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 Post subject: FT - Cadle v. Corrigan (5/2/2006)
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Cadle v. Corrigan
2006 WL 1149340 (Cal.App. 4 Dist. 05/02/2006)
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 This opinion has not been certified for publication or ordered published for purposes of rule 977.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 1, California

THE CADLE COMPANY, Plaintiff and Appellant,

v.

Jane M. CORRIGAN et al., Defendants and Respondents.

No. D046486.

(Super.Ct.No. GIC829134).

May 2, 2006.

APPEAL from a judgment of the Superior Court of San Diego County, William C. Pate, Judge. Affirmed.

James Ray Knoles, Brewer & Brewer, Newport Beach, CA, for Plaintiff and Appellant.

Craig Eugene Dwyer, Christopher R. Mordy, Smaha & Daley, San Diego, CA, for Defendants-Respondents.

McDONALD, J.

*1 Plaintiff The Cadle Company (Cadle) appeals a judgment entered following a bench trial in favor of defendants Jane M. Corrigan, Pacific Beach Veterinary, Inc. (PBVI), and Eugene Breznock (collectively Defendants) in Cadle's action against Defendants for fraudulent transfer of Corrigan's assets. On appeal, Cadle in effect contends the evidence is insufficient to support the trial court's finding that Corrigan's transfer of assets to PBVI was not fraudulent.

FACTUAL AND PROCEDURAL BACKGROUND

Corrigan, Breznock, and Breznock's wife have been friends since they were veterinary students at the same university in the early 1970's. In 1977, Corrigan bought the Pacific Beach Veterinary Clinic (Clinic). In the late 1980's or early 1990's, Corrigan obtained a loan from First California Bank, which was secured by the Clinic's equipment. That loan was later assigned to Scripps Bank.

In 1994 Corrigan and her husband were having financial problems. Corrigan's secured loan was in default with an outstanding balance of approximately $235,000. On May 2, in response to Corrigan's request for assistance, Breznock bought Corrigan's loan from Scripps Bank, paying a discounted amount of $92,000.

On May 3, 1994, a $900,000 judgment was entered in favor of First National Bank against Corrigan and her husband, apparently on an unrelated matter involving her husband's business.FN1 On or about May 20, First National Bank assigned its interest in the $900,000 judgment to Cadle.FN2 On June 1, First National Bank filed an acknowledgment of its assignment of the judgment to Cadle.

FN1. Corrigan testified at trial that she first became aware of that judgment on October 7, 2003.

FN2. In April 2004, Cadle timely renewed that judgment.

On or about June 15, 1994, Corrigan and Breznock entered into a sale and leaseback agreement, pursuant to which Corrigan sold the Clinic's inventory and equipment to Breznock in exchange for Breznock's cancellation of her secured loan.FN3 As part of that agreement, Breznock leased back those assets to Corrigan at a rent of $5,000 per month, payment of which was deferred until Corrigan sold or closed the Clinic, at which time the accrued rent would be payable in full without interest. The agreement also provided that if Corrigan did not sell or close the Clinic within five years, Breznock had the right to require her to list the Clinic for sale. If the Clinic was not sold within 120 days thereafter, the deferred rent would become immediately due and payable.

FN3. The sale and leaseback agreement noted Corrigan's secured loan had an outstanding balance of $226,000 at the time.

In October 2003, Cadle had a keeper installed at the Clinic to collect all of its receipts (to be applied against Corrigan's $900,000 judgment).FN4 The keeper apparently collected approximately $9,200 during the one week it was installed.

FN4. Breznock testified at trial that he first became aware of the $900,000 judgment against Corrigan in 2003 when she informed him a keeper had been installed at the Clinic. Corrigan testified Cadle had not asked her to pay that judgment until 2003, when it installed the keeper.

On October 29, Breznock transferred his rights under the 1994 sale and leaseback agreement to PBVI, a corporation he formed for that purpose. At the time, Corrigan's deferred rent payable under that agreement had an unpaid balance of about $565,000. On October 30, Corrigan and PBVI entered into a purchase and sale agreement (Agreement), pursuant to which Corrigan sold all of the Clinic's assets to PBVI in exchange for PBVI's forgiveness of unpaid rent Corrigan owed it.FN5 In conjunction with the Agreement, Corrigan and PBVI also entered into a surrender agreement, pursuant to which they terminated the 1994 lease and Corrigan surrendered to PBVI all of the leased inventory and equipment.

FN5. The Agreement also provided Corrigan could work up to 10 hours per week for five years managing the Clinic for PBVI and be paid $5,000 per month for those services. However, at trial Corrigan testified that although she worked about 10 hours per week managing the Clinic for PBVI, she declined the $5,000 monthly compensation and instead received payment of her car lease, related car expenses, and cellular telephone bills, totaling about $660 per month. The Agreement also included a noncompetition clause, precluding Corrigan from competing with PBVI for two years.

*2 On April 26, 2004, Cadle filed a complaint for fraudulent transfer against Corrigan, PBVI, and Breznock, alleging Corrigan's 2003 transfer of the Clinic's assets to PBVI pursuant to the Agreement was a fraudulent transfer and requesting an order declaring that transfer void. On March 2, 2005, a one-day bench trial was conducted during which the trial court heard the testimonies of Corrigan and Breznock and admitted into evidence various documentary exhibits. After considering that evidence, reading the parties' trial briefs, and hearing arguments of counsel, the trial court made the following findings:

“i. The [2003] transfer of the remaining asserts of the Clinic to [PBVI] from Dr. Corrigan [e]ffected a delay and hindrance in [Cadle's] attempts to collect on its judgment.

“ii. The rule permitting preferential transfers between creditors is valid and serves to reject challenges to preferential transfers.

“iii. [Cadle] is an unpreferred creditor to Dr. Corrigan.

“iv. A preference cannot be undone by a competing creditor.

“v. The evidence is uncontradicted that there was a valid lease between Dr. Corrigan and Dr. Breznock that provided for an encumbrance of $5,000 per month and that the parties to the lease accumulated the sum of $565,000.

“vi. There was a fair value received for the [2003] transfer of the Clinic from Dr. Corrigan to [PBVI].

“vii. A time[-]barred debt can constitute reasonable equivalent value in the process of determining whether or not a transfer was fraudulent.

“viii. [Cadle] failed in its burden of proving that the [2003] transfer of the Clinic was, in fact, fraudulent.

“ix. Defendants are entitled to costs according to statute.” (Italics added.)

Accordingly, the trial court entered judgment for Defendants and against Cadle.

Cadle timely filed a notice of appeal.

DISCUSSION

I

Standard of Review

A judgment of a trial court “is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness. [Citations.]” ( In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) This is particularly true when, as in this case, the appellant “did not request a statement of decision or findings of fact. Under these circumstances, all intendments favor the ruling below [citation], and we must assume that the trial court made whatever findings are necessary to sustain the judgment. [Citation.]” ( Michael U. v. Jamie B. (1985) 39 Cal.3d 787, 792-793, superseded by statute on another ground as noted in In re Zacharia D. (1993) 6 Cal.4th 435, 448.) Furthermore, “[t]he burden of demonstrating error rests on the appellant. [Citation.]” ( Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.)

Although Cadle omits from its briefs any discussion of the applicable standard of review, Defendants assert, and we agree, that Cadle's various appellate contentions essentially challenge the sufficiency of the evidence to support the trial court's findings. “When the trial court has resolved a disputed factual issue, the appellate courts review the ruling according to the substantial evidence rule. If the trial court's resolution of the factual issue is supported by substantial evidence, it must be affirmed.” ( Winograd v. American Broadcasting Co., supra, 68 Cal.App.4th at p. 632.) In applying the substantial evidence 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. [Citation.] 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.) “The substantial evidence standard applies to both express and implied findings of fact made by the superior court in its statement of decision rendered after a nonjury trial. [Citation.]” ( SFPP v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 462.) “ ‘Substantial evidence’ is evidence of ponderable legal significance, evidence that is reasonable, credible and of solid value. [Citations.] ‘Substantial evidence ··· is not synonymous with “any” evidence.’ ··· [Citations.] The focus is on the quality, rather than the quantity, of the evidence.” ( Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.) “It is not our task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact.” ( Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 630.) Alternatively stated, we do not evaluate the credibility of the witnesses or otherwise reweigh the evidence. ( Id. at p. 629.) Rather, “we defer to the trier of fact on issues of credibility. [Citation.]” ( Lenk v. Total-Western, Inc. (2001) 89 Cal.App.4th 959, 968.)

II

Preferential Transfers and Fraudulent Transfers Generally

*3 In general, a debtor may make a preferential transfer of assets to one creditor rather than to another. ( Wyzard v. Goller (1994) 23 Cal.App.4th 1183, 1188.) Civil Code section 3432,FN6 enacted in 1872, provides: “A debtor may pay one creditor in preference to another, or may give to one creditor security for the payment of his [or her] demand in preference to another.” Wyzard stated:

FN6. All further statutory references are to the Civil Code.

“Even before enactment of the Field Codes [in 1872], it had been recognized that a failing or insolvent debtor could prefer one creditor over another. (See Randall v. Buffington (1858) 10 Cal. 491, 494 [‘··· it is difficult to perceive how the payment of a debt which [is] justly owed, and which was past due, can be tortured into an act to hinder, delay, and defraud creditors']; [citation.] Subsequent cases continued the judicial refusal to set aside a preferential transfer solely because it worked a preference. [Citations.] If the transfer was for fair consideration and not fraudulent, the only basis to set it aside was through bankruptcy···· [Citations.] [¶] The general rule permitting a debtor to prefer one creditor or group of creditors over others has long been subject to exceptions in cases of fraud.” ( Wyzard v. Goller, supra, 23 Cal.App.4th at p. 1188.)

In 1939 California adopted the Uniform Fraudulent Conveyances Act and subsequently (in 1986) adopted the updated version of that act, the Uniform Fraudulent Transfer Act (UFTA) (§§ 3439 et seq.). ( Wyzard v. Goller, supra, 23 Cal.App.4th at pp. 1188-1189.) “The UFTA permits defrauded creditors to reach property in the hands of a transferee.” ( Mejia v. Reed (2003) 31 Cal.4th 657, 663.) The UFTA, “like its predecessor and the Statute of 13 Elizabeth, declares rights and provides remedies for unsecured creditors against transfers that impede them in the collection of their claims.” (Legis. Com. com., 12A West's Ann. Civ.Code (1997 ed.) foll. § 3439.01, p. 272.) “Under the UFTA, a transfer can be invalid either because of actual fraud [§ 3439.04, subd. (a)(1) ] or constructive fraud [§§ 3439.04, subd. (a)(2), 3439.05].” ( Mejia v.. Reed, supra, at p. 661.) Mejia stated:

“Under the UFTA, a transfer is fraudulent, both as to present and future creditors, if it is made ‘[w]ith actual intent to hinder, delay, or defraud any creditor of the debtor.’ (Civ.Code, § 3439.04, [subd.(a)(1) ].) Even without actual fraudulent intent, a transfer may be fraudulent as to present creditors if the debtor did not receive ‘a reasonably equivalent value in exchange for the transfer’ and ‘the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.’ (Civ.Code, § 3439.05.)” ( Mejia v. Reed, supra, 31 Cal.4th at p. 664.) FN7

FN7. Section 3439.04 provides: “(a) 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····” Section 3439.04 makes a debtor's transfer fraudulent if the provisions of either subdivision (a)(1) or subdivision (a)(2) are satisfied. ( Annod Corp. v. Hamilton & Samuels (2002) 100 Cal.App.4th 1286, 1294.) 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.”

“Whether a conveyance was made with fraudulent intent is a question of fact, and proof often consists of inferences from the circumstances surrounding the transfer. [Citation.]” ( Filip v. Bucurenciu (2005) 129 Cal.App.4th 825, 834.) Regarding those circumstances, Filip stated:

*4 “Over the years, courts have considered a number of factors, the ‘badges of fraud’ [citation] described in a Legislative Committee comment to section 3439.04, in determining actual intent. [Citation.] Effective January 1, 2005, those factors are now codified as section 3439.04, subdivision (b) and include considerations such as whether the transfer was made to an insider (§ 3439.04, subd. (b)(1)), whether the transferee retained possession or control after the property was transferred (§ 3439.04, subd. (b)(2)), whether the transfer was disclosed (§ 3439.04, subd. (b)(3)), whether the debtor had been sued or threatened with suit before the transfer was made (§ 3439.04, subd. (b)(4)), whether the value received by the debtor was reasonably equivalent to the value of the transferred asset (§ 3439.04, subd. (b)(8)), and similar concerns. According to section 3439.04, subdivision (c), this amendment ‘does not constitute a change in, but is declaratory of, existing law.’ “ ( Filip v. Bucurenciu, supra, 129 Cal.App.4th at p. 834.) FN8

FN8. Section 3439.04, subdivision (b) provides: “In determining actual intent under paragraph (1) of subdivision (a), consideration may be given, among other factors, to any or all of the following: [¶] (1) Whether the transfer or obligation was to an insider. [¶] (2) Whether the debtor retained possession or control of the property transferred after the transfer. [¶] (3) Whether the transfer or obligation was disclosed or concealed. [¶] (4) Whether before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit. [¶] (5) Whether the transfer was of substantially all of the debtor's assets. [¶] (6) Whether the debtor absconded. [¶] (7) Whether the debtor removed or concealed assets. [¶] (8) Whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred. [¶] (9) Whether the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred. [¶] (10) Whether the transfer occurred shortly before or shortly after a substantial debt was incurred. [¶] (11) Whether the debtor transferred the essential assets of the business to a lienholder who transferred the assets to an insider of the debtor.”

The presence of one or more of the “badges of fraud” does not create a presumption of fraud, but is evidence from which an inference of actual fraudulent intent may be drawn. ( Wyzard v. Goller, supra, 23 Cal.App.4th at p. 1191.)

III

Corrigan's 2003 Transfer of the Clinic's Assets

Cadle contends the trial court erred by finding Corrigan's 2003 transfer of the Clinic's assets to PBVI was not a fraudulent transfer. Although Cadle's various assertions do not use the term “substantial evidence,” those assertions in effect argue there is insufficient evidence to support the trial court's findings. Accordingly, we apply the substantial evidence standard of review in addressing Cadle's appellate contentions.

A

Cadle first asserts the trial court could apply the section 3432 preferential transfer rule only if PBVI were a bona fide creditor and only if the transfer was not fraudulent under section 3439.04. Cadle argues the trial court ignored the issue of whether Corrigan's 2003 transfer of Clinic's assets was fraudulent under section 3439.04, did not consider the “badges of fraud” and relied solely on section 3432 in entering judgment for Defendants.

Although, as Cadle notes, the trial court stated it was not “really necessary” to consider all 11 indicia of actual fraudulent intent under the UFTA “because of the nature of the transfer” in this case, it did so in discussing the potential applicability of the holding in Wyzard v. Goller, supra, 23 Cal.App.4th 1183. Wyzard addressed the question of “whether a preferential transfer, if made for proper consideration (‘value’ under the new law; [citation] ), but with recognition that the transfer will effectively prevent another creditor from collecting on his [or her] debt, is one made with ‘actual intent to hinder, delay, or defraud’ that creditor.” ( Id. at p. 1189.) Wyzard concluded that a debtor's transfer to an attorney creditor “in payment for his legal services, while a preference, is not for that reason a transfer made to ‘hinder, delay or defraud’ [another creditor].” ( Id. at p. 1191, italics added.) FN9 However, Wyzard also expressly stated that the preferential transfer rule does not apply in cases of fraud. ( Id. at p. 1188.) “The general rule permitting a debtor to prefer one creditor or group of creditors over others has long been subject to exceptions in cases of fraud.” ( Ibid.)

FN9. In Wyzard it was conceded that the attorney creditor “had rendered the services he claimed to have rendered, and thus had earned the fee secured by the encumbrances.” ( Wyzard v. Goller, supra, 23 Cal.App.4th at p. 1191.)

*5 Because it extensively discussed Wyzard, we infer the trial court in this case was aware of the fraud exception to the preferential transfer rule and did not simply conclude that rule applied to the exclusion of the UFTA's provisions regarding fraudulent transfers. We presume the trial court's judgment is correct and make all intendments and presumptions to support it. ( In re Marriage of Arceneaux, supra, 51 Cal.3d at p. 1133.) Furthermore, because Cadle did not request a statement of decision, “we must assume that the trial court made whatever findings are necessary to sustain the judgment. [Citation.]” ( Michael U. v. Jamie B., supra, 39 Cal.3d at p. 793.) Accordingly, we presume, despite some language that could support a contrary inference, the trial court in this case did not rely solely on the preferential transfer rule and instead also appropriately considered the UFTA's provisions regarding fraudulent transfers.

Furthermore, the trial court's statement that it was not “really necessary” to discuss all 11 indicia [i.e., “badges of fraud”] “because of the nature of the transfer” could reasonably be construed as referring to, and considering, those particular indicia of fraud that apply to the nature of challenged transfer (e.g., § 3439.04, subd. (b)(1) [whether the transfer was to an insider], subd. (b)(3) [whether the transfer was disclosed or concealed]; subd. (b)(5) [whether the transfer was of substantially all the debtor's assets]; subd. (b)(8) [whether the value of the consideration received by the debtor was reasonably equivalent to the value of the transferred asset]; and subd. (b)(9) [whether the transfer occurred shortly before or shortly after a substantial debt was incurred] ). We infer from the trial court's statement that it appropriately considered those indicia of fraud that apply to the nature of a challenged transfer. In any event, section 3439.04, subdivision (b) does not require a trial court to consider its listed “badges of fraud.” Rather, a trial court “may” consider “any or all” of those badges of fraud. (§ 3439.04, subd. (b).) Accordingly, a trial court does not necessarily err by not considering any or all of those indicia.

B

Cadle also asserts the evidence “clearly” shows section 3439.04's “badges of fraud” existed in the circumstances of this case, making Corrigan's 2003 transfer of the Clinic's assets a fraudulent transfer. Cadle then cites evidence that would have supported findings by the trial court that many, if not all, of the “badges of fraud” existed in this case. However, in so arguing, Cadle in effect asserts there is insufficient evidence to support the trial court's finding that Corrigan's 2003 transfer was not a fraudulent transfer and, by citing evidence only in its favor, ignores the rules for applying the substantial evidence standard of review. In determining whether there is any substantial evidence to support the trial court's explicit and implicit findings, “[w]e must ··· 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····” ( Jessup Farms v. Baldwin, supra, 33 Cal.3d at p. 660.) Furthermore, we do not evaluate the credibility of the witnesses or otherwise reweigh the evidence. ( Howard v. Owens Corning, supra, 72 Cal.App.4th at pp. 629-630.)

*6 However, the fact there may have been substantial evidence to support a contrary finding by the trial court (i.e., there was actual fraudulent intent based on the “badges of fraud”) does not show there was insufficient evidence to support the trial court's actual finding there was no fraudulent intent or transfer. Accordingly, we need not, and do not, discuss Cadle's purported evidence, which it does not support with citations to the record, that would support its proffered findings on each of the 11 “badges of fraud” under section 3439.04, subdivision (b). Cadle essentially asks us to reweigh the evidence and make inferences contrary to those explicitly or implicitly made by the trial court. That is not our appellate function. ( Howard v. Owens Corning, supra, 72 Cal.App.4th at pp. 629-630.)

Furthermore, although Cadle apparently argues Corrigan's 2003 transfer was constructively fraudulent because she did not receive adequate consideration, there is substantial evidence to support the trial court's express finding that Corrigan received “a fair value” for her transfer of the Clinic's assets to PBVI. The court found Corrigan's 1994 lease of the inventory and equipment was valid and under that lease Corrigan owed PBVI $565,000 at the time of the 2003 transfer. The testimonies of Corrigan and Breznock showed the value of the Clinic's assets in 2003 was less than the $565,000 amount Corrigan owed PBVI, which debt was forgiven pursuant to the Agreement. Therefore, there is substantial evidence to support the trial court's implied finding that Corrigan received reasonably equivalent value for her transfer of the Clinic's assets to PBVI. Because she received reasonably equivalent value, her 2003 transfer of the Clinic's assets was not constructively fraudulent under section 3439.04, subdivision (a)(2).FN10

FN10. Lefrooth v. Prentice (1927) 202 Cal. 215, cited by Cadle, is inapposite and does not persuade us to conclude otherwise.

C

In a separate argument, Cadle again asserts the trial court ignored or did not consider evidence that would have supported a finding that Corrigan's 2003 transfer was a fraudulent transfer. It challenges the trial court's finding that the 1994 sale and leaseback was valid, and argues there was evidence to support a finding that the 1994 sale and leaseback was a fraudulent transfer and not for reasonably equivalent value; the 1994 sale and leaseback was “intended to create a phony debt in order to either to put an asset out of reach of the judgment creditor, or to allow the very claimed ‘preferential transfer’ [i.e., the 2003 transfer].”

However, Cadle again misconstrues or misapplies the applicable standard of review. In reviewing Cadle's challenge of the judgment based on the sufficiency of the evidence, we determine whether there is substantial evidence to support the trial court's explicit and implicit findings and “must ··· 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····” ( Jessup Farms v. Baldwin, supra, 33 Cal.3d at p. 660.) Furthermore, we do not evaluate the credibility of the witnesses or otherwise reweigh the evidence. ( Howard v. Owens Corning, supra, 72 Cal.App.4th at pp. 629-630.) The fact there may have been substantial evidence to support a contrary finding by the trial court that the 1994 sale and leaseback was a fraudulent transfer or was not for reasonably equivalent value does not show there was insufficient evidence to support the trial court's actual finding that the 1994 sale and leaseback was valid and implied finding that the 1994 lease resulted in a valid debt of $565,000 owed by Corrigan to Breznock/PBVI for accumulated, unpaid rent. Accordingly, we need not, and do not, discuss Cadle's purported evidence, which it does not support with citations to the record, that would support its proffered findings contrary to those explicitly or implicitly made by the trial court. It is not our function to reweigh the evidence and make inferences contrary to those explicitly or implicitly made by the trial court. ( Howard v. Owens Corning, supra, 72 Cal.App.4th at pp. 629-630.)

D

*7 Cadle also asserts the evidence showed Corrigan did not receive reasonably equivalent value for her 2003 transfer of the Clinic's assets to PBVI. It argues that because Breznock never had the intent to collect the $565,000 debt Corrigan owed him, the forgiveness of that debt could not be considered “reasonably equivalent value” and therefore Corrigan's 2003 transfer constituted constructive fraud under section 3439.04.

However, Cadle again misconstrues or misapplies the applicable standard of review. In reviewing Cadle's challenge of the judgment based on the sufficiency of the evidence, we determine whether there is any substantial evidence to support the trial court's explicit and implicit findings and “must ··· 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····” ( Jessup Farms v. Baldwin, supra, 33 Cal.3d at p. 660.) Furthermore, we do not evaluate the credibility of the witnesses or otherwise reweigh the evidence. ( Howard v. Owens Corning, supra, 72 Cal.App.4th at pp. 629-630.) The fact there may have been substantial evidence to support a contrary finding by the trial court (i.e., Corrigan's $565,000 debt to Breznock was not valid and did not constitute reasonably equivalent value) does not show there was not substantial evidence to support the trial court's actual finding (i.e., the $565,000 debt was valid) and implied finding (PBVI's forgiveness of Corrigan's $565,000 debt constituted reasonably equivalent value). Accordingly, we need not, and do not, discuss Cadle's purported evidence, which it does not support with citations to the record, that would support its proffered findings contrary to those explicitly or implicitly made by the trial court. It is not our function to reweigh the evidence and make inferences contrary to those explicitly or implicitly made by the trial court. ( Howard v. Owens Corning, supra, 72 Cal.App.4th at pp. 629-630.)

E

Cadle also asserts the evidence showed Corrigan's 2003 transfer of the Clinic's assets was made with the actual intent to hinder, delay, or defraud Cadle's attempts to collect on its $900,000 judgment. (§ 3439.04, subd. (a)(1); Mejia v. Reed, supra, 31 Cal.4th at p. 664.) Without supporting citations to the record, Cadle posits: “Both defendants [i.e., Corrigan and Breznock] admitted on the record that [Cadle] had put in a keeper and was collecting money from [the Clinic], and that the transfer to [PBVI] was meant to specifically stop this. That is a blatant admission that they had actual intent to hinder (destroy, would be the better word) [Cadle's] ability to collect.” Cadle then asserts the trial court failed to consider that evidence.

First, without citations to the record supporting the purported evidence, we need not presume Cadle's asserted evidence exists in the record or is accurately described. Furthermore, it is not our duty to search the entire record to find that evidentiary support. Accordingly, we deem Cadle's contention waived.

*8 In any event, assuming arguendo Corrigan and Breznock testified the Agreement in 2003 was intended to preclude Cadle and its keeper from collecting money from the Clinic, that fact does not necessarily require an inference that Corrigan and Breznock had the actual intent to hinder, delay, or defraud Cadle. Rather, the trial court could, and presumably did, find they had no such intent and instead Corrigan merely gave preferential treatment to one creditor (i.e., Breznock/PBVI) over another creditor (i.e., Cadle), which preference was permissible because the 2003 transfer was not fraudulent under the UFTA. We conclude there is substantial evidence to support those findings by the trial court. It is not our function to reweigh the evidence and make inferences contrary to those explicitly or implicitly made by the trial court. ( Howard v.. Owens Corning, supra, 72 Cal.App.4th at pp. 629-630.)

F

Cadle finally asserts Corrigan's 2003 transfer of the Clinic's assets to PBVI was void because there was no delivery of the assets made to PBVI as required by section 3440. It also asserts Corrigan's 1994 transfer of the Clinic's inventory and equipment to Breznock also was void under section 3440 for lack of delivery.

Section 3440, subdivision (a) provides:

“Except as otherwise provided in this chapter, every transfer of personal property made by a person having at the time the possession of the property, and not accompanied by an immediate delivery followed by an actual and continued change of possession of the property, is void as against the transferor's creditors (secured or unsecured) at the time of the transfer and those who become creditors while the transferor remains in possession and the successors in interest of those creditors, and as against buyers from the transferor for value in good faith subsequent to the transfer.” (Italics added.)

Cadle argues that because the Clinic's assets continued to be kept at the Clinic's place of business after both the 1994 and 2003 transfers, section 3440 required the trial court to conclude those transfers were void as against Cadle.

Assuming arguendo Cadle properly raised the issue at trial, we presume the trial court implicitly considered the potential application of section 3440 in the circumstances of this case and found that statute did not make either the 1994 transfer to Breznock or 2003 transfer to PBVI void as to Cadle. Furthermore, we conclude there is substantial evidence to support that finding. Regarding the 2003 transfer, we first note that PBVI received intangible assets consisting of the Clinic's goodwill as an ongoing veterinary business and Corrigan's covenant not to compete.FN11 The Clinic's equipment was a relatively minor part of the purchase price. Intangible assets are not necessarily susceptible to physical transfer. Rather, they typically are transferred by means of delivery of a bill of sale or similar documentation, which Corrigan delivered to Breznock/PBVI in this case. ( Reynolds v. Reynolds (1960) 54 Cal.2d 669, 675.) Also, Cadle does not cite any cases showing intangible assets are considered personal property under section 3440. FN12

FN11. The Agreement provided that the reasonable value of the Clinic was $500,000, allocated as follows: (1) equipment and personal property ($50,000); (2) goodwill ($250,000); and (3) covenant not to compete ($200,000).

FN12. Breznock and PBVI argue those intangible assets are excluded from section 3440's provisions because they are deemed “things in action” under section 3440.1.

*9 Nevertheless, to the extent personal property was transferred pursuant to the 1994 and 2003 transfers, the trial court could reasonably have found section 3440 did not make those transfers void as to Cadle. It would be an unreasonable interpretation of section 3440 to require physical delivery of personal property (e.g., equipment) by means of an actual physical move from the business premises of that property when the entire assets of an ongoing business concern are sold or otherwise transferred. Therefore, the trial court could reasonably find Breznock's and PBVI's actual receipt of bills of sale and other documents showing their ownership, possession, and control of the Clinic's assets, including its personal property, was sufficient delivery followed by an actual and continued change of possession for purposes of section 3440 in the circumstances of this case.FN13 There is substantial evidence to support that finding. Cadle does not carry its burden on appeal to show otherwise.

FN13. O'Connor v. O'Connor, Rice & Barnes (1941) 44 Cal.App.2d 1, cited by Cadle, is inapposite and does not persuade us to conclude otherwise.

DISPOSITION

The judgment is affirmed. Defendants are entitled to costs on appeal.

WE CONCUR: HALLER, Acting P.J., and O'ROURKE, J.


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