Aghaian v. Minassian

59 Cal.App.5th 447

273 Cal.Rptr.3d 561

Seda Galstian AGHAIAN, Individually and as Trustee, etc., et al., Plaintiffs and Appellants,

v.Alice MINASSIAN et al. Defendants and Respondents.

B300726

Court of Appeal, Second District, Division 1, California.

Filed December 31, 2020

Kinsella Weitzman Iser Kump & Aldisert, Gregory J. Aldisert, David W. Swift, Santa Monica; Aldisert Law and Gregory J. Aldisert, Santa Monica, for Plaintiffs and Appellants Seda Galstian Aghaian and Aida Galstian Norhadian, Individually and as Trustees, etc.

Lewis Brisbois Bisgaard & Smith, Roy G. Weatherup, Caroline E. Chan, Los Angeles; and Robert Craig Woodbury, Canoga Park, for Defendant and Respondent Alice Minassian.

Law Offices of Lee David Lubin and Lee David Lubin, Calabasas, for Defendant and Respondent Shahen Minassian.

Arthur Minassian, in pro. per., for Defendant and Respondent Arthur Minassian.

ROTHSCHILD, P. J.

Seda Galstian Aghaian and Aida Galstian Norhadian, Individually and as Trustees of The Galstian Trust II U/A/D October 26, 1982, as amended and restated July 1, 2005 (plaintiffs) sued Alice Minassian (Alice), Shahen Minassian (Shahen) and Arthur Minassian (Arthur), asserting four causes of action arising out of alleged fraudulent transfers.¹ The court sustained defendants’ demurrers to two causes of action and plaintiffs voluntarily dismissed the remaining causes of action. After the court entered a judgment of dismissal, plaintiffs appealed. We reverse.

FACTUAL SUMMARY²

Plaintiffs are trustees and beneficiaries of a trust established in 1982 by their now deceased parents. In 2013 they sued Shahen based on actions Shahen took beginning in 1996 pertaining to trust properties located in Iran (the underlying action).³ Plaintiffs sought $105 million in damages.

On March 2, 2016, Arthur—Shahen's son and an attorney—applied ex parte to have the court appoint him as Shahen's guardian ad litem in the underlying action. According to his application, Shahen was "unable to comprehend the nature of the proceedings of [the underlying action] and [could not], therefore, adequately assist his counsel in the defense of [the underlying] action." The court granted the application.

Shahen and Alice were married in 1964 and have since lived together continuously. In 2004 they purchased their Sherman Oaks residence (the residence), taking title together in their names as "Husband and Wife as Joint Tenants." In 2008 they purchased property across the street from their residence (the second property), taking title in the same manner. Arthur lived in the second property.

While the underlying action was pending, Arthur, Shahen, and Alice "concocted" a "scheme ... to hinder, delay or defraud Shahen's creditors, particularly [p]laintiffs, by putting the two houses ... into Alice's name only, and thereby making it more difficult for [p]laintiffs to levy on them." In furtherance of this scheme, Alice filed a petition for the dissolution of her marriage on September 26, 2016.

According to the dissolution petition, Shahen and Alice separated on April 1, 1991—a date that preceded the events that gave rise to the underlying action. About three weeks after Alice filed the petition, the family court granted Arthur's application to be appointed Shahen's guardian ad litem in the dissolution proceeding.

Notwithstanding the dissolution proceeding and ostensible separation, Shahen and Alice continued to live together and hold themselves out as husband and wife. In January 2017, Shahen and Alice obtained a reverse mortgage on their residence in the amount of $938,250.

In June 2017, Arthur, as Shahen's guardian ad litem, and Alice stipulated to a division of property in the dissolution proceeding that allocated the two Sherman Oaks properties to Alice; Shahen assumed the entire obligation to pay any judgment against him in the underlying action. On June 27, 2017, the family court entered a judgment in accordance with the stipulation.

On August 24, 2017, Arthur, acting as Shahen's "attorney-in-fact," executed quitclaim deeds to Alice of Shahen's interest in their two Sherman Oaks properties, including their residence. Shahen, however, "retained control of the two properties."

On September 6, 2017, a bench trial in the underlying action began, and lasted six weeks. Shahen participated in the trial, including testifying during 12 days of the trial, without showing signs of diminished mental capacity.

On September 21, 2017, Arthur's quitclaim deeds to the Sherman Oaks properties were recorded.

On June 12, 2018—after the trial in the underlying action had concluded and before the court issued its statement of decision—Alice sold the second Sherman Oaks property to a third party for $970,000, with net proceeds to Alice of at least $500,000. Three days later, Alice used the proceeds from the sale to purchase, in her and Arthur's name, a condominium in Sherman Oaks for $389,500 in an "all-cash transaction." Arthur thereafter lived in the condominium. In August 2018, Arthur deeded his interest in the condominium to Alice.

In November 2018, the court issued its final statement of decision in the underlying action, awarding plaintiffs $34,506,989.⁴ The following month, the court entered judgment for plaintiffs in that amount.

Shahen and Alice continue to live together in the Sherman Oaks residence they bought in 2004. Indeed, they never actually separated.

PROCEDURAL HISTORY

Plaintiffs commenced this action by filing a complaint in July 2018. They filed the operative first amended complaint in December 2018. They alleged causes of action for fraudulent transfer (against Shahen and Alice) under Civil Code section 3439.04, subdivision (a)(1),⁵ constructive fraudulent transfer (against Shahen and Alice) under section 3439.04, subdivision (a)(2), aiding and abetting fraudulent transfer (against Arthur), and constructive trust (against Alice).

Plaintiffs alleged the facts we summarized above and further alleged: The divorce between Shahen and Alice is a "complete sham"; plaintiffs are creditors within the meaning of California's enactment of the Uniform Voidable Transactions Act (UVTA) (section 3439 et seq.); and Shahen, in making the alleged transfers, acted with " ‘an actual intent to hinder, delay or defraud any creditor of the debtor,’ " for purposes of the UVTA (see § 3439.04, subd. (a)(1) ).

The cause of action against Arthur incorporated all the foregoing allegations and added that "Arthur concocted the entire scheme (along with his parents Shahen and Alice) to hinder, delay or defraud Shahen's creditors, particularly [p]laintiffs, by putting the two houses [in Sherman Oaks]—which were community property assets of Shahen and Alice—into Alice's name only, and thereby making it more difficult for [p]laintiffs to levy on them." Arthur also "devised the ‘divorce strategy’ and came up with the date of separation ... so as to create an argument that the judgment in the [u]nderlying [a]ction was Shahen's separate property debt."

Shahen, Alice, and Arthur filed separate demurrers on the grounds that the alleged causes of action asserted against them failed to state a cause of action. They supported the demurrers with requests for judicial notice of, among other documents, the judgment in the marital dissolution petition and the orders appointing Arthur guardian ad litem for Shahen in the underlying action and in the marital dissolution proceeding.⁶

The court sustained the demurrers as to the first cause of action for fraudulent conveyance without leave to amend because Arthur made the challenged transfer as Shahen's guardian ad litem "under the supervision of the family court." Plaintiffs, therefore, "will not be able to demonstrate that transfer was made by Shahen with intent to defraud."

The plaintiffs’ inability to establish Shahen's fraudulent intent also defeated the third cause of action against Arthur for aiding and abetting fraudulent transfer. In addition, the court explained, "Arthur enjoys judicial immunity for his acts as guardian ad litem ... [and,] [e]ven if ... the applications for [guardian ad litem] and the filing of the dissolution actions were a sham, those acts are protected by the litigation privilege under [section] 47."

The court overruled the demurrers to the second and fourth causes of action. Plaintiffs subsequently dismissed these causes of action without prejudice. The court thereafter entered a judgment of dismissal, and plaintiffs timely appealed.⁷

DISCUSSION

A. Fraudulent Transfer

In their first cause of action, plaintiffs seek relief on the ground that Shahen's transfers of the Sherman Oaks properties constitute voidable transfers under section 3439.04, subdivision (a)(1).⁸ Under that statute, a transfer of property by a debtor is voidable if the debtor made the transfer "[w]ith actual intent to hinder, delay, or defraud any creditor of the debtor." ( § 3439.04, subd. (a)(1) ; see Lyons v. Security Pacific Nat. Bank (1995) 40 Cal.App.4th 1001, 1020, 48 Cal.Rptr.2d 174 [a fraudulent transfer cause of action "does not require proof of anything more than actual intent to defraud"].)⁹

"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." ( Chen v. Berenjian (2019) 33 Cal.App.5th 811, 817, 245 Cal.Rptr.3d 378 ( Chen ).) In furtherance of the state's "general policy of protecting creditors from fraudulent transfers, including transfers between spouses," the UVTA applies to property transfers made pursuant to a marital settlement agreement incorporated into a judgment of dissolution. ( Mejia v. Reed (2003) 31 Cal.4th 657, 668, 3 Cal.Rptr.3d 390, 74 P.3d 166.)

Whether a debtor had the actual intent to hinder, delay, or defraud a creditor is a question of fact. ( Nautilus, Inc. v. Yang (2017) 11 Cal.App.5th 33, 40, 217 Cal.Rptr.3d 458 ; Annod Corp. v. Hamilton & Samuels (2002) 100 Cal.App.4th 1286, 1294, 123 Cal.Rptr.2d 924.) Among other so-called "badges of fraud" indicating...