Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC364219 Richard Fruin, Judge.
Brenda Barton-LeMay for Defendant and Appellant.
Law Offices of Andrew Krzemuski and Andrew Krzemuski; and Law Offices of Robert Scott Shtofman and Robert Scott Shtofman for Plaintiff and Respondent.
TURNER, P. J.
I. INTRODUCTION
Defendant, Carol DeLeon, appeals from a judgment entered against her after a jury found that her ex-husband, Andreas DeLeon, had fraudulently transferred shares of stock he owned in Marafrando, Inc. to her in order to avoid creditors. Among the creditors Mr. DeLeon was seeking to defraud was plaintiff, Maria P. Ms. DeLeon argues: the trial court erred in refusing to grant a pretrial summary adjudication motion; evidence at trial was insufficient to support a fraudulent transfer finding; and there was insufficient evidence to support the $750,000 damages award. We affirm.
II. BACKGROUND
A. The Complaint
Plaintiff filed the complaint on December 29, 2006, naming the DeLeons as defendants. The complaint contains three causes of action. The only pertinent claim on appeal is the first cause of action to void a fraudulent transfer of corporate stock under the Uniform Fraudulent Transfer Act (the act). (Civ. Code, § 3439 et seq.) Plaintiff alleges that, on February 3, 2003, Mr. DeLeon raped her. On February 17, 2004, she sued Mr. DeLeon and several other defendants in Los Angeles Superior Court, case No. BC310697. On December 15, 2005, a judgment was entered against Mr. DeLeon in the amount of $1,000,398. Mr. DeLeon has never paid any portion of the judgment. On February 3, 2003, Mr. DeLeon owned 100, 000 shares of Marafrando, Inc. which represented a 25 percent interest in the corporation. By virtue of the judgment, plaintiff acquired a judgment lien against Mr. DeLeon’s right, title or interest in all of his property including the shares in Marafrando, Inc.
All further statutory references are to the Civil Code unless otherwise indicated.
The complaint further alleges that Mr. DeLeon had been named as a defendant in a different action, which had been filed on May 27, 2003, entitled T.M. v. DeLeon, Los Angeles Superior Court case No. BC296379. In that case, Mr. DeLeon is alleged to have raped T.M. Maria further alleged that in 2003 Mr. DeLeon was convicted of arson.
In December 2003, Mr. DeLeon, with knowledge of the May 2003 lawsuit seeking money damages, that he would be ordered to pay restitution in an arson case, and that he would be sued by plaintiff for money damages, transferred the shares of his Marafrando, Inc. stock. The stock was transferred to his former spouse, Ms. DeLeon. Ms. DeLeon is alleged to: have fraudulently and unlawfully agreed to conspire with her husband to conceal the true ownership and possession of the shares of Marafrando, Inc. stock; be, as his former spouse, an insider and not a bona fide recipient of the shares; and have not paid any consideration for the transfer, which left Mr. DeLeon insolvent. Plaintiff sought to set aside and avoid the transfer of the stock and general, special, consequential and punitive damages.
B. Ms. DeLeon’s Summary Judgment And Adjudication Motion
After answering the complaint, Ms. DeLeon sought summary judgment or adjudication of a number of issues. The summary adjudication motion requested the following issues be summarily adjudicated: plaintiff could not prove actual or constructive intent (issues 1 and 2); Mr. DeLeon was obligated as a debtor to his wife pursuant to a marital settlement agreement and legally made payment to her in preference to other creditors (issue 3); Ms. DeLeon was a “good faith taker for reasonably equivalent value” (issue 4); and plaintiff signed a settlement and mutual obligation agreement which released Ms. DeLeon from future liability (issue 5).
Ms. DeLeon asserted the transfer was made after Mr. DeLeon violated their October 27, 1999 dissolution of marriage judgment when he sold a portion of his shares of Marafrando, Inc. stock. The stock was sold to Raul DaCosta. Ms. DeLeon reasoned: the October 27, 1999 dissolution judgment gave Mr. DeLeon ownership of the Marafrando, Inc. shares; but, the October 27, 1999 dissolution of marriage judgment provided that, in the event of a sale, transfer or other disposition of the shares, he was required to pay Ms. DeLeon one-half of any proceeds; if he did not comply with the October 27, 1999 dissolution of marriage judgment, she would regain one-half of the Marafrando, Inc. shares; sometime in November 2003, she learned that he had sold half of his interest in Marafrando, Inc.; and the stock had been sold to Mr. DaCosta. Ms. DeLeon sought to modify the October 27, 1999 dissolution of marriage judgment in December 2003 because Mr. DeLeon had failed to make all of his support payments. On December 5 and 9, 2003, the DeLeons entered into a stipulation settling the arrearages issue which awarded her a one-half interest in “Yankee Doodles and/or” Marafrando, Inc. The stipulation recites that Ms. DeLeon was entitled to $18,000 in child and $30,000 in spousal support arrearages respectively. When interest is added, the total amount due to Ms. DeLeon was $53,744. Pursuant to the stipulation, Ms. DeLeon was to be paid $53,744 in cash. The modification order was signed on January 7, 2004.
On December 16, 2008, the summary adjudication motion was denied as to issues No. 1, 2, 3 and 4. The trial court ruled Ms. DeLeon had not met her burden of production on issues No. 1 and 2. As for issues No. 3 and 4, the trial court ruled Ms. DeLeon’s evidence left unanswered a number of factual issues such as: the timing of the sale to Mr. DaCosta; the delivery of shares to her; and her notice of creditor claims against Mr. DeLeon when she sought modification of the October 27, 1999 dissolution of marriage judgment.
The trial court took issue No. 5 under submission which concerned a May 2005 settlement agreement and release. The May 2005 settlement agreement states plaintiff filed an action entitled Maria P. v. Yankee Doodles, et al., Los Angeles Superior Court, case No BC310697. The parties to the settlement agreement were plaintiff and the defendants in case No. BC310697. The settlement agreement extended to the defendants, “Yankee Doodles/Marafrando, Inc. [doing business as] Yankee Doodles, ” Sue Zhang, Raul DaCosta, Jay Miller, and Frank and Fabian Bartolini. Also, the settlement agreement extended to the defendants’ respective principals, insurers, agents, attorneys, employees, partners, subsidiaries, affiliated companies, predecessors, successors in interest and assigns. The settlement and release applied to the three causes of action for negligent hiring, training “and/or” retention, unfair business practices and negligence. In addition, the release extended to all other claims, demands, losses, and liabilities of whatever nature including those known and unknown whether they were directly or indirectly connected with the three causes of action. The settling parties’ intention was to resolve the lawsuit and prevent the outbreak of potential future litigation.
The release provides: “The SETTLING PARTIES, and each of them, do hereby represent and warrant that each has the authority to, and does in fact, fully and forever completely release, acquit and discharge the SETTLING PARTIES, the insurers of the SETTLING PARTIES and their assigns, employees, agents, officers, directors, past, present and future partners, successors, predecessors, representatives, and attorneys, with the exception of [Mr. DeLeon], from any and all claims, demands, losses, damages, written contracts, costs, attorney’s fees, actions, causes of action, and liabilities of whatever kind and nature, whether known or unknown, suspected or claimed, which arise from, or are directly or indirectly related to, or are connected with, or caused by, the subject ACTION. [¶] The release... refers to all asserted and investigated claims, and claims which are known or unknown, pertaining to this ACTION. [¶] There is a risk that, after the execution of this AGREEMENT, the PLAINTIFF, MARIA P., may determine that she has new claims arising out of or related to claims set forth in the Second Amended Complaint. Accordingly, the PLAINTIFF, MARIA P., individually and collectively, shall, and do hereby, assume the above-mentioned risks.” Thus, plaintiff agreed to waive the benefit of section 1542 which was expressly stated in the release.
On December 17, 2008, the trial court ruled on the question of whether plaintiff’s fraudulent transfer claim was barred by the release. The summary adjudication motion as to issue No. 5 was denied on the ground the scope of the release was a question of fact. The trial court ruled that conflicting interpretations had been presented on whether the fraudulent transfer claim was included within the scope of the release. The trial court assumed Ms. DeLeon was an officer, employee or director at the time the May 2005 settlement agreement was signed. The trial court noted the May 2005 settlement agreement did not release all claims. Rather, it released claims connected or related to the Marafrando, Inc. action, which arose from a sexual assault by Mr. DeLeon. The trial court noted that plaintiff filed a declaration denying that she ever intended to release the DeLeons regarding the fraudulent transfer of stock. And, according to the trial court, questions existed as to whether any claim that plaintiff had as a judgment creditor was released by the May 2005 settlement agreement and there was a connection between the transfer and the sexual assault. The trial court noted that Ms. DeLeon denied that the stock transfer had anything to do with the sexual assault. As will be noted, Ms. DeLeon did not raise the release as a defense at the jury trial.
C. The Trial
At the trial, Jeffrey Graeff testified that he worked as the assistant general manager of the Yankee Doodles restaurant for about five years from 1998 until 2002. The Yankee Doodles restaurant is owned by Marafrando, Inc. In February 2003, the owners of the Yankee Doodles restaurant invited him to a company party at a Buca di Beppo restaurant. Mr. Graeff saw T.M. right after she was sexually assaulted by Mr. DeLeon. The day after the party Mr. Graeff went to the Los Angeles Police Department with T.M. and Francisco Garcia. They reported Mr. DeLeon’s sexual assault of T.M.
While working at the Yankee Doodles restaurant, Mr. DeLeon had made some offensive comments to Mr. Graeff. In December 2002, Mr. DeLeon fired Mr. Graeff. About a year before he was terminated, the other owners had Mr. Graeff speak to some attorneys. They discussed Mr. DeLeon’s involvement in fights and sexual harassment. The other owners wanted Mr. DeLeon to be a “silent” partner because they thought he was causing problems. Mr. Graeff, Mr. Garcia and T.M. subsequently filed a wrongful termination and sexual harassment complaint against Marafrando, Inc. as a result of Mr. DeLeon’s improper conduct. After filing this lawsuit, Mr. Graeff moved to Redding, California to start a sports bar and nightclub called Burt and Ernie’s. Within one month, Mr. Graeff’s nightclub was burned down to the ground. Mr. DeLeon and his sister were arrested for setting the fire. Mr. DeLeon’s stepson was also arrested. Mr. DeLeon was ordered to pay restitution to Mr. Graeff for the damages caused by the fire as part of the resolution of the arson case. A court document dated July 13, 2004, showed Mr. DeLeon did not have any assets. Mr. Graeff knew that Mr. DeLeon pled guilty and served about one year in prison for the fire. Mr. Graeff knew Ms. DeLeon because she would come in to the Yankee Doodles restaurant all the time for lunch. Ms. DeLeon seemed to be on friendly terms with her ex-husband.
Mr. Garcia testified that he worked at the Yankee Doodle’s restaurant from March 2000 until February 2003. Mr. DeLeon was one of Mr. Garcia’s employers. Mr. DeLeon was head of security and coordinated bouncers. On February 3, 2003, Mr. Garcia attended a company party at a Buca di Beppo restaurant. During the party, Mr. DeLeon sexually assaulted plaintiff and another woman, T.M. Mr. Garcia told plaintiff to go to the police department. Mr. Garcia attempted to return to work but was fired. Mr. Garcia was told that he was being fired for his own safety. In May 2003, Mr. Garcia sued Mr. DeLeon for wrongful termination. Mr. Garcia’s lawsuit was settled. Mr. Garcia recognized Ms. DeLeon from seeing her in the Yankee Doodles restaurant. She would come into the restaurant about twice a week. Sometimes, she would be with her two sons or by herself. Sometimes, Mr. DeLeon would be there. Mr. Garcia did not see Ms. DeLeon after the February 3, 2003 incident.
Ms. DeLeon testified pursuant to Evidence Code section 776. She also testified as part of the defense case. The couple was married in 1987. In November 1994, Mr. DeLeon became one of the owners of the Yankee Doodles restaurant. Mr. DaCosta was one of the owners and a family friend.
Ms. DeLeon worked at the Yankee Doodles restaurant by booking parties there from her home and on the premises until she was divorced. She received a salary every month for her services. Ms. DeLeon subsequently testified that while she was married she was not paid anything. Ms. DeLeon testified that she booked parties for the restaurant for her son’s sports teams. She also worked at a school. She was not being paid for her services. Although Mr. DeLeon worked as head of security at the restaurant, she did not know how much money he was making. When the couple divorced in 1999, he received all the shares of the Yankee Doodles restaurant. It was the only job he had and it was the source of her spousal and child support payments of $3,800 a month.
In 2004, Ms. DeLeon became a member of the board of directors of Marafrando, Inc. She was paid about $4,000 per month for about one or two years. But Ms. DeLeon did not recall how long she received the $4,000 a month salary. She was the secretary at the annual meeting and took notes for which she received $4,000 a month. Ms. DeLeon testified in regard to a declaration she had filed that she worked for Marafrando, Inc. from February 2004 until the Yankee Doodles restaurant closed in April 2008. Ms. DeLeon received $400,000 in cash after the building owners bought back the lease for the Yankee Doodles restaurant. She testified that there had been an appraisal to establish her fair share.
She did not recall where Mr. DeLeon was when she became an employee of Marafrando, Inc. She did not recall whether Mr. DeLeon was in jail. At the time, Ms. DeLeon did not know why he was incarcerated. At the time of trial, she knew he had been incarcerated for conspiracy to commit arson. According to Ms. DeLeon, she and her former husband did not have a good relationship.
Mr. DeLeon called her from jail on his cellular telephone in October 2003. He told Ms. DeLeon he was in trouble and to get a lawyer. Ms. DeLeon was not on good terms with her ex-husband at the time. Mr. DeLeon did not tell her why he was in jail. Ms. DeLeon found out he had been arrested for conspiracy to commit arson before she entered into the stipulation to amend the October 27, 1999 dissolution of marriage judgment. Before October 2003, Mr. DeLeon sometimes paid monthly spousal and child support payments of about $3,800. Mr. DeLeon stopped making the payments around February 2003. Ms. DeLeon did not recall whether she telephoned Mr. DeLeon after he stopped making the payments. Ms. DeLeon testified it was not easy to get in touch with her former husband when he stopped making the payments. Her stepson would pick her children up to visit with Mr. DeLeon. Sometimes, Mr. DeLeon would come to her home to pick up the children. At the time, Ms. DeLeon did not have the resources to pursue her unpaid child and spousal support claims. She went to visit a lawyer sometime around November 2003 to secure the past due support. Ms. DeLeon wanted the stock. She thought the divorce decree provided that, if he failed to make the required support payments, she would be entitled to the stock. She heard that Mr. DeLeon was selling one-half of his 25 percent shares in the sports bar. She does not recall who told her Mr. DeLeon was selling the shares to Mr. DaCosta. Everybody was talking about the sale at the sports bar. She believed she was entitled to one-half of Mr. DeLeon’s shares or 12 and one-half percent of the total amount of stock. The DeLeons entered into a stipulation in early December 2003. The stock sale to Mr. DaCosta did not take place until January 2004. The December 2003 stipulation modifying the October 27, 1999 dissolution of marriage judgment called for Mr. DeLeon to give her half his shares in the Yankee Doodles restaurant and to pay $53,000 in arrearages. Their attorneys handled the transaction.
Ms. DeLeon claimed not to know much about the arson of Mr. Graeff’s bar in Redding. Mr. DeLeon, his sister, and Mr. DeLeon’s stepson from a prior marriage were arrested in connection with the Redding arson. Ms. DeLeon posted bail for Mr. DeLeon’s sister who only spoke “vaguely” about the Redding arson. Ms. DeLeon characterized their conversation: ‘She didn’t go into detail. She was told not to speak about it.” At Ms. DeLeon’s deposition, the following occurred: “Question: So when you asked her what happened, how did she respond: [¶] Answer: She told me, I don’t know. [¶] She told you what? [¶] Answer: They rented a car.... [¶] They rented a car and because they were going to go on to Las Vegas. That’s where she was going to be living. They just went to Redding to check out a place. And then before they knew it, Michael or Micho or whoever decided to take it upon himself to... burn down the place.” The person identified as “Michael or Micho” is Mr. DeLeon’s first wife’s son.
Ms. DeLeon took the children to visit Mr. DeLeon in jail. But, she denied talking to Mr. DeLeon. Ms. DeLeon did not recall where she got the money to pay for an attorney in October or November 2003. She did not remember how many times she talked to Mr. DeLeon while he was in jail. Ms. DeLeon could not recall the circumstances which preceded the decision to post bail for the sister-in-law.
Ms. DeLeon denied that she ever ate meals at the Yankee Doodles restaurant with her ex-husband after the divorce. Although Ms. DeLeon understood the stock to be community property, she agreed to have the interest go to her ex-husband. If there was a sale of the stock, she would then receive one-half of the proceeds. The income Mr. DeLeon received from the Yankee Doodles restaurant was his sole source of income.
Plaintiff testified concerning the party where the sexual assaults occurred and the ensuing proceedings. Plaintiff attended the party at the invitation of T.M. They were both sexually assaulted by Mr. DeLeon. Plaintiff went to the police the day after the incident. Plaintiff filed a lawsuit and obtained a $4 million judgment against Mr. DeLeon. Plaintiff also settled with Marafrando, Inc., the owner of the Yankee Doodle’s restaurant for $100,000. Mr. DeLeon was not included in the settlement agreement. The release included all officers and directors of the corporation. Plaintiff did not intend to include Mr. DeLeon in the Marafrando, Inc. settlement agreement. She intended to pursue her action against Mr. DeLeon.
Los Angeles Police Department Detective Debbie Potter testified that she investigated the sexual assaults. In June 2003, she received telephone calls from a police officer from Redding and Mr. Graeff. She knew Mr. Graeff after interviewing him about the February 2003 incident. Mr. Graeff witnessed the sexual assaults. Detective Potter submitted a case to the district attorney’s office against Mr. DeLeon related to the sexual assaults. Detective Potter was advised that her name had been found on a piece of paper when Mr. DeLeon was arrested for the arson. The Redding police officer considered the paper to be a “hit list.”
In a special verdict, the jury found: Mr. DeLeon had made a fraudulent transfer of stock; the stock was transferred to Ms. DeLeon; the transfer caused Mr. DeLeon to become insolvent; the fraudulent stock transfer was accomplished with the intent to hinder, delay or defraud Mr. DeLeon’s creditors. Ms. DeLeon was specifically found not to have obtained the stock in good faith. The jury found Ms. DeLeon had not paid reasonably equivalent value for the stock. The jury awarded plaintiff $750,000 in damages for the fraudulent transfer. This timely appeal followed.
III. DISCUSSION
A. The Summary Adjudication Motion
1. Standard of review and Ms. DeLeon’s contentions
In Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851, our Supreme Court described a party’s burdens on summary judgment or adjudication motions as follows: “[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court’s action in his favor bears the burden of persuasion thereon. [Citation.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.... [¶] [T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.... A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]” (Fns. omitted, see Kids’ Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878.) We review the trial court’s decision to deny the summary adjudication motion de novo. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767; Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65, 67-68.)
Ms. DeLeon argues she was entitled to summary adjudication of the fraudulent transfer cause of action in her favor. She argues she gave a reasonably equivalent value for the transfer by agreeing to the satisfaction of the antecedent support debt. She further argues there is a triable controversy as to whether Mr. DeLeon had a fraudulent intent. Finally, Ms. DeLeon argues she is entitled to the benefit of the Marafrando, Inc. settlement agreement in 2005 which covered its officers and directors.
2. No prejudicial error was shown as to good faith, reasonable value, and intent issues
We agree with plaintiff that the order denying the pretrial summary adjudication motion is not reviewable on the issues of Ms. DeLeon’s good faith, reasonable value and Mr. DeLeon’s intent. These issues were fully litigated at the trial and resolved against Ms. DeLeon by special verdict. (Safeco Ins. Co. of America v. Parks (2009) 170 Cal.App.4th 992, 1002-1003; California Housing Finance Agency v. Hanover/California Management & Accounting Center, Inc. (2007) 148 Cal.App.4th 682, 689.) Where factual issues are subsequently resolved adversely to the moving party after a full trial on the merits, even if there was error, reversal cannot occur unless there was prejudice. (See Cal. Const., art. VI, §13; Safeco Ins. Co. of America v. Parks, supra, 170 Cal.App.4th at pp. 1002-1003; California Housing Finance Agency v. Hanover/California Management & Accounting Center, Inc., supra, 148 Cal.App.4th 689; South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861, 907-909.) Ms. DeLeon argues in a separate part of her brief that the jury verdict is not supported by the evidence. As shown below, the record does support the judgment. Thus, no prejudice ever occurred as a result of the denial of the summary adjudication motion. (Ibid.; see Waller v. TDI, Inc. (1993) 12 Cal.App.4th 830, 833-836.)
3. There was no error in refusing to grant Ms. DeLeon’s summary adjudication motion as to the release
A different issue arises as to whether the pretrial summary adjudication ruling on the release defense remains subject to review because Ms. DeLeon chose not to litigate the issue before the jury. Ms. DeLeon argues the summary adjudication ruling remains subject to appellate review because the harmless error rule does not apply to matters which were not fully litigated during the trial. Plaintiff asserts Ms. DeLeon waived the affirmative defense by failing to present any evidence of the release at the jury trial.
As previously noted, the general rule is that a full trial on the merits on the same questions renders harmless any error in denying a summary adjudication. (F.D.I.C. v. Dintino (2008) 167 Cal.App.4th 333, 343; Gackstetter v. Frawley (2006) 135 Cal.App.4th 1257, 1267-1269; Waller v. TJD, Inc., supra, 12 Cal.App.4th at p. 836.) Nevertheless, the release issue was not adjudicated at trial because Ms. DeLeon chose not to raise the issue to the jury. A prior compromise or release is an affirmative defense. (City of Santa Barbara v. Superior Court (2007) 41 Cal.4th 747, 780, fn. 58; Baker v. Ferrel (1947) 78 Cal.App.2d 578, 579-580.) A defendant bears the burden of asserting and proving by a preponderance of the evidence it is entitled to an affirmative defense. (Evid. Code, § 500; Walton v. City of Red Bluff (1991) 2 Cal.App.4th 117, 131; Hastings v. Matlock (1980) 107 Cal.App.3d 876, 882, superseded by statute on alternative grounds as stated in Levy v. Superior Court (1995) 10 Cal.4th 578, 585; Primm v. Joyce (1948) 87 Cal.App.2d 288, 291.) A defendant waives an affirmative defense by failing to raise the defense or produce any evidence to support it at trial. (Pool v. City of Oakland (1986) 42 Cal.3d 1051, 1065-1066; Liberty Bank v. Superior Court (1925) 195 Cal. 766, 770; Lucich v. City of Oakland (1993) 19 Cal.App.4th 494, 498.) Moreover, a judgment will not be reversed based on an affirmative defense where there is no evidence in the record to support it. (Roberts v. Hall (1905) 147 Cal. 434, 439; Prince v. Kennedy (1906) 3 Cal.App. 404, 407.) Under the circumstances, we agree with plaintiff that Ms. DeLeon’s failure to present the release or any evidence on this issue to the jury forfeits the affirmative defense.
Even if there was no forfeiture of the affirmative defense, Ms. DeLeon has not established the trial court erred in refusing to summarily adjudicate that she was covered by the release. A release is governed by ordinary rules of contract interpretation. (Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 528; Benedek v. PLC Santa Monica (2002) 104 Cal.App.4th 1351, 1356.) Ambiguity exists if the contract term is reasonably susceptible to either of the meanings suggested by the parties and is not based on a strained interpretation. (Palmer v. Truck Ins. Exchange (1999) 21 Cal.4th 1109, 1115; Shell Oil Co. v. Winterthur Swiss Ins. Co. (1993) 12 Cal.App.4th 715, 737.) The determination as to whether a contract is ambiguous is a question of law. (Producers Dairy Delivery Co. v. Sentry (1986) 41 Cal.3d 903, 912; Wachs v. Wachs (1938) 11 Cal.2d 322, 325; Brant v. California Dairies, Inc. (1935) 4 Cal.2d 128, 133.) When the instrument is “reasonably susceptible” to either of the meanings suggested by the parties or is ambiguous, parol evidence is admissible to interpret the meaning of the instrument. (Hayter Trucking, Inc. v. Shell Western E&P, Inc. (1993) 18 Cal.App.4th 1, 18; Banco Do Brasil, S.A. v. Latian, Inc. (1991) 234 Cal.App.3d 973, 1001; Sunniland Fruit, Inc. v. Verni (1991) 233 Cal.App.3d 892, 898.) Parol evidence is inadmissible to give the instrument a meaning to which it is not reasonably susceptible or to show intention independent of an unambiguous document. (Supervalu, Inc. v. Wexford Underwriting Managers, Inc. (2009) 175 Cal.App.4th 64, 75; Sunniland Fruit, Inc. v. Verni, supra, 233 Cal.App.3d at p. 898.)
In reviewing a parol evidence issue, different standards of review may apply. The trial court’s determination of whether a contract is ambiguous is a question of law and is not binding upon an appellate court. (Smith v. Selma Community Hospital (2008) 164 Cal.App.4th 1478, 1501-1502; Sunniland Fruit, Inc. v. Verni, supra, 233 Cal.App.3d at p. 898.) However, if the meaning of a contract is ambiguous and the interpretation depends upon the credibility of extrinsic testimony or documentation, the question is one of fact and when supported by substantial evidence, the findings will not be disturbed by an appellate court. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865; Sunniland Fruit, Inc. v. Verni, supra, 233 Cal.App.3d at p. 898.) In such cases, any reasonable construction of the contract is upheld if it is supported by substantial evidence. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165-1166; Stratton v. First Nat. Life Ins. Co. (1989) 210 Cal.App.3d 1071, 1084.)
The question presented in Ms. DeLeon’s summary adjudication motion was whether the May 2005 settlement agreement was intended to release an alleged fraudulent stock transfer of Marafrando, Inc. shares between the DeLeons. The release provided that it was intended to cover the “ACTION” by plaintiff against Marafrando, Inc., doing business as the Yankee Doodles restaurant, a number of named individuals, employees, directors and officers, in case No. BC310697. The “ACTION” was then described as one for negligent hiring, training, supervision “and/or” retention, unfair business practices and negligence. While it was undisputed that Ms. DeLeon was an employee or officer at the time the release was signed, conflicting evidence was presented as to the scope of the release. The release specifically stated that Mr. DeLeon was excluded from the terms of the May 2005 settlement agreement. The fraudulent transfer cause of action was to set aside a fraudulent transfer of the Marafrando, Inc. stock by Mr. DeLeon to his ex-spouse. The transfer was allegedly made in order to prevent Mr. DeLeon’s creditors, including plaintiff, from recovering moneys due to them. Although the stock transfer was made to Ms. DeLeon, according to her, it was made not in her capacity as an employer, officer, or director of Marafrando, Inc. but as the former spouse attempting to enforce a property settlement agreement. Thus, there is evidence the stock transfer occurred in Ms. DeLeon’s role as a former spouse and litigant in a dissolution of marriage action in a transaction with her ex-husband. Given Ms. DeLeon’s declaration, there was a triable controversy as to whether the May 2005 release was meant to apply to a purported fraudulent transfer between former spouses who in December 2003 were modifying the October 27, 1999 dissolution of marriage action. (Butler v. The Vons Companies, Inc. (2006) 140 Cal.App.4th 943, 949-951 [scope of release may be factual]; see Neubauer v. Goldfarb (2003) 108 Cal.App.4th 47, 58-59 [scope of release may be a factual matter].) In any event, no provision in the May 2005 release exculpated the DeLeons from liability for the December 2003 stock transfer. The trial court correctly ruled a triable issue existed as to whether the parties intended the May 2005 release to apply to the December 2003 stock transfer. (State v. Allstate Ins. Co. (2009) 45 Cal.4th 1008, 1024; Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at pp. 849-850; Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 208.) Thus, the scope of the release was properly reserved for resolution by the jury. (Butler v. The Vons Companies, Inc., supra, 140 Cal.App.4th at pp. 949-951; Mitchell v. Union Central Life Ins. Co. (2004) 118 Cal.App.4th 1331, 1341-1342, overruled on a different point in Claxton v. Waters (2004) 34 Cal.4th 367, 379, fn. 2.) And Ms. DeLeon chose not to allow the jury to resolve the factual dispute regarding the scope of the release.
B. The Jury Verdict
1. Liability
Ms. DeLeon argues there was insufficient evidence to support the fraudulent transfer verdict. Our Supreme Court has explained the act permits defrauded creditors to reach property in the hands of a transferee. (Mejia v. Reed (2003) 31 Cal.4th 657, 663; Fidelity National Title Ins. Co. v. Schroeder (2009) 179 Cal.App.4th 834, 840-841.) Section 3439.04, subdivision (a) provides: “A transfer made... by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made... if the debtor made the transfer... 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....” (See Kirkeby v. Superior Court of Orange County (2004) 33 Cal.4th 642, 648; Fidelity National Title Ins. Co. v. Schroeder, supra, 179 Cal.App.4th at p. 841.) Section 3439.04, subdivision (b)(1) through (11) enumerates factors, all of which may be considered in determining the debtor’s actual intent in transferring assets. The factors are whether: the transfer was to an insider; the debtor retained possession or control of the property after the transfer; the transfer was not disclosed but concealed; before the transfer was made, the debtor had been sued or threatened with suit; the transfer was of substantially all of the debtor’s assets; the debtor absconded; the debtor removed or concealed assets; the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred; the debtor was insolvent shortly after the transfer; the transfer occurred shortly before or after a substantial debt was incurred; and the debtor transferred the essential assets of the business to a lienholder who transferred the assets to an insider of the debtor. (§ 3439.04, subd. (b)(1)-(11).) An alternative means for establishing a fraudulent transfer is set forth in section 3439.05 which provides: “A transfer made... by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made... if the debtor made the transfer... without receiving a reasonably equivalent value in exchange for the transfer... and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer....”
Ms. DeLeon argues the judgment should be reversed because the transfer was not fraudulent as a matter of law. Ms. DeLeon argues she received the stock in good faith and gave reasonably equivalent value and there was insufficient evidence from which the jury could infer fraudulent intent. Section 3439.08, subdivision (a) provides, “A transfer... is not voidable under paragraph (1) of subdivision (a) of Section 3439.04, against a person who took in good faith and for a reasonably equivalent value....” Our review is limited to an examination of the entire record as a whole, resolving all conflicts and inferences in favor of the judgment, and we determine whether the verdict is supported by substantial evidence. (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 571; In re Marriage of Mix (1975) 14 Cal.3d 604, 613-614.)
Substantial evidence supports the jury’s verdict in finding against Ms. DeLeon on the good faith, reasonable value and intent issues. After the DeLeons were divorced, she continued to frequent his place of employment. Witnesses testified that she was in the Yankee Doodles restaurant once or twice weekly. She was seen having meals with Mr. DeLeon and her two children. When Mr. DeLeon was arrested for the arson in October 2003, he called his former spouse. Immediately after the arson, Mr. DeLeon’s sister was arrested in connection with the ensuing investigation. Ms. DeLeon posted bail for his sister. The arson occurred at a business establishment in Redding owned by Mr. Graeff, who had attended the party where Mr. DeLeon had sexually assaulted plaintiff and T. M. Mr. Graeff was also a former employee of the Yankee Doodles restaurant who had filed a wrongful termination action along with others, against Mr. DeLeon. The December 2003 stock transfer and the stipulated modification of the October 27, 1999 dissolution of marriage judgment followed shortly after Mr. DeLeon was arrested for arson. Plaintiff introduced evidence that Mr. DeLeon was avoiding service of the present lawsuit. Mr. DeLeon was behind in his support obligations for an estimated $53,000. Mr. DeLeon was paying Ms. DeLeon about $4,000 a month in support from the money he received from the Yankee Doodles restaurant. After the stock transfer Ms. DeLeon continued to receive about $4,000 a month. Ms. DeLeon also received about $400,000 from a sale of the restaurant’s lease for her ownership interest of 12 and one-half percent of the shares less one percent which she had given to Mr. DaCosta.
This evidence establishes or raises inferences as to several of the enumerated factors of fraud set forth in section 3439.04. Mr. DeLeon made the transfer to Ms. DeLeon, the mother of his children; i.e., an insider. (§3439.04, subd. (b)(1).) The circumstances surrounding the transfer were not disclosed to the family law court before the October 27, 1999 dissolution of marriage judgment was modified. (§3439.04, subd. (b)(3).) Before the transfer was made, Mr. DeLeon had been sued for sexual assault by two former employees. (§3439.04, subd. (b)(4).) He had also been charged with arson for which he was ultimately ordered to pay restitution. (§3439.04, subd. (b)(4).) There was evidence that Mr. DeLeon used the income from the stock and his job at the restaurant as his only source of income. (§ 3439.04, subd. (b)(5).) There was evidence Mr. DeLeon was evading service of process. (§3439.04, subd. (b)(6).) In addition, there was no evidence that when the DeLeons stipulated in December 2003 to modify the October 27, 1999 dissolution of marriage judgment they disclosed to the court the shares could be subject to third party claims. (§3439.04, subd. (b)(7).) Even considering the evidence showed Mr. DeLeon owed $53,000 in back support, an inference can be made that the value of the consideration received was not reasonably equivalent to the value of the asset transferred. (§3439.04, subd. (b)(8).) The transferred asset had allowed Mr. DeLeon to pay $4,000 a month in support in the past. It also had a leasehold interest which was sold for between $400,000 and $500,000. Under the circumstances, the jury’s verdict that the transfer of the shares should be avoided must be upheld.
2. Damages
Ms. DeLeon claims there was insufficient evidence to support the $750,000 damage award. Pellegrini v. Weiss (2008) 165 Cal.App.4th 515, 531-532 explained the rules concerning review of a challenge to the sufficiency of evidence to support the amount of a damage award: “The amount of damages awarded in a case is a question of fact to be determined by the jury. (Seffert v. Los Angeles Transit Lines (1961) 56 Cal.2d 498, 506.) As such, it is subject to our evaluation of whether it is supported by substantial evidence. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) In examining the sufficiency of the evidence to support an award of damages, it is not required that we be able to precisely recreate the jury’s reasoning. (City of Pleasant Hill v. First Baptist Church (1969) 1 Cal.App.3d 384, 408-409.) We will uphold a verdict if it is within the range of possibilities supported by any of the testimony. (Id. at pp. 409-410.)”
Plaintiff introduced evidence that she had obtained a judgment in excess of $1 million against Mr. DeLeon. A creditor has a number of remedies under the act including avoidance of the transfer, attachment, injunctive relief, receivership and any other relief the circumstances may require. (§ 3439.07; Fidelity Nat. Title Ins. Co. v. Schroeder, supra, 179 Cal.App.4th at p. 841; Filip v. Bucurenciu (2005) 129 Cal.App.4th 825, 829-830.) Ms. DeLeon, who was found to have been a transferee of a fraudulent conveyance with intent to defraud creditors, is liable to plaintiff. (§3439.07, subd. (a); Filip v. Bucurenciu, supra, 129 Cal.App.4th at p. 830; Flowers & Sons Development Corp. v. Municipal Court (1978) 86 Cal.App.3d 818, 825.) And, because the evidence at trial showed the shares of Marafrando, Inc. stock were no longer available, plaintiff was entitled to a money judgment against Ms. DeLeon for the value of the fraudulently conveyed asset. (§§ 3439.07, 3439.08, subds. (b) & (c); Flowers & Sons Development Corp. v. Municipal Court, supra, 86 Cal.App.3d at p. 825; Pedro v. Soares (1937) 18 Cal.App.2d 600, 604.) Section 3439.08, subdivision (b) provides that a money judgment may be entered against the transferee for the value of the asset as adjusted by subdivision (c) or the amount necessary to satisfy the creditor’s claim. Section 3439.08, subdivision (c) states, “If the judgment... 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.”
Here, the evidence supporting plaintiff’s damage award was based on Ms. DeLeon’s testimony about the value of the shares transferred to her. An owner of personal property may testify as to its value. (Evid. Code § 800; Crail v. Blakely (1973) 8 Cal.3d 744, 754; Meyer v. Benko (1976) 55 Cal.App.3d 937, 947, fn. 3; Young v. Redman (1976) 55 Cal.App.3d 827, 833; Hansford v. Lassar (1975) 53 Cal.App.3d 364, 376, disapproved on different grounds in Liodas v. Sahadi (1977) 19 Cal.3d 278, 287, fn. 3.) Although no witness testified as to the stock value at the time of the transfer of the stock in December 2003, the damages award of $750,000 was reasonable based on Ms. DeLeon’s testimony. In December 2003, Mr. DeLeon transferred 12 and one-half percent of his interest in Marafrando, Inc. stock to her. Prior to the transfer, Ms. DeLeon received about $3,800 a month out of the income from the shares. Ms. DeLeon testified that, after the transfer, she received $4,000 in income from the shares she received from Mr. DeLeon. Ms. DeLeon ultimately received $400,000 for the sale of an 11 and one-half percent share in a leasehold interest (which may have occurred sometime in April 2008). (By the time the leasehold was sold, Ms. DeLeon had given away one percent of the shares she received from her former spouse to Mr. DaCosta. Thus, her leasehold interest was valued at approximately $500,000 at the time of the sale.) In sum, the transferred asset gave Ms. DeLeon the right to $4,000 a month income and a one-eighth share of a leasehold interest appraised at $4 million. The damage award is supported by the evidence.
Finally, Ms. DeLeon has incorrectly asserted the evidence shows she is entitled to a $53,744 credit for arrearages under section 3439.08, subdivision (d)(3). By its terms this statute allows credits for a “good faith transferee.” The jury specifically found that Ms. DeLeon was not a good faith transferee.
IV. DISPOSITION
The judgment is affirmed. Plaintiff, Maria P., is awarded her costs on appeal from defendant, Carol DeLeon.
I concur: ARMSTRONG, J.
MOSK, J., Concurring and dissenting
I dissent on damages only. I concur on the issue of liability.
Liability
Defendant Carol DeLeon raises the issue of whether the transfer of the shares of the company to defendant constituted one for value as satisfying an antecedent debt (Civ. Code, § 3439.03), which issue was not addressed by plaintiff. Under the dissolution order between Carol and Andreas DeLeon, Andreas received the community interest in “the business known as ‘Marafrando, Inc., Yankee Doodles’ (hereinafter referred to as Yankee Doodles), with all good will, assets and liabilities thereof.” The order also provides that notwithstanding this provision, “the Court finds that the parties agree and as such the Court orders that in the event of sale, transfer or other disposition of Yankee Doodles, all proceeds that are due and payable to the Respondent [Andreas] as and for his interest in Yankee Doodles, shall be equally divided between the Petitioner [defendant] and Respondent and each shall receive one-half (1/2) of all proceeds.”
Literally, these provisions suggest that only if the entire business of Yankee Doodles is sold would Andreas have to pay one half of his share of the proceeds to defendant. But this makes no sense. The most reasonable interpretation of the provision is that if Andreas sells his shares in the company, he would have to pay defendant half of the proceeds from that sale.
Assuming that is the correct interpretation, the questions arise whether that obligation is an “antecedent debt” and whether the transfer of half of the shares to defendant in anticipation of Andreas selling all of his shares qualifies as satisfying an antecedent debt. Neither California law nor the Bankruptcy Code defines the term “antecedent debt.” It has been said that “a debtor incurs a debt to a creditor when the creditor has a claim against the debtor, even if the claim is unliquidated, unmatured, unfixed, or contingent.” (In re: Tanner Family LLC (11th Cir. 2009) 556 F.3d 1194, 1196.) “Just because debt is contingent or unmatured, and is not currently collectible, does not mean that it is not a ‘debt, ’ as that term is used in the Bankruptcy Code.” (2 Bankr. Service L.Ed. (2010) § 12:56).” “A debt may depend, as to existence or amount, on either the occurrence or the timing of some future event. [Citation.] As aptly stated in In re Hudson, the firm ‘.... became a creditor.... with a.... claim founded upon a contingent contractual liability and was therefore in a position to receive a preferential transfer.’ 29 B.R. at 72 (emphasis added).” (Kallen v. Litas (N.D.Ill. 1985) 47 B.R. 977, 982, rev’d on other grounds in In re Brass Kettle Restaurant, Inc., (7th Cir. 1986) 790 F.2d 574.) In cases in which a lessee paid a lump sum amount, either for future rent or a lease termination, courts have held that such a payment was for an antecedent debt. (In re Upstairs Gallery (9th Cir. 1994) 167 B.R. 915; In re Callaway (Bankr. D. Idaho 2008) [2008 WL 4261087].)
Here, there was an obligation to pay one-half of any proceeds due Andreas on a future sale of his interest in Yankee Doodles. To satisfy that contingent obligation, and as part of an agreement satisfying other obligations, Andreas transferred one-half of his interest in Yankee Doodles to defendant. There is no definitive law on the issue that has been brought to the court’s attention. But based on what authorities there are, I believe that the transfer could be considered as satisfying an antecedent debt.
The problem with defendant’s position is that had Andreas not sold, or planned to sell, his interest in Yankee Doodles, he would have no obligation to defendant. The jury in finding that Andreas intended “in making the transfer to defendant... to hinder, delay or defraud... his creditors” necessarily found that the decision to sell his shares in Yankee Doodles was part of the intention to defraud creditors. There is no suggestion he was required to sell his interest. Accordingly, I concur in the determination that there was substantial evidence to support the claim of a fraudulent conveyance.
Damages
I cannot see substantial evidence to support an award of $750,000. What defendant earned for her services seems irrelevant to the value of the shares in Yankee Doodles. The sale of the company lease more than four years after the transfer to defendant does not show the value of the shares at the time of the transfer. Although there appears to be some damage, there is no evidence supporting the award. Plaintiff did not even discuss in her brief defendant’s contention that there was not substantial evidence supporting damages. Thus, defendant has pointed to no evidence supporting the award.
The only indication of the value was the $90,000 that Andreas received for the sale of his shares in January, 2004, and this came up in connection with the summary judgment hearing.
Plaintiff has not contended that defendant forfeited this contention by not moving for a new trial on damages. (See Schroeder v. Auto Driveaway Co. (1974) 11 Cal.3d 908, 918.) Here, the issue is lack of substantial evidence. That might be reviewable even without a motion for new trial.
I would reverse the judgment and remand the matter to the trial court.
There is authority suggesting a retrial on damages. (See Toscano v. Greene Music (2004) 124 Cal.App.4th 685, 696, 697.)