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 Post subject: Marital Dissolution and Fraudulent Transfer Issues
PostPosted: Wed Dec 29, 2010 5:58 am 
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In re Marriage of Newby, 2010 WL 5265720 (Cal.App. 3 Dist., Unpublished, Dec. 27, 2010)

Not Officially Published

(Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115)

California Rules of Court, rule 8.1115, restricts citation of unpublished opinions in California courts.

Court of Appeal, Third District, California.

In re the MARRIAGE OF William Robert and Donna Jean NEWBY.

William Robert Newby, Respondent,


Donna Jean Newby, Respondent;

Julie Beal, Appellant.

No. C062596.

(Super.Ct.No. 06FL01145).

Dec. 27, 2010.

Newby, William Robert Ione, CA, Pro Per Respondent.

Elizabeth N. Niemi, Law Offices of Elizabeth N. Niemi, Timothy L. Zeff, Larschield, Buchanan & Zeff, Sacramento, CA, for Respondent.

James D. Struck, The Struck Firm, Modesto, CA, for Appellant.


*1 After Julie Beal was viciously beaten by her ex-boyfriend, William Newby, she obtained a default judgment against him for over $2 million in damages. Seeking to enforce the judgment, Beal challenged, as fraudulent, transfers William made to his wife Donna pursuant to a Marital Settlement Agreement (MSA) in dissolution of their marriage.FN1 Beal intervened in the family law matter, seeking to show William’s transfer of $375,000 to Donna, characterized in the MSA as child support, was a fraudulent transfer. After a court trial, the trial court found Beal had failed to show a fraudulent transfer because she provided insufficient evidence from which the court could determine whether William received equivalent value for the transfer.

FN1. We refer to the Newbys, William and Donna, by their first names for clarity’s sake, meaning no disrespect. ( In re Marriage of Smith (2007) 148 Cal.App.4th 1115, 1118, fn. 1.)

Beal appeals from this order.FN2 She contends the trial court improperly expanded the issue before it. She asserts the family law court was to decide only whether the $375,000 award was a proper award of child support. Once the court determined that it was not, Beal contends the matter should have been sent back to the civil court handling Beal’s fraudulent conveyance action. Further, she contends the judgment of dissolution and the MSA should be vacated based on Code of Civil Procedure section 708.440.

FN2. The parties agree that the court’s signed and filed “Decision After Trial” is an appealable order. (See Estate of Lock (1981) 122 Cal.App.3d 892, 896.)

Donna contends the appeal should be dismissed because the notice of appeal was untimely.

We affirm. Beal’s appeal was timely; the 180-day period for filing a notice of appeal was not shortened to 60 days because the notice of the appealable order was sent to the wrong address. In this judgment roll appeal, Beal has failed to show the trial court erred in finding the $375,000 transfer from William to Donna was not fraudulent. Beal’s lien on a pending judgment against William does not attach to the transfer to Donna.


The Dissolution of William and Donna’s Marriage

William and Donna were married in 1990. They had two children.

In 2002, William was seriously injured in a scaffolding accident. He filed a personal injury action, which was subsequently settled. William received his first settlement payment, of over $1 million, in March of 2006.

William and Donna had separated the previous fall. In February of 2006, William filed for dissolution; at that time William and Donna had one minor child, who was 15 years old. A default judgment in the dissolution action was entered against Donna the following July. William and Donna began resolving property issues. That June, Donna signed off on her interest in a house William had purchased with his settlement proceeds. In August, William deeded the family residence to Donna.

Beal’s Personal Injury Case Against William

Later that August, William severely beat Beal; as a result, William was convicted of multiple felonies and sentenced to life in prison. Shortly after the attack, Beal sued William for personal injuries. In August of 2007, Beal obtained a default judgment against him; the damages were $2,325,000. The following month, Beal filed a lien under Code of Civil Procedure sections 708.410 et seq. against William for that amount.


*2 In July of 2007, William and Donna executed the MSA.FN3 Paragraph 3.1 of the MSA provided that William would pay Donna “as and for child support” for their minor child the sum of $375,000. The MSA contemplated that William would be unable to make regular support payments in the future. Paragraph 6.4 of the MSA set forth the assets awarded to Donna as her share of the community property. These assets included the Citrus Heights family residence, a Lexus automobile, all accounts in Donna’s name and all personal items in her possession. In addition, certain cash payments and other transfers were listed as Donna’s share of community assets: the advance child support payment of $375,000 in cash; $75,000 in cash as a buyout of Donna’s interest in William’s retirement account; and certain automobiles and motorcycles in satisfaction of Donna’s claim against William’s personal injury award.

FN3. Donna had successfully moved to set aside the default judgment in the dissolution case, after Beal served William with her statement of damages.

In August of 2007, William transferred $346,000 to Donna pursuant to the MSA. In October of 2007, a judgment of dissolution was entered and the court approved the MSA.

Beal’s UFTA Action

In December 2007, Beal filed an action against William, Donna, and their adult son to set aside alleged fraudulent transfers, including those pursuant to the MSA, under the Uniform Fraudulent Transfer Act (Civ.Code, §§ 3439 et seq.).

Beal sought a preliminary injunction and the court granted it as to all amounts received by Donna and her son from William in excess of the $375,000 awarded as child support under the MSA. The court rejected Donna’s argument that the amounts she received were in lieu of her fair share of his personal injury settlement. Pursuant to local rule, all issues with respect to child support had to be heard on the family law calendar. The court ruled Beal could intervene in the family law proceeding even though judgment had been entered.

Beal Intervenes in the Dissolution Proceeding

Beal moved to intervene in the dissolution proceeding and set aside the MSA. The court granted the motion, allowing Beal to intervene only as to the $375,000 child support award. The civil department handling the UFTA case retained jurisdiction over all other UFTA claims.

Beal filed a complaint in intervention in the marital dissolution action. She sought an adjudication that the $375,000 child support obligation in the MSA was fraudulent under the UFTA and that it be set aside. She further sought a writ of attachment or execution against certain assets in Donna’s possession.

A court trial was held. The record contains no transcript of the trial. FN4The trial court found the sole issue was whether the $375,000 transfer was a fraudulent transfer under the UFTA. The court concluded the $375,000 was not child support; from the totality of credible and relevant evidence, the court found the $375,000 was part of an overall plan for distribution of the community property, including Donna’s share of William’s personal injury settlement. While the court found William had actual fraudulent intent, it found there was insufficient evidence to determine if Donna provided reasonably equivalent value for the transfer as the total value of the community property estate and Donna’s separate property was unknown. Because there was insufficient evidence to determine if there was a reasonably equivalent value for the transfer, there was insufficient evidence of either actual or constructive fraud. The court concluded Beal had failed to carry her burden to show the transfer was fraudulent.

FN4. Beal’s notice designating the record on appeal designates a reporter’s transcript of the trial on January 16, 2009, and the closing arguments on January 29, 2009, and indicates that if a transcript is not available, Beal will proceed on an agreed statement. A subsequent declaration of the court reporter indicates “No proceedings were had on the record relative to this case for the dates January 16, 2009 and January 29, 2009.” There is no indication in the record of an attempt to complete an agreed statement.

*3 Beal sent the court a notice of intent to move for a new trial. Although the filing fee was paid, the document was never filed. The court allowed Beal’s motion to proceed. The court construed the motion as one for reconsideration and denied it.



The Notice of Appeal Was Timely

Prior to briefing, Donna moved to dismiss the appeal contending the notice of appeal was untimely because it was filed more than 60 days after the clerk mailed the decision after trial and more than 30 days after the clerk mailed the decision denying the motion for a new trial. This court summarily denied the motion. Donna renews her argument on appeal.

We are not prevented from considering whether the appeal is untimely, even though Donna argued the same or similar grounds in an earlier motion to dismiss. The order summarily denying the dismissal motion does not constitute law of the case on the issues presented in that motion because it was not decided by an opinion signed by at least two justices. (SeeKowis v. Howard (1992) 3 Cal.4th 888, 896; In re Christopher A. (1991) 226 Cal.App.3d 1154, 1159.) This rule is supported by policies favoring judicial economy and the right to oral argument. ( Kowis v. Howard, supra, at pp. 898-899.) “As with a summary denial of a writ petition, a summary denial of a motion to dismiss the appeal should not preclude later full consideration of the issue, accompanied by a written opinion, following review of the entire record and the opportunity for oral argument.” ( Id. at p. 900.)

“The time for appealing a judgment is jurisdictional; once the deadline expires, the appellate court has no power to entertain the appeal. [Citation.]” ( Van Beurden Ins. Services, Inc. v. Customized Worldwide Weather Ins. Agency, Inc. (1997) 15 Cal.4th 51, 56.) Rule 8.104 of the California Rules of Court sets forth the normal time period to appeal.FN5 In 2009, when Beal took her appeal, rule 8.104(a) provided: “Unless a statute or rule 8.108 provides otherwise, a notice of appeal must be filed on or before the earliest of: [¶] (1) 60 days after the superior court clerk mails the party filing the notice of appeal a document entitled “Notice of Entry” of judgment or a file-stamped copy of the judgment, showing the date either was mailed; [¶] (2) 60 days after the party filing the notice of appeal serves or is served by a party with a document entitled “Notice of Entry” of judgment or a file-stamped copy of the judgment, accompanied by a proof of service; or [¶] (3) 180 days after entry of judgment.” For purposes of these time limits, “judgment” includes an appealable order. ( Rule 8.104(f).)

FN5. All further references to rules are to the California Rules of Court.

The clerk’s certificate of service by mailing indicates the decision after trial was mailed to Beal’s attorney on April 3, 2009. Beal filed her notice of appeal on July 14, 2009. Donna contends that since the notice of appeal was filed more than 60 days after the decision after trial was mailed, the notice of appeal was untimely.

*4 However, in mailing the decision after trial, the clerk used the wrong address for Beal’s attorney. It was mailed to Beal’s attorney at 1411 G Street. On September 2, 2008, Beal’s attorney had filed a change of address indicating a new address of 125 McHenry Avenue. The McHenry address was also used on Beal’s trial brief.

Successful service by mail requires strict compliance with the statutory requirements. ( Valley Vista Land Co. v. Nipomo Water & Sewer Co. (1967) 255 Cal.App.2d 172, 174.) Code of Civil Procedures section 1013, subdivision (a) provides that the mailing of a notice is complete when it is posted in an envelope “addressed to the person on whom it is to be served, at the office address as last given by that person on any document filed in the cause and served on the party making service by mail; otherwise at that party’s place of residence....” FN6 A misaddressed notice does not comply with the statute. ( Valley Vista Land Co. v. Nipomo Water & Sewer Co., supra, at p. 174.) “Where the envelope containing the notice is improperly addressed, it is as though notice were never mailed by the clerk. [Citation.]” ( Triumph Precision Products, Inc. v. Insurance Co. of North America (1979) 91 Cal.App.3d 362, 365 [notice to counsel without inclusion of his law firm in the address was ineffective notice].) There was no effective mailing to trigger the 60-day time limit of rule 8.104(a).

FN6. In construing rule 8.104, “we have necessarily assumed that the clerk’s mailing ... must, in all respects, comply with the provisions of the Code of Civil Procedure relating to service by mail. (Code Civ. Proc., §§ 1012, 1013, 1013a.)” ( Valley Vista Land Co. v. Nipomo Water & Sewer Co., supra, 255 Cal.App.2d 172, 174.) Recent changes to the California Rules of Court have eliminated the need for this assumption. Effective January 1, 2010, rule 8.104(a) begins the 60-day period on the date the clerk “serves” the appropriate document. Nothing in the Advisory Committee Comment indicates the change from “mails” to “serves” was intended to effect a change in the law.

Donna urges that the mistake in the address should be overlooked because Beal’s attorney obviously received the notice, as shown by the attempt to move for a new trial only a few days later. In Moghaddam v. Bone (2006) 142 Cal.App.4th 283, notice of an appealable order was mailed using an incorrect zip code. The court found the notice invalid because of the mistaken address, but suggested it would have been valid if there was proof of actual receipt. “In the absence of proof notice was actually received, the Bones’ failure to use the correct ZIP Code invalidates what would have otherwise been sufficient notice.” ( Id. at p. 288; cf. Lee v. Placer Title Co. (1994) 28 Cal.App.4th 503, 509 [in considering whether notice of dismissal was effective, court determined whether misaddressed notice was forwarded under postal regulations].)

We disagree that actual notice cures defective written notice for purposes of rule 8.104. Although defective service by mailing is often considered effective personal service, personal service does not start the time running for an appeal. ( Valley Vista Land Co. v. Nipomo Water & Sewer Co., supra, 255 Cal.App.2d at p. 174.) Rather, the 60-day period is triggered by the mailing of the notice of entry of judgment without regard to whether there is actual notice. ( Sharp v. Union Pacific R.R. Co. (1992) 8 Cal.App.4th 357, 360.) Actual notice of entry of judgment does not waive the right to receive written notice. ( Los Angeles Times v. Alameda Corridor Transportation Authority (2001) 88 Cal.App.4th 1381, 1389-1390, fn. 7.)

*5 We construe the time requirements of rule 8.104 strictly. “Because the time limits for filing a notice of appeal are jurisdictional, we must apply rule [8.104] of the California Rules of Court strictly and literally according to its terms; the rules ‘must stand by themselves without embroidery.’ [Citation.]” ( In re Marriage of Taschen (2005) 134 Cal.App.4th 681, 686.)

Because the clerk failed to mail the decision after trial to Beal’s attorney at the correct address, the notice was invalid and the 60-day period of rule 8.104(a) was not triggered. Beal filed the notice of appeal within the 180-day time limit of rule 8.104(c) and therefore the appeal is timely. Accordingly, we need not consider whether Beal’s notice of intent to move for a new trial extended the time to appeal under rule 8.108.


Beal Has Failed to Show the Trial Court Erred in Finding the $375,000 Transfer Was Not Fraudulent

Standard of Review

Beal appeals from the decision after trial. There is no reporter’s transcript of the trial. “In a judgment roll appeal based on a clerk’s transcript, every presumption is in favor of the validity of the judgment and all facts consistent with its validity will be presumed to have existed. The sufficiency of the evidence is not open to review. The trial court’s findings of fact and conclusions of law are presumed to be supported by substantial evidence and are binding on the appellate court, unless reversible error appears on the record. [Citation.]” ( Bond v. Pulsar Video Productions(1996) 50 Cal.App.4th 918, 924.) Our review in such a “judgment roll appeal” is limited to determining whether any error “appears on the face of the record.” ( National Secretarial Service, Inc. v. Froehlich (1989) 210 Cal.App.3d 510, 521; Cal. Rules of Court, rule 8.163.)

Scope of Issues Before Trial Court

Beal contends the trial court erred in expanding the issues before it. She contends the order permitting intervention limited the issue before the family law court to whether the $375,000 child support award was a fraudulent transfer. Beal interprets this order to mean that once the family law court determined the $375,000 was not child support, its role was over, and it should have then transferred the matter back to the civil law court. Beal contends the family law court had no authority to require her to put on evidence of the amount of the community estate and the amount of Donna’s separate property to invalidate the child support award.

The pleadings determine the issues before the court. “Issues arise upon the pleadings where a fact or a conclusion of law is maintained by the one party and is controverted by the other.” (Code Civ. Proc., § 588.) Beal’s complaint in intervention alleges the $375,000 child support obligation is fraudulent and “just a device for creating an obligation that would frustrate the enforcement of the plaintiff’s money judgment” and asks that it be set aside. Donna put this allegation at issue by denying it. The issue before the family law court, therefore, was whether the $375,000 child support award was a fraudulent transfer, not whether it was actually and solely for child support. Beal did not so limit the issue in her pleadings.

*6 The court, in ruling Beal failed to provide sufficient evidence for the court to determine the $375,000 transfer was fraudulent, did not expand the issues before it.

Interpretation of MSA

Beal contends the trial court erred in determining first that the provisions of the MSA were ambiguous and then that the child support award was not for child support. She contends the MSA was not ambiguous; by its clear terms, the $375,000 was for child support. She asks this court to interpret the MSA de novo and reach this conclusion.

The court’s ruling indicates it considered parol evidence presented by Donna in determining the MSA was intended to represent a division of the community property and the $375,000 transfer to Donna was part of the overall plan for division of community property.

The rules for determining whether to admit parol evidence to aid in interpreting a contract are set forth in Winet v. Price (1992) 4 Cal.App.4th 1159, 1165-1166: ”We begin by noting the oft-stated rule that parol evidence is properly admitted to construe a written instrument when its language is ambiguous. The test of whether parol evidence is admissible to construe an ambiguity is not whether the language appears to the court to be unambiguous, but whether the evidence presented is relevant to prove a meaning to which the language is ‘reasonably susceptible.’ [Citation.] [¶] The decision whether to admit parol evidence involves a two-step process. First, the court provisionally receives (without actually admitting) all credible evidence concerning the parties’ intentions to determine ‘ambiguity,’ i.e., whether the language is ‘reasonably susceptible’ to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is ‘reasonably susceptible’ to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step-interpreting the contract. [Citation.]”

Here the trial court found the MSA “reasonably susceptible” to the interpretation urged by Donna, admitted the parol evidence, and concluded Donna’s interpretation of the MSA was correct. Since this is a judgment roll appeal, we do not know what the parol evidence was and cannot review the court’s determination. Instead, we presume the trial court’s findings of fact and conclusions of law are supported by substantial evidence and they are binding on us unless reversible error appears on the record. ( Bond v. Pulsar Video Productions, supra, 50 Cal.App.4th 918, 924.) We find no reversible error on the face of the record.

Determination Transfer Was Not Fraudulent

Beal contends the evidence she produced at trial “requires the conclusion that the $375,000 obligation was fraudulent under the UFTA.” Again, we cannot review this contention on a judgment roll appeal. As we have only the clerk’s transcript, “we presume the trial court’s findings of fact and conclusions of law are supported by substantial evidence. [Citation.]” (People v. Roscoe (2008) 169 Cal.App.4th 829, 839.)


Beal’s Lien under Code of Civil Procedure section 708.410 Does Not Attach to the Transfer to Donna

*7 ”As a last resort,” Beal contends the judgment and the MSA should be vacated pursuant to Code of Civil Procedure section 708.440 because Donna and William blatantly disregarded her lien on this action filed pursuant toCode of Civil Procedure section 708.410.FN7 In her trial brief, Beal noted the filing of her lien and that under section 708.440 there could be no judgment or settlement without her consent, but she did not seek to vacate the judgment or MSA.

FN7. Hereafter, undesignated statutory references are to the Code of Civil Procedure.

The provisions of sections 708.410 through 708.480 provide for a lien on a pending action or special proceeding so the judgment creditor can take all or a portion of the recovery of the judgment debtor in that action or proceeding; the lien does not apply to the judgment debtor’s current assets. Since William, the judgment debtor, took no additional money or property from the MSA or the judgment approving it, there is nothing to which the lien applies. ( Casa Eva I Homeowners Assn. v. Ani Construction & Tile, Inc. (2005) 134 Cal.App.4th 771, 781.)

The lien on the pending action attaches where the judgment debtor sues for money or where the action establishes the judgment debtor’s interest in money or property. ( Fleet Credit Corp. v. TML Bus Sales, Inc. (9th Cir.1995) 65 F.3d 119, 121.) “One purpose of the lien is to establish and preserve the judgment creditor’s priority to the money and property the judgment debtor may receive from the pending action. [Citation.]” (Oldham v. California Capital Fund, Inc. (2003) 109 Cal.App.4th 421, 430.) “[Sections 708.410 et seq.] must be implemented to prevent the judgment debtor, with or without the active assistance of other parties to the settlement agreement, from structuring a settlement so it receives benefitswhile evading the lien of the judgment creditor, absent appropriate equitable considerations.” ( Ibid., italics added.)

Pursuant to subdivision (b) of section 708.410, Beal filed notice of her lien, with a copy of the abstract of the default judgment against William, on September 28, 2007. Service was made on both William and Donna. As required by subdivision (g) of section 708.420, the notice lien stated that it created restrictions on settlement of the dissolution action. Under section 708.440, subdivision (a), “[n]o compromise, dismissal, settlement, or satisfaction of the action or proceeding may be entered into by or on behalf of the debtor, and no judgment recovered by the debtor may be enforced, unless (a) the creditor’s money judgment is satisfied, (b) the lien is released, (c) the judgment creditor consents in writing, or (d) a court order so authorizes.” (8 Witkin, Cal. Procedure (5th ed. 2008) Enforcement of Judgment, § 301, p. 330 .)

Where the parties to the pending action have acted without regard to the lien, the remedy is set forth in section 708.470, subdivision (c). That subdivision provides: “If the court determines that a party (other than the judgment debtor ) having notice of the lien created under this article has transferred property that was subject to the lien or has paid an amount to the judgment debtor that was subject to the lien, the court shall render judgment against the party in an amount equal to the lesser of the following: [¶] (1) The value of the judgment debtor’s interest in the property or the amount paid the judgment debtor. [¶] (2) The amount of the judgment creditor’s lien created under this article.” (Italics added.)

*8 Here, the settlement of the dissolution action by the MSA did not result in the transfer of assets to William, the judgment debtor. Instead, the transfer was from William to Donna. Thus, the dissolution action did not result in additional assets to William that could be used to satisfy Beal’s judgment. William “received no money or property and, consequently, there was nothing subject to [Donna’s] lien.” ( Casa Eva I Homeowners Assn. v. Ani Construction & Tile, Inc., supra, 134 Cal.App.4th at p. 781.)


The judgment is affirmed. Respondent, Donna Jean Newby, shall recover her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (a)(2).)

We concur: RAYE, P.J., and BLEASE, J.

= = = = = = = = = = = = = = =

Posted by Jay D. Adkisson of Riser Adkisson LLP and the publisher of the most comprehensive free online resource regarding judgment enforcement and judgment collection in California.

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