Court Opinion

ID: 9896289
Source: CourtListenerOpinion
Date Created: 2023-11-09 21:05:22.657763+00
Date Added: 2024-06-11T09:14:34.084152
License: Public Domain

Filed 11/9/23 Reynolds v. Palmbaum CA3
                                           NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
                                      THIRD APPELLATE DISTRICT
                                                     (Sacramento)
                                                            ----

 TRACI REYNOLDS, Individually and as Trustee,                                                  C096587
 etc., et al.,
                                                                                    (Super. Ct. No. 34-2017-
                    Plaintiffs, Cross-defendants and                                00217076-CU-OR-GDS)
 Respondents,

           v.

 BRUCE PALMBAUM et al.

                    Defendants, Cross-complainants and
 Appellants.

         Hoping to enforce a 2017 civil judgment against Edward Freidberg, Bruce
Palmbaum and others (appellants) sought to establish that Freidberg’s 2017 transfer of
property to his wife Traci Reynolds was fraudulent and voidable. After appellants
presented their evidence in a court trial, the trial court issued a statement of decision

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granting the motion for judgment made by respondents Freidberg and Reynolds, finding
the 2017 transfer was made in good faith based on a preexisting obligation.
       Appellants now contend the trial court erred because there was not substantial
evidence supporting the trial court’s findings. We agree with respondents that appellants’
claim is forfeited because they have not set forth all the material evidence in their
opening brief. Accordingly, we affirm.
                                     BACKGROUND
       Due to the nature of the contention raised on appeal, we need not recite all of the
facts underlying the disputes between the parties here. The following limited background
will suffice.
       Before they married in the late 1980’s, Reynolds and Freidberg signed a
premarital agreement that provided, inter alia: (1) their separate earnings during the
marriage would be separate property, (2) Freidberg would pay for joint living expenses
from his separate property, and (3) Reynolds would receive annual lump sum cash
transfers from Freidberg after each year of marriage.
       In 1992, Reynolds started loaning money to Freidberg. To secure those loans,
Freidberg executed and recorded a deed of trust to Reynolds encumbering his interest in
the Sacramento residence they owned together (the property). At least twice between
2002 and 2007, a deed of trust was removed to facilitate refinancing of the home and then
put back on the property after the refinance. But after a 2007 refinance, a deed of trust
was not put back. Believing the deed of trust had been put back on the property,
Reynolds continued loaning money to Freidberg through at least 2017, when he owed her
a total of about $1 million.
       In 2016, Palmbaum obtained an arbitration award against Freidberg totaling
approximately $360,000. In 2017, Palmbaum petitioned the trial court to enter judgment
against Freidberg in accordance with that arbitration award. The day before the trial
court entered the requested judgment, Freidberg recorded a deed of trust on the property

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in favor of his wife Reynolds in the amount of $900,000. Reynolds asked Freidberg to do
that because she knew the 2017 judgment was imminent and was surprised to learn the
deed of trust had not been put back on the property after a 2007 refinance.
       Further litigation between the parties ensued, including a claim by Palmbaum that
the 2017 recording of the deed of trust on the property was a fraudulent transfer made to
hinder enforcement of the 2017 judgment. The trial court rejected that claim in a
statement of decision issued after a three-day court trial at which Reynolds testified.
       Specifically, the trial court found the 2017 recording of the deed of trust was a
“good faith attempt to secure a preexisting obligation,” and the legitimacy of Freiberg’s
underlying debt to Reynolds was evidenced by (1) the terms of the premarital agreement,
(2) the “meticulous records” that Reynolds maintained, and (3) the multiple deeds of trust
recorded against Freidberg’s share of the property going back to the early 2000’s.
       Procedurally, the trial court’s ruling was in the form of an order granting
respondents’ motion for judgment pursuant to Code of Civil Procedure section 631.8,
which permits a trial court acting as a trier of fact to render judgment for a defendant in
an action where the plaintiff has failed to meet the applicable burden of proof before the
defendant has presented any evidence. (Code Civ. Proc., § 631.8.) Appellants timely
appealed.
                                       DISCUSSION
                                              I
                             Forfeiture of the Claim on Appeal
       Appellants contend the trial court erred by granting the motion for judgment
because there was not substantial evidence supporting the trial court’s factual findings
that (1) Freidberg’s debt to Reynolds was legitimate and (2) the 2017 recording of the
deed of trust was made in good faith. Appellants maintain the 2017 recording of the deed
of trust was a “voidable transfer” under the Uniform Voidable Transactions Act, Civil

                                              3
Code section 3439 et seq.1 Respondents argue appellants forfeited their contention on
appeal by failing to demonstrate that the trial court’s findings were not supported by
substantial evidence in their opening brief. More specifically, respondents argue
appellants cite only to evidence that they deem favorable to their position in their opening
brief. Appellants did not file a reply brief. We agree with respondents that appellants
have forfeited their sole claim by failing to present this court with all material evidence in
this matter and thus have failed to carry their burden on appeal.
       A.     The Uniform Voidable Transactions Act
       The Uniform Voidable Transactions Act is meant to “ ‘prevent debtors from
placing, beyond the reach of creditors, property that should be made available to satisfy a
debt.’ ” (Aghaian v. Minassian (2020) 59 Cal.App.5th 447, 455-456.)
       Relevant here, section 3439.04, subdivision (a) provides that a transfer made or
obligation incurred by a debtor is “voidable” as to a creditor, whether the creditor’s claim
arose before or after the transfer was made or the obligation was incurred, “if the debtor
made the transfer or incurred the obligation” with “actual intent to hinder, delay, or
defraud any creditor of the debtor” or without receiving a “reasonably equivalent value”
in exchange for the transfer or obligation. (§ 3439.04, subd. (a); Annod Corp. v.
Hamilton & Samuels (2002) 100 Cal.App.4th 1286, 1294.)
       But section 3439.08, subdivision (a) provides a defense to a section 3439.04,
subdivision (a) claim: a transfer or obligation is not voidable against a person who “took
in good faith and for a reasonably equivalent value.” (§ 3439.08, subd. (a); Annod Corp.
v. Hamilton & Samuels, supra, 100 Cal.App.4th at p. 1294.) “Thus, a showing of good
faith and reasonably equivalent value is all that is required to defeat a creditor’s action
based on section 3439.04, subdivision (a).” (Annod Corp., at p. 1294.) Whether a debtor

1 Undesignated statutory references are to the Civil Code.

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intended to hinder, delay, or defraud a creditor is a question of fact. (Aghaian v.
Minassian, supra, 59 Cal.App.5th at p. 456; accord, Annod Corp., at p. 1294.)
       B.     Standard of Review
       In reviewing a judgment based upon a statement of decision following a bench
trial, we review questions of law de novo and typically apply a “substantial evidence”
standard of review to the trial court’s findings of fact. The factual findings are liberally
construed to support the judgment and we consider the evidence in the light most
favorable to the prevailing party, drawing all reasonable inferences in support of the
findings. A single witness’s testimony may be substantial evidence to support a finding,
and we do not reweigh the evidence or reassess witness credibility. (Thompson v. Asimos
(2016) 6 Cal.App.5th 970, 981.)
       But describing the standard of review here—where the trier of fact expressly
concluded appellants failed to carry their burden at trial—as one of “substantial
evidence” would be imprecise, because such a description suggests an analysis that
“ ‘allows an attack on . . . the evidence supporting the party who had no burden of
proof.’ ” (Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011) 196
Cal.App.4th 456, 465; see ibid. [substantial evidence test “ ‘is typically implicated when
a defendant contends that the plaintiff succeeded at trial in spite of insufficient
evidence’ ”].) Where the appellate issue “ ‘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.” ’ ” (Id. at p. 466.)

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       C.     Appellant’s Burden
       An appellant challenging the sufficiency of the evidence, “must set forth all of the
material evidence bearing on the issue, not merely the evidence favorable to the
appellant, and it also must show how the evidence does not sustain the challenged
finding.” If the appellant fails to do so “its claim of insufficiency of the evidence is
waived.” (Baxter Healthcare Corp. v. Denton (2004) 120 Cal.App.4th 333, 368; see
Ashby v. Ashby (2021) 68 Cal.App.5th 491, 512 [an appellant arguing insufficient
evidence supported a finding cannot shift their burden to set forth an adequate statement
of the evidence onto respondent or a reviewing court].)
       D.     Analysis
       Here, appellants attack the trial court findings that Freidberg’s debt to Reynolds
was legitimate and not a Uniform Voidable Transactions Act transfer and that the 2017
recording of the deed of trust was made in good faith. But they do not present all
material evidence bearing on the issue, omitting, at a minimum, any mention (a) that
Reynolds kept detailed records of the loans she made to Freidberg, beginning in 1992,
(b) that between 2002 and 2007, there were multiple recordings of deeds of trust to
Reynolds encumbering Freidberg’s interest in the property, and (c) that Reynolds
mistakenly believed a deed of trust had been put back on the property around 2007.
       By failing to set forth all material evidence, appellants have forfeited their claim.
(See Doe v. Roman Catholic Archbishop of Cashel & Emly (2009) 177 Cal.App.4th 209,
218 [ruling party forfeited a challenge to the sufficiency of the evidence supporting a
finding by failing to “set forth, discuss, and analyze all the evidence on that point, both
favorable and unfavorable”].)2

2 Even if we were to reach the merits of appellants’ claim as articulated, we would find
substantial evidence supports the trial court’s ruling. (Cf. In re S.C. (2006) 138
Cal.App.4th 396, 415 [appellate claim of error forfeited because unaccompanied by all

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                                               II
                                         Sanctions
       In briefing and at oral argument, respondents request we either issue an order to
show cause to appellants why sanctions should not be awarded in this “frivolous appeal”
or establish a briefing schedule to “allow” them to file a motion for sanctions.3 We
decline to exercise our discretion to do so.
       Code of Civil Procedure section 907 “provides that ‘[w]hen it appears to the
reviewing court that the appeal was frivolous or taken solely for delay, it may add to the
costs on appeal such damages as may be just.’ Similarly, California Rules of Court, rule
8.276(a), provides that an appellate court has the authority to ‘impose sanctions . . . on a
party or an attorney for: [¶] Taking a frivolous appeal or appealing solely to cause
delay. . . .’ ” (McCluskey v. Henry (2020) 56 Cal.App.5th 1197, 1208.) In the interests
of judicial economy, we decline their invitation to issue an order to show cause. (See Bak
v. MCL Financial Group, Inc. (2009) 170 Cal.App.4th 1118, 1127-1128 [denying request
for appellate sanctions].)

material facts, and “[e]ven if appellant’s counsel had correctly presented the claim of
error, it loses on the merits”].)
3 California Rules of Court, rule 8.276(b)(1) enabled respondents to file a motion for
sanctions no later than 10 days after the appellant’s reply brief was due. Respondents did
not avail themselves of the procedural requirement to timely file a motion for sanctions
on their own.

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                                      DISPOSITION
       The judgment is affirmed. Respondents are entitled to recover their costs on
appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)

                                                      /s/
                                                  BOULWARE EURIE, J.

We concur:

   /s/
MAURO, Acting P. J.

    /s/
DUARTE, J.

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