Maria P v. Deleon, B215233

• Decision Date: 20 July 2010
• Docket Number: No. BC364219,B215233,BC364219
• Parties: MARIA P., Plaintiff and Respondent, v. CAROL DELEON, Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

MARIA P., Plaintiff and Respondent,

v.CAROL DELEON, Defendant and Appellant.

B215233

No. BC364219

Court Of Appeal Of The State Of California

Second Appellate District

Division Five

Filed 07/20/10

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.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

TURNER, P. J.

APPEAL from a judgment of the Superior Court of Los Angeles County, Richard Fruin, Judge. Affirmed.

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, ¹ § 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.

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 plaintiffs fraudulent transfer claim was barred by the release. The summary adjudication motion asto 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...