Opinion
B317440
08-29-2023
AMAG, INC., Plaintiff and Appellant, v. MARC ANTHONY CUBAS et al., Defendants and Respondents
Law Offices of Wilfred J. Killian, Wilfred J. Killian and Wendelyn P. Killian for Plaintiff and Appellant. Zambrano Law Corporation, Omar Zambrano; Gavrilov &Brooks and Michael Coleman for Defendants and Respondents.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. 18STCV01201, Daniel S. Murphy, Judge.
Law Offices of Wilfred J. Killian, Wilfred J. Killian and Wendelyn P. Killian for Plaintiff and Appellant.
Zambrano Law Corporation, Omar Zambrano; Gavrilov &Brooks and Michael Coleman for Defendants and Respondents.
WEINGART, J.
Plaintiff and appellant AMAG, Inc. (AMAG) lent approximately $3 million to an online business called Vlaze Media Networks, Inc. (Vlaze). Vlaze defaulted on the loan, and AMAG sued Vlaze for breach of contract (namely, breach of the loan agreement). Vlaze stipulated to entry of judgment against it in the breach of contract action for $4,924,905.97 in principal and interest. When Vlaze then failed to surrender any collateral securing the loan, AMAG took further legal action. It sought to amend the judgment in the breach of contract action to include Vlaze's chief executive officer Marc Anthony Cubas (Cubas) and certain other business entities as judgment debtors under an alter ego theory. The trial court did not sustain the alter ego allegations and denied the requested amendment to the breach of contract judgment. AMAG did not appeal that determination.
AMAG separately filed a new lawsuit alleging Vlaze, Cubas, various relatives of Cubas, and certain business entities participated in fraudulent transfers under the Uniform Voidable Transactions Act (UVTA; Civ. Code, § 3439 et seq.) that frustrated AMAG's ability to enforce its judgment against Vlaze (the fraudulent transfer action). The trial court entered default against Vlaze, and AMAG's fraudulent transfer claims against Vlaze are not at issue in this appeal. The respondents to this appeal-Cubas, Sydney Susana Cubas (Susana), Nadia Nino (Nadia), Maria Angelica Cubas (Maria), Dominic Cubas (Dominic), Adrienne Smith (Smith), Happy Endings LA (Happy Endings), Injected Arts, Inc. (Injected Arts), Vanderbilt Wholesalers, Inc. (Vanderbilt) and Mint (collectively, Respondents)-moved for summary judgment. The court granted summary judgment against AMAG, finding AMAG had provided no evidence that Vlaze fraudulently transferred property to any of the Respondents. The trial court further found AMAG was collaterally estopped from arguing in the fraudulent transfer action that Cubas was the alter ego of Vlaze given the court's prior ruling on that same alter ego issue in the breach of contract action.
Subsequent unspecified statutory references are to the Civil Code.
We refer to Cubas's relatives and certain other individuals by their first names for clarity and brevity and intend no disrespect in doing so.
AMAG now appeals the grant of summary judgment against it. AMAG argues the trial court erred because a plaintiff seeking to unwind transfers under the UVTA need not demonstrate the debtor transferred property to a third party-in other words, that Vlaze can be liable for transferring property to itself (including its alter egos). AMAG further argues it was not collaterally estopped from seeking to pierce Vlaze's corporate veil, that the trial court should have denied summary judgment because Cubas was the only declarant on a purportedly material issue (Code Civ. Proc., § 437c, subd. (e)), and that the trial court erred in overruling AMAG's evidentiary objections to Respondents' evidence. Finally, AMAG argues the trial court erroneously denied it leave to amend its complaint, after summary judgment was granted, to include allegations that the Respondents aided and abetted and conspired with Vlaze to conceal its assets and to add new defendants and causes of action including constructive fraud and breach of fiduciary duty.
The judgment from which AMAG appeals is not against Vlaze, the debtor, but against Cubas and the other Respondents. We accordingly review the propriety of the trial court's summary judgment ruling as to Respondents only, and disregard AMAG's arguments applicable only to Vlaze as outside the scope of this appeal-for example, AMAG's repeated claims about Vlaze's potential liability for purportedly concealing its own assets. Focusing as we must on the parties actually before us, we conclude AMAG adduced evidence to create a triable dispute of material fact as to Cubas and Injected Arts, specifically that Injected Arts and Cubas did not provide rental income due to Vlaze under a 99-year lease of real property to Vlaze.
As to the other Respondents, namely Susana, Nadia, Maria, Dominic, Smith, Happy Endings, Vanderbilt Wholesalers, and Mint, AMAG failed to adduce any evidence that Respondents received a transfer of assets from Vlaze and thus failed to demonstrate a triable issue of fact as to its fraudulent transfer claims against Respondents. There is evidence of dubious asset transfers between Cubas and his family members prior to and after AMAG's hard money loans to Vlaze. Cubas and his family members, however, were not the debtor and the court previously rejected AMAG's attempt to hold Cubas liable as Vlaze's alter ego. Vlaze was the sole debtor, and other than evidence concerning rental income belonging to Vlaze under the 99-year lease, AMAG produced no evidence of any transfers to Respondents originating from Vlaze or involving Vlaze assets. We find no merit to any of AMAG's remaining arguments. Accordingly, we reverse as to Injected Arts and Cubas only, affirm as to Susana, Nadia, Maria, Dominic, Smith, Happy Endings, Vanderbilt Wholesalers, and Mint, and remand the matter for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
A. Factual Summary
In opposition to Respondents' motion for summary judgment, AMAG argued certain transfers of real property and leasehold interests, telephone numbers, and internet provider (IP) addresses were voidable transfers under the UVTA. We thus summarize the evidence in the record relating to ownership and transfers of these interests along with a history of the business relationship between Vlaze and AMAG.
1. Events Before AMAG's Initial Loan
On March 21, 2001, several years before Vlaze was incorporated and AMAG loaned money to Vlaze, Cubas transferred property at 517 North Alvarado Street in Los Angeles (the Alvarado Street property) to his sister, Susana, and mother, Maria. Evidence submitted in connection with the summary judgment motion suggests this transfer included 2116 Bellevue Avenue, an office in the same building as the Alvarado Street property, but that faced Bellevue Avenue. Susana operated a real estate business from that location. Cubas and/or his family also owned a four-unit residential quadplex comprised of 2124, 2126, 2128, and 2130 Bellevue Avenue that was adjacent to the Alvarado Street property. The record does not include deeds reflecting when Cubas or members of his family first obtained title to these properties.
The grant deed, recorded February 25, 2002, lists the property's address as 517 North Alvarado Street, Los Angeles, California. Other documents sometimes refer to 517 Alvarado Street. Nothing in the record indicates these are separate properties.
In 2006, Vlaze was incorporated in Nevada, with its principal place of business at the Alvarado Street property. Vlaze initially produced and distributed online video content. It later expanded into e-commerce more generally. According to declarations from Cubas and Susana filed in support of Respondents' motion for summary judgment, Vlaze used telephone and computer lines already present at that location for its business.
2. Vlaze and AMAG's Agreements
On June 15, 2007, AMAG and Vlaze entered into a loan agreement under which AMAG agreed to lend up to $2.9 million to Vlaze "exclusively for the purpose of paying certain expenses in accordance with" an approved budget. Neither Cubas nor any other entity or individual was a party to this loan agreement, or a guarantor of Vlaze's obligations under it. Under the agreement, AMAG would disburse funds to Vlaze upon AMAG's receipt of a "[r]equest for [f]unding" form, an example of which the parties appended to the loan agreement. The form required Cubas to confirm "on behalf of himself and [Vlaze]" that certain conditions were met, including that Vlaze had provided AMAG with current and accurate monthly financial statements.
Under a security agreement, Vlaze pledged as collateral "all personal property, whether tangible or intangible, wherever located or situated, and whether now owned or hereafter at any time acquired by [Vlaze], including[,] but not limited to, goods, accounts, general intangibles, equipment, copyrights, trademarks, patents, contracts, licenses and any proceeds thereon or income therefrom including, but not limited to, all right, title and interest, whether now owned or hereafter at any time acquired by [Vlaze]."
3. 2008 to 2011: Vlaze's Operations, Long-term Lease, and Additional Loan
According to Cubas, due to the economic crisis of 2008 Vlaze generated less revenue than it needed to function. In early 2009, Cubas moved to China. He retained someone to file regular Statements of Information in California for Vlaze "in case there could be a turnaround in the business." Cubas claimed in his declaration in support of the motion for summary judgment that "Vlaze ceased all operations in early 2009" and that when it ceased operations it did not generate any income or "have any assets other than a few old computers and office supplies."
Other evidence introduced at summary judgment refuted Cubas's claim about when Vlaze ceased operating, including a 99-year lease, contemporaneous emails from Cubas, and a later additional loan from AMAG.
AMAG's chairman, Steven Markoff, declared that in January 2009 he instructed Cubas to have Vlaze enter into a long-term and less expensive lease. On March 1, 2009, Cubas purportedly entered into a 99-year lease agreement with Vlaze pursuant to this instruction; Cubas leased to Vlaze the Alvarado Street property and 2116, 2124, 2126, 2128, 2130 Bellevue Avenue for $10,000 per month. The lease bound Vlaze's and Cubas's successors and assigns for the term of the lease and did not provide for an increase in rent. Under section 11.03 of the lease, the landlord (Cubas) "absolutely and unconditionally assign[ed] to [the t]enant [Vlaze] all of [the l]andlord's right, title and interest in and to all current and future [l]eases, sub[]leases, [d]eposits and [r]ents from all subleases and leases." The lease stated that its terms survived the landlord's sale, pledging of the property as collateral, or other transfer of the property, and Cubas personally guaranteed full and prompt payment of deposits and rents from any sublease to the tenant and the tenant's right to possession. The lease permitted the landlord to terminate the lease by written notice in the event of default, including the tenant's failure to pay rent on the due date on three or more occasions within a 12-month period. The record does not include a notice of termination. Cubas signed the lease both as the landlord and as a representative of Vlaze, the tenant.
Cubas and Susana filed supplemental declarations challenging the authenticity of the 99-year lease (which was attached to Markoff's declaration) and the accompanying notary acknowledgement form, which Susana allegedly executed. Susana also claimed that on the date Cubas allegedly executed the lease, he did not own the property as he had transferred it to her and her mother in 2001. On May 27, 2009, Susana and her mother gifted title in the property to themselves and Cubas, as joint tenants, thereby returning to Cubas a portion of the interest he had transferred to them.
On December 30, 2009, Markoff sent an email to Cubas, stating, inter alia, "I offered to advance the $100,000 today based on the fact that all the China business you have been exploring and will be doing is as a part of Vlaze." Cubas responded, "I can assure you all [of] my efforts in the last year have been to avoid bankruptcy and closing down." "Vlaze has survived [20]09 by my determination of not quitting." "Vlaze has generated a little over $330,000 . . . as of November 2009[,] which have all gone through our bank account and [I] have bank statements to document this. [¶] Vlaze is in debt and owes creditors and has judgment lawsuits against it.... [¶] I have focus[ed] my attention on other avenues so I personally can stay a float [sic], but Vlaze would . . . not [have] survived if [I] [had] not be[en] working the business 24/7. [¶] I would not take any money from you if it would not be to keep pushing Vlaze forward.... [¶] . . . Vlaze['s] bank account has a lien of $42,000 dollars from [a vendor]-if any money hits that bank account it would be absorbed. Mint Distribution is part of [V]laze as you can see through the website and it is the way I [have] been able to keep up paying for things, so [I] would request wiring the money to that account or to make a check payable to my personal name."
On January 2, 2010, Cubas sent an email to Markoff and John Kurtz, AMAG's attorney. Cubas shared a list of creditors and outstanding balances, excluding AMAG, totaling $337,347.99. After describing Vlaze's business plans, Cubas stated, "Vlaze in my opinion is still a viable company that will prevail. [Markoff] has not asked me for any collateral, I offer to give him my personal automobiles but he did not accept[, and] I can[']t afford to incur more interest at this point. [¶] . . . There is no new entity everything is being ran [sic] under Vlaze . . .-I am open to further advi[c]e from [Markoff] and [Kurtz] on this subject."
On January 5, 2010, AMAG entered into a loan amendment agreement with Vlaze to lend Vlaze an additional $100,000. The $100,000 was to be "used for the exclusive purpose of purchasing product manufactured in China for resale on [Vlaze's] internet websites." The amendment acknowledged that on November 13, 2008, AMAG had loaned Vlaze an additional $100,000, and that Cubas requested the January 5, 2010 "advance be made out to him personally for Vlaze business reasons."
On February 23, 2011, Cubas sent an email to Thomas Markoff (Thomas) to share some of the websites "we own." Cubas's signature block referred to Mint in Los Angeles and Mint International in China.
On May 10, 2011, Markoff emailed Cubas noting AMAG never received Vlaze's December 31, 2010 financials. In his email response, Cubas stated, "I did not planned [sic] to stay in China this long, but [another individual] is managing the Los Angeles operation as well as if [I were] there .... [¶] . . .My staff and I are working and doing everything we can to make good on what Vlaze set out to do."
In June 2011, Cubas sent an email to Markoff listing approximately 90 websites that Cubas stated were "active ecommerce sites . . . that produce revenue for [V]laze." None of the listed sites referred to Mint, Vanderbilt, Happy Endings, or Injected Arts.
On or about July 13, 2011, Cubas provided to Markoff Vlaze's depreciation schedule for "Los Angeles Studio Equipment" and "China Office Computers." The list included hundreds of items, comprised primarily of audio/visual and computer equipment, acquired between 2009 and 2011, with values ranging between $10 and nearly $6,000. All items were listed as having a five-year life expectancy.
AMAG's opening brief refers to emails from Cubas to Markoff on September 5, 8, and 9, 2011 and July 24, 2012. Copies of those emails are not included in the record.
On December 31, 2011, Vlaze and AMAG entered into a first amendment to the loan amendment agreement. Under the first amendment, the parties acknowledged Vlaze owed $3,663,969.30 to AMAG, and that "Vlaze . . . indicates it is struggling to stay in operation and to make any payments on the AMAG loans." The parties agreed that AMAG would reduce the amount due to $1.5 million as of December 31, 2011, and reduce the interest rate to 6 percent if Vlaze paid $1.5 million by January 15, 2015.
In 2011, Fan Bao, an individual, and ZICO USA, Inc. filed an unrelated lawsuit in federal district court against, inter alia, Cubas, Vlaze, and Mint (Bao v. Vlaze, case No. CV11-03587 GHK-MAN). Zambrano Law Corp. (Zambrano Law) represented the defendants in the matter. On June 29, 2011, the defendants filed an answer in which they explained Mint "is a dba of . . . [Vlaze]" and that Mint "sells goods purchased by Vlaze."
4. Additional 2009 Property Transfer
On April 28, 2009, Cubas transferred to Nadia, his sister, title in a property on North Nora Avenue, located in Covina, California (the Nora property), as a gift. This transfer was recorded on June 22, 2011. In a declaration filed in an unrelated lawsuit against Vlaze in district court, filed on January 11, 2014, Spectrum Laboratories, LLC v. Vlaze, case No. 2:14-cv-00262-RGK-VBK (the Spectrum Trademark Litigation), Cubas asserted he transferred the Nora property to Nadia because she had originally had an ownership interest in it, the property was transferred to him for refinancing, and the family wanted the property returned to Nadia. There is no evidence that Vlaze or any other business entity ever had any ownership interest in the Nora property.
5. 2012 to 2015: Property Transfers, Vlaze's Default on AMAG's Loan, and AMAG's Suit for Breach of Loan Agreement
On July 2, 2012, Cubas transferred 2124 Bellevue Avenue, in Los Angeles, California, to Cathy Cubas (Cathy), Cubas's wife or ex-wife (the record is unclear as to which), as a gift.
On July 31, 2012, and again on October 11, 2012, Cubas's sister, Nadia, filed fictious business name statements for Mint and Happy Endings. She indicated she was the registered owner of both businesses, that Mint's business address was the Alvarado Street property and then 2116 Bellevue Avenue, and that Happy Endings' business address was the Alvarado Street property. On April 17, 2013, Nadia filed a Statement of Abandonment of Use of Fictious Business Name for Mint and stopped doing business as Mint. On December 3, 2014, she also filed an abandonment of fictious business name for Happy Endings. She stated in her declaration that she stopped doing business as these companies because of a lack of sales. The record does not include any evidence that Mint or Happy Endings had any ownership interest in the real properties from which they did business.
AMAG alleged in its first amended complaint that Vanderbilt was formed in April 2013, and Injected Arts was formed in November 2013. The summary judgment pleadings contain no evidence indicating when Vanderbilt or Injected Arts began business operations. There is also no evidence that Injected Arts was a subsidiary or otherwise affiliated with Vlaze.
In a March 14, 2020 declaration in support of a motion to quash a subpoena, Susana stated, "I am the sole officer and director of Vanderbilt . . . [, which] sells packaging to compan[ies] like pizza boxes to pizza restaurants."
In 2013, Vlaze submitted an appeal to the Los Angeles County Assessment Appeals Board to obtain a changed tax assessment of its business personal property at 2116 Bellevue Avenue as it "ceased doing business in Los Angeles and California since [October 24, 2010,] and has moved to Hong Kong, China. Vlaze has no equipment or personal property as the equipment was outdated and disposed off [sic]."
This assessment related solely to business personal property owned by Vlaze, and not any real property.
The record includes a November 30, 2016, Los Angeles County Tax Collector recorded tax lien against Vlaze in the amount of $4,808.62 for delinquent business personal property taxes.
On April 18, 2014, AMAG emailed a "second request" to Cubas for Vlaze to make a $35,000 interest payment on the loan. Cubas responded that when the funds were available, Vlaze would make the payment.
In or about June 2014, Cubas provided to Markoff Vlaze's 2013 financial statement. It indicated Vlaze's income derived from telephone and online sales of products sourced in China and Los Angeles for Vlaze and Vlaze's companies, including Mint, Vanderbilt, Happy Endings, "etc." The financial statement showed Vlaze made approximately $2.2 million in profit, but had approximately $4.3 million in liabilities, including loans owed to AMAG and Citibank. Cubas also sent Markoff an email to provide a year in review. He described, "Vlaze is enjoying its best year of revenue growth and profit. Vlaze has hundreds of websites with sales in over 100 countries.... As you know from the 2013 financial statement Vlaze has multiple high end growth companies such as Mint Distribution, Mint Supplies &Distribution, Mint International Trading and Investments, . . . Vanderbilt Wholesalers, . . . Happy Endings LA, . . . and hundreds of single-product, niche sites that are significant revenue generators selling products like mylar bags, stickers, labels, dab tools, smoking equipment and accessories, clothing, hats, sex toys, envelopes, synthetic urine, [and] urine tests [sic] kits." Cubas reported that "Vlaze opened a Chinese [b]ank [a]ccount under Guangzhou Caifei Trading Company [(Caifei)]." "Finally, Vlaze has been holding off on paying our past-due vendors because if I put them off long enough most are willing to negotiate a pay-off. Vlaze through Caifei has created a singular savings account devoted to repaying [AMAG]. I anticipate that will begin late 2014." Neither Vlaze's financial statement nor Cubas's email referred to Injected Arts.
On January 3, 2015, AMAG contacted Cubas concerning Vlaze's payoff of AMAG's loan. On January 20, 2015, Cubas reported, "I am sorry Vlaze . . . is not able to meet the deadline for this payment. [¶] At this point I don't know what other alternatives you can offer Vlaze to continue its platform development." On January 27, 2015, Cubas emailed Markoff that "Vlaze and its companies will cease operations within the next 30 days[;] all equipment and inventory will be sold to cover Chinese vendors and salaries." The record does not include any communications from Markoff or AMAG thereafter.
On March 18, 2015, Cubas, Maria, and Susana transferred title of the Alvarado Street property (and likely adjacent parcels, based on the assessor parcel numbers listed in the grant deed) to Injected Arts. As noted above, AMAG presented no evidence that Injected Arts was an affiliate of Vlaze. The grant deed stated the property was worth less than $100. Although this valuation is suspect, there is no evidence that Vlaze owned title to the property; nor did the 99-year lease prohibit transfer of the property. Indeed, the lease accounted for the possibility of a transfer of property ownership and stated that in the event of such a transfer, Vlaze's rights under the lease survive.
On May 23, 2015, Injected Arts entered into a 60-month lease as lessor of the Alvarado Street property for "office use" to a tenant for $3,500 per month. Injected Arts also entered into a 60-month lease to rent 2116 Bellevue Avenue to a tenant for storage for $1,500 per month. In a declaration signed August 3, 2015, and filed in the Spectrum Trademark Litigation, Cubas averred he and his family members transferred the Alvarado Street property to Injected Arts to limit personal liability to the rentpaying tenants. Markoff declared that Injected Arts entered into these leases "without payment or notice to Vlaze pursuant to its . . . [99-]year lease." Respondents did not address whether the rent Injected Arts collected was ever provided to Vlaze.
On May 8 and July 3, 2015, Vlaze canceled its trademarks for its name and its logo, both of which had been registered in 2008.
On July 8, 2015, AMAG sued Vlaze for the outstanding balance of the loan, $4,924,905.97. Vlaze did not file an answer. Instead, in early October 2015, Vlaze stipulated to entry of judgment against it. On October 21, 2015, the trial court entered the stipulated judgment awarding AMAG $4,924,905.97 (plus interest) from Vlaze and requiring Vlaze to provide to AMAG all collateral, as defined in the June 15, 2007 security agreement, i.e., all of Vlaze's present and future personal property. It is undisputed that Vlaze is the only judgment debtor in the breach of contract action.
On August 17, 2015, Cubas transferred ownership of the domain name Vlaze.com to "Xie Abbi." AMAG asserts there is no evidence Vlaze received compensation from Xie Abbi for this transfer.
AMAG further submitted evidence, in the form of a declaration from an individual from National Comtel, that a third party registered a particular toll-free number in May 2007 and that six years later (in May 2013) Cubas registered the same toll-free number under a separate account number. The account number under which Cubas registered the toll-free number also included 17 other toll-free numbers, one of which was used by Happy Endings and Mint. Cubas paid the invoices for these phone numbers from September 2013 to May 2019. No evidence indicated any of the 800 numbers belonged to Vlaze, and the invoices were sent to Cubas's attention at "Adnet Financial." Although AMAG's declarant claimed 800 numbers are assets that "create[ ] client familiarity and allegiance . . . like a trademark or brand name," and can be transferred as a business asset, he expressly declined to ascribe the value, if any, of these 800 numbers.
6. 2016 to 2018: Secured Loan(s)
On February 21, 2018, Ashley D. Cubas (Ashley), executed a deed of trust in favor of Guangdong National Investment, Limited (Guangdong National) relating to the real property parcel located at 2124, 2126, 2128, and 2130 Bellevue Avenue, Los Angeles, to secure a loan for $400,000. There is no evidence in the record establishing the ownership of Guangdong National or it having any relationship to Vlaze. However, in opposition to the motion for summary judgment, AMAG's counsel averred Guangdong National "is an un-listed shell Chinese company." Counsel did not include any foundation or corroborating evidence for this assertion; he simply stated it.
The record includes several other deeds of trust executed in favor of either Guangdong National or Guangdong International Investment Limited (Guangdong International) to secure loans. However, the deeds are not included in the parties' submissions relating to the motion for summary judgment. Rather, they are included as evidence in support of AMAG's ex parte application to continue the trial and other dates, which it filed prior to its opposition on Respondents' motion for summary judgment. These deeds establish that on August 3, 2016, Nadia executed a deed of trust relating to the Nora property in favor of Guangdong International to secure a loan for $70,000. On October 25, 2017, Maria executed a deed of trust relating to real property located on South Burlington Avenue in Los Angeles in favor of Guangdong International to secure a loan for $223,351.04. On December 6, 2017, Injected Arts executed a deed of trust (signed by Susana, Injected Art's president) relating to the Alvarado Street property to secure, inter alia, a loan in the amount of $500,000 from Guangdong International. On April 12, 2018, Nadia executed a deed of trust in favor of Guangdong National relating to the Nora property to secure a loan in the amount of $200,000. On April 24, 2018, Susana granted a deed of trust in favor of Guagdong National relating to real property on Canada Street in Los Angeles to secure a loan for $200,000. As with Guangdong National, there is no evidence establishing the ownership of Guangdong International or that it has any relationship to Vlaze. While we granted judicial notice of a verified cross-complaint in a later filed lawsuit that made allegations about Guangdong, "[i]t is well settled that a court cannot take judicial notice of the truth of matters stated in pleadings or affidavits in the court file of another case, although it can be noticed that the documents exist." (Bennett v. Regents of University of California (2005) 133 Cal.App.4th 347, 358, fn. 7, italics omitted.) Further, we review the correctness of the judgment here as of the time it is rendered, based on the evidence that was before the trial court for consideration at that time and not on allegations made later. (State Dept. of Health Services v. Superior Court (2003) 31 Cal.4th 1026, 1034-1035 [in an appeal following a motion from summary judgment, "we take the facts from the record before the trial court when it ruled on that motion"].)
B. Procedural History
1. AMAG's Complaint in the Fraudulent Transfer Action and Motion to Amend the Breach of Contract Judgment
On October 17, 2018, AMAG sued Cubas, Vlaze, Happy Endings, Injected Arts, Mint, Susana, Nadia, Maria, Dominic, and Smith in the fraudulent transfer action. AMAG alleged that each defendant was the alter ego of the others. AMAG later filed amendments to the complaint identifying Vanderbilt and Zambrano Law as formerly named Doe defendants.
Cathy was not listed in the complaint's case caption, but was listed in the body of the complaint as a defendant. It does not appear she was served, and she is not a party to the judgment before us on appeal.
On April 8, 2020, AMAG moved to amend the breach of contract judgment to add Cubas, Mint, and another company not relevant to this appeal as judgment debtors on the basis that Vlaze was their alter ego. AMAG argued, inter alia, that Cubas personally entered into the January 5, 2010 loan for $100,000; that credit card purchasers of products from Mint's website were directed to a webpage operating under vanderbiltwholesalers.com; that Vanderbilt conducts business at 2116 Bellevue Avenue (Vlaze's former business address); that despite its suspended status, Vlaze conducts business in Los Angeles; that Cubas was Vlaze's chief executive officer, president, and only director; that Vlaze was inadequately capitalized, as evidenced by its failure to repay outstanding loans; that Vlaze failed to abide by corporate formalities in that it did not pay its California and Nevada taxes; that Vlaze, Vanderbilt, and Mint utilized the same individual as their shipping and e-commerce operations manager; and that Vlaze used the same two IP addresses as Vanderbilt and Vlaze's attorneys Zambrano Law.
As noted above, the loan amendment listed Vlaze as the borrower, but stated that "Cubas has requested this advance be made out to him personally for Vlaze business reasons," which appears to be the existence of a vendor lien on Vlaze's bank account.
AMAG submitted 73 exhibits in support of its motion evidencing the support for these claims. Cubas filed a declaration in opposition and submitted corporate filings and minutes to support his contention that Vlaze observed corporate formalities. He also demonstrated, inter alia, that he was not Vlaze's only officer or director.
On August 4, 2020, AMAG filed its first amended complaint. In its first cause of action for fraudulent transfer, AMAG alleged that Cubas "and/or V[laze] conveyed and/or transferred its interests in various assets, including but not limited to the [c]ollateral [described in the security agreement], personal property and real property . . . to [the defendants]." The first cause of action did not allege Respondents' liability for fraudulent transfers depended upon a theory that they aided or abetted or conspired with Vlaze to conceal Vlaze's assets, but instead that Respondents were liable because Vlaze made transfers to Respondents. Nor did the first amended complaint include any allegation that any corporate defendant was Vlaze's successor. AMAG also sought declaratory relief that the defendants conveyed assets, including real property, that should have been provided to AMAG, and a judicial determination of the parties' ownership interests in such property. Among other things, the first amended complaint prayed for "a declaration that all [the defendants] are the alter ago of V[laze], such that the assets from each may be levied upon . . . to satisfy [AMAG]'s [j]udgment against V[laze]." The first amended complaint did not expressly describe Vlaze's telephone numbers or IP addresses as fraudulently transferred assets.
In describing the parties to the fraudulent transfer litigation, the first amended complaint includes boilerplate language that "Plaintiff is informed and believes and, on that basis, alleges, that at all times herein mentioned, each of the [defendants] named herein was the alter ego, agent, licensee, employee, partner, joint venturer, co-adventurer, co-conspirator, servant, principal, master, employer, affiliate and/or associate of each of the other [defendants] ...." However, AMAG made no effort to plead a cause of action for fraudulent transfer premised on a conspiracy. (See AREI II Cases (2013) 216 Cal.App.4th 1004, 1022 ["It is well settled that' "[b]are" allegations and "rank" conjecture do not suffice for civil conspiracy' "]; see also Wells Fargo Bank, N.A. v. Weinberg (2014) 227 Cal.App.4th 1, 6-7 [finding boilerplate allegations of alter ego insufficient to demonstrate the plaintiff intended to pursue such a theory] (Wells Fargo Bank).)
The trial court related the breach of contract and fraudulent transfer actions. On September 11, 2020, the trial court denied AMAG's motion to amend the breach of contract judgment to add Cubas and Mint as judgment debtors under an alter ego theory. Among other things, the trial court found that AMAG failed to demonstrate a sufficient unity of interest between Vlaze and Cubas or Vlaze and Mint. AMAG did not appeal that ruling.
2. Respondents' Motion for Summary Judgment
On February 10, 2021, Respondents moved for summary judgment. Respondents argued that there was no evidence Vlaze transferred any property to them. They further argued AMAG was collaterally estopped from maintaining a cause of action for fraudulent transfer on the basis that Vlaze was Cubas's or Mint's alter ego.
Zambrano Law later sought to join in the motion for summary judgment. The trial court denied that request as untimely, and Zambrano Law is not a party to the judgment at issue in this appeal.
On August 26, 2021, AMAG filed an ex parte application to continue the trial and discovery dates on the basis that, inter alia, certain Respondents "have not allowed their depositions to be taken in a timely manner." The trial court denied AMAG's application, but indicated in its minute order that Cubas and Susana were to be deposed on August 31, 2021 and September 1, 2021, respectively.
On September 8, 2021, AMAG filed evidentiary objections to Respondents' evidence, moved for judicial notice, and opposed the motion for summary judgment. In the final sentence of its opposition, AMAG requested, "Alternatively, in the event that the [c]ourt grants the motion, [AMAG] request[s] an opportunity to file an [a]mended [c]omplaint, and complete discovery, of the newly discovered evidence of [Respondents]' money laundering and equity stripping with sham loans with Vlaze's revenue." AMAG did not attach a draft amended complaint to its submission, or otherwise elaborate on how it might amend its complaint.
On October 25, 2021, the trial court heard the parties' summary judgment arguments and took the matter under submission. On October 28, 2021, it granted summary judgment. In doing so, the court found its September 11, 2020 order denying AMAG's motion to amend the judgment in the breach of contract action collaterally estopped AMAG from proceeding under a theory that Vlaze was Cubas's alter ego in the fraudulent transfer action. Thus, it concluded, Vlaze was the only debtor that could have made the alleged fraudulent transfers. The trial court found AMAG had adduced no evidence of any transfers from Vlaze to Respondents and that AMAG's evidence instead focused on establishing that Vlaze continued operating and possessing assets beyond 2009. The trial court concluded, "The core of a fraudulent transfer claim is an exchange of property from a debtor to the defendant. No matter how substantial Vlaze's assets are or how long Vlaze operated past 2009, [AMAG] cannot maintain a claim for fraudulent transfer without presenting evidence that Vlaze's assets were actually transferred. Thus, there is no triable issue as to the first cause of action." The trial court declined to consider AMAG's argument that telephone numbers and IP addresses used by Vlaze constituted transferable assets because AMAG did not allege in its first amended complaint that these items were fraudulently transferred. Further, because AMAG's declaratory relief cause of action was based on theories of fraudulent transfer and alter ego, the trial court concluded there was no triable issue for that cause of action. The trial court also overruled the parties' evidentiary objections and granted AMAG's request for judicial notice. The trial court's minute order did not separately address AMAG's theory that Vlaze's 99-year lease was an asset and that its value appeared to have been diverted from Vlaze.
The court also denied AMAG's request to continue the hearing on the motion for summary judgment to allow further discovery (Code Civ. Proc., § 437c, subd. (h)), observing that AMAG did not provide a declaration showing that controverted evidence may exist, that AMAG had had ample opportunity to conduct discovery, and that the discovery cut-off had already passed. AMAG does not appeal this ruling.
3. Post-summary Judgment Ruling Events
On November 8, 2021, AMAG filed a motion for reconsideration of the court's grant of summary judgment. It argued, inter alia, reconsideration was warranted because AMAG could allege new and different facts in a proposed second amended complaint, attached to its motion for reconsideration, and because a recent appellate opinion, Nagel v. Westen (2021) 59 Cal.App.5th 740 (Nagel), held the UVTA did not require a plaintiff to demonstrate a transfer of assets to a third party.
On January 10, 2022, the trial court denied AMAG's motion for reconsideration. It observed "the holding in Nagel does not change the determination that [AMAG] failed to present evidence of any fraudulent transfer. [AMAG] raised Nagel during oral argument, and the [c]ourt considered it.... [AMAG]'s motion for reconsideration does not explain how assets were 'transferred,' even under the definition set forth in Nagel." (Italics added.) Further, AMAG did not provide legal authority for allowing a proposed amended complaint to serve as the basis for reconsideration of a summary judgment ruling. Neither AMAG's motion for reconsideration nor the court's ruling specifically addressed whether AMAG could amend its complaint.
On February 2, 2022, the trial court entered default against Vlaze.
On February 4, 2022, the trial court, having granted summary judgment in Respondents' favor, entered judgment for them. Neither Vlaze nor Zambrano Law was included in the judgment.
On December 28, 2021, AMAG filed a notice of appeal from the trial court's order granting summary judgment. The clerk of this court notified AMAG that the court's order was not an appealable order. On May 2, 2022, AMAG provided this court with a copy of the February 4, 2022 judgment. We treat AMAG's premature notice of appeal as filed immediately after the entry of judgment, and therefore valid. (Cal. Rules of Court, rule 8.104(d).)
DISCUSSION
A. Summary Judgment Framework and Standard of Review
A "motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law...." (Code Civ. Proc., § 437c, subd. (c).) A defendant seeking summary judgment has met the "burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established." (Id., subd. (p)(2); see also King v. United Parcel Service, Inc. (2007) 152 Cal.App.4th 426, 432.) Once the defendant has met that burden, the burden shifts to the plaintiff "to show that a triable issue of one or more material facts exists as to the cause of action." (Code Civ. Proc., § 437c, subd. (p)(2); see also Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1518.)
"' "The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues . . ."' and to frame 'the outer measure of materiality in a summary judgment proceeding.' [Citation.]" (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493.) "Accordingly, the burden of a defendant moving for summary judgment only requires that he or she negate [the] plaintiff's theories of liability as alleged in the complaint; that is, a moving party need not refute liability on some theoretical possibility not included in the pleadings." (Ibid.)
We review the trial court's summary judgment ruling de novo. In doing so, "we take the facts from the record before the trial court when it ruled on that motion." (State Dept. of Health Services v. Superior Court, supra, 31 Cal.4th at pp. 1034-1035; see In re Travis C. (2017) 13 Cal.App.5th 1219, 1224, fn. 3 ["An 'appellate court reviews the correctness of a judgment as of the time it is rendered, based on the evidence that was before the trial court for consideration at that time' "].) We liberally construe the plaintiff's evidentiary submission while strictly scrutinizing the defendant's own showing and resolve any evidentiary doubts or ambiguities in the plaintiff's favor. (Whitmire v. Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1083, citing Weber v. John Crane, Inc. (2006) 143 Cal.App.4th 1433, 1438.)
B. The UVTA
"The UVTA is a contemporary retooling of the common law remedies available to unsecured creditors seeking payment from debtors who evade collection. [Citation.] Originally enacted as the [UFTA] in 1986, its retitling in 2016 reflected the Legislature's intent to 'reduce misconceptions that the law requires proof of fraudulent intent.' [Citation.] Little else changed in substance. [Citation.]" (Nagel, supra, 59 Cal.App.5th at pp. 747-748.)
Neither party argues the UVTA is inapplicable here because AMAG was a secured creditor. Further, it does not appear the Legislature intended the UVTA or its predecessor, the Uniform Fraudulent Transfers Act (UFTA), to apply so narrowly. Section 3439.01 of the UVTA defines a creditor as a person that has a claim and defines a claim as including a right to payment, whether "secured or unsecured." (§ 3439.01, subds. (b), (c).) The 1986 Legislative Committee comments for this section state, "The definition of 'claim' is derived from [s]ection 101(4) of the Bankruptcy Code. Since the purpose of [the UVTA] is primarily to protect unsecured creditors against transfers and obligations injurious to their rights, the words 'claim' and 'debt' as used in the [UVTA] generally have reference to an unsecured claim and debt. As the context may indicate, however, usage of the terms is not so restricted." (§ 3439.01, Legis. Com. com. (2).)
Because the UVTA "did not alter the essential elements of a cause of action for a fraudulent or voidable transfer," we rely on opinions addressing the UFTA in our analysis. (Aghaian v. Minassian (2020) 59 Cal.App.5th 447, 455, fn. 8 [relying on UFTA opinions in determining the sufficiency of the plaintiff's complaint]; see § 3439.14, subd. (d) [provisions in the UVTA that "are substantially the same as the provisions" under the UFTA are to "be construed as restatements and continuations" of the former law].)
Under the UVTA, "[a] transfer made or [an] obligation incurred by a debtor," if done "[w]ith actual intent to hinder, delay, or defraud any creditor of the debtor," or "[w]ithout receiving a reasonably equivalent value in exchange" therefor, is "voidable as to a creditor." (§ 3439.04, subd. (a).) Thus, the UVTA "permits defrauded creditors to reach property in the hands of a transferee." (Mejia v. Reed (2003) 31 Cal.4th 657, 663; see § 3439.08 [describing defenses, liability, and protection of transferees under the UVTA].)
C. The Trial Court Did Not Err in Finding AMAG Was Collaterally Estopped from Maintaining Vlaze Was Cubas's or Mint's Alter Ego
The debtor here is Vlaze, and as just noted, the UVTA requires a "transfer made or [an] obligation incurred by [the] debtor." (§ 3439.04, subd. (a).) If Vlaze was Cubas's or Mint's alter ego, then transfers from Cubas or Mint to other Respondents may give rise to liability under the UVTA. Thus, we first consider the trial court's finding that AMAG was collaterally estopped from maintaining that Vlaze was Cubas's or Mint's alter ego.
"' "The prerequisite elements for applying the doctrine [of res judicata and collateral estoppel] to either an entire cause of action or one or more issues are the same: (1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding. [Citations.]"' [Citation.]" (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797.) Collateral estoppel applies to issues "actually litigated and necessarily decided" in the previous suit, while res judicata applies to claims that were or should have been litigated. (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 825.)
Citing Wells Fargo Bank, supra, 227 Cal.App.4th 1, AMAG argues Cubas and Mint cannot establish the first element of collateral estoppel because AMAG's breach of loan agreement claim in the breach of contract matter "could not implicate the current facts and causes of action for fraudulent transfer and declaratory relief." (Bold and italics omitted.) This argument misapprehends the doctrine of collateral estoppel and misreads Wells Fargo Bank.
"Collateral estoppel is one of two aspects of the doctrine of res judicata. In its narrowest form, res judicata' "precludes parties or their privies from relitigating a cause of action [finally resolved in a prior proceeding]."' [Citations.] But res judicata also includes a broader principle, commonly termed collateral estoppel, under which an issue' "necessarily decided in [prior] litigation [may be] conclusively determined as [against] the parties [thereto] or their privies . . . in a subsequent lawsuit on a different cause of action."' [Citation.] [¶] Thus, res judicata does not merely bar relitigation of identical claims or causes of action. Instead, in its collateral estoppel aspect, the doctrine may also preclude a party to prior litigation from redisputing issues therein decided against him, even when those issues bear on different claims raised in a later case." (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 828, italics omitted.)
Here, AMAG pursued an identical issue in the fraudulent transfer action as it did in the breach of contract action: whether Vlaze was Cubas's or Mint's alter ego. The first prong is therefore met. We disagree with AMAG that Wells Fargo Bank, supra, 227 Cal.App.4th 1 dictates a different result. In that case, a lender sued an attorney and his law corporation for breach of a loan agreement. The attorney successfully demurred, and judgment was entered only against the law corporation. (Id. at pp. 3-4.) The lender then moved to amend the judgment to add the attorney as a judgment debtor as the law corporation's alter ego. (Id. at p. 4.) The court rejected the argument that res judicata or collateral estoppel barred the proposed amendment because the issue of the attorney's contractual liability for breach of the loan agreement (the issue litigated in the demurrer) was distinct from the issue of the attorney's exercise of control over the law corporation (the issue in the proposed amendment to the judgment). (Id. at p. 7.) Here, in contrast, the previously litigated issue in the breach of contract action was the same as in the fraudulent transfer action-the purported alter ego status of Cubas, Mint, and Vlaze for purposes of liability on AMAG's loans to Vlaze.
As to the other prerequisites for collateral estoppel, AMAG does not dispute that the issue of alter ego was actually litigated and necessarily decided as part of AMAG's motion to amend the judgment or that the trial court's September 11, 2020 postjudgment order was final by the time Cubas and Mint moved for summary judgment. (See Misik v. D'Arco (2011) 197 Cal.App.4th 1065, 1071 [concluding that the order denying the plaintiff's motion to amend the judgment was appealable as a postjudgment order]; Cal. Rules of Court, rule 8.104(a).) Nor is there any dispute that the same party in both litigations, AMAG, sought to advance the same alter ego theory against the same defendants, Mint and Cubas. Thus, the trial court correctly found its order denying AMAG's motion to amend the judgment in the breach of contract action collaterally estopped AMAG from successively asserting Vlaze was Cubas's or Mint's alter ego in the fraudulent transfer action.
Before the trial court, AMAG disputed that the time for filing an appeal relating to its motion to amend the judgment had expired, asserting that the "one final judgment rule" did not permit an appeal from a judgment that fails to dispose of all causes of action between the parties. This ignores that the trial court's ruling in the breach of contract action was a postjudgment ruling, and nothing remained for the court's determination in that litigation.
Although it is not clear, AMAG also appears to argue that a new claim for alter ego arose as to Cubas and Mint after September 11, 2020, the date of the court's ruling on AMAG's motion to amend the judgment. AMAG states collateral estoppel should not apply because it did not "have the benefit of the current discovery" and cites the principle from Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486 that" '[t]he general rule that a judgment is conclusive as to matters that could have been litigated "does not apply to new rights acquired pending the action which might have been, but which were not, required to be litigated ...."' [Citation.]" (Id. at pp. 514, 517 [concluding res judicata did not preclude the plaintiff from adding an individual as a judgment debtor because "when the complaint was filed, [the plaintiff] had no reason to suspect the existence of an alter ego relationship"], italics omitted.)
AMAG does not articulate what new evidence it obtained after September 11, 2020, that would have fairly given rise to a new claim for alter ego against Mint and Cubas at the time of the hearing on Respondents' motion for summary judgment. Indeed, in contrast to Greenspan, AMAG fully litigated the issue of alter ego in its motion to amend the judgment, submitting 73 exhibits in support of its motion, including deposition excerpts and a declaration from as late as 2020. Thus, AMAG has not demonstrated the trial court erred in finding AMAG was collaterally estopped from maintaining a cause of action for fraudulent transfer on the basis that Vlaze was Cubas's or Mint's alter ego.
D. AMAG Demonstrated a Triable Issue of Material Fact that Injected Arts and Cubas Diverted Vlaze's Rental Income
Turning to AMAG's claim that there was a triable issue of material fact as to Vlaze's alleged fraudulent transfers, we note first that" 'transfer' under the [UVTA] has a broad meaning." (Sturm v. Moyer (2019) 32 Cal.App.5th 299, 308.) The term is defined as "every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance." (§ 3439.01, subd. (m).)
In opposing summary judgment, AMAG argued Vlaze's 99-year lease was an asset under which Vlaze was entitled to receive payments. Respondents argued the 99-year lease was not an asset, but a liability for Vlaze, that the lease was counterfeit, and that it was void because Cubas entered into the lease as landlord when only Susana and Maria owned the property.
AMAG demonstrated a triable question as to whether Vlaze's long-term lease qualifies as an asset and whether Injected Arts and Cubas diverted the value of that asset. "When parties enter into a lease they create the legal relationship that governs their respective rights in the land, and either's successor in interest will be bound thereby. When the parties are sophisticated commercial entities of the type likely to sign leases for 35 or more years, such leases will often confer substantial rights on the lessee .... [T]he primary economic value of land encumbered by a lease of such duration rests with the lessee ...." (Pacific Southwest Realty Co. v. County of Los Angeles (1991) 1 Cal.4th 155, 167-168, italics added &fn. omitted.) Indeed, here, the lease conferred upon Vlaze the right-unless the landlord terminated the lease in writing due to default-to current and future rents and deposits from other leases and subleases. Cubas, a signatory on the lease, personally guaranteed this right. Drawing all reasonable inferences in favor of AMAG, when Injected Arts entered into two five-year leases in 2015, for a total of $5,000 per month, for real property subject to Vlaze's 99-year lease, those rents belonged to Vlaze, which arguably would then have had to make them available to satisfy AMAG's debts. However, the record does not contain evidence that Injected Arts provided these monies or equivalent value to Vlaze. Nor does the evidence indicate that Cubas fulfilled his contractual obligation to ensure Vlaze received these rents. Accordingly, we conclude AMAG carried its burden to demonstrate a triable issue of material fact as to Cubas and Injected Arts.
E. AMAG Failed to Demonstrate a Genuine Issue of Material Fact that Vlaze Transferred Any Assets Other than the 99-year Lease to Respondents
AMAG also broadly argues summary judgment was improper because under Nagel, it did not need to submit evidence that Vlaze transferred assets or that those assets were transferred to Respondents. Our discussion herein excludes the issue of any transfer of Vlaze's interests under the lease discussed ante, and we conclude AMAG failed to adduce evidence sufficient to create a triable issue of material fact under any other theory alleged in the first amended complaint.
In Nagel, supra, 59 Cal.App.5th 740, the Court of Appeal clarified that a "transfer" under the UVTA need not include a third-party transferee. In that case, Tracy Westen and Linda Lawson (Westen) sold their Brentwood home to Nicole Nagel. Nagel discovered the home was uninhabitable due to water damage. She sued Westen and obtained an arbitration award of over $4.5 million. (Id. at pp. 743-744.) Shortly before the award, Westen created an" '[a]sset [p]rotection plan,'" under which Westen placed a portion of the Brentwood property sale proceeds into an annuity and used the balance of it to buy and improve a house in Texas, a state with an unlimited homestead exemption. The trial court found that although Westen had converted assets from nonexempt to exempt, Nagel could not maintain a cause of action under the UVTA without first identifying a third party transferee. (Id. at pp. 745, 746.) The Court of Appeal disagreed and held Westen's transfer of assets out of state and transmutation of those assets into another legal form constituted a "transfer" within the meaning of the UVTA even if there was no third party transferee. (Id. at p. 749.) To hold otherwise would contravene the UVTA's purpose" 'to prevent debtors from placing, beyond the reach of creditors, property that should be made available to satisfy a debt.'" (Id. at p. 751.)
Based on Nagel, AMAG argues, "[AMAG] may simply produce evidence and/or inferences that Vlaze concealed its continued operations, its assets, and its revenue that was generated from its business entities and websites." (Bold and italics omitted.) Because Vlaze continued its operations but did not provide any secured collateral to AMAG, in AMAG's view "the logical inference that should be deduced is that [Vlaze] . . . transferred" its assets. Further, because Respondents purportedly "conceal[ed] Vlaze's existence and operation," they, "by logical extension," concealed its assets.
We reject this framing of the issue. We begin with the reminder that the court entered Vlaze's default and did not grant summary judgment in favor of Vlaze. Thus, Vlaze's continued operation and generation of profits that resulted in any transfer of those profits and any other asset within Vlaze itself are not before us. Rather, we review only AMAG's claims against Respondents. As to Respondents, we first observe that the pleadings delimit the parties' arguments on summary judgment. (See Hutton v. Fidelity National Title Co., supra, 213 Cal.App.4th at p. 493.) In the first amended complaint, AMAG alleged only that Respondents were liable as transferees or under an alter ego theory. AMAG's bare, boilerplate allegation that Respondents were "co-conspirators" was insufficient to provide fair notice to Respondents that they should anticipate and defend against claims for conspiracy or aiding and abetting transfers of assets to someone other than themselves. (See Wells Fargo Bank, supra, 227 Cal.App.4th at pp. 6-7; AREI II Cases, supra, 216 Cal.App.4th at p. 1022.) Having not sufficiently alleged a theory of conspiracy or aiding and abetting in the fraudulent transfers, AMAG may not avoid summary judgment by asserting those theories in its opposition. Thus, to survive summary judgment under the theory pleaded in its first amended complaint, AMAG needed to adduce evidence that Vlaze transferred its assets or interests to the Respondents. (See § 3439.08; Lo v. Lee (2018) 24 Cal.App.5th 1065, 1072 [concluding payments could not be recovered from debtor's son under the UVTA because debtor's son was not a transfer beneficiary].)
Next, Nagel does not relieve AMAG from demonstrating an actual transfer-whether to someone or into a different legal form-of the debtor's assets. Nor could it, as the statutory language itself requires proof of such a transfer. (§ 3439.04, subd. (a).) In Nagel, the plaintiff demonstrated that the defendant debtors transmuted the proceeds from a home sale to avoid collection. (See Nagel, supra, 59 Cal.App.5th at p. 749.) Here, regardless of its failure to sufficiently allege a conspiracy or aiding and abetting theory, with the exception of rent received under the 99-year lease discussed above, AMAG failed to articulate any transfer of Vlaze's assets to anyone, Respondents or otherwise.
AMAG's speculation that because it did not receive Vlaze's assets Respondents must have been the ones that received or concealed any such assets is not enough. (Buehler v. Alpha Beta Co. (1990) 224 Cal.App.3d 729, 734 ["mere speculation . . . is legally insufficient to defeat a summary judgment"].) Considering first Vlaze's alleged interests in real property, AMAG not only failed to present evidence that Vlaze transferred any real property to anyone, AMAG never adduced evidence that Vlaze owned any real property (other than the leasehold interest, which we expressly exclude from this discussion). The Alvarado Street property, the Nora property, and other properties described in this opinion were all owned by Cubas or his family members. Accordingly, any evidence of transfers of interests in these properties is irrelevant to the question of whether Respondents received Vlaze's corporate property as a fraudulent or voidable transfer.
We describe Vlaze's leasehold interest here as a real estate interest as" '[m]any long-term leases do amount to a transfer of a present interest in real property, including the beneficial use thereof ....'" (Thrifty Corp. v. County of Los Angeles (1989) 210 Cal.App.3d 881, 885.)
AMAG contends that loans Cubas's family members and Injected Arts secured from Guangdong National or Guangdong International were simply a way for Vlaze to launder money. However, there is no evidence demonstrating Guangdong National or Guangdong International are related to Vlaze. Nor does AMAG explain this money laundering allegation or provide evidence supporting it. Using the common understanding of money laundering, Vlaze would have had to transfer its assets to the Guangdong entities for those assets to be "cleansed" before they were returned to Vlaze or its nominees. But as stated before, other than the leasehold interest there is no evidence of Vlaze having any interest in the real properties that secured loans from Guangdong National and Guangdong International or making any non-real property transfer to those entities. Nor is there any evidence in the record that Vlaze was still operating in 2017 and thereafter when some of these transfers were made.
AMAG argues Vlaze transferred its toll-free phone numbers and that such phone numbers are "valuable assets." Assuming arguendo that toll-free numbers are assets and that they fell within the definition of collateral under the security agreement, AMAG did not present any evidence that Vlaze owned any of the toll-free phone numbers. Cubas and Susanna stated in their declarations that the phone numbers Vlaze used existed at the Alvarado Street property before Vlaze was formed. AMAG's evidence does not contradict this; it established only that beginning in May 2013-several years after Vlaze's formation- Cubas had toll-free phone numbers through National Comtel and that Mint and Happy Endings used some of those phone numbers. Thus, there is no evidence that Vlaze owned or transferred toll-free phone numbers to any of the Respondents.
AMAG also contends Vlaze transferred its IP addresses to someone named Xie Abbi. Assuming arguendo that Vlaze could own IP addresses, that they had any value, and that they were pledged assets under the security agreement, it is undisputed those transfers did not involve the Respondents and that neither Vlaze nor Xie Abbi is a party to this appeal. Accordingly, we need not consider the effects of these purported transfers, or the transfer of Vlaze's domain name to Xie Abbi.
In sum, AMAG failed to demonstrate a genuine issue of material fact that Vlaze transferred any assets to Respondents. The trial court thus did not err in granting summary judgment as to AMAG's non-lease-based theories of fraudulent transfer.
F. AMAG Has Not Demonstrated Error in the Trial Court's Evidentiary Rulings
AMAG argues that the trial court erred in considering Cubas's declaration that alleged Vlaze ceased operations by 2009. Instead, AMAG claims because Cubas was the only witness to testify to this fact, the trial court "was obligated to deny" Respondents' motion for summary judgment under Code of Civil Procedure section 437c, subdivision (e). That section states, "summary judgment may be denied in the discretion of the court if the only proof of a material fact offered in support of the summary judgment is an affidavit or declaration made by an individual who was the sole witness to that fact." (Code Civ. Proc., § 437c, subd. (e), italics added.) Given this discretion, AMAG is simply incorrect that the trial court was required to deny summary judgment. Furthermore, Cubas's declaration was not the only evidence on this point; as AMAG itself argues, considerable other evidence contradicted Cubas's claim that Vlaze ceased operation in 2009. Section 437c, subdivision (e) was thus inapplicable.
Although not argued by Respondents, we note for completeness that while the evidence on whether Vlaze ceased operations in 2009 was in dispute, that question was not a material fact for purposes of summary judgment. Material facts "measure whether the plaintiff has alleged a cause of action." (Carlsen v. Koivumaki (2014) 227 Cal.App.4th 879, 884.) "[E]videntiary facts . . . establish whether the material facts have been prove[n]." (Ibid., fn. omitted) "Whether a fact is one or the other depends on the function to be performed. [Citation.] If the facts are used to establish a ground for relief, they are material. If the facts are used to establish the truth of the material facts they are evidentiary." (Ibid., fn. 6.) Whether Vlaze ceased operations in 2009 was not a material fact as to whether Vlaze made fraudulent transfers to any of the Respondents. Neither the trial court's analysis, nor ours, ignores what happened from 2009 onwards. As the trial court correctly noted, "No matter . . . how long Vlaze operated past 2009, [AMAG] cannot maintain a claim for fraudulent transfer without presenting evidence that Vlaze's assets were actually transferred."
AMAG separately argues, in a conclusory manner, that the trial court erred in overruling its objections to portions of Cubas's, Susana's, and Nadia's declarations. What rulings are purportedly erroneous and the reasons why are not explained. Whether our review is de novo or for abuse of discretion, we presume the trial court's orders and rulings are correct, and AMAG has the burden of demonstrating error."' "[D]e novo review does not obligate us to cull the record for the benefit of the appellant in order to attempt to uncover the requisite triable issues. As with an appeal from any judgment, it is the appellant's responsibility to affirmatively demonstrate error and, therefore, to point out the triable issues the appellant claims are present by citation to the record and any supporting authority. In other words, review is limited to issues which have been adequately raised and briefed."' [Citation.]" (Los Angeles Unified School Dist. v. Torres Construction Corp. (2020) 57 Cal.App.5th 480, 492; see also Champir, LLC v. Fairbanks Ranch Assn. (2021) 66 Cal.App.5th 583, 597 [" 'In order to demonstrate error, an appellant must supply the reviewing court with some cogent argument supported by legal analysis and citation to the record. Rather than scour the record unguided, we may decide that the appellant has forfeited a point urged on appeal when it is not supported by accurate citations to the record. [Citations.] Similarly, we may disregard conclusory arguments that are not supported by pertinent legal authority' "].) AMAG has not provided any cogent argument on the issue or adequate citations to the record, and thus, has not carried its burden to demonstrate error in the trial court's evidentiary rulings.
The standard of review on this issue is not settled. (See Reid v. Google, Inc. (2010) 50 Cal.4th 512, 535 ["we need not decide generally whether a trial court's rulings on evidentiary objections based on papers alone in summary judgment proceedings are reviewed for abuse of discretion or reviewed de novo"].)
G. The Trial Court Acted Within Its Discretion in Impliedly Denying AMAG's Motion to Amend Its Complaint
AMAG argues that the trial court abused its discretion in not granting it leave to amend its complaint. The record does not include a formal request to do so, and AMAG's arguments on appeal focus on its implied request contained in its motion for reconsideration filed after the trial court granted summary judgment. Accordingly, so do we.
During oral argument, Respondent's counsel referred to AMAG's request to amend its complaint contained at the end of its opposition to the motion for summary judgment. However, AMAG did not provide a draft complaint with that request. Further, although AMAG claimed in its opposition that it could amend to include allegations of money laundering or equity skimming, AMAG did not provide a satisfactory explanation how Guangdong National or Guangdong International were related to Vlaze, if at all. As the transactions involving those companies occurred three years prior to AMAG filing its fraudulent transfer complaint, the trial court's declination to reopen discovery and for AMAG to amend its complaint was within its discretion." 'The law is . . . clear that even if a good amendment is proposed in proper form, unwarranted delay in presenting it may-of itself- be a valid reason for denial.' [Citation.]" (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 613.)
On November 8, 2021, AMAG filed a motion for reconsideration of the trial court's order granting summary judgment in favor of Respondents. AMAG's motion was made, in part, on the grounds that its proposed second amended complaint, which was appended to its motion, alleged new and different facts, "discovered after the [f]irst [a]mended [c]omplaint was filed." The trial court denied the motion for reconsideration and thereby impliedly denied AMAG's unspoken request to amend its complaint. AMAG argues the trial court erred in not permitting AMAG to amend its complaint as leave to amend is routinely liberally granted, including in the context of summary judgment motions.
The trial court was presented with a request for reconsideration of its summary judgment ruling, and we agree with it that AMAG's proposed second amended complaint did not provide grounds for reconsideration of that ruling. Discovery was taken, summary judgment pleadings prepared, and argument presented based on the governing complaint; changing the alleged parameters for liability after the fact is not a proper ground for reconsideration. (Code Civ. Proc., § 1008.)
To the extent one construes the motion for reconsideration as requesting leave to file an amended complaint separate and distinct from the reconsideration request, we likewise perceive no error in the court's implicit denial of that request." 'Code of Civil Procedure section 473, subdivision (a)(1) permits a court, "in furtherance of justice," to "allow a party to amend any pleading . . . in any . . . respect." The trial court's ruling on a motion to amend a pleading is reviewed under an abuse of discretion standard . . ., and the appellant has the burden of establishing its discretion was abused.... Generally, "the trial court has wide discretion in determining whether to allow the amendment, but the appropriate exercise of that discretion requires the trial court to consider a number of factors: 'including the conduct of the moving party and the belated presentation of the amendment....'"' [Citation.]" (Duchrow v. Forrest (2013) 215 Cal.App.4th 1359, 1377.)
Here, AMAG submitted its proposed second amended complaint to the trial court six years after obtaining judgment against Vlaze; three years after filing the action underlying this appeal; over a year after filing its first amended complaint; nine months after Respondents filed their motion for summary judgment and, even more importantly, after the trial court issued its ruling on summary judgment against it. AMAG's counsel stated in a declaration that he was unaware of the facts alleged in paragraphs 51 to 97 of the proposed second amended complaint "at the time of filing the instant matter." However, this does not adequately explain AMAG's lack of diligence in seeking leave to amend its complaint, especially when it stated it knew no later than the time of its summary judgment opposition of "countless examples of the common scheme and plan of [Respondents'] conspiracy to aid and abet in the concealment of Vlaze's continued operations." Thus, the trial court did not abuse its discretion in not permitting AMAG to amend its complaint.
DISPOSITION
The trial court's judgment is affirmed with regard to respondents Sydney Susana Cubas, Nadia Nino, Maria Angelica Cubas, Dominic Cubas, Adrienne Smith, Happy Endings LA, Vanderbilt Wholesalers, Inc., and Mint; reversed with regard to appellant AMAG's claim against respondents Marc Anthony Cubas and Injected Arts, Inc.; and remanded for further proceedings consistent with this opinion. Respondents Sydney Susana Cubas, Nadia Nino, Maria Angelica Cubas, Dominic Cubas, Adrienne Smith, Happy Endings LA, Vanderbilt Wholesalers, Inc., and Mint are awarded their costs on appeal. Respondents Marc Anthony Cubas and Injected Arts, Inc. are to bear their own costs on appeal.
We concur: ROTHSCHILD, P. J. BENDIX, J.