Filed 10/22/21 King v. May-Wesely CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

RON KING,

Plaintiff and Appellant,

v.

MERINNA MAY-WESELY et al.,

Defendants and Respondents.

F080224

(Super. Ct. No. 2024022)

OPINION

APPEAL from a judgment of the Superior Court of Stanislaus County. Roger M. 

Beauchesne, Judge.

Serlin & Whiteford and Mark A. Serlin for Plaintiff and Appellant.

Daniel S. Glass; Germain Law and Michael R. Germain for Defendants and 

Respondents.

-ooOooA creditor holding a nondischargeable judgment for $12 million sued the 

judgment debtor, the judgment debtor’s wife, and a corporation currently owned by the 

wife in an action alleging fraudulent transfers, conspiring to defraud creditors, and aiding 

and abetting fraud on creditors. After a bench trial, the trial court issued a statement of 

decision concluding that the judgment creditor “has failed to establish his case on all 
2.

three causes of action and theories by a preponderance of the evidence.” The court 

entered judgment in favor of the judgment debtors.

The judgment creditor appealed, contending he had established the challenged 

transfers of assets were voidable under the Uniform Voidable Transactions Act (UVTA)

which contains an actual fraud test and a constructive fraud test. (Civ. Code, §§ 3439–

3439.14.) (Unlabeled statutory references are to the Civil Code.) A transfer is voidable 

based on constructive fraud if the debtor (1) made the transfer without receiving 

reasonably equivalent value in exchange and (2) was insolvent at the time of the transfer. 

(§ 3439.05, subd. (a).) A pretrial stipulation by the parties established the judgment 

debtor was insolvent when he made the challenged transfers in 2015 and 2016. Also, the 

evidence in the record compels a finding that the judgment debtor did not receive 

reasonably equivalent value (1) when he transferred $170,000 to his wife to use in 

purchasing real estate in which he received a 2 percent interest or (2) when he 

surrendered his shares in the defendant corporation without receiving anything in return. 

Thus, pursuant to section 3439.07, subdivision (a), the judgment creditor is entitled to a 

judgment voiding those transfers.

We therefore reverse the judgment.

FACTS

Plaintiff Ron King owned a cabinet making business in the 1990’s and early 

2000’s. The business was organized as a corporation named National West 

Manufacturing, Inc.1 King retained defendant Stephen M. House as his certified public 

accountant, and they became close friends. House embezzled millions of dollars from 

King’s business by telling King to send his tax deposits to House’s firm instead of 

1Records filed with the California Secretary of State and available online show the 

corporation filed its articles of incorporation in November 1985 and a certificate of dissolution in 

February 2008. We have not taken judicial notice of the official records because these facts are 

provided as background and do not affect the outcome of this appeal.
3.

sending them directly to the taxing authorities. House kept the money and filed false tax 

returns on behalf of King and his company. When the scheme was discovered, the taxing 

authorities notified King that he owed millions of dollars in back taxes. These events 

resulted in the loss of King’s business and the demise of his marriage.

Federal criminal charges were brought against House. In October 2006, House 

pleaded guilty to one count of wire fraud (18 U.S.C. § 1343) and was sentenced to 63 

months in federal prison and supervised release for a term of three years. The federal 

court recommended that House be incarcerated in a California facility and that House 

“participate in the 500-Hour Bureau of Prisons Substance Abuse Treatment Program.” 

The court also directed House to pay approximately $4.4 million in restitution to eight 

different people or entities. The restitution to be paid to National West Manufacturing, 

Inc., was $3,040,817.

In 2005, House filed a Chapter 7 bankruptcy petition in the United States 

Bankruptcy Court for the Eastern District of California, Sacramento Division. King filed 

an adversary proceeding in House’s bankruptcy case, seeking to have House’s debt 

declared nondischargeable based on fraud. On October 25, 2006, the bankruptcy court 

entered a judgment in favor of King and National West Manufacturing, Inc., in the 

amount of $11,739,168. The judgment was “adjudged non-dischargeable within the 

meaning of 11 U.S.C. section 523(a)(2) and 11 U.S.C. section 523(a)(4).”

In 2007, while House was in prison, he filed a motion in the bankruptcy court to 

set aside the nondischargeable judgment entered in favor of King. The bankruptcy court 

denied House’s motion.

In 2011, after House was released from prison, he was involved in the 

incorporation of California Almond Pollination Service, Inc. (Pollination Inc.), and 

became its director of operations. His responsibilities included (1) obtaining pollination 

accounts from almond growers who would lease bees from Pollination Inc. and (2) 

obtaining those bees by entering into leases with beekeepers.
4.

In 2013, House became the sole shareholder of Pollination Inc. and continued to 

act as the director of operations.

In April 2014, House signed a $300,000 check made payable to cash and drawn on 

Pollination Inc.’s account at Tri Counties Bank. House testified the bank had told him 

Pollination Inc.’s account had been hacked and had suggested opening a new account. 

House left a small amount in the existing account to cover outstanding checks and 

automatic withdrawals and transferred the $300,000 to another account at Tri Counties 

Bank.

In April 2015, House surrendered his shares to Pollination Inc. There is no 

evidence that Pollination Inc. paid House anything in exchange for his shares. During the 

trial, House testified about an amount shown in the financial records as “owner 

contraction” and stated it had been rent paid to him.

House’s federal tax forms for 2015 show that Pollination Inc. paid him $86,250 in 

wages and $75,000 in nonemployee compensation. House testified the $75,000 would 

have been either rent for beehives he owned or charges for the use of his truck, trailer,

and forklift to unload other beekeepers’ hives.

In March 2016, House met defendant Merinna May-Wesely, a registered nurse 

who works full time. Prior to their meeting, May-Wesely had no experience in the bee 

business.

On April 1, 2016, May-Wesely acquired all the shares of Pollination Inc. She 

testified the agreement was that she had about a year to decide if she wanted to give the 

shares back or conclude her purchase of the business. Pollination Inc. held her note for 

$50,000 while she decided whether to continue with the purchase or back out and return 

the shares.

On May 1, 2016, House and May-Wesely signed a prenuptial agreement. House 

attached a list of creditors to the agreement, but King was not listed among them. On 

May 19, 2016, House and May-Wesely were married.
5.

In July 2016, House deposited a check for $170,000 directly into May-Wesely’s 

bank account. In his deposition, House described the transfer as a gift. During the trial, 

House testified, “I gave her 170,000. She gave me a hundred seventy thousand. We put 

it into an escrow account to purchase a house.” House reiterated this testimony, stating: 

“I believe my attorney sent you documents showing she gave me 170 and I gave her 170, 

and we purchased a piece of property.”

The grant deed for the Geer Road property stated the seller “hereby GRANTS to 

Stephen House, as to an undivided 2% interest and Merinna May-Wesely, as to an 

undivided 98% interest, as tenants in common,” in the property. At trial, House 

confirmed the grant deed related to the property where he was living and confirmed it 

reflected that he had an undivided 2 percent interest. The court received the grant deed 

into evidence.

Like House, May-Wesely testified that, under the grant deed for the Geer Road 

property, she owned 98 percent and House owned 2 percent. She confirmed that they put 

$340,000 into escrow to close the purchase of the property and stated none of that money 

was returned to House. May-Wesely also testified: “We had an agreement when we 

purchased this property that I would put money in to take care of the repairs, because 

there was a lot of deferred maintenance on the property; that I would take care of all the 

mortgage payments, the property taxes, and I would take care of the balance of whatever 

was due on the mortgage.”

2

 Explaining the reasoning behind the agreement, May2May-Wesely’s testimony is consistent with her interrogatory responses, which stated the 

$170,000 from House and $170,000 of her separate property funds were deposited into escrow 

and most of the $340,000 was paid to the seller of the real property being acquired. Her 

responses also stated that, in addition to depositing an equal amount into the escrow, she agreed 

to (1) pay all mortgage payments to the seller, which were about $4,000 per month on a principal 

amount of $738,500, (2) pay all deferred maintenance and repairs on the property, (3) pay for the 

cost of replacing an orchard on the property, and (4) pay all insurance, property taxes, and 

ongoing maintenance for the property.
6.

Wesely testified: “So basically from this day forward, I am responsible for everything 

from that day at the title company. That’s why I have 98 percent.”

Pollination Inc. rents all of the Geer Road property from May-Wesely and House, 

except for about an acre containing the residence. Pollination Inc. paid rent of $4,000 per 

month, which was increased to $4,520 per month on January 1, 2019. The rental 

payment was sufficient to cover May-Wesely’s monthly mortgage payment on the 

property.

In September 2016, King filed an application for and renewal of judgment in the 

bankruptcy court. After credits were subtracted and postjudgment interest was added, the 

total renewed judgment was $16,587,522.18. The bankruptcy court issued a notice of 

renewal of judgment, which was served on House by mail on September 14, 2016.

House’s federal tax forms for 2016 indicate Pollination Inc. paid him $141,250 in 

wages and $104,000 in rent.

House testified at trial that in 2017 he had several medical issues, cut back on both 

administrative and field work, and hired a full-time foreman to do what he had done in 

the field. His federal tax forms show that Pollination Inc. paid him $11,000 in wages and 

$144,000 in rent during 2017.

May-Wesely’s federal tax forms for 2017 show that Pollination Inc. paid her 

$27,500 in wages and $160,400 in rent. The 2017 form 1099-MISC showed Tuolumne 

River Honey, a fictitious business name used by May-Wesely, as the recipient of her rent 

payments. She testified that during 2017, she leased about 200 beehives to Pollination 

Inc. at $50 per hive.

Also in 2017, May-Wesely paid off the note used to purchase the shares in 

Pollination Inc. with a $50,000 check. The check was dated March 24, 2017, and made 

payable to the corporation.
7.

PROCEEDINGS

In January 2017, King conducted a judgment debtor examination of House. In 

March 2017, King began this litigation by filing a complaint against House, Pollination 

Inc., and May-Wesely. In February 2018, King filed a third amended complaint for 

damages alleging fraudulent transfers, conspiracy to defraud creditors, and aiding and 

abetting fraud on creditors. Three months later, defendants filed an answer.

The two-day court trial was held in April 2019. The parties addressed some of the 

material facts by stipulating in writing that (1) on October 25, 2006, a bankruptcy court 

issued a nondischarge judgment in favor of King and against House in the amount of 

$11,739,168; (2) the judgment was against House only and was valid and enforceable 

against House at all relevant times; (3) the unsatisfied amount of the judgment was in 

excess of the total value of House’s assets at all relevant times; (4) House and MayWesely were married on May 19, 2016; and (5) King did not, at any time, attempt to levy 

upon any of House’s assets after the judgment was entered in October 2006.

King, House and May-Wesely testified during the trial. After the close of 

evidence, the trial court and counsel agreed to the submittal of posttrial briefs instead of 

closing arguments. Defendants requested a tentative decision and both sides requested a 

statement of decision.

In May 2019, the parties simultaneously filed the first round of posttrial briefs. 

King’s posttrial brief asserted “a transfer can be fraudulent as to a creditor either by 

reason of the transferor’s intent to defraud creditors (intentional fraud as per ...

§ 3439.04(a)(1)) or by a transfer made while the debtor was insolvent and for which the 

debtor did not obtain reasonably equivalent value (constructive fraud per ... § 3439.05).” 

King argued the undisputed evidence established both elements of constructive fraud. In 

June 2019, the parties’ posttrial reply briefs were filed.

In August 2019, the trial court filed a tentative decision addressing three 

transactions—the $170,000 transfer from House to May-Wesely, a $22,000 transfer from 
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House to Pollination Inc., and the transfer of shares in Pollination Inc. The tentative 

decision stated the court’s determination that King had “failed to establish his case on all 

three causes of action and theories by a preponderance of the evidence.” Part of the 

rationale provided stated:

“The Court is cognizant of defense Counsel’s repetition of the Renewal of 

Judgment in 20[1]6 and no attempts at collection during the timeframes of 

the alleged improper transfers in issue. [¶] Nevertheless, those two factors 

are indelible in the analysis of the causes of action. [¶] Knowledge and 

intent are crucial in attempting to cull the thought processes of the 

Defendants. [¶] Ultimately, [King] presented no evidence to establish the 

transfers were executed with fraudulent intent.”

The tentative decision did not address constructive fraud, did not mention the 

stipulated facts resolved the element of insolvency, and made no explicit findings 

regarding the value House received in exchange for the transfers.

The tentative decision described certain procedural matters by stating both sides 

had requested a statement of decision and directing “defense counsel to prepare a 

statement of decision pursuant to California Rules of Court, rule 3.1590 subdivision 

(c)(3).”

3

 The register of actions does not include an entry showing a proposed statement 

of decision or a proposed judgment was filed with the court or served on King’s counsel. 

Also, the register of actions does not include an entry showing King filed objections to 

the proposed statement of decision or the proposed judgment.

On September 23, 2019, the trial court filed a statement of decision accompanied 

by a judgment after court trial. The disposition in the statement of decision provided: 

3Subsequent references to a numbered “Rule” are to the California Rules of Court.

Rule 3.1590(f) provides in part: “A party that has been ordered to prepare the statement 

must within 30 days after the announcement or service of the tentative decision, serve and submit 

to the court a proposed statement of decision and a proposed judgment.”

Rule 3.1590(g) provides in full: “Any party may, within 15 days after the proposed 

statement of decision and judgment have been served, serve and file objections to the proposed 

statement of decision or judgment.”
9.

“Based upon the evidence at trial and the post-trial briefing, the Court finds Judgment on 

all three causes of action in favor of Defendants. [King] has failed to establish his case 

on all three causes of action and theories by a preponderance of the evidence.” The 

statement of decision addressed King’s theory of actual fraudulent intent and concluded: 

“Ultimately, [King] presented no evidence to establish the transfers were executed with 

fraudulent intent.” Like the tentative decision, the statement of decision did not mention 

constructive fraud or address its two elements—insolvency and the receipt of reasonably 

equivalent value in exchange for the transfers.

The clerk’s transcript does not include a postjudgment motion for a new trial 

under Code of Civil Procedure section 657 or a postjudgment motion to set aside the 

judgment pursuant to Code of Civil Procedure section 663.4 Similarly, there are no 

entries in the register of actions showing King filed any such motions.

In October 2019, defense counsel filed and served a notice of entry of judgment. 

King filed a timely appeal.

DISCUSSION

I. Basic Legal Principles

A. Uniform Voidable Transactions Act

In 1986, the Legislature enacted the Uniform Fraudulent Transfer Act. (Stats. 

1986, ch. 383, § 2; see Mejia v. Reed (2003) 31 Cal.4th 657, 664.) It was designed for 

the protection of creditors. (Lewis v. Superior Court (1994) 30 Cal.App.4th 1850, 1873.)

In 2015, the Legislature amended the act and changed its name to the Uniform 

Voidable Transactions Act (UVTA; §§ 3439–3439.14). Under the UVTA, a transfer is 

4Code of Civil Procedure section 634 provides: “When a statement of decision does not 

resolve a controverted issue, or if the statement is ambiguous and the record shows that the 

omission or ambiguity was brought to the attention of the trial court either prior to entry of 

judgment or in conjunction with a motion under Section 657 or 663, it shall not be inferred on 

appeal or upon a motion under Section 657 or 663 that the trial court decided in favor of the 

prevailing party as to those facts or on that issue.”
10.

voidable as to present and future creditors if it was made “[w]ith actual intent to hinder, 

delay, or defraud any creditor of the debtor.” (§ 3439.04, subd. (a)(1).) A nonexclusive 

list of factors relevant to determining the debtor’s actual intent is contained in subdivision

(b) of section 3439.04.

Even without actual fraudulent intent, a transfer is voidable as to present creditors

under the constructive fraud test. (Ahart, Cal. Practice Guide: Enforcing Judgments and 

Debts (The Rutter Group 2021) ¶ 3:326, p. 3-131 (Enforcing Judgments).) Subdivision

(a) of section 3439.05 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 [1] the debtor made the transfer or incurred the obligation 

without receiving a reasonably equivalent value in exchange for the transfer 

or obligation and [2] the debtor was insolvent at that time or the debtor 

became insolvent as a result of the transfer or obligation.”

Insolvency is addressed in section 3439.02 and exists “if, at a fair valuation, the 

sum of the debtor’s debts is greater than the sum of the debtor’s assets.” (§ 3439.02, 

subd. (a); Enforcing Judgments, supra, ¶ 3:327, p. 3-132.) Value is defined by section 

3439.03:

“Value is given for a transfer or an obligation if, in exchange for the 

transfer or obligation, property is transferred or an antecedent debt is 

secured or satisfied, but value does not include an unperformed promise 

made otherwise than in the ordinary course of the promisor’s business to 

furnish support to the debtor or another person.”

The term “reasonably equivalent value” is not defined by the UTVA. (Enforcing 

Judgments, supra, ¶ 3:325, p. 3-130.) Because the UTVA was designed to protect 

creditors, the determination of what constitutes “reasonably equivalent value” must be 

made from the standpoint of the transferor’s creditors. (See In re Prejean (9th Cir. 1993) 

994 F.2d 706, 708 [debtor’s transfer of a security interest in satisfaction of an antecedent 

obligation arising from cash loans and services rendered constituted reasonably 

equivalent value where the obligation, but for the statute of limitations, was enforceable]; 
11.

Hansen v. Cramer (1952) 39 Cal.2d 321, 324 [conveyance void because it rendered 

defendant insolvent and she did not receive fair consideration for the conveyance].)

B. Standards of Review

The three standards of appellate review play a significant role in this appeal 

because those standards and related principles control how the trial court’s statement of 

decision is interpreted by this court. In particular, they govern what inferences we draw 

to deal with the statement of decision’s failure to explicitly address the constructive fraud 

theory.

1. Questions of Law

First, we independently review the trial court’s resolution of questions of law. 

(Brasher’s Cascade Auto Auction v. Valley Auto Sales & Leasing (2004) 119 Cal.App.4th 

1038, 1048 (Brasher’s).) Under the independent standard of review, no deference is 

given to how the trial court decided the question of law. (Coburn v. Sievert (2005) 133 

Cal.App.4th 1483, 1492.)

2. Explicit and Implicit Findings of Fact

Second, “a trial court’s explicit and implicit findings of fact in its statement of 

decision are reviewed under the substantial evidence standard.” (Brasher’s, supra, 119 

Cal.App.4th at p. 1048; see Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429 

[substantial evidence rule].) Under that standard of review, “‘the power of an appellate 

court begins and ends with a determination as to whether there is any substantial 

evidence, contradicted or uncontradicted,’ to support the findings below. (Crawford v. 

Southern Pacific Co.[, supra,] 3 Cal.2d 427, 429.) We must therefore view the evidence 

in the light most favorable to the prevailing party, giving it the benefit of every 

reasonable inference and resolving all conflicts in its favor in accordance with the 

standard of review so long adhered to by this court.” (Jessup Farms v. Baldwin (1983) 

33 Cal.3d 639, 660.) Evidence is “substantial” for purposes of this standard of review if 
12.

it is of ponderable legal significance, reasonable in nature, credible, and of solid value. 

(Brewer v. Murphy (2008) 161 Cal.App.4th 928, 935–936.)

To properly apply the substantial evidence standard, we must identify the 

circumstances in which an appellate court infers the statement of decision contains an 

implied finding. As relevant to this appeal, when a statement of decision contains 

ambiguities or omits a theory raised by a party and the ambiguity or omission was not 

brought to the trial court’s attention, “the reviewing court will infer the trial court made 

every implied factual finding necessary to uphold its decision, even on issues not 

addressed in the statement of decision. The question then becomes whether substantial 

evidence supports the implied factual findings.” (Fladeboe v. American Isuzu Motors 

Inc. (2007) 150 Cal.App.4th 42, 48.) The foregoing principle about implied findings is 

derived from the statutes governing statements of decision (Code Civ. Proc., §§ 632, 634) 

and the fundamental principle that appellate courts presume the trial court’s judgment is 

correct, and, as a result, “‘[a]ll intendments and presumptions are indulged to support it 

on matters as to which the record is silent, and error must be affirmatively shown.’” 

(Denham v. Superior Court (1970) 2 Cal.3d 557, 564, italics added.)

3. Failure of Proof Determinations

The third standard of review relevant to this appeal applies to a trial court’s 

determination that a party did not carry its burden of proof.

“[I]t is misleading to characterize the failure-of-proof issue as whether 

substantial evidence supports the judgment.... [¶] [W]here the issue on 

appeal turns on a failure of proof at trial, the question for a reviewing court 

becomes whether the evidence compels a finding in favor of the appellant 

as a matter of law. [Citations.] Specifically, the question becomes whether 

the appellant’s evidence was (1) ‘uncontradicted and unimpeached’ and (2) 

‘of such a character and weight as to leave no room for a judicial 

determination that it was insufficient to support a finding.’” (In re I.W.

(2009) 180 Cal.App.4th 1517, 1528; see Dreyer’s Grand Ice Cream, Inc. v. 

County of Kern (2013) 218 Cal.App.4th 828, 838.)
13.

Thus, the finding-compelled-as-a-matter-of-law standard applies to a trial court’s 

determination that a plaintiff failed to prove a particular element of a cause of action.

4. Interpreting the Statement of Decision

The trial court’s statement of decision did not mention constructive fraud and did 

not address the elements of (1) House’s insolvency or (2) whether House received 

reasonably equivalent value in exchange for the challenged transfers. Before we consider 

whether the omissions are subject to the doctrine of implied findings, we must interpret 

the statement of decision and decide whether it addressed the constructive fraud theory

and, therefore, implied findings are not needed. In other words, is the constructive fraud 

theory a “‘matter[] as to which the record is silent.’” (Denham v. Superior Court, supra, 

2 Cal.3d at p. 564.) In particular, we consider whether the trial court’s general failure-ofproof determination should be interpreted as resolving the constructive fraud theory in 

favor of defendants.

As background, we note the statement of decision expressly addressed an element 

of King’s actual fraud theory—fraudulent intent. It stated that King had the burden of 

proving fraudulent intent and that he did not meet his burden of proof. It reiterated this 

determination by stating “there is no proof by a preponderance of the evidence that any of 

the transfers were intended to fraudulently deprive King of judgment proceeds.” Both of 

these statements are limited to fraudulent intent and cannot be interpreted as reaching the 

two factual elements for constructive fraud.

In comparison to these specific determinations, the statement of decision’s 

disposition includes a general statement that King “has failed to establish his case on all 

three causes of action and theories by a preponderance of the evidence.” The statement 

of decision and the remainder of the record is silent about the scope of this general 

failure-of-proof determination. Applying the presumption of correctness and related 

principles, we interpret the determination as resolving all of King’s theories, including 
14.

the constructive fraud theory. In other words, we do not interpret the opinion as 

erroneously ignoring a theory for relief raised by King.

Based on the interpretation King’s constructive fraud theory was addressed by the 

court’s general statement that King had not established his causes of action and theories 

by a preponderance of the evidence, we do not examine whether the constructive fraud 

theory could be resolved by implied findings of fact.

5

 In other words, the explicit 

statement about the failure of proof is the basis for the trial court’s decision on the 

constructive fraud theory and, therefore, there is no gap that needs to be filled with 

implied findings of fact.

To summarize, we conclude (1) the trial court determined King failed to prove his 

constructive fraud theory and (2) that determination is subject to review under the 

finding-compelled-as-a-matter-of-law standard of appellate review.

II. Credibility Issues

A. Explicit Findings Are Not Required

King contends “the lower court never even reached the issue of credibility of 

witnesses. This was manifest error.” We disagree.

The lack of explicit credibility determinations is resolved by the doctrine of 

implied findings. (See Martinez v. BaronHR, Inc. (2020) 51 Cal.App.5th 962, 966 

[implied credibility findings accepted by appellate court].) Accordingly, we infer the trial 

court considered the issue of witness credibility and made credibility findings in support 

of its judgment. King’s argument the trial court never reached the issue of witness 

credibility is unconvincing because it ignores the long-established doctrine of implied 

findings and cites no authority supporting the contention such findings must be explicit.

5

In such an examination, only implied findings supported by substantial evidence are 

adopted by the appellate court. (See Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 

Cal.App.4th 959, 970 [under doctrine of implied findings, appellate court presumes trial court 

made all necessary findings supported by substantial evidence].)
15.

B. The Implied Credibility Findings Are Not Erroneous

Appellate courts “generally defer to [a trial court’s] credibility determinations.” 

(Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 49.) When a trial court finds a 

witness is credible, the appellate court must accept this credibility finding unless the 

testimony is incredible on its face, inherently improbable, or wholly unacceptable to 

reasonable minds. (Nevarez v. Tonna (2014) 227 Cal.App.4th 774, 786.) Here, King has 

not established the testimony of House or May-Wesely falls within this narrow exception. 

His arguments, which did not acknowledge the applicable standard, ask this court to 

reweigh the factors relevant to witness credibility and reach a determination contrary to 

the trial court’s implied credibility findings. We will not reweigh the evidence. Our 

inquiry ends with the determination defendants’ testimony was not incredible on its face, 

inherently improbable, or wholly unacceptable to reasonable minds. Accordingly, we 

will defer to the trial court’s credibility findings and those findings provide part of the 

foundation for our analysis of the facts.

III. Actual Fraud

King asserts he proved the transfers were voidable under section 3439.04, the 

actual fraud provision. He contends “[v]ast circumstantial evidence demonstrates that the 

transfer of $170,000.00 in cash from House to [May-]Wesely in the summer of 2016 and 

the transfer of the [Pollination Inc.] shares and [Pollination Inc.] cash flows were 

intentionally fraudulent and thus voidable under ... § 3439.04.”

The circumstantial evidence described in King’s appellate brief is contradicted by 

House’s direct testimony about his state of mind. During the trial, House was asked 

whether he engaged in any of the transactions addressed in the questions posed by King’s 

counsel with the intention of defrauding or hindering King as a creditor. House 

answered: “No.” The trial court found this testimony credible and concluded King failed 

to prove actual fraudulent intent.
16.

To establish the trial court erred in determining King failed to prove fraudulent 

intent, we apply the finding-compelled-as-a-matter-of-law standard. Under this standard, 

King must show his evidence was (1) uncontradicted and unimpeached and (2) of such a 

character and weight as to leave no room for a judicial determination it was insufficient 

to support a finding. (See Dreyer’s Grand Ice Cream, Inc. v. County of Kern, supra, 218 

Cal.App.4th at p. 838.) Here, the circumstantial evidence relied upon by King was 

contradicted by House’s testimony. Therefore, a finding of fraudulent intent was not 

compelled as a matter of law.

King’s failure to prove fraudulent intent supports the trial court’s conclusion King 

did not prove his cause of action based on section 3439.04. It also supports the trial court 

conclusion King failed to prove his causes of action alleging (1) a conspiracy to defraud 

creditors and (2) aiding and abetting a fraud on creditors. As a result, we need not 

discuss those causes of action in detail or King’s argument the good-faith-transferee 

defense is unavailable to May-Wesely as a matter of law.

IV. Constructive Fraud

A. Insolvency

Our analysis of King’s constructive fraud claims begins with whether House “was 

insolvent at th[e] time” the transfers were made. (§ 3439.05, subd. (a).) The parties’ 

written stipulation addressed House’s insolvency by stating the judgment against him was 

valid and enforceable at all relevant times, and the unsatisfied amount of that judgment 

was in excess of the total value of House’s assets at all relevant times. Based on these 

stipulated facts, the trial court was compelled as a matter of law to find King proved the 

insolvency element of his constructive fraud theory. (See § 3439.02 [definition of 

insolvent].)

Therefore, we conclude House was insolvent (1) when he surrendered his shares in 

Pollination Inc. in April 2015 and (2) when he deposited $170,000 into May-Wesely’s 
17.

bank account in July 2016. As a result, the existence of reversible error depends on the 

remaining element of the constructive fraud theory and whether the trial court was 

compelled as a matter of law to find House did not receive “reasonably equivalent value”

for the two transfers. (§ 3439.05, subd. (a).)

B. $170,000

Under the definition of value in section 3439.03, value is given for a transfer if, in 

exchange, property is transferred to the debtor. The trial court found “that House and 

[May-]Wesely each contributed $170,000.00 for the purchase of real property as a newly 

married couple.” Accordingly, we consider what House received in exchange for his 

transfer of $170,000. First, House was granted a 2 percent ownership interest in the Geer 

Road property. Second, under the agreement he and May-Wesely made, House received 

May-Wesely’s promise to pay the cost of repairs, taxes, future maintenance, and 

mortgage installments.

Based on applicable law and the evidence presented, the trial court was compelled 

to find that House did not receive reasonably equivalent value in exchange for his 

$170,000. The Geer Road property was purchased with a down payment of less than the 

$340,000 placed in escrow and a mortgage of $738,000, which had a balloon payment 

after five years. Two percent of an unencumbered property valued at $1,078,000 is 

$21,560. Therefore, the value of the 2 percent ownership interest of the encumbered

property is well below the $170,000 transferred by House. May-Wesely’s argument that 

she transferred equivalent value in the form of $170,000 of her separate property is 

irrelevant to the application of the constructive fraud test, which compares what the 

debtor transferred and what the debtor received in exchange.

May-Wesely’s promise to pay various costs and expenses related to the property 

does not constitute “value” under the statutory definition, which excludes “an 

unperformed promise made otherwise than in the ordinary course of the promisor’s 
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business to furnish support to the debtor.” (§ 3439.03.) Pursuant to this exclusion, the 

value of May-Wesely’s promise to pay all of the future expenses arising in connection 

with the Geer Road property cannot be considered in evaluating whether House received 

a reasonable equivalent for his $170,000. In In re Carbaat (N.D.Cal. 2006) 357 B.R. 

553, the bankruptcy court stated that the definition of value in the bankruptcy statutes and 

section “3439.03 excludes an unperformed promise to provide future support to the 

debtor or to another person.” (In re Carbaat, supra, at p. 561.) The court stated: “The 

rationale behind the statutory exclusion is that an unperformed promise to provide future 

support to the debtor does not benefit creditors in a liquidation.” (Ibid.) Therefore, 

defendants’ reliance on May-Wesely’s agreeing to make various payments in the future is 

misplaced because such an agreement does not qualify as “value” received by House in 

exchange for his contribution. (§ 3439.03.)

Consequently, House’s transfer of $170,000 to May-Wesely satisfied the test for 

constructive fraud because (1) he was insolvent at the time and (2) he did not receive 

reasonably equivalent value in exchange. As a result, the trial court was compelled to 

find the transfer was voidable pursuant to section 3439.05, subdivision (a).

C. Shares of Pollination Inc.

There are two separate transfers of shares in Pollination Inc. The first occurred 

when House “surrendered his shares back to [Pollination Inc.] on April 1, 2015.” The 

second occurred a year later, when May-Wesely received all the shares of Pollination Inc.

in exchange for her $50,000 promissory note.

1. 2015 Transfer

The trial court’s finding that House “surrendered” his shares back to Pollination 

Inc. implies House received nothing from Pollination Inc. in exchange for his shares. We 

accept this implication because House was questioned on the subject during trial, he did 
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not identify any payment or property he received for his shares, and he testified that an 

amount labeled “owner contraction” is a financial record for a payment of rent.

Defendants argue King failed to prove the lack of reasonably equivalent value in 

exchange for the Pollination Inc. shares. They assert that, without evidence of the value 

of the shares, “there is no way to determine reasonably equivalent value in exchange for 

those shares.” In defendants’ view of the evidence, “the ‘shares’ have no value outside of 

the labor required to operate the corporation—the labor contributed by House and [May-

]Wesely.”

We reject defendants’ view of the value of the shares. In 2014, Pollination Inc. 

had $300,000 in a bank account. In 2016, May-Wesely testified she paid $50,000 for all 

of the shares in Pollination Inc. Therefore, we are compelled to find the shares had some 

value when House surrendered them in 2015. In other words, the inability of King to 

prove the exact value of the business on April 1, 2015, when House surrendered the 

shares does not mean we must accept that receiving nothing in exchange was the 

reasonable equivalent of the share’s value. Accordingly, we find as a matter of law that 

House surrendered his shares to the corporation without receiving a reasonably 

equivalent value in exchange. As a result, his 2015 transfer of the shares is voidable 

pursuant to section 3439.05, subdivision (a).

2. 2016 Transfer to May-Wesely

The transfer of shares from Pollination Inc. to May-Wesely in April 2016 is 

outside the scope of the UVTA because the transferor, Pollination Inc., was not a debtor 

of King and King did not pursue the theory that Pollination Inc. was an alter ego of 

House. Furthermore, his theories of conspiracy to defraud and aiding and abetting fraud 

cannot be used to establish error because the trial court properly determined he failed to 

prove actual fraudulent intent.
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Alternatively, even if the corporation’s 2016 transfer of shares was within the 

scope of the UVTA, King has not demonstrated we are compelled as a matter of law to

find May-Wesely did not give reasonably equivalent value in exchange for the shares. 

King suggests May-Wesely’s promissory note for $50,000 does not constitute “value” 

under the statutory definition. We disagree. The statutory definition of value excludes 

“an unperformed promise made otherwise than in the ordinary course of the promisor’s 

business to furnish support to the debtor or another person.” (§ 3439.03.) Even if the 

initial delivery of the promissory note is treated as an unperformed promise, that promise 

had been performed long before the trial when May-Wesely paid off the note in March 

2017. Thus, the promise to pay for the shares was not “an unperformed promise” for 

purposes of section 3439.03.

D. Remedy

Both the July 2016 transfer of $170,000 from House to May-Wesely and the April 

2015 transfer of House’s shares in Pollination Inc. to the corporation are voidable as to 

King pursuant to section 3439.05, subdivision (a). The remedies a creditor may obtain 

under the UVTA are addressed in section 3439.07. “In an action for relief against a 

transfer ... under [the UVTA], a creditor, subject to the limitations in Section 3439.08, 

may obtain: [¶] (1) Avoidance of the transfer ... to the extent necessary to satisfy the 

creditor’s claim.” (§ 3439.07, subd. (a).) Under this provision, King is entitled to a 

judgment declaring the two transfers void. However, because the trial court did not reach 

the question of how the limitations in section 3439.08 apply to the facts of this case, that 

issue and the other remedies available under section 3439.07, subdivision (a) must be 

determined by the trial court on remand. Accordingly, the matter will be remanded to the 

trial court to enter a judgment in favor of King that voids the transfers and provides other 

relief appropriate under the UVTA. (See §§ 3439.07, 3439.08.)
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DISPOSITION

The judgment is reversed. The trial court is directed to enter a judgment in favor 

of King (1) voiding the July 2016 transfer of $170,000 from House to May-Wesely and

the April 2015 transfer of House’s shares in Pollination Inc. to the corporation and (2)

providing other relief in accordance with sections 3439.07 and 3439.08 and this opinion. 

Whether the trial court conducts further proceedings addressing other appropriate relief 

is, in the first instance, committed to the court’s discretion. King shall recover his costs 

on appeal.

PEÑA, Acting P. J.

WE CONCUR:

MEEHAN, J.

DE SANTOS, J.