Court Opinion

ID: 5117868
Source: CourtListenerOpinion
Date Created: 2021-10-12 20:02:41.831299+00
Date Added: 2024-06-11T08:22:04.655395
License: Public Domain

Filed 10/12/21 Raphael v. Shaalemi CA2/2
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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

                         SECOND APPELLATE DISTRICT

                                        DIVISION TWO

ARNON RAPHAEL,                                                      B305984

         Plaintiff and Appellant,                                   (Los Angeles County
                                                                    Super. Ct.
         v.                                                         No. EC066999)

AZIM SHAALEMI et al.,

         Defendants and Respondents.

     APPEAL from a judgment of the Superior Court of
Los Angeles County, William D. Stewart, Judge. Affirmed.

     The Sheikh Law Firm and Scott A. Sheikh for Plaintiff and
Appellant.

         Mark Andrew McBride for Defendants and Respondents.

                           ______________________________
      Plaintiff and appellant Arnon Raphael (Raphael), trustee of
the Arnon and Terry Raphael Family Trust, appeals from a
judgment following a bench trial in favor of defendants and
respondents Azim Shaalemi (Azim), individually and as trustee of
the Azim Shaalemi Trust and the Azim Shaalemi Family Trust,
and Yama Shaalemi (Yama).1
      We affirm.
                          BACKGROUND
I. The Yamee Action
      In November 2015, Raphael filed a first amended complaint
in Raphael v. Yamee, Inc. (Super. Ct., L.A. County, 2019,
No. EC064088) (the Yamee action), alleging causes of action
against Yamee, Inc., and Azim, individually, related to a
commercial space leased to them by Raphael.
      On July 10, 2017, Yamee, Inc., filed a notice of bankruptcy,
which prompted the trial court in the Yamee action to order a
continuance of the trial.
      A bench trial was eventually held in July 2018. In April
2019, judgment was entered awarding Raphael $276,605.26 plus
interest in damages from Yamee, Inc., and Azim, jointly and
severally.
II. The Current Litigation
      A. The complaint
      On July 13, 2017—three days after Yamee, Inc., filed its
notice of bankruptcy in the Yamee action—Raphael filed the
instant action. The complaint asserted causes of action to set
aside fraudulent transfer and for conspiracy.

1      Because Azim and Yama share the same last name, for
clarity we refer to them, individually, by their first names. No
disrespect is intended.

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       The complaint alleged that Raphael was the holder of a
claim against Azim “consist[ing] of back rent, late fees, collection
fees, and future rent under a written lease . . . and”—referring to
the Yamee action—“the subsequent lawsuit to reduce the debt to
a judgment . . . .” Prior to signing the lease and through the
filing of the first amended complaint in the Yamee action, Azim
owned a commercial property located on Ventura Boulevard in
Studio City (the Ventura property) and a single-family residence
located on Fairway Avenue in Studio City (the Fairway property).
On or about June 22, 2017, less than three weeks before trial was
set to begin in the Yamee action, Azim transferred the Ventura
and Fairway properties to his son, Yama, by quitclaim deeds.
Azim received no consideration for transferring the properties,
which had a combined value exceeding $2,500,000.
       The complaint further alleged that Raphael expected a
judgment in the Yamee action exceeding $500,000 and that the
property transfer “was made with an actual intent to hinder,
delay, or defraud . . . Azim[’s] . . . then and future creditors, in
particular, [Raphael] in the collection of his claim and eventual
judgment.”
       B. Trial
       During a bench trial, Azim testified that he transferred the
Ventura and Fairway properties to Yama, his only child, on
June 22, 2017, without any payment or promise of payment by
Yama, because Azim was planning to travel to Afghanistan for an
unknown duration. Azim was born in Afghanistan and believed
that it was his civic duty to return there to assist the United
States military. He had previously intended to travel to
Afghanistan in 2015 and had begun the process of transferring
property to Yama. However, because his mother became ill, Azim

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had to cancel his trip and did not proceed at that time with the
property transfer. Azim denied that the reason he transferred
the properties in 2017 was to avoid creditors, specifically
Raphael. Azim claimed that he had no assets.
      Yama testified that he was not aware of any liens (other
than mortgages) on the Ventura and Fairway properties prior to
taking ownership. Since he was in high school, Yama had
ongoing discussions with Azim regarding transferring the
Ventura property.
      Samantha Navarro (Navarro), an employee at a bridge
lender used by Azim, testified that Azim had previously
attempted to transfer property to Yama in 2015.
      C. Judgment
      On February 3, 2020, the trial court found for Azim and
Yama and against Raphael. According to the minute order, the
court found that the “transfer of property was not done to avoid
creditors and . . . was not fraudulent or voidable.” The record
does not indicate that a statement of decision was issued or
requested. (See Code Civ. Proc., § 632.)2 Judgment was
subsequently entered on March 16, 2020.

2       “‘Upon a party’s timely and proper request, [Code of Civil
Procedure] section 632 requires a trial court to issue a statement
of decision following “the trial of a question of fact by the court.”
The statement must explain “the factual and legal basis for [the
court’s] decision as to each of the principal controverted issues at
trial . . . .”’ [Citations.] If the parties fail to request a statement
of decision, the trial court is not required to provide one.” (Nellie
Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982,
995–996, fn. omitted (Nellie Gail).)

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       D. Appeal
       Raphael timely appealed from the judgment.
                            DISCUSSION
       Raphael argues that substantial evidence does not support
the trial court’s finding that the transfer of the Ventura and
Fairway properties was not done to avoid creditors and was not
fraudulent or voidable. Instead, Raphael contends that the
property transfer was voidable under Civil Code section 3439.04,
subdivision (a)(2),3 which is part of the Uniform Voidable
Transactions Act (UVTA, § 3439 et seq.).4
I. Standard of Review
       We review the trial court’s factual findings for substantial
evidence. (Rubinstein v. Fakheri (2020) 49 Cal.App.5th 797, 811.)
“‘“In the case where the trier of fact has expressly or implicitly
concluded that the party with the burden of proof did not carry
the burden”’ . . . and that party appeals, ‘“the question for a
reviewing court becomes whether the evidence compels a finding
in favor of the appellant as a matter of law.”’” (Manela v. Stone
(2021) 66 Cal.App.5th 90, 105 (Manela); see also Shaw v. County
of Santa Cruz (2008) 170 Cal.App.4th 229, 279 [“Specifically, the
question becomes whether the appellant’s evidence was
(1) ‘uncontradicted and unimpeached’ and (2) ‘of such a character

3    All further statutory references are to the Civil Code unless
otherwise indicated.
4     Raphael does not address his cause of action for conspiracy
and has therefore forfeited any challenge regarding it. (Golden
Door Properties, LLC v. Superior Court (2020) 53 Cal.App.5th
733, 786 [“issues not addressed as error in a party’s opening brief
with legal analysis and citation to authority are forfeited”].)

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and weight as to leave no room for a judicial determination that
it was insufficient to support a finding[]’”].)
II. Relevant Law5
      The UVTA—formerly known as the Uniform Fraudulent
Transfers Act (Potter v. Alliance United Ins. Co. (2019)
37 Cal.App.5th 894, 901 (Potter))—“permits a defrauded creditor
to reach property that has been fraudulently transferred by a
judgment debtor to a third party.” (Voris v. Lampert (2019)
7 Cal.5th 1141, 1160, fn. 14.) “‘Under the U[V]TA, a transfer can
be invalid either because of actual fraud [citation] or constructive
fraud [citations] . . . .’” (Potter, supra, at p. 904.)
      “Actual fraud . . . is shown when a transfer is made, or an
obligation is incurred, ‘[w]ith actual intent to hinder, delay, or
defraud any creditor of the debtor.’ (§ 3439.04, subd. (a)(1).)”
(Potter, supra, 37 Cal.App.5th at p. 904.)
      Constructive fraud is shown “where a debtor makes a
transfer or incurs an obligation ‘[w]ithout receiving a reasonably
equivalent value in exchange for the transfer or obligation, and
the debtor either: [¶] (A) [w]as engaged or was about to engage
in a business or a transaction for which the remaining assets of
the debtor were unreasonably small in relation to the business or
transaction[; or] [¶] (B) [i]ntended to incur, or believed or
reasonably should have believed that the debtor would incur,
debts beyond the debtor’s ability to pay as they became due.’

5     Although the complaint did not include a specific citation to
the UVTA, the judgment states that “[t]he case controversy fell
under the Uniform Voidable Transfer [sic] Act.” This is not
disputed in the parties’ appellate briefs. We therefore analyze
Raphael’s fraudulent transfer cause of action under the UVTA.

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(§ 3439.04, subd. (a)(2).)” (Potter, supra, 37 Cal.App.5th at p. 904,
fn. omitted.)6
      A creditor seeking relief under section 3439.04,
subdivision (a)(1) or (a)(2), of the UVTA bears the burden of proof
by a preponderance of the evidence. (§ 3439.04, subd. (c).)
III. Analysis
      In finding that the property transfer “was not done to avoid
creditors and . . . was not fraudulent or voidable[,]” the trial court
implicitly concluded that Raphael did not meet his burden of
proving otherwise. (See § 3439.04, subd. (c).) Accordingly, we
consider whether the evidence compelled a contrary finding as a
matter of law. (Manela, supra, 66 Cal.App.5th at p. 105.)
      A. Actual fraud (§ 3439.04, subd. (a)(1))
      The evidence before the trial court did not compel a finding
that Azim engaged in actual fraud—that is “[w]ith actual intent
to hinder, delay, or defraud any creditor of the debtor.”
(§ 3439.04, subd. (a)(1).)
      When testifying, Azim explicitly denied such intent and
explained that he transferred the Ventura and Fairway
properties to Yama because he intended to travel to Afghanistan

6      Constructive fraud can also be shown “when a debtor
makes a transfer or incurs an obligation ‘without receiving a
reasonably equivalent value in exchange for the transfer or
obligation and the debtor was insolvent at that time or the debtor
became insolvent as a result of the transfer or obligation.’
(§ 3439.05, subd. (a).) This form of transfer is voidable as to a
creditor whose claim arose before the transfer was made.
[Citation.]” (Potter, supra, 37 Cal.App.5th at p. 904.) Raphael
does not claim on appeal that the transfer of the Ventura and
Fairway properties was voidable on this ground; instead, he
relies on section 3439.04, subdivision (a)(2).

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for an unknown period of time. Azim also testified that, when he
had previously planned to travel to Afghanistan in 2015, he had
begun the process of transferring property to Yama. Azim had to
cancel that trip and did not proceed with the transfer at that
time. Azim’s testimony regarding his previous attempt to
transfer property to Yama was corroborated by Navarro, an
employee of Azim’s bridge lender.
       Azim’s testimony was neither “physically impossible” nor
“inherently implausible”; therefore, we “may not reject [the]
evidence as lacking credibility . . . .” (State Farm Fire & Casualty
Co. v. Jioras (1994) 24 Cal.App.4th 1619, 1626, fn. 5; see also
Linear Technology Corp. v. Tokyo Electron Ltd. (2011) 200
Cal.App.4th 1527, 1534 [an appellate court “may not reweigh the
evidence or judge the credibility of witnesses unless their
testimony is ‘inherently improbable or clearly false[]’”].) Based
on that testimony, the trial court was not compelled, as a matter
of law, to make a finding of actual fraud. Rather, it could
reasonably conclude, as it did, that the property transfer “was not
done to avoid creditors and . . . was not fraudulent or voidable.”
       B. Constructive fraud (§ 3439.04, subd. (a)(2))
       On appeal, Raphael’s primary argument is that the
undisputed evidence demonstrates constructive fraud under
section 3439.04, subdivision (a)(2). However, nothing in the
record before us indicates that Raphael raised a theory of liability
based on constructive fraud in the trial court.
       Tracking the language of section 3439.04,
subdivision (a)(1), regarding actual fraud, the complaint alleged
that the property transfer “was made with an actual intent to
hinder, delay, or defraud” Azim’s creditors, including Raphael.
The complaint did not cite section 3439.04, subdivision (a)(2), or

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echo its language. Nor do the trial transcripts or filings in the
action reflect that a constructive fraud theory was ever presented
to the trial court.7
       “The rule is well settled that the theory upon which a case
is tried must be adhered to on appeal. A party is not permitted to
change his position and adopt a new and different theory on
appeal. To permit him to do so would not only be unfair to the
trial court, but manifestly unjust to the opposing litigant.” (Ernst
v. Searle (1933) 218 Cal. 233, 240–241; see also Nellie Gail,
supra, 4 Cal.App.5th at p. 997.) Accordingly, Raphael has
forfeited his argument regarding constructive fraud. (See Schultz
v. Workers’ Comp. Appeals Bd. (2015) 232 Cal.App.4th 1126, 1134
[“issues not raised in the trial court are generally forfeited for
purposes of appeal”]; Natkin v. California Unemployment Ins.
Appeals Bd. (2013) 219 Cal.App.4th 997, 1011 [“Issues presented
on appeal must actually be litigated in the trial court—not simply
mentioned in passing”].)

7     The reporter’s transcripts provided to us do not include the
closing arguments. As the appellant, Raphael has the burden of
providing an adequate record establishing error. (Barak v. The
Quisenberry Law Firm (2006) 135 Cal.App.4th 654, 660.)
“Failure to provide an adequate record on an issue requires that
the issue be resolved against appellant.” (Ibid.)

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                         DISPOSITION
       The judgment is affirmed. Respondents are entitled to
their costs on appeal.
       NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

                               _____________________, Acting P. J.
                               ASHMANN-GERST

We concur:

________________________, J.
CHAVEZ

________________________, J.
HOFFSTADT

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