Tianjin Weinada Int'l Trading Co. v. Wang

• Decision Date: 17 November 2017
• Docket Number: G053371
• Parties: TIANJIN WEINADA INTERNATIONAL TRADING CO., LTD., Plaintiff and Respondent, v. YANG WANG, et al., Defendants; TIANJIN TIANWU INTERNATIONAL TRADE DEVELOPMENT CO., LTD., Nonparty and Appellant.
• Court: California Court of Appeals Court of Appeals

TIANJIN WEINADA INTERNATIONAL TRADING CO., LTD., Plaintiff and Respondent, v. YANG WANG, et al., Defendants;TIANJIN TIANWU INTERNATIONAL TRADE DEVELOPMENT CO., LTD., Nonparty and Appellant.

G053371

COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE

November 17, 2017

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Super. Ct. No. 30-2014-00714657)

OPINION

Appeal from a judgment of the Superior Court of Orange County, Ronald Kreber, Judge. (Retired judge of the Orange Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Motion to dismiss appeal granted. Appeal dismissed.

Lewis Brisbois Bisgaard & Smith, Hong Lu, Christopher W. Harmon and Brittany H. Bartold; and Dean T. Cho for Nonparty and Appellant.

Law Offices of William Li Niu and William Li Niu; Esner, Chang & Boyer, Stuart B. Esner and Joseph S. Persoff for Plaintiff and Respondent.

No appearance by Defendants.

* * *

Nonparty Tianjin Tianwu International Trade Development Co., Ltd. (Tianwu) appeals from the judgment the trial court entered on plaintiff Tianjin Weinada International Trading Co., Ltd.'s (Weinada) claims against defendants Yang Wang, Pinland, Inc., and Pei Yi Sun. In addition to awarding Weinada nearly $4 million, the judgment also set aside the transfer of a residential property from Wang and Pinland to Sun as a fraudulent transfer, and imposed a constructive trust on title to that property in favor of Weinada and against Wang, Pinland, and Sun. The judgment does not purport to award any relief against Tianwu, and Wang, Pinland, and Sun have not appealed from the judgment.

Claiming title to the residential property as a subsequent, good faith purchaser for value, Tianwu appeals to challenge the judgment's award relating to the property. Weinada moved to dismiss Tianwu's appeal, arguing Tianwu lacked standing because it was not a party of record in the trial court.

To establish standing, an appellant must be a party of record and be aggrieved by the judgment. A party of record either is named as a party to the lawsuit or becomes a party by intervening in the lawsuit or moving to vacate the judgment in the trial court. A nonparty also has standing to appeal if the judgment would bind the nonparty based on res judicata.

Here, Tianwu did not successfully employ either of the procedures for becoming a party of record, and it failed to show it is bound by the judgment. To the contrary, Tianwu argues it cannot be bound by the judgment because it was not a party tothis lawsuit, it is not in privity with any party, and the issues the trial court decided concerning the fraudulent transfer from Wang and Pinland to Sun are distinct from the issues Tianwu raises concerning its status as a subsequent, good faith purchaser for value.

Because the judgment does not award any relief against Tianwu and Tianwu failed to show the judgment is binding on it, we conclude Tianwu lacks standing to appeal and therefore grant the motion to dismiss.

IFACTS AND PROCEDURAL HISTORY

Tianwu is in the business of importing luxury automobiles from the United States to China. During the summer of 2013, Tianwu agreed to pay Sun and his company, Onyx Auto Inc. (Onyx), $2.475 million to purchase 33 Mercedes Benz automobiles and have them delivered to Tianwu in China. In the fall of 2013, Tianwu wired the full purchase price to Onyx, but Sun and Onyx never delivered the automobiles. When Tianwu threatened litigation to recover its money, Sun and Onyx claimed they could not repay the money or deliver the vehicles.

Weinada also is in the business of importing luxury automobiles from the United States to China. In January 2014, Weinada agreed to pay Wang and his company, Pinland, more than $2.5 million to purchase 29 Mercedes Benz automobiles and have them delivered to Weinada in China. Weinada wired the full purchase price to Wang and Pinland that same month, but they never delivered the automobiles.

In April 2014, Weinada filed this lawsuit against Wang and Pinland, alleging claims for breach of contract, money had and received, conversion, unfair competition, fraud, unjust enrichment, and accounting (Breach of Contract Action). In addition to alleging Wang and Pinland breached their contract and defrauded Weinada, the complaint alleged Wang and Pinland used Weinada's money to purchase two luxury homes in Yorba Linda, California, including one located at 19847 Trotter Lane (TrotterProperty). Weinada sought compensatory and punitive damages, and also an order that Wang and Pinland held title to the two residential properties as constructive trustees for Weinada. Three days after filing the complaint, Weinada recorded a lis pendens against the Trotter Property, but did not file a copy with the court until more than a month later.

In May 2014, Weinada personally served the complaint on Wang in New York. Upon receiving the complaint, Wang and his wife immediately drove from New York to an escrow office in California, where Wang executed a grant deed transferring the Trotter Property to Sun. Sun did not pay Wang or Pinland any consideration for the Trotter Property.

In June 2014, Weinada filed a second lawsuit (Orange County Superior Court Case No. 30-2014-00727077) against Sun, Pinland, and Wang alleging claims for fraudulent transfer, unjust enrichment, and constructive trust (Fraudulent Transfer Action). The complaint alleged Pinland and Wang fraudulently transferred the Trotter Property to Sun to avoid the judgment Weinada sought in the Breach of Contract Action. Weinada prayed for a judgment setting aside the transfer of the Trotter Property from Pinland and Wang to Sun as void. One day after filing the Fraudulent Transfer Action, Weinada recorded a second lis pendens against the Trotter Property.

During the first half of 2014, Tianwu continued to threaten litigation if Sun and Onyx did not return the money Tianwu paid them for the vehicles they failed to deliver. After receiving title to the Trotter Property, Sun agreed to transfer that property to Tianwu to settle its claim. In July 2014, Sun executed a grant deed transferring the Trotter Property to Tianwu. The deed stated, "This is a reconveyance of realty upon satisfaction of a debt." According to Tianwu, it gave reasonably equivalent value for the Trotter Property because Sun and Onyx owed it at least $2.475 million, the Trotter Property was listed for sale in May 2014 for $2.48 million, and the assessed value of the property for tax purposes was $1.85 million.

In early August 2014, Weinada filed a doe amendment to the complaint in the Fraudulent Transfer Action naming Tianwu as Doe 1 based on Sun's transfer of the Trotter Property to Tianwu. Less than ten days later, Weinada filed a first amended complaint in the Breach of Contract Action adding Sun as a defendant and adding claims for declaratory relief and constructive trust relating to the Trotter Property. Weinada alleged Wang and Pinland used the funds they obtained from Weinada to purchase the Trotter Property and then "fraudulently transferred" the property to Sun. The amended complaint did not include any allegations about Sun transferring the Trotter Property to Tianwu.

In January 2015, the trial court declared the two actions related and assigned them to the same judge. In February 2015, Weinada filed a motion to consolidate the Breach of Contract Action and the Fraudulent Transfer Action, but Weinada later took the motion off calendar shortly before it was scheduled to be heard in May 2015. Also in February 2015, the trial court expunged the lis pendenses Weinada recorded against the Trotter Property based on both the Breach of Contract Action and the Fraudulent Transfer Action because of deficiencies in Weinada's service of the lis pendenses.

In August 2015, one week before the trial date in the Breach of Contract Action, Tianwu filed an ex parte application to intervene and continue trial.¹ The trial court denied the application, finding it was untimely and Tianwu lacked standing to intervene because "it is not bound by the factual or legal determinations made during the trial in [the Breach of Contract Action]." Tianwu did not appeal that ruling.

During late August 2015, the trial court conducted a six-day bench trial in the Breach of Contract Action. At the trial's conclusion, the court issued a tentative decision finding for Weinada on all claims against Wang, Pinland, and Sun, and also finding Pinland and Wang's transfer of the Trotter Property to Sun was fraudulent. The court requested briefing from the parties on what relief it could award regarding the Trotter Property, and the court ordered the parties to given Tianwu notice so it could file a brief addressing the issue.

Weinada argued the trial court should find Wang and Pinland fraudulently transferred the Trotter Property to Sun, and therefore should impose a constructive trust on the Trotter Property in Weinada's favor. Weinada, however, acknowledged the court should reserve the validity of the transfer from Sun to Tianwu for the Fraudulent Transfer Action because Tianwu was not a party to the Breach of Contract Action. In its brief, Tianwu argued the court should deny Weinada's request for a constructive trust and a judgment voiding the transfer from Wang and Pinland to Sun because Tianwu held title to the Trotter Property as a good faith purchaser for value and there was no evidence showing Tianwu had any connection to Pinland, Wang, or Sun, or their transaction with Weinada. Finally, Tianwu argued the trial court could not properly bind Tianwu or restrict its ability to use or sell the Trotter Property because Tianwu was not a party to the Breach of...