Opinion
A149554
12-18-2017
W. REED FOSTER, Plaintiff and Appellant, v. HIRAM WOO Defendant; JEFFERY WOO et al., Third Party Claimants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG05221737)
Plaintiff W. Reed Foster, attempting to collect a judgment against defendant Hiram Woo, obtained a writ of execution and levied property located on Clement Street in San Francisco. Third party claimants Jeffery Woo and Shirly Tan moved to quash the writ of execution on the ground that Hiram Woo had transferred his interest in the property to them more than five years before. The trial court granted the motion, finding that Woo and Tan held title to the property and that Foster's challenge to the transfer of title was barred by the statute of limitations. Foster timely appealed. We shall affirm.
Factual and Procedural Background
On September 10, 2007, Foster obtained a judgment against Hiram Woo in the amount of $100,000. At the time, Hiram Woo was a partial owner of the Clement Street property, along with Woo and Tan and others. Hiram Woo's ownership interest in the property was disclosed to Foster in the course of a debtor's examination that was completed in May 2008.
On March 30, 2010, Woo and Tan purchased Hiram Woo's interest in the Clement Street property for $831,696.76. The grant deed was recorded on March 31, 2010.
On August 20, 2014, Foster recorded an abstract of the judgment against Hiram Woo in San Francisco County. On March 30, 2015, Foster obtained a writ of execution and attempted to enforce the judgment by levy and sale of the Clement Street property. Woo and Tan asserted a third party claim of ownership pursuant to Code of Civil Procedure section 720.110. Thereafter, the parties filed competing petitions seeking adjudication of the validity of Woo and Tan's third party claim. In his petition, Foster asserted the conveyance from Hiram Woo was fraudulent under the Uniform Voidable Transaction Act (UVTA), Civil Code section 3439 et seq., previously named the Uniform Fraudulent Transfer Act (2015 Stats., ch. 44, § 2).
On September 1, 2016, the court quashed the writ of execution. The court found that Woo and Tan had a valid claim of ownership based on the transfer of the property in 2010 "for an amount that was within the fair market value of the property" and that Foster's challenge to their ownership interest under the UVTA was barred by the statute of limitations.
Foster timely filed a notice of appeal.
Discussion
"Detailed statutory provisions govern the manner and extent to which civil judgments are enforceable." (Imperial Bank v. Pim Electric, Inc. (1995) 33 Cal.App.4th 540, 546.) "The most common method of enforcing a money judgment is to levy on the judgment debtor's property under a writ of execution." (Ahart, Cal. Practice Guide: Enforcing Judgments and Debts (The Rutter Group 2017) ¶ 6:300.) "A writ of execution is a court process directed to the levying officer (i.e., sheriff, marshal or constable) of the county where the levy is to be made . . . . The writ requires the levying officer to enforce the money judgment in the manner prescribed by law." (Id., ¶ 6:311.)
Under Code of Civil Procedure section 720.110, "A third person claiming ownership . . . of property may make a third-party claim under this chapter in any of the following cases if the interest claimed is superior to the creditor's lien on the property: [¶] (a) Where real property has been levied upon under a writ of attachment or a writ of execution." The purpose of this third-party claim procedure is "to give a quick and effectual remedy to third parties whose property has been levied upon by mistake." (Regency Outdoor Advertising, Inc. v. Carolina Lanes, Inc. (1995) 31 Cal.App.4th 1323, 1329.)
"At a hearing on a third-party claim, the third person has the burden of proof" of his superior right to the property at issue. (§ 720.360.) "The third party claimant is required to introduce evidence that it owns the attached property. [Citation.] Once the third party accomplishes this, the burden shifts to the creditor to establish that the transfers represented by the deeds were fraudulent." (Whitehouse v. Six Corp. (1995) 40 Cal.App.4th 527, 535.)
In this case, substantial evidence supports the trial court's finding that respondents' ownership interest is superior to Foster's lien on the property. The March 30, 2010 grant deed satisfied respondents' burden of establishing ownership of the property and the record supports the court's finding that Foster's challenge under the UVTA is barred by the statute of limitations.
Under the UVTA, "A transfer made or obligation incurred by a debtor is fraudulent as to a creditor . . . if the debtor made the transfer or incurred the obligation . . . [w]ith actual intent to hinder, delay, or defraud any creditor of the debtor." (Civ. Code, § 3439.04, subd. (a)(1).) An action to void the transfer under the Act is extinguished unless it is brought "not later than four years after the transfer was made . . . or, if later, not later than one year after the transfer . . . was or could reasonably have been discovered by the claimant." (Civ. Code, § 3439.09, subd. (a).) " '[E]ven if belated discovery can be pleaded and proven' . . . 'the maximum elapsed time for a suit under either the [UVTA] or otherwise is seven years after the transfer.' " (PGA West Residential Assn., Inc. v. Hulven Internat., Inc. (2017) 14 Cal.App.5th 156, 170; Civ. Code, § 3439.09, subd. (c) [" 'Notwithstanding any other provision of law, a cause of action under this chapter with respect to a fraudulent transfer or obligation is extinguished if no action is brought or levy made within seven years after the transfer was made or the obligation was incurred.' "].)
Contrary to Foster's argument, Civil Code section 3439.09, subdivision (c) does not create a separate seven-year statute of limitations period. (PGA West Residential Assn., Inc. v. Hulven Internat., Inc., supra, 14 Cal.App.5th at p. 179 [concluding that section 3439.09, subdivision (c) is a statute of repose].) --------
In this case, the record establishes that the transfer was made in March 2010, so that, absent delayed discovery, the four-year statute of limitations ran in March 2014. It is undisputed that Foster did not challenge the transfer within this four-year period. Foster asserts that the limitations period was extended because he did not discover the transfer until June 9, 2015. The court rejected this argument, finding that Foster "could have discovered the transfer at any point in time later than March 31, 2010 by reference to the public records in the San Francisco Recorder's Office."
Foster argues that the court's order "improperly placed the burden upon [him], requiring him to search the assessor's records to determine any transfer of the property." He claims that he "can find no statute or case authority for such a duty or requirement to be placed on a judgment creditor." We disagree.
In Sun 'n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671, 701, the court held that a common law "cause of action for fraud or mistake accrues, and the limitations period commences to run, when the aggrieved party could have discovered the fraud or mistake through the exercise of reasonable diligence." (See also Prudential Home Mortgage Co. v. Superior Court (1998) 66 Cal.App.4th 1236, 1247 [The "delayed discovery" rule requires the plaintiff to show diligence and a lack of constructive notice of facts sufficient to require him to inquire.].) Likewise, under Civil Code section 3439.09, subdivision (a) the time period runs from the time the transfer "could reasonably have been discovered by the claimant."
A plaintiff who claims delayed discovery must show that he "was not at fault for failing to discover [his cause of action] or had no actual or presumptive knowledge of facts sufficient to put him on inquiry." (Community Cause v. Boatwright (1981) 124 Cal.App.3d 888, 900.) " '[W]hen the plaintiff has notice or information of circumstances to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to his investigation (such as public records . . .), the statute commences to run.' " (Baker v. Beech Aircraft Corp. (1979) 96 Cal.App.3d 321, 327-328; McKelvey v. Boeing North American, Inc. (1999) 74 Cal.App.4th 151, 160, fn. 11 [rejecting the plaintiff's "fanciful contention that they had no duty of inquiry because they were not purchasers or tenants of property owned or managed by [the defendant] and thus were not in 'privity' with [the defendant]"].)
Here, Foster knew shortly after obtaining judgment that Hiram Woo held an interest in the property, because that fact was disclosed at the May 2008 debtor's examination. Foster was not required to take steps to satisfy his judgment against the property at that time, apparently opting to levy various bank accounts instead. However, knowing of Hiram Woo's interest in the real property, he took no steps over a period of five years to ensure he became aware of any transfer, as he easily could have done by checking the public record. The court could reasonably find that by doing nothing Foster failed to exercise reasonable diligence. The trial court did not err in finding his claim under the UVTA barred by the statute of limitations.
Foster's remaining arguments are largely incomprehensible. His argument that "this matter was brought . . . under [Civil Code] sections 3439.01, 3439.07, and 3439.08, not as the respondent falsely claims, [Civil Code] sections 3439.04 and 3439.05" makes little sense. Section 3439.01 merely defines the terms used under the UTVA. Section 3439.07 sets forth the remedies available to a creditor "[i]n an action for relief against a transfer or obligation under this chapter." Section 3439.08 provides a defense for a transferee when the transfer was made in good faith. As set forth above, section 3439.04 sets forth the requirements for an action to void a transfer.
Likewise, having found that Foster's claim to void the transfer was barred by the statute of limitations, it was not necessary to determine whether Woo and Tam were good faith purchasers under Civil Code section 3439.08 or any other provision.
Disposition
The order quashing the writ of execution is affirmed. Third Parties Woo and Tan shall recover their costs on appeal.
/s/_________
Pollak, Acting P.J. We concur: /s/_________
Siggins, J. /s/_________
Jenkins, J.