Court Opinion

ID: 5120589
Source: CourtListenerOpinion
Date Created: 2021-10-22 18:03:07.199259+00
Date Added: 2024-06-11T08:22:18.072608
License: Public Domain

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

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                     FIFTH APPELLATE DISTRICT

 RON KING,
                                                                                             F080224
           Plaintiff and Appellant,
                                                                                 (Super. Ct. No. 2024022)
                    v.

 MERINNA MAY-WESELY et al.,                                                               OPINION
           Defendants and Respondents.

         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.
                                                        -ooOoo-
         A 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
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.

                                                 2.
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.

                                            3.
        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.

                                             4.
       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, May-

       2May-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.

                                                5.
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.

                                             6.
                                     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 May-
Wesely 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

                                              7.
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.”

                                               8.
“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.”

                                              9.
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];

                                             10.
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

                                             11.
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.)

                                             12.
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-of-
proof 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

                                             13.
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.

       5In 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].)

                                               14.
       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.

                                             15.
       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

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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.

                                            19.
       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.)

                                             20.
                                      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.

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