish either an actual or constructive fraudulent transfer, a creditor must show that the debtor transferred the asset without receiving a reasonably equivalent value in exchange for the asset. (§§ 3439.04, subd. (a), 3439.05.) This is another way of expressing the principle that, in order to be fraudulent, a transfer must prejudice the creditor by removing assets that the creditor could have otherwise obtained and used to satisfy the creditor’s judgment. (Mehrtash v. Mehrtash (2001) 93 Cal.App.4th 75, 81 (Mehrtash).) An asset that has no value would not be able to satisfy the creditor’s judgment if there were no transfer. (Id. at pp. 81-82.) It follows that, in order to show whether the debtor received a reasonably equivalent value, a creditor must establish the value of the asset. If the asset had no value, zero consideration would be a reasonably equivalent value, and thus, the transfer could not qualify as fraudulent.
All essential elements to establish actual or constructive fraudulent transfer were present except the element of plaintiff’s injury by the MCC stock transfer. (Mehrtash, supra, 93 Cal.App.4th at p. 80.)Substantial evidence supports the trial court’s express finding of fraudulent intent. Substantial evidence also supports a finding that MacDonald was insolvent at the time of the initial stock transfer. (Tusher v. Gabrielsen, supra, 68 Cal.App.4th at p. 140.) MacDonald testified about a number of specific sizeable debts he had at the time of the transfers in 1995 and that, at that time, he did not have sufficient assets to pay the debts. He filed for bankruptcy in 1996.
Defendants mistakenly claim that there was no finding that the MCC stock was transferred with fraudulent intent. The statement of decision expressly sets forth the finding of fraudulent intent. Evidence in the record shows that MacDonald made an ostensibly irrevocable transfer of the MCC stock to the LAM Trust for benefit of a family member, his daughter, Veje. Nevertheless, he did not fully relinquish control of the stock or its proceeds. MacDonald held the proxy to vote the stock as long as the stock remained an asset of the LAM Trust. At his request, Goggin made unsecured cash loans to him from trust assets. MacDonald effectively controlled the selection of and changes in, the person or entity designated as the trustee through express request to and direction of Veje. Thus, there is substantial evidence in the record to support a finding of intent by MacDonald to hinder, delay or defraud plaintiff in satisfying the 1989 judgment against him by transferring the MCC stock to the LAM Trust.
Fraudulent intent, however, is insufficient to establish that the MCC stock transfer was fraudulent. Another essential element is proof that the transfer injured plaintiff. (Mehrtash, supra, 93 Cal.App.4th at pp. 80-81.) In Mehrtash, for example, the trial court found that the defendant conveyed real property with the intent to defraud creditors. Liens by other entities had priority over the plaintiff’s claim, however, and exceeded the value of the property. Thus, even if the court voided the conveyance as fraudulent and ordered the property sold, the proceeds would have gone to the priority lienholders, leaving nothing to satisfy any part of the plaintiff’s claim. The appellate court affirmed the judgment for the defendant, stating that “[p]laintiff produced no evidence that the value of the property could support any net recovery for her in the event the conveyance were set aside. The trial court was authorized to consider this a failure by plaintiff to prove an essential element of her case (that the allegedly fraudulent conveyance injured her), and therefore was authorized to grant judgment for defendants . . . .” (Id. at p. 81.)
In the instant case, plaintiff had the burden of proving that she was injured by the MCC stock transfer. (Mehrtash, supra, 93 Cal.App.4th at pp. 80-81.) To do so, plaintiff was required to establish that she would have a net recovery in the event the transfer were avoided (i.e., had not occurred), in that the MCC stock had value in excess of the consideration defendant received for its transfer. (§§ 3439.04, subd. (a), 3439.05; Mehrtash, supra, at p. 81.)
Evidence was presented by both parties as to the value of the MCC stock. MacDonald and Field each testified that the MCC stock had no value at the time of the February 1995 transfer, in that MCC had been in existence only a short time prior to the transfer date and, as yet, had no business assets, no financing and no income. Plaintiff claims, however, that evidence she offered showed that the MCC stock had value. First, she asserts that each MCC stock certificate had a value printed on its face in the amount of 1/1000 of a cent per share. Plaintiff does not cite to any part of the record, however, indicating that, at trial, she ever offered the face amount of the stock as evidence it had value.
Plaintiff offered expert testimony from Arthur Swicker (Swicker) that the MCC stock had value on or near the February 1995 transfer date, within a range from a specified minimum to a specified maximum dollar amount. There is substantial evidence in the record, however, to support a finding that Swicker’s testimony was unreliable. The record indicates that the expert had limited experience in evaluating businesses and their stock. The information the expert indicated he relied upon in forming his opinion was never verified by him. The purported financial statements in the document from which the information was taken were never authenticated during the trial and were not admitted into evidence.
The information was primarily from a document created by Whitney, a third party not affiliated with MCC, in connection with the proposed sale of Prodata Systems stock to MCC. That the document was only a draft is shown by the testimony of MacDonald and Field. Their testimony indicates that they had never reviewed or approved the document and that the information in it purporting to be financial statements for MCC bore no reasonable relationship to the financial status of MCC at the time. For example, one of the financial statements was for 1993, the year prior to the time MCC was formed. Plaintiff did not offer any testimony from Whitney as to the status or source of the information.
Plaintiff failed to establish a proper foundation for her expert’s testimony. It is well-settled that “[a]n expert opinion must not be based upon speculative or conjectural data. [Citations.] [¶] . . . ‘If [the expert] opinion is not based upon facts otherwise proved, . . . it cannot rise to the dignity of substantial evidence.’ [Citation.]” (Hyatt v. Sierra Boat Co. (1978) 79 Cal.App.3d 325, 338-339.) In some cases inadmissible matter may form an adequate foundation for an expert’s testimony. (People v. Gardeley (1996) 14 Cal.4th 605, 618.) In all cases, however, “any material that forms the basis of an expert’s opinion testimony must be reliable.” (Ibid.) Plaintiff failed to establish that the information used by Swicker was reliable information.
Plaintiff’s witness, CFO and Treasurer of MCC in 2000, Alan Meister, testified regarding transactions, as the result of which MCC had assets of $4.5 million in 2001. Plaintiff contends that this is sufficient evidence from which to infer that the MCC stock would have had value in 2000, the year Goggin transferred the Trust to the first Bahamian trustee. Meister’s testimony as to value in 2001, however, does not constitute substantial evidence of the specific value of the MCC stock with respect to the transfer in February 1995 to Crotty as trustee, the 1998 transfer to Goggin or the 2000 transfer to the first Bahamian trustee. The testimony does not, therefore, support a relevant finding as to the value of the MCC stock. (Mehrtash, supra, 93 Cal.App.4th at p. 81.)
Based on the foregoing review of the evidence, we conclude that plaintiff failed to meet her burden to show that she was injured by any MCC stock transfer. Plaintiff’s evidence regarding the value of the MCC stock does not constitute substantial evidence that plaintiff would have been able to obtain a net recovery if the stock had not been transferred. (Mehrtash, supra, 93 Cal.App.4th at pp. 81-82.) Without proof of the essential element that plaintiff was prejudiced by the MCC stock transfer, as a matter of law, no fraudulent transfer of MCC stock was established. (Mehrtash, supra, at pp. 80-82.) The trial court properly denied relief for fraudulent transfer with respect to the MCC stock.
Even though the statement of decision does not expressly provide that the trial court found that the transfer of the MCC stock did not constitute a fraudulent transfer, the conclusion is inferred from the facts that plaintiff failed to establish all essential elements of the cause of action and that no relief related to the MCC stock was granted. (Filip v. Bucurenciu, supra, 129 Cal.App.4th at p. 833.)
2. Defense Verdict for Goggin
Plaintiff contends that Goggin was liable for fraudulent transfer of stock pursuant to section 3439.08, subdivisions (b)(1) and (b)(2), in that he was not a good faith transferee, and therefore, the trial court erred in not rendering judgment against him. We disagree and, as explained below, conclude that the trial court properly denied plaintiff any recovery from him.
Section 3439.08 provides an alternative to relief by avoidance of a fraudulent transfer for a creditor who is otherwise entitled to it pursuant to section 3439.07, subdivision (a)(1). Specifically, subdivisions (b) and (c) of section 3439.08 provide as follows: “(b) . . . [T]o the extent a transfer is voidable in an action by a creditor under . . . Section 3439.07, the creditor may recover judgment for the value of the asset transferred, as adjusted under subdivision (c), or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against the following: [¶] (1) The first transferee of the asset or the person for whose benefit the transfer was made. [¶] (2) Any subsequent transferee other than a good faith transferee who took for value or from any subsequent transferee. [¶] (c) If the judgment under subdivision (b) is based upon the value of the asset transferred, the judgment shall be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.” The term “good faith” transferee has been interpreted to mean a transferee who did not collude with the debtor or otherwise actively participate in the debtor’s fraudulent scheme. (Lewis v. Superior Court (1994) 30 Cal.App.4th 1850, 1858-1859.)
Plaintiff asserts a number of reasons she believes Goggin was not a good faith transferee. They relate to evidence that Goggin was MacDonald’s longtime friend and represented him as his lawyer in various matters over the years. At the time of the stock transfers in which he was involved as trustee, Goggin knew about plaintiff’s family court judgment against MacDonald and was aware MacDonald had filed for bankruptcy prior to the transfer by Crotty of stock to Goggin as trustee. Also as trustee, Goggin made loans from the LAM Trust to MacDonald and allowed MacDonald to hold the proxy to vote all the shares of stock. When Goggin resigned as trustee, he transferred the LAM Trust assets to the first Bahamian trustee, The Private Trust Corporation, as instructed by MacDonald.
Regardless of such evidence referred to by plaintiff, however, Goggin could not be held liable under section 3439.08, subdivision (b), with respect to the MCC stock. As previously discussed, we concluded that the trial court properly determined that plaintiff failed to establish that any transfer of the MCC stock was fraudulent and therefore, that she was entitled to any relief with respect to the MCC stock. Goggin had no liability as a bad faith transferee, in that there was no conclusion that the MCC stock was fraudulently transferred.
In regard to the Calusa stock, we reviewed the record and identified substantial evidence that would support a finding that Goggin could not be held liable under section 3439.08, subdivisions (b)(1) or (b)(2) for the Calusa stock fraudulent transfer. Subdivision (b)(1) applies to the initial transferee, who in this case was Crotty, not Goggin. It also applies to the person for whose benefit the transfer was made, who in this case was Veje, the trust beneficiary, and not Goggin. As to subdivision (b)(2), there was no substantial evidence that Goggin was not a good faith transferee, in that he had colluded or actively participated in MacDonald’s scheme of transfers to defraud plaintiff. Mere knowledge of information about MacDonald’s affairs is insufficient to constitute the requisite collusion or active participation. (Lewis v. Superior Court, supra, 30 Cal.App.4th at pp. 1858-1859.) Veje testified that she gave written ratification and approval of loans made during Goggin’s tenure by the trust to MacDonald. Goggin did not initiate the movement of the trust to the Bahamas; Veje testified that, in consultation with her father, MacDonald, she requested that the trust be moved, in that MacDonald had recently moved to the Bahamas. Resolving conflicts in the evidence, if any, in favor of the judgment rendered (In re Marriage of Mix (1975) 14 Cal.3d 604, 614), we conclude that the trial court properly denied plaintiff any recovery against Goggin.
3. Punitive Damages
Plaintiff contends that the trial court erred in failing to award punitive damages, despite having discretion to do so. (§ 3439.07, subd. (a)(3)(C); Filip v. Bucurenciu, supra, 129 Cal.App.4th at p. 840.) We disagree with plaintiff’s contention.
The record amply supports the conclusion that the trial court did not abuse its discretion by failing to award punitive damages. (Filip v. Bucurenciu, supra, 129 Cal.App.4th at p. 840.) MacDonald died during the course of the trial, requiring substitution of an authorized representative of his estate. When a defendant dies prior to the entry of judgment, “punitive damages may not be awarded against a deceased defendant’s estate, since the primary purpose is to punish and deter the wrongdoer.” (Whelan v. Rallo (1997) 52 Cal.App.4th 989, 995.)
Plaintiff cites Leavitt v. Gibson (1935) 3 Cal.2d 90 for her position that even if a party dies before judgment is rendered, the trial court may award punitive damages against the party where the court is the cause for the delay in rendering the judgment. She contends the fact that the trial extended so long—over a three-year period—was due to the complexity of the issues and the court’s schedule.
While Leavitt may support plaintiff’s stated position, it does not provide authority for an award of punitive damages against MacDonald or his estate. Leavitt can be distinguished from the instant case on the facts. In Leavitt, after the presentation of evidence was completed, the court allowed the parties to present their final arguments in briefs. After the time for filing the briefs ended, but before the plaintiff’s reply brief had been served, Gibson died. (Leavitt v. Gibson, supra, 3 Cal.2d at p. 93.) Months later, the trial court rendered a judgment which included punitive damages against the decedent. In order to allow recovery of the punitive damages, the court declared the judgment to be entered nunc pro tunc on a date prior to Gibson’s death. The California Supreme Court noted that a trial court has inherent authority to order judgment entered nunc pro tunc for the purpose of doing justice between the parties. (Id. at pp. 103-104.) The court indicated that, under the circumstances presented, the judgment should be rendered in accordance with the status of the parties on the date the case was submitted for decision: “If the cause has been tried and finally submitted to the court for its judgment, the rights of the parties are to be determined as they existed at the time of such submission, and neither party is to be prejudiced by the delay of the court in rendering its judgment.” (Id. at p. 104.)
In the instant case, MacDonald died well before the final submission of the case. The evidence does not support a finding that such a nunc pro tunc entry of the judgment is warranted for the purpose of doing justice between the parties. (Leavitt v. Gibson, supra, 3 Cal.2d at pp. 103-104.) We conclude that the trial court did not err in omitting a punitive damages award from the judgment.
4. Prevailing Party Issue
Plaintiff contends that she is the prevailing party under Code of Civil Procedure section 1032, in that (1) she prevailed on her fraudulent conveyances causes of action and (2) for the fraudulent conveyance of the Calusa shares, she obtained “a net monetary recovery,” that is, the right to receive the first $259,666.66 (plus simple interest at 10 percent per annum from February 10, 1995 until paid) distributed from the LAM Trust to Veje. For the reasons discussed below, we agree that plaintiff obtained “a net monetary recovery” and, thus, must be designated the prevailing party and awarded costs. (Code Civ. Proc., § 1032, subd. (a)(4).)
Code of Civil Procedure section 1032 provides that costs are awarded as “a matter of right” when the prevailing party is within one of four designated categories: the party with “a net monetary recovery,” the defendant in whose favor a dismissal was entered, the defendant where neither plaintiff nor defendant recovers any relief, and the defendant against whom plaintiff has not recovered any relief. (Code Civ. Proc., § 1032, subd. (a)(4); Michell v. Olick (1996) 49 Cal.App.4th 1194, 1198.) In other situations or when a party recovers other than monetary relief, the trial court has discretion to determine which party, if any, is the prevailing party and is to be awarded costs. (Code Civ. Proc., § 1032, subd. (a)(4); Michell, supra, at p. 1198.)
Whether the relief granted by the trial court to plaintiff constitutes a “net monetary recovery” under Code of Civil Procedure section 1032, subdivision (a)(4), is a question of law, involving statutory interpretation of section 1032. (Wakefield v. Bohlin (2006) 145 Cal.App.4th 963, 978, 980 (Wakefield).) We review questions of law de novo. (Burden v. Snowden (1992) 2 Cal.4th 556, 562.) The statutory phrase “a net monetary recovery” has been interpreted and applied as an objective criterion to determine which party is entitled to costs. (Wakefield, supra, at p. 980.) If both plaintiff and defendant recover money pursuant to a judgment, then the prevailing party is the party that recovers an amount in excess of the amount recovered by the other party. (Ibid.) If only the plaintiff recovers money, then the plaintiff is the prevailing party. (Ibid.) The result is the same if the plaintiff receives only a partial recovery. (Michell v. Olick, supra, 49 Cal.App.4th at p. 1199.)
Plaintiff contends the judgment constitutes a “net monetary recovery” under section 3439.08. Plaintiff specifically claims her recovery from Veje, the sole initial beneficiary of the LAM Trust, qualifies as a judgment against “the person for whose benefit the transfer was made,” under section 3439.08, subdivision (b)(1). Giving effect to the plain meaning of the language of the statute, we agree that Veje qualifies as such person. (§ 3439.08, subd. (b)(1); Burden v. Snowden, supra, 2 Cal.4th at p. 562.) Defendants effectively concede plaintiff’s claim as to Veje’s status, by failing to address the issue in their brief. Defendants instead focus on section 3439.08, subdivisions (a) and (b), which indicate there can be no recovery from a good faith transferee. We note, however, that there is no parallel statutory “good faith” bar to recovery from a “person for whose benefit the transfer was made.” Defendants cite no authority supporting their interpretation of the statute.
Applying relevant principles of statutory interpretation, the plain words of section 3439.08 describing relief a creditor may obtain from the benefited person—“a judgment for the value of the transferred asset”—indicate that the authorized relief is a monetary recovery. (Burden v. Snowden, supra, 2 Cal.4th at p. 562.) In Wisden v. Superior Court, supra, 124 Cal.App.4th 750, Division Eight of our court recognized that even if a complaint for relief from fraudulent transfers seeks avoidance of the transfers, “[t]he ‘mode of relief to be afforded’ is necessarily monetary relief, and it does not depend upon the application of equitable doctrines.” (Id. at pp. 757-758, citation omitted; see also Flowers & Sons Development Corp. v. Municipal Court (1978) 86 Cal.App.3d 818, 825 [applying case law subsequently codified in the 1986 amendments to section 3439.08].) The court noted that “‘any distinction that might exist between “damages” and monetary relief under a different label is purely semantic . . . .’” (Wisden, supra, at p. 758, citation omitted.)
The principles from Wisden also defeat defendants’ argument that plaintiff cannot qualify as the prevailing party, in that she was not awarded damages, and obtained no more than the right of a judgment creditor to levy a fraudulently conveyed asset or its proceeds, as provided under section 3439.07, or a court’s order to a judgment debtor to assign to the judgment creditor all or part of a right to future payments due the judgment debtor, as provided under Code of Civil Procedure section 708.510.
Similarly, defendants’ reliance on the statement in Wakefield that the term “recovery” is limited to a damages award is misplaced. (Wakefield, supra, 145 Cal.App.4th at p. 980.) Nothing in Wakefield indicates, however, that “recovery” is limited to damages. In fact, the Wakefield court recognized that “‘[t]he words “recovery” or “recovered” have the common connotation of representing the entirety of a sum obtained by process and course of law . . . .’” (Id. at p. 981.) In the instant case, in an effort to satisfy the judgment plaintiff was awarded in a prior lawsuit against MacDonald, she had to resort to initiating yet another action to obtain relief. It was through such a “‘process and course of law’” that plaintiff was awarded a specific sum of money from a source other than MacDonald or his estate. Accordingly, the judgment with respect to the specific sum of money, $259,666.66 plus interest, fits within the interpretation of “recovery” advanced in Wakefield. (Ibid.)
Based upon the foregoing considerations, we conclude that, as a matter of law, plaintiff was awarded “a net monetary recovery.” (Code Civ. Proc., § 1032, subd. (a)(4); Wakefield, supra, 145 Cal.App.4th at p. 978.) Therefore, plaintiff qualifies as the prevailing party and is entitled to her costs.
DISPOSITION
The judgment is reversed as to the provision that neither party was the prevailing party and both parties were to bear their own costs, and the cause is remanded with directions to the trial court to designate plaintiff as the prevailing party and to determine the amount of costs to be awarded to her and allocate responsibility for payment among the defendants. As to all other provisions, the judgment is affirmed. The parties are to bear their own costs on appeal.
We concur: MALLANO, Acting P. J., VOGEL, J.
The statement of decision and the judgment also make no mention that the relief was granted based upon the trial court’s conclusion that the transfer of the Calusa stock was fraudulent. Such a conclusion is amply supported by the record, however, and the parties do not challenge that portion of the judgment. The judgment for plaintiff is limited to recovery of $259,666.66.