Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_18-cv-07204/USCOURTS-cand-3_18-cv-07204-3/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

PRIYA SANGER, et al.,

Plaintiffs,

v.

AHE AHN, et al.,

Defendants.

Case No. 18-cv-07204-JCS 

ORDER REGARDING MOTION FOR 

SUMMARY JUDGMENT

Re: Dkt. No. 53

I. INTRODUCTION

Plaintiffs Priya Sanger and Michael Sanger are co-own a residential building in San 

Francisco as a tenancy in common with non-party Leah Ahn and another individual who is not 

involved with the facts of this case. The Sangers brought this action under California’s Uniform 

Voidable Transactions Act (the “UVTA”) challenging a deed of trust recorded on March 18, 2013 

by Defendant Lance Ahn (Leah Ahn’s brother) on behalf of Defendant Ahe Ahn (Leah Ahn and 

Lance Ahn’s mother), which placed in trust Leah Ahn’s interest in the tenancy in common, 

purportedly to secure Leah Ahn’s repayment of a promissory note in favor of Ahe Ahn. The 

Ahns1now move for summary judgment. The Court held a hearing on October 11, 2019. For the 

reasons discussed below, the motion is DENIED.2

II. BACKGROUND

Most of the facts relevant to the arguments raised in the present motion are not in dispute. 

The Sangers and Leah Ahn, along with another non-party, own a residential building in San 

 

1 This order uses the term “the Ahns” in some instances to refer only to Defendants Lance Ahn 

and Ahe Ahn. Nothing in this order should be construed as attributing any litigation conduct in 

this case to non-party Leah Ahn.

2 The parties have consented to the jurisdiction of the undersigned magistrate judge for all 

purposes pursuant to 28 U.S.C. § 636(c).

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Francisco as tenants in common, subject to a mortgage on the property as a whole. The tenancy in 

common is governed by a contract, the “Tenancy in Common Agreement” (“TICA”), which sets 

forth each cotenant’s interest in the property, share of the mortgage obligation, and other rights 

and duties. Leah Ahn’s share of the tenancy in common has at all relevant times been worth more 

than her share of the amount due on the mortgage but less than the total amount due. 

The Sangers contend that Leah Ahn has been delinquent in her mortgage payments and 

other obligations for many years. They obtained a ruling to that effect from an arbitrator, which a 

California state court affirmed as a judgment in 2012. The judgment was amended several times 

in the years since then to reflect increasing amounts owed by Leah Ahn. The Sangers obtained a 

writ of execution against Leah Ahn in 2013 and an order of sale for her interest in the property in 

2014, but Leah Ahn filed for bankruptcy, halting a planned sheriff’s sale. In 2017, a bankruptcy 

court determined that the Sangers’ abstract of judgment was invalid for failure to sufficiently 

identify the Sangers and judgment creditors, and Judge Tigar affirmed that decision on appeal to 

the district court in 2018. An appeal of that decision to the Ninth Circuit remains pending, with 

oral argument scheduled for October 22, 2019. See Ahn v. Sanger, No. 18-16794 (9th Cir.).

The Sangers filed this action in state court seeking to void the deed of trust and recover 

damages under the UVTA. The Ahns removed to this Court, and this Court granted the Sangers’ 

motion for a preliminary injunction barring the Ahns from foreclosing under the deed of trust 

pending the outcome of litigation. The Sangers filed their operative first amended complaint 

(“FAC,” dkt. 41) after the Court granted in part a motion for judgment on the pleadings. The 

Court recently denied a motion by the Sangers for leave to amend their complaint further after the 

deadline set by a scheduling order for amendment had expired.

In their present motion for summary judgment, the Ahns contend that the UVTA does not 

apply because there was no “transfer” of an “asset” as those terms are defined in the statute, as a 

result of the total amount due on the mortgage exceeding the value of Leah Ahn’s interest in the 

tenancy in common. Mot. (dkt. 53) at 4–10. The Ahns also argue that they are entitled to 

judgment on the Sangers’ claim against Lance Ahn, because Lance Ahn was is neither the 

transferee nor a person for whose benefit a transfer was made, and because the purported defects 

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in the Sangers’ underlying claim are fatal to any derivative claim against Lance Ahn based on a 

theory of conspiracy. Id. at 10–11. The Ahns’ motion also briefly suggests that the Ahns are 

entitled to summary judgment because the Sangers are unsecured creditors. Id. at 8. 

The Ahns’ motion does not include a number of arguments first raised in their reply brief: 

(1) whether the Sangers’ complaint sufficiently alleged that Leah Ahn’s interest was of greater 

value than relevant encumbrances, an issue that is regardless better suited for motion at the 

pleading stage than at summary judgment, see Reply (dkt. 67) at 7–8; (2) whether the Sangers 

should be estopped from claiming they are secured creditors, an issue that is regardless irrelevant 

to the outcome of this motion for reasons discussed below, see id. at 8–10; (3) whether Lance 

Ahn’s role was merely “administrative” such that he cannot be held liable as a coconspirator, id. at 

12; and (4) whether the opinions of the Sangers’ expert witness regarding the value of the property 

should be excluded,3id. at 13–15. The Sangers had no opportunity to respond to these arguments, 

and the Court declines to consider them.

III. ANALYSIS

A. Legal Standard

Summary judgment on a claim or defense is appropriate “if the movant shows that there is 

no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of 

law.” Fed. R. Civ. P. 56(a). In order to prevail, a party moving for summary judgment must show 

the absence of a genuine issue of material fact with respect to an essential element of the nonmoving party’s claim, or to a defense on which the non-moving party will bear the burden of 

persuasion at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 

Once the movant has made this showing, the burden then shifts to the party opposing 

summary judgment to designate “‘specific facts showing there is a genuine issue for trial.’” Id. 

(citation omitted); see also Fed. R. Civ. P. 56(c)(1) (“A party asserting that a fact . . . is genuinely 

 

3 The case management order in this case calls for challenges to expert testimony to be presented 

in Daubert motions, to be filed separately from but heard concurrently with motions for summary 

judgment. See Case Mgmt. & Pretrial Order (dkt. 40) § III. Pursuant to the parties’ stipulation, 

the Ahns filed their summary judgment motion earlier than the originally scheduled date for such 

motions, well before the deadline for completing expert discovery. If the Ahns wish to file a 

Daubert motion, they may do so on the schedule discussed at the October 11, 2019 hearing.

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disputed must support the assertion by . . . citing to particular parts of materials in the record 

. . . .”). “[T]he inquiry involved in a ruling on a motion for summary judgment . . . implicates the 

substantive evidentiary standard of proof that would apply at the trial on the merits.” Anderson v. 

Liberty Lobby Inc., 477 U.S. 242, 252 (1986). The non-moving party has the burden of 

identifying, with reasonable particularity, the evidence that precludes summary judgment. Keenan 

v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996). Thus, it is not the task of the court to scour the 

record in search of a genuine issue of triable fact. Id.; see Carmen v. S.F. Unified Sch. Dist., 237 

F.3d 1026, 1031 (9th Cir. 2001); Fed. R. Civ. P. 56(c)(3). 

A party need not present evidence to support or oppose a motion for summary judgment in 

a form that would be admissible at trial, but the contents of the parties’ evidence must be amenable 

to presentation in an admissible form. See Fraser v. Goodale, 342 F.3d 1032, 1036−37 (9th Cir. 

2003). Neither conclusory, speculative testimony in affidavits nor arguments in moving papers 

are sufficient to raise genuine issues of fact and defeat summary judgment. Thornhill Publ’g Co., 

Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). On summary judgment, the court draws all 

reasonable factual inferences in favor of the non-movant, Scott v. Harris, 550 U.S. 372, 378 

(2007), but where a rational trier of fact could not find for the non-moving party based on the 

record as a whole, there is no “genuine issue for trial” and summary judgment is appropriate. 

Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986).

B. The UVTA

The Sangers seek to void Ahe Ahn’s deed of trust pursuant to California Civil Code 

section 3439.04, which governs transactions voidable by present or future creditors. FAC ¶ 64.4

“There are two theories under which a [creditor] may proceed under [section 3439.04]: actual 

fraud or constructive fraud.” Donell v. Kowell, 533 F.3d 762, 770 (9th Cir. 2008) (applying 

California law). Under the former theory, a plaintiff must show “actual intent to hinder, delay, or 

defraud any creditor of the debtor,” which may be based on a number of non-exclusive factors 

enumerated in the statute. Cal. Civ. Code § 3439.04(a)(1), (b). As an alternative to showing 

 

4 The Sangers do not rely on the test of section 3439.05, which only applies to creditors whose 

claims arose before the transactions or obligation sought to be voided.

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actual intent to hinder, delay, or defraud, a plaintiff may also prevail on a theory of constructive 

fraud by showing that the debtor transferred property or incurred an obligation “[w]ithout 

receiving equivalent value in exchange” and at least one of the following: either the debtor “[w]as 

engaged or was about to engage in a business or a transaction for which the remaining assets of the 

debtor were unreasonably small in relation to the business or transaction,” or the debtor 

“[i]ntended to incur, or believed or reasonably should have believed that the debtor would incur, 

debts beyond the debtor’s ability to pay as they became due.” Cal. Civ. Code § 3439.04(a)(2).

The Ahns’ arguments here focus not on whether the deed of trust was “fraudulent” within 

the meaning of the UVTA,5but instead whether it was a transfer of an “asset” as that term is 

defined by the statute, and whether the Sangers were prejudiced by the purported transfer. 

The UVTA applies to “transfers,” defined as “every mode, direct or indirect, absolute or 

conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an 

asset, and includes payment of money, release, lease, license, and creation of a lien or other 

encumbrance.” Cal. Civ. Code § 3439.01(m). The statute defines an “asset” broadly as “property 

of a debtor,” but excludes (among other exceptions) “[p]roperty to the extent it is encumbered by a 

valid lien.” Id. § 3439.01(a). “Property” is defined as “anything that may be the subject of 

ownership.” Id. § 3439.01(j). A “valid lien” is defined as “a lien that is effective against the 

holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.” Id.

§ 3439.01(n).

To bring a claim under the UVTA, a creditor must affirmatively show prejudice as a result 

of the challenged transfer. Mehrtash v. Mehrtash, 93 Cal. App. 4th 75, 80 (2001). The transfer 

must cause “property [the plaintiff] otherwise would be able to subject to the payment of [the 

plaintiff’s] debt” to be placed “beyond [the plaintiff’s] reach.” Id. (citation and internal quotation 

marks omitted). 

 

5 The Sangers argue briefly in their opposition brief that the Ahns “admit the Sangers’ allegations 

of fraud.” Opp’n at 6. The motion includes no such admission. More accurately, the present 

motion does not challenge the Sangers’ ability to produce evidence at least establishing a genuine 

issue of material fact as to whether the purported transfer was fraudulent within the meaning of the 

UVTA. The Sangers therefore had no obligation to present such evidence with their opposition 

brief, and the Court has no occasion to consider whether they could do so.

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C. Encumbrances on Tenancies in Common and the UVTA

The Ahns rely heavily on a California appellate court’s decision in Schoenfeld v. Norberg, 

11 Cal. App. 3d 755 (1970). That case did not involve a claim under the UVTA, but instead a 

judgment creditor’s efforts to force a sale of a judgment debtor’s home. See id. at 758–59. The 

home was worth $35,000, it was subject to other liens and encumbrances of $9,099, and the 

judgment debtor was entitled to a homestead exemption of $12,500. Id. at 759. The trial court 

ordered a sale without resolving whether the judgment debtor and his wife owned the home as 

community property or as a joint tenancy. Id. The appellate court reversed, holding that the trial 

court erred in failing to resolve that question because if the home was community property, the 

entirety of it could be reached to satisfy the husband’s debt, while if it was a joint tenancy, only 

the husband’s interest could be sold. Id. at 760–61. The appellate court also held that, if the 

property was held as a joint tenancy and the husband’s interest was to be sold, the homestead 

exemption and encumbrances would apply in full to that one-half interest. Id. at 761–67. The 

appellate court’s analysis of encumbrances reads as follows:

One cotenant may encumber his undivided interest in property 

without the consent of the other tenants; the encumbrance affects his 

interest only. (Haster v. Blair (1940) 41 Cal.App.2d 896, 898; 13 

Cal.Jur.2d, Cotenancy, § 38, p. 325.) A creditor may levy only on the 

interest of the debtor joint tenant (Rupp v. Kahn (1966) 246 

Cal.App.2d 188, 195; 2 Miller and Starr, Current Law of California 

Real Estate, § 535, pp. 736–737). Where an encumbrance affects only 

the debtor tenant’s interest, it obviously must be discharged in full in 

an execution sale. 

In the present case, the encumbrance is a mortgage jointly given by 

both husband and wife on the entire property. Therefore the question 

arises whether the sale must net sufficient proceeds to discharge the 

entire encumbrance in order for the husband’s interest to be sold or 

whether the encumbrance will be apportioned and only one-half of it 

discharged. Only the first alternative is workable. In the case of a joint 

encumbrance, each cotenant’s interest, as part of the entirety, is 

vulnerable to sale for the total debt; a creditor may foreclose against 

one cotenant’s interest to satisfy the debt. (Powell on Real Property, 

§ 607, p. 630.) Therefore, the mortgage, while jointly given by 

husband and wife, constitutes an encumbrance on husband’s interest. 

If only one-half of the debt secured by the encumbrance were 

discharged, the creditor could still go against the interest of the 

purchaser to obtain satisfaction of the other half of the debt. Such a 

result would be contrary to the requirement of section 1254 [of the 

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California Civil Code at the time of the decision6] that all liens and 

encumbrances on the interest to be sold be discharged.

Therefore, we conclude that the husband’s interest cannot be sold 

unless its value exceeds the amount of the joint encumbrance. The 

purchaser, having in effect paid off the entire encumbrance, would be 

entitled to contribution from the other tenant or tenants (in this case 

the wife). (Conley v. Sharpe (1943) 58 Cal.App.2d 145, 155–156; 

Jamison v. Cotton (1933) 136 Cal.App. 127, 129.)

. . . Under the facts which have been determined in this case, the 

property cannot be sold if it is held in joint tenancy; the husband’s 

interest does not exceed the sum of the joint encumbrance and the 

homestead exemption.

Id. at 765–67. The Schoenfeld court acknowledged that its holding established “severe limitations 

. . . on the situations in which a sale of property held in cotenancy between the judgment debtorhomestead claimant and another party could be ordered,” but concluded that it was bound by 

statutory language “apparently adopted without consideration of encumbrances on jointly owned 

property.” Id. at 766. A more recent California appellate decision quoted Schoenfeld for the 

proposition that a debtor’s interest in a tenancy in common “can be sold at execution only if its 

appraised value exceeds the value of any homestead exemption plus the total value of joint

encumbrances on the entire property,” but that case involved attorney malpractice claims, and 

Schoenfeld was at most tangentially relevant to its outcome. Dang v. Smith, 190 Cal. App. 4th 

646, 661 (2010).

The Sangers argue that Schoenfeld is inapposite because it considered power to order a 

judgment sale rather than the definition of an “asset” under the UVTA, but cite no authority 

distinguishing Schoenfeld or reaching a different conclusion with respect to the UVTA. The only 

case cited by the Sangers at all relevant to this issue is Romo v. Stewart Title of California, 35 Cal. 

App. 4th 1609 (1995), which explains that a buyer at a nonjudicial foreclosure takes title subject to 

any senior liens. 

 The Ninth Circuit distinguished Schoenfeld in a 1991 bankruptcy case not cited by either 

party here, holding “that Schoenfeld is a case about powers of sale rather than a case about 

 

6 The relevant statutes have since been moved to the Code of Civil Procedure and renumbered. 

See Dang v. Smith, 190 Cal. App. 4th 646, 661 n.9 (2010). As discussed in a separate footnote 

below, but not addressed by Dang or other recent decisions citing Schoenfeld, changes to the 

statutes would seem to undermine Schoenfeld’s reasoning.

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valuation.” In re Reed, 940 F.2d 1317, 1323 (9th Cir. 1991). Much like in Schoenfeld, the 

bankruptcy debtor in Reed held a residence as a joint tenancy with his wife, and the value of 

encumbrances and his homestead exemption exceeded the value of his one-half interest, but not 

the value of the residence as a whole. Id. at 1322–23 & nn.6, 9. The debtor and his wife sold the 

home while the bankruptcy was pending. Id. at 1320. The Ninth Circuit affirmed a preliminary 

injunction issued by the bankruptcy court requiring the debtor to turn over net proceeds of the sale 

to the bankruptcy estate. Id. 

The Ninth Circuit acknowledged that “[c]ases interpreting Schoenfeld have strictly adhered 

to its mandate that, when calculating a Debtor’s equity in a joint-tenancy interest for creditor sale 

purposes, one must subtract the full value of the outstanding liens and encumbrances and the 

homestead exemption from the Debtor’s one-half interest in the fair market value,” and no sale can 

be ordered on behalf of a creditor where the result is negative. Id. at 1322 (citing bankruptcy court 

decisions).7 The panel stated two independent reasons for its conclusion that Schoenfeld did not 

allow the debtor to keep the proceeds of the sale that actually occurred: first, that a bankruptcy 

trustee (unlike a normal creditor) has the authority to compel the sale of an entire joint tenancy 

under certain circumstances and “Schoenfeld itself makes it clear that there is no problem and its 

 

7 This Court has serious doubts both as to whether Schoenfeld was correctly decided at the time 

and, if it was, as to whether it remains good law in light of subsequent statutory amendments. 

Schoenfeld relied on a then-existing section of the Civil Code providing that, when a homestead 

exemption is claimed, then “‘[i]f, from the [appraiser’s] report, it appears to the judge that the 

land claimed exceeds in value, over and above all liens and encumbrances thereon, the amount of 

the homestead exemption, and that it cannot be divided, he must make an order directing its sale 

under the execution.’” Schoenfeld v. Norberg, 11 Cal. App. 3d 755, 761–62 (1970) (quoting Cal. 

Civ. Code § 1254) (second alteration in original). The statute discusses circumstances where a 

judge must order a sale; it is not clear that a judge would lack such authority if those conditions 

were not met. Regardless, section 1254 of the Civil Code was repealed in 1983. The current 

equivalent statute includes the following somewhat similar provision: “The court shall make an 

order for sale of the dwelling subject to the homestead exemption, unless the court determines that 

the sale of the dwelling would not be likely to produce a bid sufficient to satisfy any part of the 

amount due on the judgment pursuant to Section 704.800 [requiring a bid to exceed all 

exemptions, liens, and encumbrances].” Cal. Civ. Proc. Code § 704.780(b). Based on the plain 

language of the current statute, it appears that even where total encumbrances on the property as a 

whole exceeded the value of a cotenant’s individual share, a court would be required to order a 

sale if it determined that a buyer—perhaps another cotenant, or perhaps a third party willing to 

rely on the right to receive contribution from other cotenants—would likely bid high enough to 

satisfy the full encumbrance. In this case, however, Schoenfeld is inapposite even if valid, and the 

Court need not resolve whether the California Supreme Court would likely follow its rule.

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formula need not be applied when the property is subject to sale in its entirety,” and second, that 

“[t]o hold that there is no value to a Debtor’s interest in an asset unless that interest exceeds the 

full value of all outstanding encumbrances and the homestead exemption would also ignore the 

final mandate of Schoenfeld” by disregarding Schoenfeld’s acknowledgment that a purchaser who 

paid off the full encumbrance would be entitled to contribution from cotenants. Id. at 1323.

The relevant case law provides little guidance as to how the UVTA applies to 

encumbrances on tenancies in common. In the absence of precedent so holding, this Court 

declines to adopt the unintuitive rule that a fractional interest in a tenancy in common must exceed 

the value of encumbrances on the property as a whole to constitute an “asset.” As the Court noted 

at the hearing, such a rule would countenance intentionally fraudulent transfers of assets with real 

net value so long as a total encumbrance on the whole of a tenancy in common exceeded the value 

of a defendant’s fractional interest, regardless of the how the value of that interest compares to a 

proportionate share of the encumbrance.8 Such a rule would be particularly inappropriate under 

the circumstances of this case, where the Sangers are cotenants in the property at issue and would 

likely have avenues to reach the property that are not available to a typical creditor.9 See Sanger 

 

8 The Ahns rely on a decision of the Eight Circuit Bankruptcy Appellate Panel stating that a court 

cannot “substitute its own definition for the term ‘asset’” for the one provided by the Minnesota’s 

version of the UVTA. See In re Wintz Cos., 230 B.R. 848, 861 (B.A.P. 8th Cir. 1999). Wintz

reversed a bankruptcy court for finding value based on a stream of rental income rather than 

comparing the assessable value of the property at issue to encumbrances on the property. The 

decision does not speak to whether a cotenant’s interest should be compared to full or 

proportionate encumbrances. To the extent that the reasoning of Wintz might be read as 

inconsistent with the decision here, this Court would respectfully find such reasoning to be 

unpersuasive.

9 The Ahns argue in their reply brief that any other interest the Sangers might have had under the 

TICA were extinguished by the Sangers’ choice to obtain a judgment. Reply at 5. That may be so 

for the amount Leah Ahn owed at the time of the judgment, but does not account for Leah Ahn’s 

purported continuing failure to pay her share of the mortgage. See Sanger Decl. re Prelim. Inj. 

(dkt. 6) ¶ 9. Along the same lines, Leah Ahn’s alleged failure to make payments after the date the 

deed of trust was recorded undermines the Ahns’ argument that the Sangers have not shown harm

resulting from the deed of trust because a lien purportedly created by the TICA (as asserted by the 

Sangers, but disputed by the Ahns) could have priority of the deed of trust. Even if that were so 

for payments Leah Ahn failed to make before the deed of trust was recorded, it would not hold 

true for payments after that date. The Ahns also argue that the claim alleged in the Sangers’ 

complaint is based solely on the judgment, but rely for that assertion on the Sangers’ 

characterization of their original complaint in a brief on a previous motion, without addressing the 

operative first amended complaint, which is not so limited. See Reply at 5; FAC ¶¶ 15, 40, 44, 63, 

66 (alleging that Leah Ahn continues to fail to pay her share of the mortgage and asserting that the 

deed of trust impaired the Sangers’ ability to satisfy not only the judgment against Leah Ahn, but 

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Decl. (dkt. 64) ¶ 6 (stating that the Sangers would pay down their share of the mortgage if needed 

to obtain a sale of Leah Ahn’s share of the property); Sanger Decl. Ex. A (TICA) § 14.8 

(providing for a right of nonjudicial foreclosure in the event of default); Romo v. Stewart Title of 

Cal., 35 Cal. App. 4th 1609, 1614 (1995) (explaining that a nonjudicial foreclosure sale may be 

conducted regardless of senior liens, with the buyer taking title subject to such liens); cf. Reed, 940 

F.2d at 1323 (distinguishing Schoenfeld in the context of bankruptcy in light of a bankruptcy 

trustee’s greater power to effect a sale as compared to a typical creditor). 

The language of the UVTA does not compel a holding that a tenancy-in-common interest 

is not an “asset” where a shared mortgage exceeds the value of the individual interest, but the 

individual share of that mortgage does not. The Court declines to so hold. While there might be 

circumstances where Schoenfeld could nullify any prejudice as a result of a transfer of a fractional 

interest of lesser value than an encumbrance on the property as a whole, because Schoenfeld’s bar 

against a subsequent forced sale would result in the property remaining outside the creditor’s reach 

regardless of whether the transfer occurred, this is not such a case.

D. Unsecured Creditors and the UVTA

The parties dispute whether the Sangers have a secured interest in the property at issue. 

The Court need not decide that issue, because the UVTA protects both secured and unsecured 

creditors.

The Ahns rely on a 1994 California decision and a 2015 Utah decision for the proposition 

that unsecured creditors cannot proceed under the UVTA. Mot. at 8 (citing Tassone v. Tovar, 28 

Cal. App. 4th 765, 769 (1994); Rupp v. Moffo, 358 P.3d 1060, 1065 (Utah 2015)). In both cases, 

the relevant courts determined that senior encumbrances on or exemptions applicable to the 

properties at issue exceeded the value of the properties as a whole,

10 and that either the plaintiffs 

were not harmed by the transfers or that no “transfer” of an “asset” occurred within the meaning of 

the statute. Tassone, 28 Cal. App. 4th at 768–69; Rupp, 358 P.3d at 1064–65. That proposition is 

 

also “other obligations under the TICA”).

10 These cases were not faced with the question of whether to compare encumbrances on the 

property as a whole to the value of a fractional interest, as discussed above in this order’s 

consideration of Schoenfeld. 

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neither controversial nor disputed in the present case. 

The Ahns quote a phrase from Rupp stating that “unsecured creditors are not harmed 

because they would never have been able to recover their debt by means of the encumbered 

property,” but fail to acknowledge that the phrase appears in a discussion of “property that is fully 

encumbered by a valid lien.” See Rupp, 358 P.3d at 1064–65; Mot. at 8. Rupp explicitly 

acknowledges that Utah’s codification of the UVTA, which is materially identical to California’s, 

contains no “indication that a creditor’s standing is contingent on any actual interest in the 

property at issue.” Rupp, 358 P.3d at 1063.

To the extent that Tassone could be read as suggesting, as an alternative to its clearer 

holding that the debtor’s homestead exemption exceeded the value of the property at issue, that a 

creditor must have a lien on the property purportedly transferred in order to proceed under the 

UVTA, it is contrary to the language of the statute. A more recent California decision has 

explained that a plaintiff need not even have a judgment, much less a lien, at the time of the 

challenged transfer:

AUIC also argues Potter did not have a “claim” against Tovar[11], and 

thus was not a “creditor” when Tovar executed the Release, because 

Potter did not have a judgment against Tovar at the time. While AUIC 

is correct that a creditor under the UVTA is “a person that has a 

claim,” the word “claim” is not as narrowly defined as AUIC 

contends. With an exception not pertinent here, a claim is “a right to 

payment, whether or not the right is reduced to judgment, liquidated, 

unliquidated, fixed, contingent, matured, unmatured, disputed, 

undisputed, legal, equitable, secured, or unsecured.” (§ 3439.01, 

subd. (b).)

The plain language of section 3439.01 demonstrates an individual 

need not have a judgment to have a claim, as does section 3439.04, 

which provides certain transfers are voidable as to a creditor “whether 

the creditor's claim arose before or after the transfer was made” 

(§ 3439.04, subd. (a)). Though Potter did not have a judgment against 

Tovar when the Release was executed, he had a claim against him. He 

and Tovar were thus, respectively, a creditor and debtor under the 

terms of the UVTA. (§ 3439.01, subds. (c), (e).)

Potter v. All. United Ins. Co., 37 Cal. App. 5th 894, 909 (2019) (emphasis added). 

The UVTA is clear that an unsecured creditor may bring a claim to void a transfer. Cal. 

 

11 Potter and Tassone involved different individuals with the surname “Tovar.” There does not 

appear to be any relevant connection between those individuals or the two cases.

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Civ. Code § 3439.01(b). Whether the Sangers were secured creditors is of no consequence.

E. Claim Against Lance Ahn

The Ahns’ motion challenges the Sangers’ claim against Lance Ahn only on the grounds 

that: (1) Lance was not a transferee or beneficiary of the transfer; and (2) any claim against Lance 

Ahn based on a theory of conspiracy must fail for the same reasons that the Ahns argued they were 

entitled to summary judgment on the underlying claim against Ahe Ahn. 

The Sangers’ claim against Lance Ahn is based solely on a theory of conspiracy. See

Opp’n at 8–9. The Court previously held that such a theory can be viable with respect to a claim 

under the UVTA, although the Sangers’ original complaint lacked sufficient allegations regarding 

Lance Ahn’s involvement to state such a claim. See Order Re Mot. for J. on the Pleadings (dkt. 

38) at 10–12.12 The Sangers subsequently filed their first amended complaint to cure that defect. 

The Ahns’ present motion does not contend that the Sangers lack sufficient evidence of Lance’s 

involvement in the transfer to hold him liable as a coconspirator. Although the Ahns briefly raise 

such arguments in their reply, the Court declines to consider arguments to which the Sangers had 

no opportunity to respond. 

The only basis for judgment on the Sangers’ claim against Lance Ahn as a coconspirator 

that the Court considers here is the argument raised in the Ahns’ motion: that the Ahns are entitled 

to judgment on the underlying claim against Ahe Ahn under the UVTA. Because the Court 

declines to grant judgment on the underlying claim for the reasons discussed above, the Court also 

declines to grant judgment on the claim against Lance Ahn as a coconspirator.

IV. CONCLUSION

For the reasons discussed above, the Ahns’ motion for summary judgment is DENIED.

IT IS SO ORDERED.

Dated: October 15, 2019

______________________________________

JOSEPH C. SPERO

Chief Magistrate Judge

 

12 Sanger v. Ahn, No. 18-cv-07204-JCS, 2019 WL 1229660, at *6–7 (N.D. Cal. Mar. 15, 2019).

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