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Matched Legal Cases: ['§ 452', '§ 3439', '§ 1107', '§ 3439', '§ 3439', '§ 3439', '§ 3439', '§ 3439', '§ 101', '§ 3439', '§ 2924', '§ 3439', '§ 3439', '§ 3439', '§ 339', '§ 912', '§ 3439']

California Creditor Debtor Law Forum • View topic - FT - Prof. Collection v. Griffis (4/9/2004) Civil Conspiracy
FT - Prof. Collection v. Griffis (4/9/2004) Civil Conspiracy
Post subject: FT - Prof. Collection v. Griffis (4/9/2004) Civil Conspiracy
Professional Collection Consultants, Inc. v. Griffis
2004.CA.0003139 (Cal.App. Dist.2 04/09/2004)
Appellant, Professional Collection Consultants, Inc., commenced this action on January 25, 2002. After several demurrers and amended complaints, appellant filed the third amended complaint on April 10, 2003. The third amended complaint alleges that in September 1994, Palos Verdes National Bank ("the bank") obtained a money judgment against respondent, Eldon R. Griffis, and in 1995, the bank assigned the judgment to appellant.
Appellant contends that various transactions are alleged to have been fraudulent transfers in violation of the California Uniform Fraudulent Transfers Act. The appellants assert the following nine transfers, as being fraudulent, and made within the four-year statute of limitations, they say is applicable to those transactions:
1. Assignment of a deed of trust on Barkentine Road property by Bayview Investments to McMahan on April 12, 2000 (first, second, and third causes of action);
2. Foreclosure sale of Corona Avenue property on August 16, 1999 (fourth cause of action);
3. Collection of rents from the Corona property by Griffis after August 16, 1999 (fourth cause of action);
4. Assignment of a deed of trust on the Santa Fe Avenue property by Lawndale Properties Group to Vermont 53 Limited Partnership dated May 18, 1998 (fifth cause of action);
5. Grant deed of Santa Fe property from Griffis to Lawndale Properties Group dated December 1998 (fifth cause of action);
6. Foreclosure sale of Santa Fe property by Washington Mutual on April 20, 1999 (fifth cause of action);
7. Foreclosure sale of Spreckels Lane property by Thompson on January 13, 2000 (sixth cause of action);
8. Grant deed of Olympic Boulevard property by Griffis to 253 Harbor City Partners dated January 22, 1999 (seventh cause of action);
9. Foreclosure sale of Olympic Boulevard property by unnamed person or entity on June 2, 1999 (seventh cause of action).
The first cause of action alleges that Griffis and his wife own a residence on Barkentine Road. The property was subject to a deed of trust that secured a note that was already in default at the time the bank obtained its judgment. Appellants claim that Griffis’ sister used her corporation to purchase the property, with money given to her by Griffis, for the purpose of hindering and frustrating Griffis’ creditors. Then, the deed of trust was transferred to Kelly McMahan. Appellants didn’t realize that the property had been transferred until they received a copy of the notice of default that had been recorded by “Kelly McMahan c/o Vickie Thompson.” Appellants claim that the transactions were undertaken as part of a conspiracy between Griffis, Thompson, and McMahan to place the property out of appellant's reach, in order to hinder or delay the collection of the judgment.
The court reasoned that, although appellant’s arguments were poorly articulated, they were invoking the rule that "when a civil conspiracy is properly alleged and proved, the statute of limitations does not begin to run on any part of a plaintiff's claims until the `last overt act' pursuant to the conspiracy has been completed.” The court found that the tortiuous scheme was lacking a crucial element. At least by inference, the scheme was to culminate in a sham foreclosure. Well, the foreclosure never took place. The court states:
“Thus, even if we were to find, as appellant wishes, that a foreclosure sale can constitute a fraudulent conveyance, the cause of action with regard to the Barkentine Road property is premature, since there has been no foreclosure sale. We agree that the statute of limitations has not run on the "continuing scheme," because the cause of action for such a conspiracy has not yet arisen.”
Appellants next claim that Griffis and his wife owned an apartment complex on Corona Avenue in Bell, California, and that the property was sold in a sham foreclosure sale to respondent H & B Corona Partnership for no consideration or inadequate consideration, with the intent to hinder, defraud, or delay appellant in the collection of its claim against Griffis. Appellants contend that H & B Corona Partnership is an entity controlled by the Griffis’. Thus Griffis remained in control of the property, even collecting rents, after the foreclosure sale. Since the foreclosure sale took place within four years of filing the original complaint, the court agrees it is not barred by the statute of limitations.
Respondents contend that this was not a fraudulent transfer because a foreclosure sale can’t be a transfer, under the meaning of the California Fraudulent Transfer Act. However, that is erroneous. Both under the CUFTA and the federal Bankruptcy Code, a transfer includes the “foreclosure of the debtor’s equity of redemption.” The court concludes that this indeed was a fraudulent transfer, made with the actual intent to hinder, delay, or defraud, and was brought in a timely matter.
The next cause of action alleges that Griffis owned a property on Santa Fe Avenue in Long Beach, California, and that on March 4, 1994, he gave a promissory note secured by a second trust deed on the property to respondent Lawndale Properties Group, Inc., which is owned or controlled by Griffis. Lawndale Properties then assigned the trust deed to Vermont 53 Limited Partnership, which is also controlled or owned by Griffis. The property was foreclosed upon. Appellants contend that Vermont 53 LP scared off any potential buyers by entering credit bids until the price was too high for outside bidders. Vermont 53 LP then purchased the property from the bank.
The next cause of action alleges that Griffis owned a property on Spreckels Lane in Redondo Beach, CA, in which he gave his sister a promissory note secured by a trust deed on the property. Then Griffis and his sister arranged a foreclosure sale where she obtained the property for little or no consideration. The court again reiterates, that a collusive foreclosure sale may be a fraudulent transfer.
The final cause of action alleges that Griffis owned real property on Olympic Boulevard in Los Angeles, CA, and that he transferred it to Respondent, a corporation owned and controlled by Griffis, for little or no consideration.
[U] Professional Collection Consultants Inc. v. Griffis,
B168199
2004.CA.0003139
PROFESSIONAL COLLECTION CONSULTANTS INC., PLAINTIFF AND APPELLANT,
ELDON R. GRIFFIS, ET AL., DEFENDANTS AND RESPONDENTS.
APPEAL from a judgment of the Superior Court of Los Angeles County, Alexander Williams, III, Judge. Reversed in part and Affirmed in part. (Los Angeles County Super. Ct. No. BC267041)
Wu & Naus and Joseph W. Naus for Plaintiff and Appellant.
Leslie K. Hart and William James Beverly for Defendant and Respondent Eldon R. Griffis.
Walter Weiss for all other Defendants and Respondents.
The opinion of the court was delivered by: Hastings, J.
Various transactions are described in seven causes of action that are alleged to have been fraudulent transfers in violation of the California Uniform Fraudulent Transfers Act, Civil Code sections 3439 et seq., because, among other reasons, they were intended to hinder or delay the collection of appellant's judgment. The third amended complaint prays that the transfers be set aside, and for a constructive trust on the properties and damages.
Respondents interposed a general demurrer to each cause of action on the ground that each was barred by the statute of limitations. The trial court sustained the demurrers without leave to amend, and dismissed the action on May 22, 2003. Appellant then filed a timely notice of appeal from the judgment of dismissal.
Appellant contends that the four-year statute of limitations of Civil Code section 3439.09 is applicable here, that each cause of action alleges a transfer within that period, and that the trial court erred in ruling that a foreclosure sale cannot be a "transfer" within the meaning of the Uniform Fraudulent Transfers Act. *fn1
Respondents contend that the seven-year statute of limitations bars each of appellant's causes of action. Section 3439.09, subdivision (c) provides: "Notwithstanding any other provision of law, a cause of action with respect to a fraudulent transfer or obligation is extinguished if no action is brought or levy made . . . within seven years after the transfer was made or the obligation was incurred." The seven-year period applies to both statutory fraudulent-transfer actions and common-law actions, and runs from the date of the transfer or the creation of the debt, regardless of discovery. (Macedo v. Bosio (2001) 86 Cal.App.4th 1044, 1050-1051, fn. 4.)
Appellant sets forth in its opening brief a chart showing nine transfers alleged to have been fraudulent and made within four years of the filing of the complaint. We summarize the list as follows:
4 .Assignment of a deed of trust on the Santa Fe Avenue property by Lawndale Properties Group to Vermont 53 Limited Partnership dated May 18, 1998 (fifth cause of action);
On appeal from a judgment of dismissal entered after a general demurrer is sustained, we review the complaint to determine whether it states a cause of action, and if not, whether there is a reasonable possibility that it could be amended to do so. (MacLeod v. Tribune Publishing Co. (1959) 52 Cal.2d 536, 542.) Our review is a de novo review. (Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468, 515.) Our function is to review the ruling, not the trial court's reasoning, and the ruling will be upheld if correct on any theory. (Home Ins. Co. v. Zurich Ins. Co. (2002) 96 Cal.App.4th 17, 22.)
"`[W]e give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]'" (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Code Civ. Proc., § 452.) "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed. [Citation.]" (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)
With these principles in mind, we shall review each cause of action and allegedly fraudulent transfer.
1. The Barkentine Road Property
The first cause of action of the third amended complaint alleges that Griffis and his wife own a residence on Barkentine Road in Palos Verdes, California. *fn2 The property was subject to a deed of trust that secured a note that was already in default at the time the bank obtained its judgment. It is alleged that on December 30, 1994, Griffis's sister, respondent Vicki Thompson, caused her corporation, Bayview Investments, to purchase the note with funds provided by Griffis. It is alleged that the purchase was made for the "express purpose of hindering, delaying, and defrauding" Griffis's creditors. Then, on April 12, 2000, Thompson assigned the deed of trust to Kelly McMahan, also for the "express purpose of hindering, delaying, or defrauding [appellant]."
The first cause of action further alleges that appellant did not discover that Thompson had purchased the note until after February 16, 2001, when appellant received a copy of a notice of default that had been recorded by "Kelly McMahan, c/o Vicki Thompson," on January 16, 2001, causing appellant to investigate. *fn3
The second cause of action appears to be identical to the first cause of action, but with additional evidentiary facts. The third cause of action alleges that the previously alleged transactions were undertaken as part of a conspiracy between Griffis, Thompson, and McMahan to place the property out of appellant's reach, in order to hinder or delay the collection of the judgment.
With a previous demurrer, respondents provided copies of recorded documents, and they asked the court to take judicial notice of them in connection with their demurrer to the third amended complaint. An assignment of the deed of trust to Bayview Investments by Western Mortgage & Realty Company was recorded on December 30, 1994.
The Uniform Fraudulent Transfers Act determines when a transfer is made. If it concerns real property, a transfer is made "when the transfer is so far perfected that a good faith purchaser of the asset from the debtor against whom applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee." (§ 3439.06, subd. (a)(1).) *fn4
A transfer of an interest in real property is perfected when the transfer instrument is recorded. (See Chalmers v. Raras (1962) 200 Cal.App.2d 682, 686; Civ. Code, §§ 1107, 1213, 1217.) Thus, section 3439.06, subdivision (a), means that an allegedly fraudulent transfer is made when the transfer instrument is recorded. Other jurisdictions have so construed the equivalent provision. (See Wilder v. Miller (2000) 135 Idaho 382, 385; Tiger v. Anderson (Colo.App. 1998) 976 P.2d 308, 310-11; Boardwalk Regency Corp. v. Burd (1993) 262 N.J.Super. 162, 165.)
The transfer from Western Mortgage to Bayview Investments occurred upon recordation, which took place more that seven years ago, beyond the limit of section 3439.09, subdivision (c).
The first, second, and third causes of action also allege the assignment of the deed of trust by Bayview Investments to McMahan on April 12, 2000. *fn5 Bayview Investments is alleged to be a corporation owned by Thompson, who in turn, is alleged to have acted as Griffis's agent in the transaction. We assume the allegations are true, and that the transfer was made in order to delay or defraud creditors, as alleged. (See Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)
Giving a trust deed to property is a "transfer" under the Uniform Fraudulent Transfers Act, since "`[t]ransfer' means 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, and creation of a lien or other encumbrance." (§ 3439.01, subd. (i).)
Respondents contend that the assignment by Bayview Investments to McMahan on April 12, 2000, was not a transfer at all within the meaning of the Uniform Fraudulent Transfers Act, because it did not create the encumbrance, but merely transferred Bayview's property in which Griffis had no interest. (See § 3439.01, subd. (i).)
Since appellant does not address respondents' theory, we assume that the point is conceded. (Cf., Johnson v. English (1931) 113 Cal.App. 676, 677; California Products, Inc. v. Mitchell (1921) 52 Cal.App. 312, 315.) Instead, appellant contends that the McMahan assignment, like the 1994 assignment, was just a step in respondents' overall scheme to hinder or delay the collection of appellant's claim, and insists that all we need determine is whether foreclosure can constitute a fraudulent conveyance. Appellant reasons that since the wrongs in furtherance of respondents' scheme are continuing, the statute of limitations has not run.
Although appellant's arguments are poorly articulated, we think that it is invoking the rule that "when a civil conspiracy is properly alleged and proved, the statute of limitations does not begin to run on any part of a plaintiff's claims until the `last overt act' pursuant to the conspiracy has been completed. [Citation.]" (Wyatt v. Union Mortgage Co. (1979) 24 Cal.3d 773, 786.) A civil conspiracy is pleaded by alleging the commission of an actionable wrong in which the defendants participated or in which they concurred, expressly or tacitly, with knowledge of its unlawful purpose. (Id. at pp. 784-785.)
The third amended complaint has adequately alleged participation by the respondents in the alleged scheme with knowledge of its unlawful purpose. It alleges that the two assignments were part of a series of transactions undertaken by respondents with the intent to hinder or delay appellant's collection of its claim in violation of section 3439.04, subdivision (a).
The allegedly tortious scheme, however, is lacking an element. It is alleged, at least by inference, that the scheme was to culminate in a sham foreclosure; and appellant's arguments here support such an inference. Without reaching the question of whether nor not a foreclosure can constitute a fraudulent conveyance, we observe that no foreclosure sale, or even an imminent foreclosure sale, is alleged in the first, second, or third cause of action. Indeed, it is alleged that foreclosure was commenced when a notice of default was recorded, but was "halted." A conspiracy to commit an uncompleted civil wrong is not actionable. (Herron v. Hughes (1864) 25 Cal. 555, 559-560.)
Thus, even if we were to find, as appellant wishes, that a foreclosure sale can constitute a fraudulent conveyance, the cause of action with regard to the Barkentine Road property is premature, since there has been no foreclosure sale. We agree that the statute of limitations has not run on the "continuing scheme," because the cause of action for such a conspiracy has not yet arisen.
It is appellant's burden to establish that the demurrer was sustained erroneously. (Lewis v. Purvin (1989) 208 Cal.App.3d 1208, 1213.) As we have seen, appellant cannot meet its burden with regard to the first, second, and third causes of action by showing that there is an ongoing conspiracy, or by showing that the trial court erred in ruling that a foreclosure cannot constitute a fraudulent conveyance. Since appellant has urged no other theory, we turn to the fourth cause of action and the Corona Avenue property.
2. The Corona Avenue Property
The fourth cause of action alleges that Griffis and his wife owned an apartment complex on Corona Avenue in Bell, California, and that the property was sold in a sham foreclosure sale on August 16, 1999, to respondent H & B Corona Partnership for no consideration or inadequate consideration, with the intent to hinder, defraud, or delay appellant in the collection of its claim against Griffis. It is alleged that H & B Corona Partnership is owned or controlled by Griffis, who remained in possession after the foreclosure sale and continued to collect the rents.
Since the foreclosure sale took place within four years of the filing of the original complaint, we agree that it is not barred by the statute of limitations. (See § 3439.09, subd. (a).) Respondents contend that the fourth cause of action nevertheless fails to allege a fraudulent transfer, because a foreclosure sale cannot be a transfer.
"`Transfer' means 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, and creation of a lien or other encumbrance." (§ 3439.01, subd. (i), italics added.)
The definition of transfer is derived principally from former section 101(48) of the Bankruptcy Code. (See Assem. Legis. Com. com., 1986 Addition, 12A West's Ann. Civ. Code, § 3439.01, p. 274.) Respondents rely upon a bankruptcy case, In re Madrid (9th Cir. 1984) 725 F.2d 1197, 1199-1200 (Madrid), which held that the transfer in that case was made at the time that the trust deed was perfected, not when the trust deed was foreclosed. Among the recorded documents submitted in the trial court by respondents for judicial notice was a copy of a trust deed on the Corona Avenue property. Thompson is the beneficiary, and it was recorded on May 12, 1994, more than seven years before this action was filed.
After Madrid was decided, the Bankruptcy Code definition of transfer was amended to include "foreclosure of the debtor's equity of redemption." (11 U.S.C. § 101(54).) Respondents suggest that this addition affected a change in the definition, and that because California's statute did not add that language, an involuntary transfer was not intended to be a foreclosure sale.
But Congress's addition of the phrase, "foreclosure of the debtor's equity of redemption," was not a change in the definition of transfer; it was a clarification of the definition, eliminating any suggestion that collusive foreclosure sales cannot be fraudulent transfers, made in pre-amendment conflicting decisions, including Madrid. (BFP v. Resolution Trust Corporation (1994) 511 U.S. 531, 543, fn. 7; see generally, In re General Industries, Inc. (Bankr.D.Mass. 1987) 79 B.R. 124 [summary of conflicting decisions].)
In any event, the California Legislature intended the definition to be comprehensive, and an involuntary transfer was intended to include execution and foreclosure sales. (See Assem. Legis. Com. com., supra, 12A West's Ann. Civ. Code, § 3439.01, at p. 274.) Further, other states that have adopted the Uniform Fraudulent Transfers Act have held that the definition may include a foreclosure. (See e.g., Mussetter v. Lyke (N.D.Ill. 1998) 10 F.Supp.2d 944 [construing Calif. Uniform Fraudulent Transfers Act]; Megabank Financial v. Alpha Gamma Rho (Col.App. 1992) 841 P.2d 318, 320 [collusive mortgage foreclosure intended to hinder or delay creditors]; Cook v. Cook (Me. 1990) 574 A.2d 1353, 1355 [issue of fact whether mother's foreclosure of son's mortgage to her was fraudulent as to wife's rights in divorce proceeding, defeating summary judgment].) Similarly, under the Act's predecessor, the Uniform Fraudulent Conveyance Act, a collusive foreclosure was held to be a fraudulent conveyance. (Sheffield Progressive, Inc. v. Kingston Tool Co., Inc. (1980) 10 Mass.App.Ct. 47, 49-50.)
Respondents also contend that federal law has no application in this case, but if it did, appellant should be required to allege facts showing that there was some irregularity in the foreclosure process and the property was acquired for less than the full amount of the mortgaged debt. Respondents rely upon In re Worcester (Bankr.C.D.Cal. 1983) 28 B.R. 910, which in turn, relied upon California authority, to find that a "misdescription of the property, coupled with the gross inadequacy of price, is enough to set aside the sale under California's foreclosure law." (Id. at p. 915, citing Crist v. House & Osmonson (1936) 7 Cal.2d 556, 559 (Crist).)
Since Crist, a non-judicial trust-deed foreclosure statute has been enacted. (See Civ. Code, § 2924 et seq.) Since appellant did not attempt to plead a cause of action under that statute, we do not need to determine, as respondents' argument suggests, whether it is sufficiently alleged. Under the Uniform Fraudulent Transfers Act, a plaintiff must allege a transfer that is deemed fraudulent for one of the reasons set forth in section 3439.07. Appellant alleged a transfer (foreclosure of a trust deed) that was made with actual intent to hinder, delay, or defraud a creditor, based upon the fact, albeit conclusory, that it was a sham foreclosure implemented by the defendants as part of a scheme to avoid paying appellant's judgment. *fn6 Although far from model pleading, the fourth cause of action states a timely cause of action under 3439.07, subdivision (a).
1. Santa Fe Avenue Property
The fifth cause of action alleges that Griffis owned real property on Santa Fe Avenue in Long Beach, California, and that on March 4, 1994, he gave a promissory note secured by a second trust deed on the property to respondent Lawndale Properties Group, Inc., which is owned or controlled by Griffis. In May 1998, Lawndale Properties assigned the trust deed to Vermont 53 Limited Partnership, which is also controlled or owned by Griffis. It is alleged that the senior lienholder, Washington Mutual, foreclosed in December 1998, and "in conjunction with" that foreclosure, Griffis issued a grant deed to Lawndale Properties.
The fifth cause of action also alleges that in April 1999, Washington Mutual foreclosed "on the subject property." At the foreclosure sale, Vermont 53 Limited Partnership "scared off any potential bidders" by entering credit bids on their second trust deed, until the price was too high for outside bidders, rendering the foreclosure sale a fraud and a sham. *fn7 Vermont 53 Limited Partnership then purchased the property from Washington Mutual, and although it is alleged that Washington Mutual "played no part in any of [respondents'] fraudulent activity," it is also alleged that all the "foregoing transactions were made with an actual intent to hinder, delay, or defraud creditors," and were "sham transactions conveying the property for little or no consideration or inadequate consideration."
We have not used the same mixture of present, past, and conditional tenses as used in the pleading, and we may have thus unintentionally changed the meaning of some of the allegations. We recognize that our summary is confusing and contradictory, but in the original language, the allegations are nearly incomprehensible. We think that the fifth cause of action intends to allege a series of transactions whereby Griffis gave liens or title to alter-ego corporations, and then allowed the first trust deed to go into foreclosure in order to position himself to obtain title to the property without consideration and free of any judgment liens. Appellant contends that these are continuing violations, making all of them fall within the limitations period.
Appellant compares the facts to those in Joseph v. J.J. Mac Intyre Companies, L.L.C. (N.D.Cal. 2003) 281 F.Supp.2d 1156, where the federal district court applied a continuing-wrong theory to a cause of action based upon unfair debt collection practices, after comparing the wrongs to the continuing sexual harassment described in Birschtein v. New United Motor Manufacturing, Inc. (2001) 92 Cal.App.4th 994, 1002, because in both cases, their "`very nature involves repeated conduct.' [Citation.]" (Joseph v. J.J. Mac Intyre Companies, L.L.C., supra, 281 F.Supp.2d at p. 1161, italics added.) The same cannot be said of fraudulent transfers, and the analogy is inapt.
The trust deed given by Griffis to Lawndale Properties Group was recorded on March 4, 1994. Thus, this transfer was "made" more than seven years prior to the filing of this action, and is barred from being challenged by the statute of limitations. (See §§ 3439.06, subd. (a), 3439.09, subd. (c).) The question therefore becomes whether any remaining transfer alleged in the fifth cause of action, each made within the four-year statute of limitations of section 3439.09, subdivision (a), is a "transfer made or obligation incurred by a debtor." (§ 3439.04.)
Respondents contend that the assignment of the trust deed by Lawndale Properties Group to Vermont 53 Limited Partnership dated May 18, 1998, was not made by the debtor, because Griffis had no interest in it at the time of the assignment. *fn8 In addition, the foreclosure sale on April 20, 1999, was initiated by Washington Mutual, who did not participate in any alleged fraud, and Vermont 53 purchased the property from Washington Mutual.
We need not reach respondents' contention with regard to these transfers, because another transfer was alleged in the fifth cause of action to have been made by Griffis personally and for the purpose of hindering or delaying the collection of the judgment: the grant deed from Griffis to Lawndale Properties Group dated December 1998, transferring a wholly different interest in the property. Respondents made no motion to strike each transfer of the fifth cause of action, and a demurrer cannot reach just one portion of a cause of action barred by the statute of limitations, if there are other portions that are not barred. (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1681.) Thus, it was error to sustain the demurrer to the entire cause of action.
1. The Spreckels Lane Property
The sixth cause of action alleges that Griffis and his wife owned real property on Spreckels Lane in Redondo Beach, California, and on June 29, 1994, Griffis gave Thompson a promissory note secured by a trust deed on the property. It is alleged that in January 2000, in order to hinder, delay, or defraud appellant in the collection of the judgment, Thompson and Griffis arranged a foreclosure sale in which Thompson obtained title to the property for either no consideration or inadequate consideration, although Griffis retains a "secret interest" in the property.
As we have already determined, a collusive foreclosure sale may be a fraudulent transfer. Since the allegedly collusive foreclosure sale took place within the statute of limitations, it was error to sustain the demurrer as to the sixth cause of action. (See § 3439.09, subd. (a).)
2. Olympic Boulevard Property
The seventh cause of action alleges that Griffis owned real property on Olympic Boulevard in Los Angeles, California, and on January 22, 1999, Griffis transferred it by grant deed for inadequate or no consideration to respondent 253 Harbor City Partners II, Inc., a corporation owned or controlled by Griffis. It is alleged that 253 Harbor City Partners II then allowed respondent Oakdale Mobile Home and R.V. Park, Inc., another corporation owned or controlled by Griffis, to acquire the property for inadequate or no consideration in foreclosure. *fn9 It is alleged that the transfers were intended to hinder, delay, or defraud appellant, or were shams in which Griffis retained legal and beneficial ownership of the property.
None of the recorded documents submitted by respondents belie the allegation that Griffis transferred the Olympic Boulevard property by grant deed on January 22, 1999, within four years of the filing of the original complaint. There was no basis, therefore, for finding the seventh cause of action to be barred by the statute of limitations.
The judgment of dismissal is reversed with regard to the fourth, fifth, sixth, and seventh causes of action. The judgment is affirmed with regard to the first, second, and third causes of action. The cause is remanded to the trial court with instructions to vacate its order sustaining the demurrers to the fourth, fifth, sixth, and seventh causes of action, and to enter a new order overruling them. Appellant shall have its costs on appeal.
*fn1 All further statutory references are to the Civil Code unless otherwise indicated.
*fn2 Rather than providing "[a] statement of the facts constituting the cause of action, in ordinary and concise language," as required by Code of Civil Procedure section 425.10, subdivision (a)(1), appellant appears to have inserted nearly every evidentiary and inferential fact, and every conclusion of law and fact that it possibly could into the first, second, and third causes of action, making the pleading uncertain, ambiguous, and in parts, contradictory. (See generally, 4 Witkin, Cal. Procedure (4th ed. 1997) Pleading, §§ 339, 353, pp. 436, 453.) We shall endeavor to summarize only the ultimate facts; however, where the evidentiary, conclusory, or inferential material is necessary to the statement of a cause of action, we shall treat such facts as properly pleaded, since respondents did not interpose a special demurrer for uncertainty, and have therefore waived such defects. (See Lattin v. Hazard (1890) 85 Cal. 58, 62- 63, 24 P. 611; 5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 912, p. 371.)
*fn3 It was the same investigation that caused appellant to discover the remaining transfers alleged to be fraudulent elsewhere in the third amended complaint.
*fn4 A transfer of personal property is made "when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this chapter that is superior to the interest of the transferee." (§ 3439.06, subd. (a)(2).)
*fn5 This second assignment was also recorded, presumably on or after April 12, 2000, but the date is not alleged.
*fn6 In contrast to the first, second, and third causes of action, the paucity of facts alleged in the fourth cause of action leave the pleading uncertain and ambiguous. For example, the foreclosure is alleged to have been a sham, but there are no facts to support that conclusion, other than the allegation of the payment of little or no consideration and Griffis's continuing to collect rents after the sale, and what may be inferred from the allegation that Griffis, his wife, the buyer, and Doe defendants acted in concert as agents of one another to bring about the sham foreclosure sale. The official documents submitted by respondents for judicial notice include a trust deed in favor of Thompson, Griffis's sister, who therefore may have been the foreclosing lienholder, although she is not a named defendant in the fourth cause of action.
*fn7 This allegation appears to suggest that credit bids are unlawful. They are not. (Cf., Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1238.) With regard to trustees' sales in general, see Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 438- 442.
*fn8 If appellant did intend to allege alter- ego liability, its attempt was a failure. "There is no litmus test to determine when the corporate veil will be pierced; rather the result will depend on the circumstances of each particular case. There are, nevertheless, two general requirements: `(1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow.' [Citation.]" (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.) While the second element may reasonably be inferred from the pleading, there are no facts alleged to support the first. It appears reasonably possible, however, that the complaint could be amended to do so, since it is alleged that Griffis controlled the corporations, and it is implied that they were formed for the purpose of making fraudulent transfers. (See MacLeod v. Tribune Publishing Co., supra, 52 Cal.2d at p. 542.) This was not an issue in the demurrer proceedings, however, and has not been raised here.
*fn9 See footnote 8, ante.