Chen v. Berenjian

245 Cal. Rptr. 3d 378, 33 Cal. App. 5th 811
CourtCalifornia Court of Appeal, 5th District
DecidedMarch 28, 2019
DocketG055496
StatusPublished
Cited by30 cases

This text of 245 Cal. Rptr. 3d 378 (Chen v. Berenjian) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chen v. Berenjian, 245 Cal. Rptr. 3d 378, 33 Cal. App. 5th 811 (Cal. Ct. App. 2019).

Opinion

FYBEL, J.

*814INTRODUCTION

After obtaining money judgments against Shazad Berenjian, Pang Yen Chen sued him and his brother Sharmad Berenjian1 for fraudulent transfer under the Uniform Voidable Transactions Act (UVTA), Civil Code section 3439 et seq., formerly known as the Uniform Fraudulent Transfer Act (see Stats. 2015, ch. 44, § 3). Chen alleged Shazad and Sharmad had attempted to thwart Chen's attempts to execute on the judgments by colluding in a sham lawsuit, stipulating to a judgment, and allowing Sharmad to execute on the *815judgment. The trial court sustained a demurrer with leave to amend, but Chen allowed dismissal to be entered against him and pursued this appeal.

The primary issue presented by this appeal is whether, on the face of Chen's complaint, the litigation privilege of Civil Code section 47, subdivision (b) ( section 47(b) ) barred the cause of action for fraudulent transfer under the UVTA. Exercising de novo review ( McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415, 106 Cal.Rptr.2d 271, 21 P.3d 1189 ), we conclude the litigation privilege of section 47(b) does not bar the fraudulent transfer cause of action as alleged because the gravamen of that cause of action is the noncommunicative act of transferring assets by executing on a judgment. We therefore reverse.

ALLEGATIONS

We accept as true all of the material allegations of Chen's complaint and facts that reasonably can be inferred from those expressly pleaded. ( King v. CompPartners, Inc. (2018) 5 Cal.5th 1039, 1049, fn. 2, 236 Cal.Rptr.3d 853, 423 P.3d 975 ; Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081, 6 Cal.Rptr.3d 457, 79 P.3d 569.)

Chen alleged:

Shazad and Sharmad are brothers. Shazad owns and operates a business called Digital Ear, Inc. In September 2012, Chen paid Shazad $32,952.22 for goods which Shazad did not deliver. Chen filed a lawsuit against Shazad and obtained a judgment against him for that amount.

In August 2014, Shazad became indebted to Chen for an additional $50,000 for goods that were never delivered. In September 2015, Chen filed a second lawsuit *382against Shazad and obtained a judgment against him for $57,997.26.

In June 2015, after the judgment in the first lawsuit was entered and before the second lawsuit was filed, Shazad and Sharmad entered into an agreement by which Sharmad would file a lawsuit against Shazad and Shazad would allow a default judgment to be taken. The agreement enabled Sharmad to obtain title to or a lien against all of Shazad's assets. Sharmad and Shazad intended "to create a shield against claims of other creditors, including [Chen]."

Pursuant to this agreement, Sharmad filed a lawsuit against Shazad. The allegations of Sharmad's complaint were false. In October 2015, Sharmad *816and Shazad entered into a stipulated judgment against Shazad in the amount of $199,900. There were no "genuine grounds" for that amount.

"The stipulated judgment was not followed by any effort to actually enforce the judgment or obtain assets from [Shazad] in satisfaction of the judgment. Instead, [Shazad] continued to operate his business called Digital Ear, Inc., as he had done previously. However, when an attempt was made to enforce the above mentioned claims and judgments by [Chen], or any other creditor, [Sharmad] would levy on the property subject to the claim, pursuant to the sham judgment mentioned above, solely in order to defeat the attempts by [Chen] to enforce his own judgments."

When Chen filed his second lawsuit against Shazad, Sharmad levied on two stereo speakers that were owned by Shazad through Digital Ear and which were being stored in a warehouse. The speakers had been previously sold to Chen and were the basis of his second lawsuit against Shazad. Sharmad levied on the speakers to defeat Chen's claims. Shazad has transferred other assets to Sharmad without reasonable consideration in order to conceal them from Chen.

PROCEDURAL HISTORY

Chen filed a complaint against Shazad, Sharmad, and others asserting two causes of action: (1) fraudulent transfer under the UVTA; and (2) common counts. The common counts are irrelevant to this appeal.

The trial court sustained Sharmad's demurrer to the first cause of action with leave to amend. The court concluded the fraudulent transfer cause of action was barred by the litigation privilege of section 47(b) and was uncertain because it alleged Shazad transferred assets other than the speakers but did not identify those assets.

Chen did not amend the complaint but allowed the first cause of action to be dismissed as to Sharmad. Chen filed a request for dismissal of the second cause of action. After Chen filed a notice of appeal, he obtained a signed order of dismissal of Sharmad.

*817DISCUSSION

I.

The Litigation Privilege Does Not Bar Chen's Cause of Action for Fraudulent Transfer.

A. The UVTA

Claims for fraudulent transfer are governed by the UVTA. 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. ( Lo v. Lee (2018) 24 Cal.App.5th 1065, 1071, 234 Cal.Rptr.3d 824

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Cite This Page — Counsel Stack

Bluebook (online)
245 Cal. Rptr. 3d 378, 33 Cal. App. 5th 811, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chen-v-berenjian-calctapp5d-2019.