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Filed 9/1/21 Yan v. Hearst CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

TINA YAN et al.,

Plaintiffs and Appellants,

v.

JOSEPH HEARST,

Defendant and Respondent.

 A161732

 (Alameda County

 Super. Ct. No. RG19017165)

Attorney Joseph Hearst represented Tina Yan and Thai Ming 

Chiu in an appeal from a judgment against them in an action to set 

aside Demas Yan’s fraudulent transfers of real property.1 Tina and 

Chiu then sued Hearst for professional negligence, and the trial court 

entered judgment in Hearst’s favor. On appeal, Tina and Chiu contend 

the trial court erred in concluding they could not state a cause of action. 

We disagree and affirm.

1 Because Tina and Demas share the same last name, we refer to 

each by first name only. 
2

BACKGROUND

A.

The Uniform Voidable Transactions Act (the Act; Civ. Code, 

§ 3439 et seq.) permits defrauded creditors to reach property that a 

debtor has transferred to a third party with actual fraudulent intent.2 

(§ 3439.04, subd. (a)(1) [transfer made by debtor is voidable as to 

creditor if debtor made transfer “[w]ith actual intent to hinder, delay, 

or defraud any creditor of the debtor”]; see Kirkeby v. Superior Court

(2004) 33 Cal.4th 642, 648; Mejia v. Reed (2003) 31 Cal.4th 657, 663, 

664.) Section 3439.08, subdivision (a), provides that an otherwise 

fraudulent transfer is not voidable “against a person that took in good 

faith and for a reasonably equivalent value . . . .” 

An aggrieved creditor may also obtain relief for constructive 

fraud, without the need to prove the debtor’s actual intent. (§ 3439.05, 

subd. (a).) The statute provides: “A transfer made or obligation 

incurred by a debtor is voidable as to a creditor whose claim arose 

before the transfer was made or the obligation was incurred if the 

debtor made the transfer or incurred the obligation without receiving a 

reasonably equivalent value in exchange for the transfer or obligation 

and the debtor was insolvent at that time or the debtor became 

insolvent as a result of the transfer or obligation.” (Ibid.)

B.

This dispute has a long procedural history. It originates in a 

previous professional negligence action that Charles Li filed against 

Demas in 2010, involving Demas’s representation of Li in lawsuits 

2 Undesignated statutory references are to the Civil Code.
3

concerning property ownership rights. We draw the background facts 

largely from appellate decisions authored by our colleagues in Division 

Three of this court—in Li v. Chiu (May 31, 2018, A149849 [nonpub. 

opn.] (Li v. Chiu I)) and Li v. Chiu (Dec. 22, 2020, A156760 [nonpub. 

opn.] (Li v. Chiu II))—which we judicially notice on our own motion. 

(Evid. Code, §§ 452, subd. (d), 459, subd. (a).)

Following a bench trial on Li’s malpractice action, the trial court 

found that Demas had engaged in the unauthorized practice of law and 

was liable to Li for professional negligence, breach of fiduciary duty, 

breach of contract, and fraud. Division Two of this court affirmed the 

judgment against Demas. (See Li v. Yan (2016) 247 Cal.App.4th 56, 59, 

62.) A judgment was entered against Demas totaling $1,086,001.12. 

C.

Through efforts to enforce the judgment, Li learned that Demas 

had transferred certain residential property to a wholly owned limited 

liability company in 2007 and then, after trial commenced in the 

professional negligence action, Demas transferred his ownership 

interest in the LLC to relatives, purportedly to repay debts Demas 

owed. After the LLC was ordered to appear for a judgment debtor 

examination, the property was transferred yet again to a newly formed 

LLC.

In February 2014, after learning of the suspicious transactions 

involving the property, Li filed a complaint to set aside the transfers for 

actual fraud (§ 3439.04, subd. (a)(1)) as well as constructive fraud (§ 

3439.05). Li alleged the conveyances were made to prevent him from 

satisfying his judgment against Demas, and named as defendants 

Demas, Tina and Cheuk Tin Yan (Demas’s parents), Chiu and Kaman 
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Liu (Demas’s brothers-in-law), and the two LLCs that had held title to 

the property. 

Li entered defaults against Demas and the two LLCs. A jury 

trial proceeded against Demas’s parents and his brothers-in-law (the 

“transferee defendants”). At the same time, a bench trial was 

conducted on the transferee defendants’ equitable title affirmative 

defense. Demas testified that he had not paid any of Li’s judgment and 

that he had essentially no assets or income (despite supporting himself 

and his children). He originally bought the property in 2000. Twelve 

years later, he transferred his ownership in the first LLC (holding title 

to the property) as follows: 68.43 percent to his mother, Tina; 25.83 

percent to Chiu; and 5.74 percent to Liu. After Demas failed to appear 

for a debtor’s exam as an agent for the LLC, the property was again 

transferred to a new LLC owned by the transferee defendants in the 

same percentages. Around the same time, the property was publicly 

offered for sale at the price of $1,925,000. 

The jury returned special verdicts against all of the defendants, 

finding each liable for actual and constructive fraud. The jury also 

found that Tina and Chiu did not take their interests in the property in 

good faith or for reasonably equivalent value. Concluding that the 

transferee defendants failed to prove they made investments or 

purchased an ownership interest in the property, the trial court denied 

their request for equitable relief. 

The trial court entered default judgments against Demas and the 

two LLCs and, consistent with the special verdicts returned by the jury, 

entered judgment against each of the transferee defendants in the

following amounts: $824,180.57 jointly against Demas’s parents, Tina 
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and Cheuk Tin (who is now deceased); $324,167.58 against Chiu; and 

$72,037.24 against Liu. The judgment also declared Demas to be the 

sole owner of all legal and equitable interest in the property. The trial 

court also granted Li’s request for attorney fees and entered a first 

amended judgment that incorporated an award of attorney fees of 

$802,059.50 and costs of $11,527.19.

D.

In their appeal from the first amended judgment entered in the 

fraudulent conveyance case (Li v. Chiu I, supra, A149849), Hearst 

represented the transferee defendants. They raised two issues on 

appeal: (1) that the trial court erred in granting Li’s motions in limine 

preventing them from presenting certain evidence; and (2) that it was 

error to award attorney fees against the transferee defendants because 

they were not parties to the earlier action between Li and Demas and 

cannot be liable for attorney fees incurred to enforce the judgment in 

that earlier action. (Li v. Chiu I, supra, A149849.)

Our colleagues in Division Three found in favor of the transferee 

defendants on the second issue only. Noting that there had been no 

finding that the transferee defendants conspired with Demas to engage 

in the fraudulent transfers for the purpose of evading Li’s enforcement 

of his judgment, Division Three concluded there was no basis to impose 

an attorney fee award against anyone other than Demas. The trial 

court was directed to enter a new amended judgment providing that the 

fees award was imposed solely against Demas. The judgment was 

otherwise affirmed. (Li v. Chiu I, supra, A149849.)
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E.

On remand, the trial court entered the second amended 

judgment. In accordance with the Li v. Chiu I decision, the trial court 

modified the judgment to state that the attorney fees award may be 

recovered only against Demas.3 The second amended judgment also 

provides:

“A. Judgment of $824,180.57 is hereby entered jointly 

against Cheuk Tin Yan and Tina Yan.

“B. Judgment of $324,167.58 is hereby entered against 

Thai Ming Chiu.

“C. Judgment of $72,037.24 is hereby entered against 

KaMan Liu. [¶ . . . ¶]

“E. Default judgment is hereby entered against defendants 

Demas Yan and 547 23rd Avenue, LLC. The transfer of the 

Subject Property from defendant Demas Yan to defendant 547 

23rd Avenue, LLC . . . is fraudulent, void, and hereby set aside to 

the extent necessary to satisfy plaintiff’s judgment against 

defendant Demas Yan in Charles Li v. Demas Yan, San 

Francisco Superior Court No. CGC-10-497990 . . . (‘Underlying 

Judgment’) . . . .

“F. The transfer of Demas Yan’s membership interests in 

547 23rd Avenue, LLC, from defendant Demas Yan to 

defendants Thai Ming Chiu, Kaman Liu, and Tina Yan was 

made with the intent to hinder, delay, or defraud plaintiff; was 

received without good faith and not in exchange for reasonably 

3 Tina and Chiu filed a request for judicial notice of the second 

amended judgment. We originally deferred ruling on their unopposed 

request but now grant it. (Evid. Code, §§ 452, subd. (d), 459, subd. (a).)
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equivalent value; and is hereby set aside to the extent necessary to 

satisfy plaintiff’s Underlying Judgment along with the costs and 

attorneys’ fees specified in this Judgment;

“G. Default judgment is hereby entered against defendants 

547 23rd Avenue, LLC and 547 Investments, LLC. The 

conveyance of the Subject Property from 547 23rd Avenue, LLC 

to defendant 547 Investments LLC . . . is fraudulent, void, and 

hereby set aside to the extent necessary to satisfy plaintiff’s 

Underlying Judgment along with the costs and attorneys’ fees 

specified in this Judgment.

“H. For the purpose of satisfying plaintiff’s Underlying 

Judgment, along with the costs and attorneys’ fees specified in 

this Judgment, and for that purpose only, Demas Yan is 

DECLARED the sole owner of all legal and equitable title or 

interest in the Subject Property. Plaintiff may execute or 

foreclose on the Subject Property to satisfy plaintiff’s Underlying 

Judgment along with the costs and attorneys’ fees specified in 

this Judgment.

“I. Plaintiff may seize, execute on, or foreclose on any real 

or personal property of any defendant provided that recovery 

against any defendant shall not exceed the money judgment 

amount entered above against that specific defendant, and 

further provided that plaintiff’s aggregate recovery shall not 

exceed plaintiff’s Underlying Judgment.” (Italics added.)

The transferee defendants then filed a motion to set aside and/or 

modify the second amended judgment, arguing it is void because it 

grants Li a double recovery. The trial court denied the motion.

In their appeal from the trial court’s order denying their motion 

(Li v. Chiu II, supra, A156760), the transferee defendants argued the 

second amended judgment was void because, in both setting aside the 
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fraudulent transfers and awarding a money judgment, it granted relief 

beyond that authorized by the Act. Our colleagues in Division Three 

affirmed the order denying the motion to set aside the judgment, 

concluding that the transferee defendants forfeited their “ ‘dual 

remed[ies]’ ” argument by failing to raise it in Li v. Chiu I, that the 

judgment was not void, and that the appellants failed to provide an 

adequate record for review. (Li v. Chiu II, supra, A156760.) Although 

the Li v. Chiu II court did not need to reach the merits of the transferee 

defendants’ double recovery argument (because it had been forfeited), 

the court observed that the argument was not supported by the record 

or by the Act. 

F.

In the meantime, Tina and Chiu had also filed a complaint for 

professional negligence against Hearst—the attorney who represented 

them in the Li v. Chiu I appeal. They alleged Hearst had negligently 

failed to press their “double recovery” argument—that the trial court 

exceeded its jurisdiction, under the Act, by entering a money judgment 

and setting aside the fraudulent transactions. Had Hearst raised the 

argument, Tina and Chiu argued the Li v. Chiu I appeal would have 

brought a more favorable result. 

Hearst filed a motion for judgment on the pleadings, which the 

court granted without leave to amend. The trial court entered 

judgment in Hearst’s favor. 

DISCUSSION

A.

Tina and Chiu contend Hearst violated his professional duty 

because, had he performed diligent research, Hearst “would have 
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discovered that the money judgments against [them] were rendered 

erroneously and in excess of authority.” After independently reviewing 

the question (Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 

Cal.App.4th 592, 602-603), we agree with the trial court that Tina and 

Chiu’s complaint does not state a cause of action. (See Code Civ. Proc., 

§ 438, subd. (c)(1)(B)(ii).) 

The remedies imposed in this case do not exceed the Act’s 

authority. The Act allows a creditor to, among other remedies, void a 

transfer of real property to the extent necessary to satisfy the creditor’s 

claim, obtain “[a]n attachment or other provisional remedy against the 

asset transferred,” and “[s]ubject to applicable principles of equity and 

in accordance with applicable rules of civil procedure . . .[¶] . . . [¶] [to 

obtain a]ny other relief the circumstances may require.” (§ 3439.07, 

subds. (a)(1)-(2), (a)(3)(C).) In addition, to the extent a transfer is 

avoidable, “the creditor may recover judgment for the value of the asset 

transferred, [subject to adjustment as equity requires], or the amount 

necessary to satisfy the creditor’s claim, whichever is less.” (§ 3439.08, 

subd. (b)(1).) Such a judgment may be entered against the “first 

transferee of the asset or the person for whose benefit the transfer was 

made” and any subsequent transferee other than “[a] good faith 

transferee that took for value” and her subsequent transferee. 

(§ 3439.08, subd. (b)(1)-(2).)

Thus, in addition to setting aside the fraudulent transfers, the 

trial court had discretion to enter a money judgment against Tina and 

Chiu. (See §§ 3439.07, subd. (a), 3439.08, subd. (b)(1)(A); Filip v. 

Bucurenciu (2005) 129 Cal.App.4th 825, 839-840 [trial court “acted well 
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within its discretion” by setting aside fraudulent transfers and entering 

money judgment against transferee defendants].)

Contrary to Tina and Chiu’s implicit assertion, Li did not file an 

action under the common law; Li sought relief under the Act. (See 

Berger v. Varum (2019) 35 Cal.App.5th 1013, 1019.) The Act does not 

incorporate a common law rule that, before entering a money judgment 

against a transferee, the court must make a preliminary finding of 

conspiracy or unavailability of the transferred property. (Compare § 

3439.08, subd. (b)(1)-(2) and Filip v. Bucurenciu, supra, 129 

Cal.App.4th at pp. 838-840 with Hy-Lo Unit & Metal Products Co. v. 

Ryon (1937) 21 Cal.App.2d 38, 43.) Even if the Legislature had 

incorporated such common law rules, Tina and Chiu have not 

demonstrated neither exception applies. (See Osgood v. Landon (2005) 

127 Cal.App.4th 425, 435 [appellant must affirmatively show error by 

adequate record].)

The courts’ remedial discretion may be constrained by the 

equitable principle that a creditor cannot obtain a double recovery for 

the same harm. (See Renda v. Nevarez (2014) 223 Cal.App.4th 1231, 

1237; id. at p. 1238 [“ ‘defrauded creditor is not entitled to an 

enhancement of position beyond what it was before the fraud’ ”].) 

Renda involved a judgment creditor that had obtained a money 

judgment in a prior action but had difficulty collecting because the 

debtor transferred assets to sham entities. The creditor then brought a 

second action to set aside the transfers and obtain money damages. 

The trial court voided the transfers but refused to award money 

damages because they would duplicate damages that the creditor had 

been awarded in the first action. (Id. at p. 1234.) The court of appeal 
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affirmed the trial court’s ruling, concluding that a creditor cannot 

recover duplicative judgments against the debtor. (Id. at pp. 1236-

1237.) 

This case does not present duplicative judgments. Li did not 

have a preexisting judgment against Tina and Chiu. Moreover, the 

trial court ensured that Li would not be unjustly enriched by providing 

that Li’s “ ‘aggregate recovery shall not exceed [his] underlying 

judgment.’ ” The second amended judgment merely gave Li alternative 

means to recover no more than the amount of his underlying judgment. 

Hearst was not negligent in failing to press the “double recovery” 

argument.

B.

Nor did the trial court abuse its discretion in denying leave to 

amend. (Ludgate Ins. Co. v. Lockheed Martin Corp., supra, 82 

Cal.App.4th at p. 602.) It is Tina and Chiu’s burden to show the defects 

in their complaint can be cured by amendment. (Pang v. Beverly 

Hospital, Inc. (2000) 79 Cal.App.4th 986, 989.) By failing to address 

the issue in their opening brief, they concede the complaint’s flaws 

cannot be cured. (Julian v. Hartford Underwriters Ins. Co. (2005) 35 

Cal.4th 747, 761, fn. 4.) 

DISPOSITION 

The judgment is affirmed. Hearst shall recover his costs on 

appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)
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_______________________

BURNS, J. 

We concur:

____________________________

SIMONS, ACTING P.J.

____________________________

NEEDHAM, J.

A161732