Kassab v. Kachi

1

JOANDARK KASSAB, Plaintiff and Appellant, v. NABIL N. KACHI et al., Defendants and Respondents.

D079954

California Court of Appeals, Fourth District, First Division

May 1, 2023

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of San Diego County No 37-2016-00026336- CU-FR-CTL, Eddie C. Sturgeon, Judge. Requests for judicial notice denied. Affirmed.

Joandark Kassab, in pro. per, for Plaintiff and Appellant.

Law Office of Quintin G. Shammam and Quintin G. Shammam for Defendants and Respondents.

DATO J.

Joandark Kassab appeals from a summary judgment in her action to set aside an alleged fraudulent conveyance of real property and a policy of term life insurance. Defendants offered admissible evidence showing that she was not injured because (1) the secured debt on the property exceeded its value, and (2) the unmatured life insurance had no cash value. Because Kassab offered no evidence to create a triable issue on the essential element of injury, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND^[1]

In 2012, Kassab contracted with a company owned by Nabil Kachi Hatra Engineering and Construction, to build retail and office space. After disputes between them arose, an arbitrator awarded Kassab $142,382.

In 2014, about a week before the arbitration award was issued Kachi quitclaimed a single-family residence (the Property) to his son, Nadeem "as trustee" of the Kachi Family Irrevocable Trust. The deed was notarized on October 4, 2014, which the parties call the "Transfer Date."^[2] At that time the Property was encumbered by two deeds of trust totaling $933,000. Kachi also owned a $200,000 term life insurance policy. In October 2014, he transferred it to the Kachi Irrevocable Life Insurance Trust.

At the end of 2014, the superior court confirmed the arbitration award and entered a $148,877 judgment in Kassab's favor against Kachi.^[3]

About two years later, Kassab filed a complaint against Kachi alleging that his transfer of the Property and the life insurance were fraudulent conveyances.^[4] The operative first amended complaint alleges three causes of action: (1) fraudulent conveyance of the Property and life insurance; (2) "constructive" fraudulent conveyance; and (3) conspiracy to "hinder, delay and defraud" Kassab "in the collection of the arbitration award."

A fraudulent transfer may be set aside only by one who is injured by the transfer. And a creditor suffers no injury if the property's encumbrances exceed its value. (See Fidelity National Title Ins. Co. v. Schroeder (2009) 179 Cal.App.4th 834, 842.) Invoking this principle, Kachi^[5] moved for summary judgment on the grounds that Kassab could not establish an essential element of her case, injury. In support of the motion, two appraisals of the Property showed that its fair market value was $740,000 to $778,000 on the transfer date. In light of the negative equity, Kachi asserted Kassab suffered no injury because the transfer did not put beyond her reach an asset that otherwise would be available to pay the judgment. As to the term life policy, Kachi maintained that on the transfer date it was unmatured and, therefore, had no value.

Kassab submitted no admissible evidence in opposition. Citing a real estate website, she claimed the Property was worth at least $1.2 million. Her opposition referred to an exhibit showing a $1,223,000 appraisal-but the exhibit number was blank, and it was never filled in:

conveyance. Other assessments and valuations after remodeling I renovation are considered the Plaintiff has evidence to support a value on the property of $$1,223,000 Million. (SEE EXHIBIT ) This dispute of material fact must be tried.

After conducting an unreported hearing, the trial court granted summary judgment. It determined that "[d]efendants have met their burden to show the fair market value of the [Property] at the time of the transfer by [Kachi] was less than the amount owed on the property," and Kassab offered no evidence of value as of the date of transfer. The court also ruled that the life insurance policy had no value because Kachi was alive on the date of transfer and "term life insurance is generally accepted as having no value, since once its term has expired its worthless." Because the two fraudulent conveyance causes of action failed, so too did the conspiracy claim.

DISCUSSION

A. Appealability

In a self-represented filing, Kassab purported to appeal from orders (1) granting summary judgment; (2) taking her motion for reconsideration off calendar; (3) denying her motion for reconsideration; and (4) denying her request for a statement of decision. Shortly after the appeal was docketed, we notified the parties that none of these were appealable orders. We subsequently allowed the appeal to proceed, notifying the parties that appealability may be addressed in the merits briefs.

Especially given Kassab's self-represented status, we construe the order granting summary judgment to include an appealable judgment, and the notice of appeal to adequately identify it. (See Mitchell v. Los Robles Regional Medical Center (2021) 71 Cal.App.5th 291, 296, fn. 2.) Kachi does not contend otherwise.

B. The Court Correctly Granted Summary Judgment Because the Undisputed Evidence Established That Kassab Suffered No Injury, Even If the Transfers Were Done with Fraudulent Intent.

The Uniform Voidable Transfers Act (Act) (Civ. Code, § 3439 et seq.) permits defrauded creditors to reach property in the hands of a transferee. (See Fidelity National Title Ins. Co. v. Schroeder (2009) 179 Cal.App.4th 834, 840.) But to constitute a fraudulent transfer, the debtor must have disposed of an "asset." (Civ. Code, § 3439.01, subd. (m).) By statutory definition, "asset" does not include property "to the extent it is encumbered by a valid lien." (Id., § 3439.01, subd. (a)(1).)

Thus, if valid encumbrance(s) on the property exceed its value, then the transferred property is not an "asset." If the transferred property is not an "asset" within the meaning of the Act it cannot be set aside, no matter how fraudulent the debtor's intent. The rationale is that a creditor is not injured by a transfer unless the property otherwise would be" 'subject to the payment of [the] debt.'" (Mehrtash v. Mehrtash (2001) 93 Cal.App.4th 75, 80 (Mehrtash).) This rule applies to both a common law action to set aside a fraudulent conveyance as well as to one under the Act. (See Berger v. Varum (2019) 35 Cal.App.5th 1013, 1020.)

We review the trial court's grant of a motion for summary judgment independently to determine "whether triable issues of fact exist to reinstate the action." (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.) We look to the evidence before the trial court (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 716-717), construing the opposing party's submissions liberally and applying stricter scrutiny to the moving party's evidence, resolving doubts in favor of the former. (Wiener, at p. 1142.) When a defendant moves for summary judgment and demonstrates that the plaintiff cannot establish an essential element of a claim, the burden shifts to the plaintiff to show that a triable issue of fact exists as to the challenged element. (Hanson v. Grode (1999) 76 Cal.App.4th 601, 604.) If the plaintiff fails to do so," 'no amount of factual conflicts upon other aspects of the case will affect the result and the motion for summary judgment should be granted.' "^[6] (Willard v. Hagemeister (1981) 121 Cal.App.3d 406, 415-416.)

Here, there is no dispute that Nabil transferred the Property to the family trust when an adverse arbitration award was apparently imminent. For purposes of summary judgment, that alone is likely sufficient to create a triable issue of fraudulent intent. But the key question remains: Was there substantial evidence from which a jury could conclude that the Property was an "asset."

Kachi submitted declarations of licensed real estate appraisers showing the Property's fair market value on the transfer date was $740,000 to $778,000.

They also showed that as of the transfer date, the balance on the first deed of trust was $827,923 and the second was approximately $105,833.

With the moving parties having offered admissible evidence that the Property was not an asset under the Act, on summary judgment the burden shifted to Kassab to present admissible evidence raising a triable issue of fact to the contrary. (See Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) She failed to do so. Although Kassab repeatedly asserted that the Property's value was $1,223,000, she submitted no declaration, no appraisal, nor any other admissible evidence to support such a finding. Her eight-page list of "Disputed Material Facts" contests nearly every issue in the underlying case-but it refers to no admissible evidence on any of them.

Summary judgment is an evidentiary proceeding designed to "pierce" mere allegations to determine whether a trial "is truly necessary to resolve the dispute between the parties." (Jordan v. City of Sacramento (2007) 148 Cal.App.4th 1487, 1492.) Thus, although Kassab asserts "there were no fewer than forty (40) disputed material facts," she overlooks that her bare assertion a fact is disputed does not make it so. The whole point of summary judgment is to get behind naked contentions to determine if they are supported by admissible evidence. Kassab is correct that in ruling on the motion, "the declarations of . . . the opposing party are liberally construed." But here, there was nothing for the trial court to construe, liberally or otherwise, because she submitted no declaration or any other admissible evidence on the valuation issue. Accordingly, the trial court correctly...