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 Post subject: FT - Korea Data Systems v. Cheng (2/21/2006)
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Korea Data Systems (USA), Inc. v. Yu Chang Chiang et al.
2006 WL 401288 (Cal.App. 4 Dist. 02/21/2006)
Not Officially Published

(Cal. Rules of Court, Rules 976, 977)

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

Court of Appeal, Fourth District, Division 3, California.

KOREA DATA SYSTEMS (USA), INC., Plaintiff and Respondent,

v.

Yu Chang CHIANG et al., Defendants and Appellants.

No. G034662.

(Super.Ct.No. 807595).

Feb. 21, 2006.

Appeal from a judgment of the Superior Court of Orange County, David C. Velasquez, Judge. Affirmed in part, reversed in part, and remanded with directions. Motion to dismiss appeal of appellant Christina Chiang. Denied. Application for permission to file reply brief to opposition to motion to dismiss. Denied.

Ferruzzo & Worthe, Ferruzzo & Ferruzzo, James J. Ferruzzo and John R. Pelle for Defendants and Appellants.

Law Offices of D. Steve Cameron and D. Steve Cameron for Plaintiff and Respondent.

OPINION

FYBEL, J.

Introduction

*1 The plaintiff obtained a $5 million default judgment against defaulting defendants in a fraudulent conveyance case. The defaulting defendants first argue on appeal there was not substantial evidence supporting the trial court's finding that they participated in a conspiracy to fraudulently convey property. We conclude the trial court's finding was supported by substantial evidence of a fraudulent conveyance, and of the defaulting defendants' participation in a conspiracy to fraudulently convey property. The defaulting defendants next argue the entry of judgment in favor of some of the nondefaulting defendants required the trial court to enter judgment in their favor as well. For the reasons described post, we disagree. Finally, the defaulting defendants argue there was not substantial evidence supporting the amount of damages awarded against them. The statement of decision does not adequately explain the factual or legal basis for the court's decision that the defaulting defendants were liable for a judgment in the amount of $5 million. Therefore, we affirm in part, reverse in part, and remand with directions for the trial court to issue a new statement of decision and enter a new judgment based on that statement of decision.

Statement of Facts and Procedural History

Korea Data Systems, Co., Ltd., sued Julius Chiang, his brother Jay Chiang, and others for breach of contract. Korea Data Systems, Co., Ltd., obtained a judgment in April 1998, in the total amount of $9,428,832, and assigned the judgment to Korea Data Systems (USA), Inc. (KDS).

KDS then sued the following individuals and entities for fraudulent conveyance, for declaratory relief, to cancel an instrument, and to quiet title: Julius Chiang; Wen Chiang (Julius's wife); Yu Chang Chiang (Julius and Jay's father); En-Fu Chiang (Julius and Jay's mother); Chiang Family Investment Partnership; Yung Hao Wang; Chieh-Hui Yang; Eastern Computer, Inc. Systems and Engineering; Nancy Chang; Brenda Chang; Presidential, Incorporated; Christina Chiang (Jay's wife); 1243723 Ontario Inc.; Frances Chiang; Crystalview Technology Corp.; Warren Matthews; and Allen Chiang. Jay Chiang was not named as a defendant.

KDS alleged all defendants conspired to prevent it from collecting on the 1998 judgment by (1) facilitating the purchase of a property at 14 Rapallo in Irvine, California (the Rapallo property) by Yu Chang and En-Fu Chiang with money provided by Julius and Wen, and in which Julius and Wen lived rent free; (2) engaging in a series of fraudulent transfers of real property located at 6649 Dillman Street in Lakewood, California (the Dillman property), which was originally owned by Julius and Wen; (3) assisting in Julius's transfer of his community property interest in real and personal property to Wen; and (4) assisting in the transfer of assets that could have been used to satisfy KDS's judgment, and otherwise interfering with KDS's ability to collect on the judgment.FN1

FN1. In the first cause of action, KDS alleged Julius and Wen Chiang fraudulently conveyed the money to acquire the Rapallo property to Yu Chang and En-Fu Chiang, and that the Rapallo property should be determined to be the property of Julius and Wen. In the second cause of action, KDS alleged Julius fraudulently conveyed the Dillman property to Wen, who fraudulently transferred the Dillman property to the Chiang Family Investment Partnership, which in turn fraudulently transferred the Dillman property to Yung Hao Wang and Chieh-Hui Yang. In the third cause of action, KDS sought a declaration that all property owned by Wen, is community property or quasi-community property subject to execution by Julius's creditors. The fourth cause of action sought to cancel the grant deed transferring the Dillman property from the Chiang Family Investment Partnership to Yung Hao Wang and Chieh-Hui Yang. In the fifth cause of action, KDS sought to quiet title in the Dillman property, and sought to establish its claims to the Dillman property were superior to those of Wen Chiang, the Chiang Family Investment Partnership, and the current owners, Yung Hao Wang and Chieh-Hui Yang. The sixth cause of action was for fraudulent conveyance, alleging all defendants were part of a “conspiracy [that] is international in scope” and each defendant assisted in the transfer of funds that could have been used to satisfy KDS's judgment. The judgment was an exhibit to the complaint.

*2 The trial court entered defaults against Yu Chang Chiang, En-Fu Chiang, the Chiang Family Investment Partnership, Christina Chiang, and 1243723 Ontario Inc. (appellants or defaulting defendants). Certain other defendants were dismissed from the case or filed successful dispositive motions. The case went to trial against Crystalview, Julius Chiang, and Wen Chiang. A prove-up hearing was held on January 12, 2004, in connection with appellants' defaults.

The trial court issued a tentative decision and statement of decision on January 26, 2004, granting judgment in favor of KDS and against Wen Chiang in the sum of $152,186.48, and determining KDS should take nothing from appellants or Crystalview. On March 16, 2004, the trial court issued a second tentative decision and statement of decision.FN2 The court again granted judgment in favor of KDS against Wen Chiang in the sum of $152,186.48, and again determined that KDS should take nothing from Crystalview. However, in the second statement of decision, the trial court granted judgment against appellants in the amount of $5,100,393.19.FN3

FN2. Although appellants do not raise it as a separate argument, they refer repeatedly to the trial court's first tentative decision, and imply the trial court did not have the authority to change that decision absent new facts or a change in the law. The court was not bound by its statement of intended decision. ( Horning v. Shilberg (2005) 130 Cal.App.4th 197, 203; In re Marriage of Ditto (1988) 206 Cal.App.3d 643, 646-647.)

FN3. The court entered judgment: (1) in favor of Wen, En-Fu and Yu Chang Chiang and against KDS on the first cause of action; (2) in favor of Wen and Julius Chiang and the Chiang Family Investment Partnership and against KDS on the second cause of action; (3) in favor of KDS and against Wen Chiang in the sum of $152,186.48 on the third cause of action; (4) in favor of the Chiang Family Investment Partnership and against KDS on the fourth cause of action; (5) against KDS and in favor of Wen Chiang and the Chiang Family Investment Partnership on the fifth cause of action; (6) in favor of KDS and against Wen and Julius Chiang on the sixth cause of action; and (7) in favor of Crystalview and against KDS, also on the sixth cause of action. No damages were awarded against Wen and Julius on the sixth cause of action, but KDS did not appeal from the judgment. The court entered default judgment on the sixth cause of action in favor of KDS and against appellants, in the sum of $5 million.

In its statement of decision, the trial court made the following findings regarding the appellants' liability: “[P]laintiff has proved a prima facie case against all of the defaulted defendants in the Sixth Cause of Action. First, plaintiff alleges Julius transferred to his wife his interest in the Pesaro residence without valid consideration. Wen then transferred $200,786.37 to Brenda Chang in furtherance of the conspiracy to defraud creditors···· Julius, as Wen's husband and a joint tenant in the property, had a one-half interest in the proceeds transferred, i.e., $100,393.19. The Sixth Cause of Action incorporates all preceding paragraphs. It is alleged that the defaulted defendants joined the conspiracy to defraud creditors···· The defendants then transferred or aided in the transfer of large sums of money···· It is further alleged that defendant Crystalview Technology Corp. received large sums of money from Julius' company, Everview, for no consideration ··· causing damage ‘in excess of $5,000,000.’ Therefore, the court awarded the sum of $5,000,000 and $100,393.19 for total damages against the defaulted defendants in the amount of $5,100,393.19.”

The damages award was remitted to $5 million. Judgment was entered, and this timely appeal followed.

Discussion




I.


KDS's Motion to Dismiss Christina Chiang's Appeal

After the completion of briefing, KDS moved to dismiss the appeal of Christina Chiang. She opposed the motion.

An appellate court has the inherent power to dismiss an appeal if the appellant willfully fails to respond to postjudgment interrogatories. ( TMS, Inc. v. Aihara (1999) 71 Cal.App.4th 377, 379-380.) “A party to an action cannot, with right or reason, ask the aid and assistance of a court in hearing his demands while he stands in an attitude of contempt to legal orders and processes of the courts of this state. [Citations.]” ( MacPherson v. MacPherson (1939) 13 Cal.2d 271, 277.)

*3 KDS contends Christina Chiang willfully failed to respond to postjudgment interrogatories, and therefore asks us to dismiss her appeal. KDS has not met its burden of proof to support the sanction of dismissal of the appeal. KDS's motion papers include a set of postjudgment interrogatories directed to Christina Chiang, Christina's responses, a minute order and notice of ruling granting a motion to compel further responses, and supplemental responses by Christina. Christina's supplemental responses, for the most part, stated that she had already produced “a complete and accurate accounting of all of my assets” to KDS as part of a bankruptcy case pending in Canada. Former Code of Civil Procedure section 2030, subdivision (f),FN4 gave a party responding to interrogatories the “option to produce writings.” In the context of this case, as well as the myriad of other cases in the United States and Canada involving the same parties, the same documents, and the same information, we cannot conclude that Christina's supplemental responses to the postjudgment interrogatories constitute a willful failure to respond to discovery. We do not know whether KDS has attempted to seek additional relief from the trial court, whether by a further motion to compel or a motion for sanctions, and our opinion here is not intended to apply to such a proceeding. KDS's motion to dismiss the appeal of Christina Chiang is denied.

FN4. The postjudgment interrogatories were served March 8, 2005, and therefore the provisions of the Civil Discovery Act of 1986 apply. Former Code of Civil Procedure section 708.020, subdivision (a), provided that postjudgment interrogatories should be responded to in the manner provided by section 2030.




II.


Standard of Review

When damages are awarded following entry of a default, we review the record to determine whether it contains substantial evidence to support the damages. ( Scognamillo v. Herrick (2003) 106 Cal.App .4th 1139, 1150.)

III.


Appellants Have Not Met Their Burden of Proving There Was Not Substantial Evidence Supporting The Trial Court's Finding That Appellants Participated in a Conspiracy to Fraudulently Convey Property.

Appellants contend that KDS failed to establish a transfer of property by Julius Chiang to appellants, and appellants therefore cannot be liable for conspiracy to fraudulently convey.

Two statutes may be involved when, as is the case here, present, not future, creditors challenge the alleged fraudulent transfers. Civil Code section 3439.04, subdivision (a), provides: “A transfer made or obligation incurred by a debtor is fraudulent 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 as follows: [¶] (1) With actual intent to hinder, delay, or defraud any creditor of the debtor. [¶] (2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor either: [¶] (A) Was 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. [¶] (B) Intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due.” FN5 Civil Code section 3439.05 provides: “A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the 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.”

FN5. Civil Code section 3439.04 was amended in 2004. Although the former version of the section was in place when this trial was conducted, the changes were stylistic only, and did not substantively change the statute.

*4 Appellants argue the trial court found KDS failed to prove any transfer by Julius that would give rise to a cause of action against appellants, based on the following portion of the court's written statement of decision: “For the most part in the trial, [KDS] put much effort into showing the transfer of funds to Julius Chiang, but, except for the above findings favorable to [KDS], it failed to prove by a preponderance of the evidence any transfer by Julius to a third party.”

Appellants, however, do not acknowledge the court's express reference to “the above findings favorable to” KDS. Those written findings by the court include the following: “The court declares that the transfer by Julius Chiang of his community property interest in the real estate, referred to in the trial as the Pesaro property, was fraudulently transferred to Wen Chiang without consideration. The court further finds that Julius Chiang transferred his personal assets to the certain bank accounts in the name of Shiann Long Chen without consideration. All such transfers were in the furtherance of the conspiracy between defendant Julius Chiang and defendant Wen Chiang and were made in violation of the provisions of Civil Code §§ 3439.04[, subdivision] (b)(1) and 3409.05, to wit, that the defendant Julius Chiang transferred property and assets without receiving a reasonably equivalent value in exchange for the transfers, which left his remaining assets unreasonably small in relation to the amount of the transfers, and was insolvent at the time of the transfers as provided in Civil Code § 3439.02[, subdivision] (a).” The court also found, “[o]n the Sixth Cause of Action of the Second Amended Complaint (Fraudulent Conveyance), the court, by the preponderance of the evidence, finds judgment in favor of [KDS] and against defendants Wen Chiang and Julius Chiang····” We must indulge all presumptions and intendments to support the judgment if supported by substantial evidence. ( In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.)

Appellants' general citation to the entirety of the exhibits admitted by the trial court-more than 2,200 pages in all-does not meet their burden of showing there was not substantial evidence supporting the judgment. “Where the appellant challenges the sufficiency of the evidence, the reviewing court must start with the presumption that the record contains evidence sufficient to support the judgment; it is the appellant's burden to demonstrate otherwise. [Citation.]” ( Baxter Healthcare Corp. v. Denton (2004) 120 Cal.App.4th 333, 368 (italics added); see also Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881; Cal. Rules of Court, rule 14(a).) Appellants have failed to demonstrate the trial court's findings that Julius made fraudulent transfers of property were not supported by substantial evidence.

Appellants also argue the fraudulent transfers alleged in the third cause of action for declaratory relief, in which appellants were not named as defendants, were the basis of a conspiracy separate and apart from the conspiracy appellants were alleged to have been a part of in the sixth cause of action. Appellants fail to offer any support for this contention. In the third cause of action in the second amended complaint, KDS alleged Julius and Wen Chiang mislabeled and hid Julius's assets, “[p]ursuant to the conspiracy set forth herein.” The sixth cause of action alleged “all the Defendants herein joined into a conspiracy” to prevent KDS from collecting on the 1998 judgment. As noted ante, the trial court found against Wen and Julius on the sixth cause of action. The second amended complaint also included general allegations that all defendants “knowingly and willfully conspired and agreed amongst themselves” to hide Julius's assets from KDS. Nothing in the second amended complaint established separate conspiracies relevant to the different causes of action. The trial court's statement of decision did not make any findings that the parties were involved in separate conspiracies. Appellants do not cite us to any portion of the testimony or the documentary evidence in support of this claim. Substantial evidence showed one overarching conspiracy, not separate ones.

IV.


The Judgments Entered in Favor of Some Nondefaulting Defendants Did Not Preclude Entry of a Default Judgment Against Appellants.

*5 Appellants contend that because judgment was entered in favor of Crystalview, Frances Chiang, Warren Matthews, Allen Chiang, and Presidential on the sixth cause of action, the trial court could not have found appellants liable on that cause of action. “The rule is definitely established that where there are two or more defendants and the liability of one is dependent upon that of the other the default of one of them does not preclude his having the benefit of his codefendants establishing, after a contested hearing, the nonexistence of the controlling fact; in such case the defaulting defendant is entitled to have judgment in his favor along with the successful contesting defendant.” ( Adams Mfg. & Engineering Co. v. Coast Centerless Grinding Co. (1960) 184 Cal.App.2d 649, 655 ( Adams ).)

Appellants overstate and misapply the holding of Adams. If the trial court had found there was no fraudulent conveyance, we would agree that it could not later find appellants liable. However, the court found that Julius made multiple fraudulent conveyances. The court's determination that KDS did not prove the involvement of certain nondefaulting defendants in the conspiracy to fraudulently convey property does not mean KDS did not prove a fraudulent conveyance. To the contrary, the court found Julius fraudulently conveyed property, as alleged in the third and sixth causes of action.

True, other defendants prevailed on a cause of action also alleged against appellants. But that does not necessarily mean appellants can escape liability. We must consider why judgment was entered in favor of those nondefaulting defendants. “Where there are two or more defendants and the defenses by the answering defendant go to the basic right of the plaintiff to recover at all, as opposed to his or her right to recover against any particular defendant, and those defenses prove successful, judgment must be entered in favor of both the defendant who answered and the defendant who defaulted. [Citation.]” (Cal. Civil Practice (Thomson/West 2001) Procedure, § 18:4, p. 8.) Having reviewed the record, we cannot say any of the nondefaulting defendants was dismissed because the trial court concluded KDS had no right to recover at all, i.e., there was no fraudulent conveyance.

During trial, Frances Chiang and Warren Matthews moved for judgment under Code of Civil Procedure section 631.8, and the court granted the motion. Neither the motion papers nor the court's written tentative ruling is included in the appellate record, so we have no way to determine the grounds for the trial court's decision. Although the court later found in favor of Crystalview on the sixth cause of action, in denying Crystalview's motion for judgment, the court stated: “As to Crystalview Technology Corp. on the sole cause of action against it, sixth cause of action, deny the motion. [¶] The court has not referred to the element of damage, which the court could do, if defendants rest. [¶] However, anticipating they may produce evidence on damages, the court has only found they have not carried the burden. [¶] Actually, plaintiff has carried its burden to show by preponderance of the evidence that [Crystalview], through its directors, officers and sole shareholder, did conspire[ ] with Julius Chiang, who is a debtor within the meaning of the fraudulent conveyance act.” (Italics added.)

*6 The trial court granted the motion for judgment by Allen Chiang and Presidential, but this ruling was not because KDS had failed to prove the elements of fraudulent conveyance or the existence of a conspiracy. Instead, the court determined the actions of Wen Chiang in furtherance of the conspiracy to fraudulently convey property were not within the course and scope of her duties as a licensed real estate agent for Presidential, which was the only basis for liability on behalf of Presidential and Allen Chiang. (Wen Chiang was a real estate agent for Presidential, and Allen Chiang was its sole shareholder.)

Although several nondefaulting defendants were dismissed from the case, the appellate record does not show their dismissals were due to the establishment of the nonexistence of the controlling fact of liability as to appellants. ( Adams, supra, 184 Cal.App.2d at p. 655.) Therefore, appellants, as the defaulting defendants, were not entitled to judgment in their favor on this ground.

V.


The Complaint Sufficiently Pleaded Fraudulent Conveyance by Appellants in Connection with Jay Chiang's Property.

After a defendant defaults, “the court shall hear the evidence offered by the plaintiff, and shall render judgment in his or her favor for such sum (not exceeding the amount stated in the complaint ··· ), as appears by such evidence to be just.” (Code Civ. Proc ., § 585, subd. (b).) At the default prove-up hearing, the plaintiff “may not introduce evidence on claims not pleaded in the complaint. I.e., defendant may not be subjected to liability in a greater amount or on different claims than those pleaded in the complaint to which he or she has defaulted.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2005) ¶ 5:214, p. 5-49 (rev.# 1, 2004); see Jackson v. Bank of America (1986) 188 Cal.App.3d 375, 387-390.)

In connection with the default prove-up hearing, KDS submitted a declaration from Benny Mendlowitz, Jay Chiang's bankruptcy trustee, and a declaration from Ta-Chung Tseng, KDS's counsel in Taiwan. Exhibits were presented. KDS's expert witness, Mark Berenblut, testified. The trial court also considered testimony presented at the trial of the nondefaulting defendants “if relevant to the prove-up.”

Appellants argue KDS's expert witness failed to provide any evidence of a fraudulent transfer by Julius. There was no need for the expert on damages to do so. As noted repeatedly ante, the trial court found there had been more than one fraudulent transfer by Julius.

Appellants argue KDS did not meet its burden to offer sufficient evidence of its damage claims at the default prove-up hearing. It is the appellants' burden to provide a record sufficient to show the asserted error. ( Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295.) But in their opening and reply briefs, appellants failed to provide us with any citation to the record that would support this claim.

*7 Appellants state in a conclusory fashion, “there was absolutely no factual evidence presented at the default prove-up to support a $5 million judgment against Appellants.” They make no mention of the four days of testimony from damages expert witness Berenblut during the trial and the default prove-up hearing, the declarations of Mendlowitz and Tseng, the 290 pages of exhibits offered at the default prove-up hearing, or the 2,219 pages of exhibits offered at the trial of the nondefaulting defendants, all of which are part of the appellate record. In response to our request for supplemental briefing, appellants challenged several transfers as not constituting fraudulent conveyances.

In its respondent's brief, KDS acknowledges that some portion of the $5 million default judgment was based on allegedly fraudulent transfers by Jay Chiang, not Julius Chiang: “The trial court must have considered transfers by Jay Chiang in awarding the damages it did under the default judgment.” KDS further acknowledges, “the $5 Million default judgment is not justified if transfers by judgment debtor Jay Chiang are not considered.”

The issue thus becomes whether appellants were on notice from the allegations of the second amended complaint that fraudulent transfers of Jay's assets could be included in the default judgment. “It is a fundamental concept of due process that a judgment against a defendant cannot be entered unless he was given proper notice and an opportunity to defend. (U.S. Const., art. XIV; Mullane [v.] Central Hanover Bank (1950) 339 U.S. 306, 313-315····) California satisfies these due process requirements in default cases through [Code of Civil Procedure] section 580.[¶] Section 580 provides in part that ‘[t]he relief granted to the plaintiff, if there be no answer, cannot exceed that which he shall have demanded in his complaint.’ The ‘primary purpose of the section is to guarantee defaulting parties adequate notice of the maximum judgment that may be assessed against them.’ [Citations.] [¶] It is fundamental to the concept of due process that a defendant be given notice of the existence of a lawsuit and notice of the specific relief which is sought in the complaint served upon him. The logic underlying this principle is simple: a defendant who has been served with a lawsuit has the right, in view of the relief which the complainant is seeking from him, to decide not to appear and defend. However, a defendant is not in a position to make such a decision if he or she has not been given full notice.” ( In re Marriage of Lippel (1990) 51 Cal.3d 1160, 1166.) FN6

FN6. Code of Civil Procedure section 580, subdivision (a), provides: “The relief granted to the plaintiff, if there is no answer, cannot exceed that which he or she shall have demanded in his or her complaint, in the statement required by Section 425.11, or in the statement provided for by Section 425.115; but in any other case, the court may grant the plaintiff any relief consistent with the case made by the complaint and embraced within the issue. The court may impose liability, regardless of whether the theory upon which liability is sought to be imposed involves legal or equitable principles.”

Code of Civil Procedure section 580 requires that the complaint provide adequate notice to the defendant of both the type and the amount of damages sought; a default judgment exceeding either cannot stand. ( Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489, 493-494.) It is not the amount of relief awarded that is at issue in this case; indeed, the second amended complaint sought damages in excess of $9 million against defendants, including appellants, and the default judgment was limited to $5 million.

*8 Nor does the default judgment exceed the type of relief requested by the second amended complaint. KDS sought general damages as a result of the fraudulent transfers in which appellants participated; the trial court awarded general damages for fraudulent conveyance. ( In re Marriage of Lippel, supra, 51 Cal.3d 1160, 1170-1171 [failure by wife to indicate on petition she was seeking child support in dissolution proceeding prevented court from awarding child support in default judgment because petition did not give notice to husband that type of relief was being sought]; Becker v. S.P.V. Construction Co., supra, 27 Cal.3d 489, 494-495 [compensatory damages, punitive damages, and attorney fees are different types of relief]; Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1302 [where complaint demands money judgment and court enters money judgment, plaintiff has not obtained a different form of relief]; Finney v. Gomez (2003) 111 Cal.App.4th 527, 539 [although court may generally provide an accounting in partition case, if an accounting was not requested in complaint, it cannot be awarded as remedy in default judgment without violating defendant's constitutional right to notice].)

Rather, the issue in this case is whether the allegations of the second amended complaint were sufficient to apprise appellants that the relief sought was based not only on fraudulent transfers of Julius's property, but also on fraudulent transfers of Jay's property. Jay was not named as a defendant in this case. Thus, appellants argue, they were not on notice they would be liable for assisting in the fraudulent conveyance of Jay's property as well as Julius's property. For the reasons described post, we conclude the second amended complaint did give them sufficient notice.

By defaulting, appellants admitted all material allegations of the second amended complaint. ( Sporn v. Home Depot USA, Inc., supra, 126 Cal.App.4th 1294, 1303.) In assessing whether a pleading is sufficient for purposes of overcoming a demurrer, we consider whether “the complaint as a whole contain[s] sufficient facts to apprise the defendant of the basis upon which the plaintiff is seeking relief.” ( Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.) “[L]anguage must be read not in isolation, but in the context of the facts alleged in the rest of petitioner's complaint.” ( Ibid.) In assessing whether the allegations in the second amended complaint provided notice to appellants for due process purposes, we also consider the language of the complaint as a whole.

The second amended complaint attached and incorporated the judgment from the first action, which unquestionably lists Jay Chiang as a judgment debtor who is jointly and severally liable for the entirety of the judgment. In the general allegations, KDS alleged appellants (and the other defendants) “knowingly and willfully conspired and agreed amongst themselves to transfer assets, hide assets, take assets in their names which are not theirs, all for the purpose of preventing collection on the judgment and allowing defendant JULIUS CHIANG to continue to enjoy the benefits of his assets and keep them beyond the reach of [KDS] in its effort to execute on the judgment. The defendants acted with the intent to hinder and impede [KDS]'s proper and lawful collection efforts against JULIUS CHIANG and his assets.” The second amended complaint also alleged appellants and other defendants “knew that JULIUS CHIANG was insolvent, knew that judgment creditors would or had obtained a judgment against him, and knowingly participated in the actions herein with the intent to hinder and delay [KDS]'s rights.” Appellants and other defendants were alleged to have knowingly and willfully agreed “to act in concert to hinder, delay and otherwise obstruct the collection efforts of [KDS] for its judgment against JULIUS CHIANG···· [KDS] is currently unaware of whether there were separate conspiracies regarding each fraudulently conveyed asset or whether all the parties agreed in one conspiracy to take the various acts set forth herein to hinder, delay and obstruct [KDS]'s collection efforts under the judgment.” The sixth cause of action for fraudulent conveyance incorporated by reference each of the foregoing allegations. (The first through fifth causes of action are limited to transfers of Julius's real property.)

*9 The allegations of the sixth cause of action use much more expansive language than do the general allegations, referring more generally to collection on the judgment that was against Jay Chiang, among others. Paragraph 63 of the second amended complaint alleges: “[A]ll the Defendants herein joined into a conspiracy to hinder, delay and obstruct KDS-USA's efforts to collect on the judgment. Non-defendant judgment debtor Jay Chiang is also part of said conspiracy. The conspiracy is international in scope. As part of the conspiracy, Defendants concealed and destroyed evidence of the location of transfers of assets.” The next paragraphs allege: “As part of the conspiracy, various defendants transferred or aided in the transfer of large sums of money, which could be subject to execution under the judgment. Said transfers went from country to country and bank account to bank account. [¶] ··· [KDS] has initiated actions in Canada, Hong Kong and Taiwan in an effort to collect on the judgment and hold these and other Defendants responsible for their role in the conspiracy to fraudulent[ly] convey and conceal assets.” KDS then listed specific transfers of assets, none of which included any transfers of Jay's assets. “[KDS] has been damaged by these actions in the amount of the total of all the fraudulent transfers made by the various Defendants pursuant to the conspiracy with the intent to hinder, delay and obstruct [KDS]'s collection efforts.”

When the second amended complaint is viewed as a whole, we conclude appellants were on notice that transfers of Jay's property could be a part of a default judgment against them. Therefore, the default judgment did not violate appellants' due process rights. Jay was a judgment debtor named as jointly and severally liable for the judgment in the first case. Jay's property was therefore subject to execution to satisfy the judgment in the first case. In the second amended complaint in this case, KDS alleged appellants conspired to prevent KDS from collecting on the judgment and participated in transferring assets that could be used to satisfy the judgment-which would include Jay's assets. True, certain allegations in the second amended complaint are specific to transfers of Julius's property, but that does not mean the more generally stated allegations can be disregarded. The allegations of the second amended complaint were sufficient to put appellants on notice that transfers of Jay's assets were at issue as part of a conspiracy to defraud creditors. Therefore, we conclude the second amended complaint gave appellants sufficient notice for due process purposes that evidence of transfers of Jay's property might be offered to support the default judgment.

VI.


We Cannot Determine Whether the Damages Awarded in the Default Judgment Can Be Supported on This Record, and Therefore Remand This Matter for Preparation of a New Statement of Decision.

“A statement of decision should set forth ultimate facts rather than evidentiary facts. [Citations.] [¶] It should provide a narrative explanation of the judge's reasoning-the ‘factual and legal basis' for the decision [citation]. But the judge cannot be required ‘to make minute findings as to individual items of evidence .’ [Citation.]” (Wegner et al., Cal. Practice Guide: Civil Trials and Evidence (The Rutter Group 2005) ¶ 16:172, p. 16-37 (rev.# 1, 2002).)

*10 The statement of decision in this case does not adequately explain the factual or legal basis for the court's decision that appellants were liable for a default judgment of $5 million. The question before us is whether there is substantial evidence to support the finding that appellants are liable for $5 million. The substantial evidence standard of review is very liberal. “ ‘When a trial court's factual determination is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination, and when two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court. If such substantial evidence be found, it is of no consequence that the trial court believing other evidence, or drawing other reasonable inferences, might have reached a contrary conclusion.’ [Citation.] The substantial evidence standard of review is applicable to appeals from both jury and nonjury trials. [Citation.]” ( Jameson v. Five Feet Restaurant, Inc. (2003) 107 Cal.App.4th 138, 143.)

Notwithstanding the liberality of the substantial evidence standard of review, on the record before us-and even considering the parties' arguments regarding the evidence-we cannot tell whether substantial evidence supported the $5 million default judgment. For purposes of illustration only, not by way of limitation, we note the following: (1) The statement of decision does not contain any explanation of how the $5 million in damages was computed or any identification of which transactions were considered fraudulent. (2) The trial court entered judgment for Crystalview on the sixth cause of action. The court then found Crystalview received money from Julius's company Everview for no consideration “causing damage ‘in excess of $5,000,000.’ “ Based on that finding, the court awarded $5 million in damages. Given the appellate record, we cannot square those two aspects of the statement of decision. (3) Did KDS have a right to funds held by Everview and transferred to Cyrstalview? (4) The trial court correctly noted that a default judgment is limited in amount to the damages specifically alleged in the complaint. Although the second amended complaint alleged damages “in excess of $9 million,” the court remitted KDS's damages to $5 million. (5) The statement of decision states that KDS alleged $5 million in damages, but does not explain how KDS proved damages of $5 million, or any other amount, for that matter. (6) The statement of decision finds in favor of KDS and against Wen and Julius Chiang on the sixth cause of action, but awards no damages against them on that claim, while awarding KDS $5 million in damages against appellants on the same claim.

*11 The damages issue was identified by KDS in its request for a statement of decision, and was a principal controverted issue at trial. Under these circumstances, it is appropriate for us to reverse the judgment with directions to the trial court to issue a new statement of decision and enter a new judgment based on that statement of decision, consistent with our holdings herein. In a similar situation, our Supreme Court approved the Court of Appeal's procedure, as follows: “The Court of Appeal held that Judge Miller's statement of decision was insufficient as a matter of law because it failed to adequately explain the factual or legal basis for his decision on a number of issues identified by Commercial Union and deemed by the Court of Appeal to constitute ‘principal controverted issues at trial’ [citation]. On this ground, the Court of Appeal reversed the judgment with directions to Judge Miller to issue a new statement of decision addressing certain additional issues and to enter a new judgment based thereon.” ( Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1066-1067.) We follow the same course and reverse the judgment and direct the trial court to issue a new statement of decision providing the factual basis for its damages award against appellants.

Disposition

The judgment is affirmed in part, reversed in part, and the matter is remanded with directions to the trial court to issue a new statement of decision and enter a new judgment based on that statement of decision. Because neither party has fully prevailed on this appeal, neither party shall recover costs on appeal.

WE CONCUR: MOORE, Acting P.J., and ARONSON, J


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