This case was last updated from Los Angeles County Superior Courts on 04/22/2022 at 14:57:07 (UTC).

STEVEN J. HORN VS ANTHONY N. KLING, INDIVIDUALLY AND AS TRUSTEE OF THE ANTHONY N. KLING TRUST OF 1997, ET AL.

Case Summary

On 06/19/2020 STEVEN J HORN filed a Property - Other Property Fraud lawsuit against ANTHONY N KLING, INDIVIDUALLY AND AS TRUSTEE OF THE ANTHONY N KLING TRUST OF 1997,. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are LAWRENCE P. RIFF and DAVID J. COWAN. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******3329

  • Filing Date:

    06/19/2020

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Property Fraud

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

LAWRENCE P. RIFF

DAVID J. COWAN

 

Party Details

Plaintiff

HORN STEVEN J.

Defendants and Not Classified By Court

ANTHONY N. KLING INDIVIDUALLY AND AS TRUSTEE OF THE ANTHONY N. KLING TRUST OF 1997

CLIFFWOOD LLC.

MURKY & LURKY LLC

MARY J. KLING INDIVIDUALLY AND AS TRUSTEE FOR THE HEYWOOD F. AND MARY J. KLING FAMILY TRUST

STABILE SIGNORINO LLC

3123 SMB LLC

Attorney/Law Firm Details

Plaintiff Attorneys

HORN STEVEN JEFFRY

HORN VALERIE F.

Defendant Attorneys

HYMAN ALLEN

KLING ANTHONY N

 

Court Documents

Reply - REPLY SUPPLEMENTAL REPLY ) MEMORANDUM IN SUPPORT OF ) DEFENDANTS ANTHONY KLING, ) INDIVIDUALLY AND TRUSTEE; MARY J. KLING, )) INDIVIDUALLY AND TRUSTEE; MURKY AND ) LURKY, AND CLIFFWOOD LLC'S )

4/20/2022: Reply - REPLY SUPPLEMENTAL REPLY ) MEMORANDUM IN SUPPORT OF ) DEFENDANTS ANTHONY KLING, ) INDIVIDUALLY AND TRUSTEE; MARY J. KLING, )) INDIVIDUALLY AND TRUSTEE; MURKY AND ) LURKY, AND CLIFFWOOD LLC'S )

Reply - REPLY SUPPLEMENTAL REPLY OF 3123 SMB, ) LLC IN SUPPORT OF DEMURRER

4/20/2022: Reply - REPLY SUPPLEMENTAL REPLY OF 3123 SMB, ) LLC IN SUPPORT OF DEMURRER

Notice - NOTICE PLAINTIFF'S AMENDED NOTICE OF WITHDRAWAL OF PENDENCY OF ACTION (LIS PENDENS)

8/20/2021: Notice - NOTICE PLAINTIFF'S AMENDED NOTICE OF WITHDRAWAL OF PENDENCY OF ACTION (LIS PENDENS)

Summons - SUMMONS ON COMPLAINT (1ST)

8/20/2021: Summons - SUMMONS ON COMPLAINT (1ST)

Demurrer - without Motion to Strike

8/23/2021: Demurrer - without Motion to Strike

Declaration - DECLARATION OF ANTHONY KLING (CCP SECTION 430.41(A)) [HEARING DATE 1/5/22]

8/23/2021: Declaration - DECLARATION OF ANTHONY KLING (CCP SECTION 430.41(A)) [HEARING DATE 1/5/22]

Motion for Order - MOTION FOR ORDER APPLICATION BY DEFENDANT STABILE SIGNORINO LLC (DOE 1) FOR COURT TO VACATE CLERK'S DEFAULT JUDGMENT AS TO STABILE SIGNORINO LLC (PURSUANT TO SECTION 473(B) OF THE C

8/25/2021: Motion for Order - MOTION FOR ORDER APPLICATION BY DEFENDANT STABILE SIGNORINO LLC (DOE 1) FOR COURT TO VACATE CLERK'S DEFAULT JUDGMENT AS TO STABILE SIGNORINO LLC (PURSUANT TO SECTION 473(B) OF THE C

Declaration - DECLARATION OF ANTHONY N. KLING IN SUPPORT OF APPLICATION BY STABILE SIGNORINO LLC [HEARING DATE 1/5/22]

8/25/2021: Declaration - DECLARATION OF ANTHONY N. KLING IN SUPPORT OF APPLICATION BY STABILE SIGNORINO LLC [HEARING DATE 1/5/22]

Opposition - OPPOSITION PLAINTIFF STEVEN J. HORN'S OPPOSITION TO DEFENDANT 3123 SMB, LLC'S MOTION TO QUASH SERVICE OF PROCESS, MEMORANDUM OF POINTS AND AUTHORITIES, DECLARATION OF STEVEN J. HORN

8/31/2021: Opposition - OPPOSITION PLAINTIFF STEVEN J. HORN'S OPPOSITION TO DEFENDANT 3123 SMB, LLC'S MOTION TO QUASH SERVICE OF PROCESS, MEMORANDUM OF POINTS AND AUTHORITIES, DECLARATION OF STEVEN J. HORN

Notice - NOTICE PLAINTIFF STEVEN J. HORNS NOTICE OF ERRATA RE: AMENDED NOTICE OF MOTION RE: LEAVE TO FILE A SECOND AMENDED COMPLAINT

8/31/2021: Notice - NOTICE PLAINTIFF STEVEN J. HORNS NOTICE OF ERRATA RE: AMENDED NOTICE OF MOTION RE: LEAVE TO FILE A SECOND AMENDED COMPLAINT

Notice of Lodging - NOTICE OF LODGING LAINTIFF STEVEN J. HORN'S NOTICE OF LODGING PROPOSED SECOND AMENDED COMPLAINT

9/1/2021: Notice of Lodging - NOTICE OF LODGING LAINTIFF STEVEN J. HORN'S NOTICE OF LODGING PROPOSED SECOND AMENDED COMPLAINT

Opposition - OPPOSITION DEFENDANTS' MEMORANDUM IN OPPOSITION TO PLAINTIFF'S REQUEST TO FILE SECOND AMENDED COMPLAINT ADDING 3123 SMB, LLC [HEARING DATE 9/17/21]

9/3/2021: Opposition - OPPOSITION DEFENDANTS' MEMORANDUM IN OPPOSITION TO PLAINTIFF'S REQUEST TO FILE SECOND AMENDED COMPLAINT ADDING 3123 SMB, LLC [HEARING DATE 9/17/21]

Reply - REPLY PLAINTIFF STEVEN J. HORNS REPLY TO DEFENDANT 3123 SMB, LLCS NOTICE OF MOTION AND MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT

9/8/2021: Reply - REPLY PLAINTIFF STEVEN J. HORNS REPLY TO DEFENDANT 3123 SMB, LLCS NOTICE OF MOTION AND MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT

Reply - REPLY SPECIAL AND LIMITED APPEARANCE FOR REPLY MEMORANDUM IN SUPPORT OF DEFENDANT 3123 SMB LLC'S MOTION TO QUASH SERVICE AND/OR DISMISS [HEARING DATE 9/17/21]

9/10/2021: Reply - REPLY SPECIAL AND LIMITED APPEARANCE FOR REPLY MEMORANDUM IN SUPPORT OF DEFENDANT 3123 SMB LLC'S MOTION TO QUASH SERVICE AND/OR DISMISS [HEARING DATE 9/17/21]

Notice - NOTICE THAT CASE IS NOT AT ISSUE [HEARING DATE 9/17/21]

9/10/2021: Notice - NOTICE THAT CASE IS NOT AT ISSUE [HEARING DATE 9/17/21]

Amended Complaint - AMENDED COMPLAINT (2ND)

9/17/2021: Amended Complaint - AMENDED COMPLAINT (2ND)

Notice of Ruling

9/17/2021: Notice of Ruling

Order Appointing Court Approved Reporter as Official Reporter Pro Tempore

9/17/2021: Order Appointing Court Approved Reporter as Official Reporter Pro Tempore

151 More Documents Available

 

Docket Entries

  • 06/20/2023
  • Hearing06/20/2023 at 09:30 AM in Department 51 at 111 North Hill Street, Los Angeles, CA 90012; Non-Jury Trial

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  • 06/08/2023
  • Hearing06/08/2023 at 08:30 AM in Department 51 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 05/05/2022
  • Hearing05/05/2022 at 09:00 AM in Department 51 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Demurrer - without Motion to Strike

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  • 05/05/2022
  • Hearing05/05/2022 at 09:00 AM in Department 51 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Demurrer - without Motion to Strike

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  • 04/20/2022
  • DocketReply (SUPPLEMENTAL REPLY ) MEMORANDUM IN SUPPORT OF ) DEFENDANTS ANTHONY KLING, ) individually and trustee; MARY J. KLING, )) individually and trustee; MURKY AND ) LURKY, AND CLIFFWOOD LLC'S ) DEMURRER TO P); Filed by Murky & Lurky LLC (Defendant)

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  • 04/20/2022
  • DocketReply (SUPPLEMENTAL REPLY OF 3123 SMB, ) LLC IN SUPPORT OF DEMURRER); Filed by Murky & Lurky LLC (Defendant)

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  • 04/04/2022
  • DocketNotice (DEFENDANTS STABILE SIGNORINO LLC ET AL's [NOTICE OF &] OBJECTIONS TO PLAINTIFF'S INCORRECT NOTICE OF RULING OF MARCH 22, 2022 & DEFENDANTS' COUNTER NOTICE OF RULING); Filed by Cliffwood, LLC. (Defendant)

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  • 03/24/2022
  • DocketNotice (DEFENDANT STABILE SIGNORINO LLC (DOE 1)'S [NOTICE OF] ACKNOWLEDGMENT OF RECEIPT); Filed by 3123 SMB, LLC (Defendant)

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  • 03/23/2022
  • DocketNotice of Ruling; Filed by Steven J. Horn (Plaintiff)

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  • 03/23/2022
  • DocketNotice of Change of Address or Other Contact Information; Filed by Steven Jeffry Horn (Attorney)

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174 More Docket Entries
  • 09/21/2020
  • DocketApplication for Publication; Filed by Steven J. Horn (Plaintiff)

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  • 09/21/2020
  • DocketProof of Service - No Service; Filed by Steven J. Horn (Plaintiff)

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  • 09/21/2020
  • DocketApplication for Publication; Filed by Steven J. Horn (Plaintiff)

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  • 09/14/2020
  • DocketProof of Service - No Service (non service report); Filed by Steven J. Horn (Plaintiff)

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  • 06/23/2020
  • DocketNotice of Lis Pendens; Filed by Steven J. Horn (Plaintiff)

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  • 06/22/2020
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 06/19/2020
  • DocketComplaint; Filed by Steven J. Horn (Plaintiff)

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  • 06/19/2020
  • DocketSummons (on Complaint); Filed by Steven J. Horn (Plaintiff)

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  • 06/19/2020
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 06/19/2020
  • DocketCivil Case Cover Sheet; Filed by Steven J. Horn (Plaintiff)

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Tentative Rulings

Case Number: *******3329 Hearing Date: September 29, 2022 Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE: September 29, 2022

CASE NAME: Steven J. Horn v. Anthony N. Kling, indivudally and as trustee of the Anthony N. Kling Trust of 1997, et al.

CASE NO.: *******3329

DEFENDANT’S MOTION TO APPEAR PRO HAC VICE

MOVING PARTY: Defendant Anthony N. Kling, et al.

RESPONDING PARTY(S): Plaintiff Steven J. Horn

REQUESTED RELIEF:

1. An order granting the application for David Knieriem appear as counsel pro hac vice

TENTATIVE RULING:

1. Application to appear pro hac vice is GRANTED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On June 19, 2020, Plaintiff Steven J. Horn filed a complaint against Defendants Anthony N. Kling, individually and as Trustee of the Anthony N. Kling Trust of 1997, Mary J. Kling, individually and as Trustee of the Heywood F. and Mary J Kling Family Trust Dated July 18, 1987, Cliffwood, LLC, Murky & Lurky, LLC, and Does 1 through 50. The complaint alleged six causes of action: (1) To set Aside and Cancel Fraudulent Transfer of Real Properties, (2) Temporary Restraining Order and Preliminary and Permanent Injunction, (3) Constructive Trust, (4) Creditor’s Suit, (5) Fraudulent Transfer, and (6) Fraudulent Transfer. The complaint alleges that the Plaintiff and Defendants were parties to a separate action that resulted in a ruling in favor of Plaintiff. Plaintiff alleges that the Defendants transferred property to Defendant Murky & Lurky to conceal assets from creditors.

On March 28, 2021, Defendants Murky & Lurky, LLC, and Cliffwood, LLC filed a Demurrer without a Motion to Strike.

On July 6, 2021, Plaintiff filed a Motion for Leave to File a First Amended Complaint.

On August 6, 2021, Plaintiff filed a First Amended Complaint.

On August 23, 2021, Defendant Cliffwood, LLC filed a Demurrer without a Motion to Strike.

On September 17, 2021, Plaintiff file a Second Amended Complaint.

On November 5, 2021, Defendants Anthony Kling, Mary J. Kling, Murky & Lurky, and Cliffwood, LLC filed a Demurrer without a Motion to Strike.

On June 28, 2022, Defendants filed a Motion to be Admitted Pro Hac Vice. Plaintiff filed an Opposition on June 30, 2022. Defendant’s reply was filed on September 15, 2022.

LEGAL STANDARD

Pursuant to California Rules of Court 9.40, an application for appearance pro hac

vice must be served on all parties who have appeared in the case and on the State Bar of California at its San Francisco office, with payment of a $50.00 fee.

Additionally, the application must state:

1. The applicant's residence and office address;

2. The courts to which the applicant has been admitted to practice and the dates of admission;

3. That the applicant is a member in good standing in those courts;

4. That the applicant is not currently suspended or disbarred in any court;

5. The title of court and cause in which the applicant has filed an application to appear as counsel pro hac vice in this state in the preceding two years, the date of each application, and whether or not it was granted; and

6. The name, address, and telephone number of the active member of the State Bar of California who is attorney of record.

(CRC 9.40(d).)

ANALYSIS:

Defendants move to have David Knieriem appear pro hac vice in the current matter. Movant has provided all the information required under California Rules of Court 9.40 in the application to appear pro hac vice.

Plaintiff filed an opposition arguing that Mr. Knieriem has been involved in over 12 proceedings in the past two years; thus, he is “actively engaged in the practice of law in California without being admitted to practice law by the State Bar of California.” (Opp. 3: 23-26.) However, the rule of court has a “special circumstances” waiver. There are clearly special circumstances here. All of these cases involve the same Plaintiff and involved similar causes of action in various stages in the trial court and courts of appeal. Moreover, even Walter E. Heller Western, Inc. (1980) 111 Cal.App.3d 706, cited by Plaintiff does not support Plaintiff’s position. There, although counsel appeared in16 disputes and made five trips to California, the court of appeal did not find the trial court’s decision to grant pro hac vice status an abuse of discretion. (Id. at p. 711.) Thus, counsel may be admitted to appear pro hac vice.

Conclusion:

For the foregoing reasons, the Court decides the pending motion as follows:

Application to be Admitted Pro Hac Vice is GRANTED.

Moving party is to give notice.

IT IS SO ORDERED.

Dated: September 29, 2022 Upinder S. Kalra

Judge of the Superior Court



Case Number: *******3329 Hearing Date: May 27, 2022 Dept: 51

MOVING PARTY: Defendant 3123 SMB LLC

RESPONDING PARTY(S): Plaintiff Steven J. Horn

TENTATIVE RULING:

Demurrer is SUSTAINED, with leave to amend.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On June 19, 2020, Plaintiff Steven J. Horn filed a complaint against Defendants Anthony N. Kling, individually and as Trustee of the Anthony N. Kling Trust of 1997, Mary J. Kling, individually and as Trustee of the Heywood F. and Mary J Kling Family Trust Dated July 18, 1987, Cliffwood, LLC, Murky & Lurky, LLC, and Does 1 through 50. The complaint alleged six causes of action: (1) To set Aside and Cancel Fraudulent Transfer of Real Properties, (2) Temporary Restraining Order and Preliminary and Permanent Injunction, (3) Constructive Trust, (4) Creditor’s Suit, (5) Fraudulent Transfer, and (6) Fraudulent Transfer. The complaint alleges that the Plaintiff and Defendants were parties to a separate action that resulted in a ruling in favor of Plaintiff. Plaintiff alleges that the Defendants transferred property to Defendant Murky & Lurky to conceal assets from creditors.

On March 28, 2021, Defendants Murky & Lurky, LLC, and Cliffwood, LLC filed a Demurrer without a Motion to Strike.

On July 6, 2021, Plaintiff filed a Motion for Leave to File a First Amended Complaint.

On August 6, 2021, Plaintiff filed a First Amended Complaint.

On August 23, 2021, Defendant Cliffwood, LLC filed a Demurrer without a Motion to Strike.

On September 17, 2021, Plaintiff file a Second Amended Complaint.

On November 5, 2021, Defendants Anthony Kling, Mary J. Kling, Murky & Lurky, and Cliffwood, LLC filed a Demurrer without a Motion to Strike.

On November 5, 2021, Defendant 3123 SMB, LLC, filed a Demurrer without a Motion to Strike

LEGAL STANDARD

Demurrer

A demurrer for sufficiency tests whether the complaint states a cause of action. Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747. When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2011) 7:8. “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed (Code Civ. Proc., 430.30, 430.70). The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” Hahn 147 Cal.App.4th at 747.

Request for Judicial Notice

The Court may take judicial notice of the existence of the records, but not the truth of matters asserted in such records. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1565). As a result, although the court may take judicial notice that the documents exists, the Court may not take judicial notice of the truth of the facts in the documents.

Additionally, Evidence Code only allows the Court to take judicial notice of certain types of documents. The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code 452, subds. (c), (d), and (h).) The Evidence Code does not allow the Court to take judicial notice of discovery responses or parts of cases, such as depositions.

The Request for Judicial Notice as to the Defendants is GRANTED. The Request for Judicial Notice as to the Plaintiff is GRANTED.

ANALYSIS:

Defendant demurs on the grounds that the Second Amended Complaint does not plead sufficient facts for any of the causes of action.

  1. Pierce Corporate Veil

Defendant argues that the Plaintiff does not state a cause of action, but merely argues that 3123 SMB, LLC is insolvent and can pierce the corporate veil. But under Missouri law (as 3123 SMB LLC is a Missouri LLC), “insolvency is determined at incorporation, not dissolution.” The SAC does not contain any allegations of such. Moreover, the Defendant argues that the Plaintiff’s claims concerning collateral estoppel are misplaced. The prior Court found that Defendant 3123 SMB, LLC was an alter ego of Defendant Kling, not the other way around.

  1. First and Second Causes of Action

Defendant argues that under Civil Code 3439.04, the Defendant must be either about to enter a business transaction or believed it was about to incur unpayable debts. However, the Defendant argues that the SAC does not allege either.

  1. Third Cause of Action:

Under Civil Code 3439.05, the debtor must become insolvent. The Defendant, however, argues that the Plaintiff has failed to demonstrate that the sum of the debtor’s debts is greater than the sum of the debtor’s assets. The SAC pleads no facts about the time of the transfer, but merely about future obligations.

  1. Fourth Cause of Action:

The Defendant argues that this cause of action fails as it is merely a statute of limitation, not an actual cause of action. However, assuming this cause of action is for common law fraudulent transfer, the Defendant argues that this fails because it was previously determined that Defendant 3123 SMB LLC was not a party to the agreement. Additionally, the transfer property has a value of approximately zero and therefore, the transaction cannot be attacked.

  1. Creditor’s Suit Statute of Limitations

Defendant argues that the under CCP 708.230, a creditor’s suit must be brought within the same period as the original defendants. Since this is based on written contract, under CCO 337, it must be done so within four years. However, the Complaint only alleges that the Plaintiff first brought suit in 2014, “so it would be sometime before then.” Therefore, the matter is time barred.

  1. Cortez Decided Incorrectly

Defendant argues that Cortez v. Vogt (1997) 52 Cal.App.4th 917, which provides that the four year statute of limitation for fraudulent transfer does not begin to run until judgment is entered, is incorrect. Specifically, Defendant argues that this is incorrect when looking at PGA West Residential Assn., Inc. v. Hulven Internat., Inc. (2017) 14 Cal.App.5th 156.

Lastly, the Defendant argues that the first through fourth causes of action fail because there is “no claim against any of the parties other than 3123 SMB LLC and Murky & Lurky LLC” and the causes of action are outside the statute of limitations.

Plaintiff:

Plaintiff first argues that the demurrer is procedurally defective. The demurrer does not state the grounds on which the Defendants demurred, like the complaint fails because it does not state a cause of action, there was a misjoinder of parties, or it was uncertain. Additionally, the Defendant failed to state each ground for the cause of action.

  1. First cause of action:

Fraudulent Transfer under Civil Code 3439.04(a)(1) states “A transfer made or obligation incurred by a debtor is voidable 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.” Plaintiff argues that paragraph 25-30 of the SAC sufficiently describe that there was a transfer that was done so to hinder or defraud any creditor. Additionally, while the Defendants argue that the property value is zero, this assertion is false as the Quitclaim Deed only states that the transfer tax is zero, not the value.

  1. Second cause of Action

Fraudulent Transfer under Civil Code 3439.04(a) states “

A transfer made or obligation incurred by a debtor is voidable 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:

(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 the debtor would incur, debts beyond the debtor's ability to pay as they became due.

Plaintiff argues that paragraphs 20 and 22 are sufficient as they describe that the transfer was to render the debtor insolvent and unable to pay the creditors as well as that the transfers were not made with reasonable equivalent value.

  1. Third Cause of Action

Fraudulent Transfer under Civil Code 3439.05 states: “(a) A transfer made or obligation incurred by a debtor is voidable as to a creditor whose claim arose before the transfer was made or the obligation was incurred if 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.”

Plaintiff argues that paragraphs 12, 13, 20, 22, and 40 of the SAC satisfy this requirement. The Plaintiff specifically argues that the transfers were done to ensure that the defendants were “devoid of assets and not subject to the plaintiff’s Judgment.” The Defendants dissolved 312 SMB LLC on October 29, 2019, after the October 1, 2019 Minute Order where the arbitration award was confirmed.

  1. Fourth Cause of Action

Civil Code 3439.12 allows for other principles of law and equity, such as estoppel, laches, misrepresentation, duress, and others, may be supplemented. Under CCP 338(d), an action “for relief on the ground of fraud or mistake” must be brought within three years, which accrues when the aggrieved party discovers the facts constituting fraud or mistake. Plaintiff cites to Macedo v. Bosio, where the Court stated “If and as such an action is brought, the applicable statute of limitations is section 338(d) and, more importantly, the cause of action accrues not when the fraudulent transfer occurs but when the judgment against the debtor is secured (or maybe even later, depending upon the belated discovery issue).” (Macedo v. Bosio (2001) 86 Cal.App.4th 1044, 1051). The Court in Berger stated “A well-established principle of the law of fraudulent transfers is, ‘A transfer in fraud of creditors may be attacked only by one who is injured thereby. Mere intent to delay or defraud is not sufficient; injury to the creditor must be shown affirmatively. In other words, prejudice to the plaintiff is essential.’ ” (Berger v. Varum (2019) 35 Cal.App.5th 1013, 1020). Here, the Plaintiff argues that the SAC sufficiently pleads that there was a transfer and injury on part of the Plaintiff. (SAC 20, 21, 22, 23, 40 and 46).

  1. SAC is within Statute of Limitations

Plaintiff argues that under Civil Code 3439.09(a) and (b), the statute of limitations has not run. While the Defendants argue that Cortez was incorrectly decided, Plaintiff asserts that this is incorrect, as the holding in Cortez was affirmed in Potter v. Alliance United Ins. Co. (2019) 37 Cal.App.5th 894. Further, Defendant asserts that Cortez was wrong because of PGA West Residential Ass’n, Inc. v. Hulven Internat., Inc. (2017) 14 Cal.App.5th 156 because the two Courts assess different sections of the statute of limitations. Cortez determined that the statute runs “at the time of judgment in the underlying action, but if the creditor is unaware of the fraudulent conveyance, the limitations period begins to run when the creditor discovers the fraudulent conveyance.” (Cortez v. Vogt (1997) 52 Cal.App.4th 917, 929). Here, the first three causes o action did not start until Judgment was entered on March 6, 2020. As for the fourth cause of action, CCP 338(d) states that the time does not accrue until discovery by the aggrieved party. The SAC states that the Plaintiff did not discover the fraudulent transfer until after October 2019, when the Defendants dissolved 3123 SMB, LLC.

  1. Alter Ego Adequately Alleged

Lastly, the Plaintiff argues that the alter ego theory is adequately alleged. Specifically, paragraph 9 of the SAC states that the Plaintiff believes that the Defendants are alter egos of the other defendants. Specifically, the Plaintiff argues that a unity of interest was demonstrated by Exhibit 4, the Quitclaim Deed, which states that the Defendants transferred the property with $0 Transfer Tax from one entity they owned to another “in order to avoid paying transfer taxes,”

Reply:

The Defendants argue that the SAC should be dismissed because the SAC no longer sufficiently pleads that the Defendants are judgment debtors. For a fraudulent transfer claim to be viable, the aggrieved party must demonstrate that the transfer was done so with an intent to defraud the debtor. However, the Requests for Judicial Notice, specifically the Court of Appeal Decision from December 2021 and the Minute Order Ex. No. 1, which states that the Court of Appeal voided the amended judgment where the Defendants were added as alter ego judgment debtors. (RJN 4.20.2022 Ex. 5; 5.18.2022 Ex. 1).

The Demurrer is SUSTAINED, with leave to amend. The Defendants are correct that the Court of Appeal reversed the amended judgment of the trial court that indicated that the Defendants were alter ego judgment debtors. However, the matter is granted leave to amend because the Court of Appeal stated “because in Kling I we affirm the judgment confirming the arbitration award, the trial court will soon have jurisdiction to hear a(nother) motion to amend the judgment to add additional judgment debtors.” (RJN 4.20.2022 Ex. 5, page 13). Therefore, there is a chance that the SAC can be amended. As such, the Demurrer is SUSTAINED, with leave to amend.

Conclusion

For the foregoing reasons, the Court decides the pending motion as follows:

The Demurrer is SUSTAINED, with leave to amend.

Moving party to give notice.



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