Opinion ID: 466517
Heading Depth: 2
Heading Rank: 5

Heading: shipp property

Text: 42 Before the district court, the Allustiartes raised the same issues regarding the Shipp property that they advanced concerning the Storm property. They contended that the imposition of a constructive trust on the Shipp property was error because (1) the allegation of a fraudulent conveyance was barred by the statute of limitations, (2) the trustee in bankruptcy failed to join indispensable parties to the action, and (3) the bankruptcy court's findings were unsupported by the evidence. The district court affirmed the bankruptcy court's findings as to fraud, but reversed the decision for failure to join indispensable parties. Having prevailed on the issue of failure to join, the Allustiartes now challenge the finding of fraud based on the statute of limitations and assert that the evidence was insufficient. In his cross-appeal, the trustee contends that the district court erred in holding that a reversal of the order imposing a constructive trust was compelled because of the failure to join indispensable parties.
43 The Shipp property was conveyed in a manner similar to the transactions involving the Storm property. The debtors negotiated for themselves with Shipp prior to the execution of the lease. The lease was executed by Linda Allustiarte, purportedly as the trustee of the family trusts. During the term of the lease, Benjamin Allustiarte, Sr. managed the property. The rent payments were made by the debtors. 44 As discussed above concerning the Storm property, the statute of limitations does not begin to run on a claim based on fraud until it is discovered. Because title was not taken in the debtors' names, the fraudulent conveyance was not discovered until the trustee in bankruptcy was appointed and took possession of the debtors' records. This action was filed within three years of the appointment of a trustee. Thus, under Cal.Civ.Proc.Code Sec. 338(4) (West 1986) the statute of limitations had not run when the action was brought.
45 The evidence that Benjamin Allustiarte, Sr. managed the Shipp property as if it were his own, and that the debtors paid the rent on the lease supports the finding that title to the land was taken in the name of the Allustiarte children to defraud creditors. The finding of the bankruptcy court that the conveyance of title to the Shipp property was fraudulent is not clearly erroneous. 46
47 The trustee in bankruptcy contends that Marianne Allustiarte Pack's husband and Gregory Allustiarte's wife were not indispensable parties regarding the Shipp property claim. He argues that the district court erred in vacating the bankruptcy court's order imposing a constructive trust on the Shipp property for failure to join the absent spouses. We agree. 48 The Shipp property was conveyed to Gregory, who was married at the time of the conveyance. It is undisputed that this conveyance was to the community, thus making Gregory's wife a holder of title. They conveyed 1/3 interest each to Benjamin Allustiarte, Jr. and his wife, and to Marianne and her husband. When Benjamin Allustiarte, Jr. and his wife divorced, she reconveyed her share to him, and was not a holder of title when this action commenced. The Allustiartes failed to object prior to trial to the fact that Gregory's wife and Marianne's husband were not joined as parties. During trial, however, the Allustiartes made a motion to dismiss due to failure to join an indispensable party. The motion was denied. 49 The procedure which must be followed in determining whether a person is an indispensable party is set forth in Fed.Bank.R. 719. The language of Rule 719 is virtually identical to Fed.R.Civ.P. 19. In discussing this issue, the parties and the district court relied on cases interpreting Rule 19. We will do the same. We review determinations regarding the indispensability of a party for abuse of discretion. Walsh v. Centeio, 692 F.2d 1239, 1241 (9th Cir.1982); accord Bakia v. County of Los Angeles, 687 F.2d 299, 301 (9th Cir.1982). 50 Under Fed.Bank.R. 719 and Fed.R.Civ.P. 19, the determination of whether a party is indispensable to an action is a two tiered process. 1 Provident Bank v. Patterson, 390 U.S. 102, 108-09, 88 S.Ct. 733, 737-38, 19 L.Ed.2d 936 (1968). First, the trial court must determine if the person must be joined if feasible. Fed.Bank.R. 719(a) and Fed.R.Civ.P. 19(a). A person shall be joined if he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest. Fed.Bank.R. 719(a) and Fed.R.Civ.P. 19(a). As holders of title to the property in dispute, both absent spouses qualify as parties who should be joined if feasible. 51 If the person must be joined if feasible pursuant to 719(a) or 19(a) the court must then determine if such person is indispensable to the action. In making that determination, the court must balance the four factors set forth in 719(c) or 19(b). The court must decide whether pursuant to Fed.Bank.R. 719(c) and Fed.R.Civ.P. 19(b), such person is indispensable, and if so, the action must be dismissed in his or her absence. We believe the third factor set forth in the rules is controlling under these facts. If the court determines that a judgment rendered in the person's absence will be adequate id. to protect his interests, the person is not indispensable. Joinder is not required where the absent parties' interests are adequately protected by those who are present. Eldredge v. Carpenters, 662 F.2d 534 (9th Cir.1981), cert. denied, 459 U.S. 917, 103 S.Ct. 231, 74 L.Ed.2d 183 (1982); accord Mihara v. Dean Witter & Co., 619 F.2d 814 (9th Cir.1980); Owens-Illinois, Inc. v. Lake Shore Land Co., 610 F.2d 1185, 1191 (3d Cir.1979). The record demonstrates that the interests of the absent spouses were adequately protected by the Allustiartes who were present at trial. The absent spouses were not prejudiced by the failure to join them as parties since their interests were identical to their spouses who were named in the action. 2