Court Opinion

ID: 4645611
Source: CourtListenerOpinion
Date Created: 2020-12-22 19:02:09.685463+00
Date Added: 2024-06-11T08:00:53.802291
License: Public Domain

Filed 12/22/20 Li v. Chiu CA1/3
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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 THREE

 CHARLES LI,
           Plaintiff and Respondent,                                    A156760
 v.
 THAI MING CHIU et al.,                                                 (City & County of San Francisco
           Defendants and Appellants.                                   Super. Ct. No. CGC-14-537574)

         Judgment was entered against defendants Thai Ming Chiu, Kaman
Liu, Cheuk Tin Yan, and Tina Yan in a fraudulent conveyance action. The
defendants previously appealed from the judgment, and in 2018, we issued
an unpublished decision in which we directed that the judgment be modified
in one aspect and otherwise affirmed the judgment. After the trial court
modified the judgment as directed, the defendants then moved to have the
second amended judgment set aside as void under Code of Civil Procedure
section 473, subdivision (d). The trial court denied their motion, and
defendants now appeal the order denying their motion to set aside the
judgment. We affirm.
                                                  BACKGROUND
         We draw many of the background facts of this case from our prior
appellate decision in Li v. Chiu (May 31, 2018, A149849 [nonpub. opn.]) and

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set out these facts for context only. (See Pacific Gas & Electric Co. v. City
and County of San Francisco (2012) 206 Cal. App. 4th 897, 907, fn. 10.)
I.    Professional Negligence Lawsuit—Li v. Yan
      This dispute flows from a professional negligence action Charles Li
filed against Demas Yan in 2010 involving Yan’s representation of Li in
lawsuits concerning property ownership rights. Following a bench trial in
2012, the trial court found that Yan had engaged in the unauthorized
practice of law and was liable for professional negligence, breach of fiduciary
duty, breach of contract, and fraud. Division Two of this court affirmed the
judgment in Li v. Yan (2016) 247 Cal. App. 4th 56. In June 2016, a fourth
amended judgment was entered against Yan totaling $1,086,001.12, inclusive
of damages, attorney fees, costs, and interest.
II.   Fraudulent Conveyance Lawsuit
      Through efforts to enforce the judgment, Li learned that Yan had
transferred a residential property to a wholly owned limited liability
company in 2007 and then, after trial commenced in the professional
negligence action, Yan transferred his ownership interest in the LLC to
relatives, purportedly to repay debts Yan owed. After the LLC was ordered
to appear for an examination in connection with enforcement of the judgment
against Yan, the property was transferred yet again to a newly formed LLC.
      In February 2014, after learning of the various suspicious transactions
involving the property, Li filed the complaint to set aside fraudulent transfers
that gives rise to this appeal. Li named as defendants: Yan,1 Tina Yan and
Cheuk Tin Yan (Yan’s parents), Thai Ming Chiu and Kaman Liu (both
brothers-in-law of Yan), and the two LLC’s that had held title to the property.

      1 To avoid confusion, we refer to Demas Yan as Yan and to his parents
by their full names.

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The complaint alleged the various conveyances were made to prevent Li from
satisfying his judgment against Yan. Li asserted claims for fraudulent
transfer and alleged both actual fraud (Civ. Code, § 3439.04, subd. (a)(1)) as
well as constructive fraud (Civ. Code, § 3439.05).
      Li entered defaults against Yan and the two LLC’s. The action
proceeded against the remaining defendants—i.e., Yan’s parents and his
brothers-in-law. (We refer to the defendants who proceeded to trial as the
“transferee defendants,” as the parties do in their appellate briefs.) The trial
court granted a motion for terminating sanctions against the transferee
defendants, based upon their noncompliance with discovery obligations, and
entered judgment in favor of Li. The transferee defendants moved for a new
trial, and the trial court vacated the judgment and set the matter for trial but
still barred Yan’s parents from testifying.
      A jury trial was conducted in tandem with a court trial on the
transferee defendants’ equitable title affirmative defense. Yan testified that
in July 2012, he transferred his ownership in the first LLC as follows: 68.43
percent to his mother, Tina Yan; 25.83 percent to Chiu; and 5.74 percent to
Liu. In November 2013, after Yan 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.
      The jury returned special verdicts against the transferee defendants,
finding each defendant liable for actual and constructive fraud. The trial
court denied the transferee defendants equitable relief. The trial court
entered default judgments against Yan and the two LLC’s, and consistently
with the special verdicts returned by the jury, the court entered judgment
against each of the transferee defendants in the following amounts:
$824,180.57 jointly against Yan’s parents, Cheuk Tin Yan and Tina Yan;

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$324,167.58 against Chiu; and $72,037.24 against Liu. The judgment
declared Yan to be the sole owner of all legal and equitable interest in the
property, for the purposes of satisfying the judgment.
       The trial court granted Li’s request for attorney fees and entered a first
amended judgment that incorporated an award of attorney fees of
$802,059.50.
III.   Defendants’ Prior Appeal of Fraudulent Conveyance Judgment
       In their appeal from the first amended judgment entered in the
fraudulent conveyance case, the transferee defendants raised two issues:
(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 Yan and they cannot be liable for
attorney fees incurred to enforce the judgment in the earlier action. We
found in favor of the transferee defendants on the second issue only. We
directed the trial court to enter a new amended judgment providing that the
attorney fees award was to be imposed solely against defendant Demas Yan.
We affirmed the judgment in all other respects. (Li v. Chiu, supra, A149849.)
IV.    Subsequent Trial Court Proceedings
       On November 16, 2018, the trial court issued the second amended
judgment. In accordance with this court’s decision, the trial court modified
the judgment to state that the attorney fees portion of the award may be
recovered against Demas Yan only. The second amended judgment
enumerates the judgments, orders and declarations as follows:
       “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.

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      “D. The real property referred to herein is situated in the State of
California, City and County of San Francisco . . . . It is referred to herein as
the ‘Subject Property.’
      “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 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

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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.
      “J. The Court hereby Orders all defendants to do the following in
relation to the Subject Property: (1) maintain, receive, and collect all rents,
security deposits, and other rental or lease payments in the ordinary course
of business; (2) maintain and continue payment on all required taxes, fees,
mortgages, reasonable insurance, and reasonable expenses in the ordinary
course of business; (3) secure and maintain all books, documents, and records
relating to the matters in (1) and (2) in this Section, and render an
accounting of the same upon request by plaintiff.
      “K. The Court hereby ENJOINS all defendants from doing the
following in relation to the Subject Property: (1) committing or permitting
any waste on the Subject Property; (2) committing or permitting any act in
violation of law; (3) removing, encumbering, wasting, or otherwise disposing
of any of the fixtures on the property; (2) selling, transferring, disposing,
encumbering, concealing, or otherwise transferring the Subject Property
without a prior court order; and (3) doing any act that will impair the
preservation of the Subject Property or plaintiff’s interest in the Subject
Property.
      “L. Costs of $12,543.04 and attorneys’ fees of $1,141,383.50 are hereby
awarded to plaintiff. Plaintiff’s recovery pursuant to Paragraph I above may

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be increased to include these amounts, provided that attorneys’ fees may only
be recovered against Demas Yan.” (Sic.)
      On December 20, 2018, the transferee defendants filed a motion to set
aside and/or modify the first and second amended judgments setting aside
fraudulent transfers as void. The transferee defendants’ motion, made
pursuant to Code of Civil Procedure section 473, subdivision (d), argued that
the first2 and second amended judgments are void because they grant double
recovery by (1) setting aside the transferred asset and permitting Li to seize
and levy upon the asset and (2) entering money judgments against the
transferee defendants.
      On January 23, 2019, the trial court heard and denied the transferee
defendants’ motion, and on February 6, 2019, the trial court issued a written
order denying the motion.
                                DISCUSSION
      The transferee defendants argue the second amended judgment is
facially void because it grants relief beyond what is authorized by the
Uniform Voidable Transactions Act (UVTA) (Civ. Code, § 3439 et seq.).
Specifically, they argue the second amended judgment provides “dual
remedies” because it both sets aside the fraudulent transfer and awards a
money judgment. They assert the trial court acted in excess of its authority
under the UVTA.

      2 The first amended judgment is not part of the record on appeal.
Given that our prior decision directed the trial court to enter a new amended
judgment providing the attorney fees award be imposed solely against Demas
Yan (which became the second amended judgment), it is unclear why the
transferee defendants included the first amended judgment in their motion to
vacate. In any event, it is not part of the record and we focus our discussion
on the second amended judgment entered in accordance with our prior
decision.

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      Under Code of Civil Procedure section 473, subdivision (d), a trial court
“may . . . set aside any void judgment or order.” This provision grants a trial
court the discretion to set aside a judgment or order at any time “if that
judgment or order is ‘void.’ [Citation.] Voidness is a legal question we review
de novo; the discretionary decision whether to set aside a void judgment or
order is . . . reviewed solely for an abuse of that discretion.” (People v. The
North River Ins. Co. (2020) 48 Cal. App. 5th 226, 232.)
      We affirm the order denying the motion to set aside the judgment as
void because the transferee defendants forfeited their “dual remedies”
argument by failing to raise it in their prior appeal, the judgment is not void,
and the transferee defendants have failed to provide an adequate record for
review.
I.    “Dual Remedies” Argument Is Forfeited
      The alleged “dual remedy” error asserted by the transferee defendants
was apparent when they appealed the first amended judgment. Our prior
decision summarizes the first amended judgment, which included the
monetary judgments entered against each transferee defendant. (Li v. Chiu,
supra, A149849, at p. 5.) In the prior appeal, the transferee defendants
argued the trial court erroneously excluded certain evidence and that the
court erred by awarding attorney fees against all defendants instead of
against Yan only. (Id. at p. 1.) They acknowledge that in their prior appeal
they did not raise any issues regarding the validity of the monetary
judgments entered against them. The record provides no explanation for
their failure to do so.

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      To the extent the judgment is erroneous because it includes remedies
not authorized by statute,3 the transferee defendants should have raised the
issue in their direct appeal from the judgment. Having failed to do so, they
are not permitted to now collaterally attack the judgment. (See People v.
Jordan (2018) 21 Cal. App. 5th 1136, 1143 [defendant precluded from
pursuing “successive appeals based on issues ripe for consideration in the
prior appeal and not brought in that proceeding”].)
II.   The Judgment Is Not Facially Void
      In an apparent effort to avoid forfeiture, the transferee defendants
argue that a judgment that is void on its face can be set aside at any time on
a motion under Code of Civil Procedure section 473, subdivision (d). This

      3  Because we find the judgment is not void on its face, and therefore
affirm the trial court’s denial of the defendants’ motion to set aside the
judgment as void, we need not address the merits of the transferee
defendants’ collateral attack on the judgment. However, we note that the
remedies provided in the UVTA include both avoidance of the transfer and
judgment for the value of the asset transferred, which may be entered
against the transferee. (Civ. Code, §§ 3439.07, subd. (a)(1), 3439.08, subd.
(b)(1)(A).) The UVTA further provides a creditor may obtain: “Any other
relief the circumstances may require.” (Civ. Code, § 3439.07, subd. (a)(3)(C).)
We also note that the judgment states the transfer is “set aside to the extent
necessary to satisfy plaintiff’s Underlying Judgment” and that: “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.)
       As discussed above, the defendants have provided an inadequate record
which precludes any meaningful review. The defendants’ argument that the
judgment improperly awards a double recovery to Li is not apparent from our
reading of the relevant statutes and the judgment, which expressly provides
the “aggregate recovery shall not exceed plaintiff’s Underlying Judgment.”

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argument is unavailing because, as explained below, the second amended
judgment is not void on its face.
      In People v. American Contractors Indemnity Co. (2004) 33 Cal. 4th 653
(American Contractors), our high court explained the type of jurisdictional
error that renders a judgment void: “Essentially, jurisdictional errors are of
two types. ‘Lack of jurisdiction in its most fundamental or strict sense means
an entire absence of power to hear or determine the case, an absence of
authority over the subject matter or the parties.’ [Citation.] When a court
lacks jurisdiction in a fundamental sense, an ensuing judgment is void, and
‘thus vulnerable to direct or collateral attack at any time.’ [Citation.]
[¶] However, ‘ . . . the phrase “lack of jurisdiction” ’ . . . may also ‘be applied to
a case where, though the court has jurisdiction over the subject matter and
the parties in the fundamental sense, it has no “jurisdiction” (or power) to act
except in a particular manner, or to give certain kinds of relief . . . .’
[Citation.] ‘ “[W]hen a statute authorizes [a] prescribed procedure, and the
court acts contrary to the authority thus conferred, it has exceeded its
jurisdiction.” ’ [Citation.] When a court has fundamental jurisdiction, but
acts in excess of its jurisdiction, its act or judgment is merely voidable.
[Citations.] That is, its act or judgment is valid until set aside, and a party
may be precluded from setting it aside by ‘principles of estoppel, disfavor of
collateral attack or res judicata.’ [Citation.] Errors which are merely in
excess of jurisdiction should be challenged directly, for example by motion to
vacate the judgment, or on appeal, and are generally not subject to collateral
attack once the judgment is final unless ‘unusual circumstances were present
which prevented an earlier and more appropriate attack.’ ” (Id. at p. 661; see
Lee v. An (2008) 168 Cal. App. 4th 558, 565 [“ ‘A court can lack fundamental
authority over the subject matter, question presented, or party, making its

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judgment void, or it can merely act in excess of its jurisdiction or defined
power, rendering the judgment voidable’ ”].)
      Here, the transferee defendants attack the judgment on the grounds
that it awards “dual remedies” that are “in excess of authority” under the
UVTA. They do not claim that the trial court lacked personal or subject
matter jurisdiction. “ ‘ “If a judgment, no matter how erroneous, is within the
jurisdiction of the court, it can only be reviewed and corrected by one of the
established methods of direct attack.” ’ ” (Estate of Buck (1994) 29
Cal. App. 4th 1846, 1854.) Mistake of law is not a jurisdictional error. (In re
Marriage of Goddard (2004) 33 Cal. 4th 49, 56.)
      The transferee defendants rely on 311 South Spring Street Co. v.
Department of General Services (2009) 178 Cal. App. 4th 1009 for the position
that a judgment granting excessive relief may be collaterally attacked as void
even if the issue was not raised in a prior appeal from the judgment. 311
South Spring Street Co. held that a judgment imposing an unconstitutional
postjudgment interest rate of 10 percent on a state agency (rather than
7 percent as provided in Cal. Const., art. XV, § 1 and Gov. Code, § 965.5) was
void and subject to collateral attack because the trial court had acted in
“excess of [its] jurisdiction . . . .” (311 South Spring Street Co., at pp. 1015,
1018.) This holding appears to conflict with the California Supreme Court’s
holding in American Contractors that “[w]hen a court has fundamental
jurisdiction, but acts in excess of its jurisdiction, its act or judgment is [not
void but] merely voidable.” (American Contractors, supra, 33 Cal.4th at p.
661.) We decline to follow 311 South Spring Street Co.
      The transferee defendants’ claim that the judgment violates the UVTA
is not a fundamental jurisdictional error. Instead, their untimely assertion is
that the trial court erroneously exercised its power. Such a claim does not

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render the judgment void. (American Contractors, supra, 33 Cal.4th at p.
661.) Because the second amended judgment is not void, the trial court did
not err when it denied the transferee defendants’ motion to set aside
judgment.
III.   Inadequate Record
       An independent basis for affirming the trial court’s order is that the
transferee defendants failed to provide an adequate record for meaningful
review. An appellant must affirmatively show error by an adequate record.
“ ‘A necessary corollary to this rule [is] that a record is inadequate, and
appellant defaults, if the appellant predicates error only on the part of the
record he provides the trial court, but ignores or does not present to the
appellate court portions of the proceedings below which may provide grounds
upon which the decision of the trial court could be affirmed.’ ” (Osgood v.
Landon (2005) 127 Cal. App. 4th 425, 435.)
       The transferee defendants complain that the trial court’s order does not
explain how the court arrived at the decision to deny their motion to set aside
judgment. But notably, the order specifically refers to the parties’ briefing
and the argument of counsel at the January 23, 2019 hearing. The register of
actions confirms that Li filed an opposition to the motion, that the transferee
defendants filed a reply brief, and that a hearing was held. In the appellants’
appendix, the transferee defendants include their motion but not Li’s
opposition or the reply brief.
       Nor have the transferee defendants provided either a reporter’s
transcript of the January 23, 2019 hearing or a settled statement, the “viable
alternative to a reporter’s transcript on appeal.” (Randall v. Mousseau (2016)
2 Cal. App. 5th 929, 933; see Cal. Rules of Court, rule 8.137.) The trial court’s
order does not summarize what occurred at the hearing. The transferee
defendants would have us find error based on a review of only the second

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amended judgment and their own motion to vacate the judgment. This we
will not do.
                              DISPOSITION
      The order is affirmed. Respondent is awarded his costs on appeal.

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                                 _________________________
                                 Jackson, J.

WE CONCUR:

_________________________
Siggins, P. J.

_________________________
Petrou, J.

A156760/Li v. Chiu

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