Opinion
F053701
9-3-2008
SHARON BONFIELD, Plaintiff and Respondent, v. CAROL FIGLIENO et al., Defendants and Appellants.
Malcolm G. Ellis for Defendants and Appellants. Noriega & Bradshaw and Donald C. Oldaker for Plaintiff and Respondent.
Not to be Published
In March 2005, respondent Sharon Bonfield obtained a $260,000 judgment against Amy Salak. Bonfield subsequently filed this fraudulent transfer lawsuit, alleging that Salak attempted to avoid paying the judgment by transferring horses and other assets to appellants Carol Figlieno, Jerry L. Coffey, and Keystone Farms, LLC (collectively, Transferees). Bonfield alleged that Transferees did not give Salak a reasonable equivalent value in exchange.
Bonfield obtained a default judgment against the Transferees. The default judgment (1) authorized Bonfield to levy execution against eight horses transferred by Salak to Transferees and (2) stated Transferees were jointly and severally liable to Bonfield for $300,213.42, plus interest and costs. Transferees attempted to set aside the default judgment pursuant to Code of Civil Procedure section 473. The superior court denied relief as well as Transferees subsequent motion to reconsider. Transferees appeal from those orders.
Further statutory references are to the Code of Civil Procedure unless indicated.
We conclude that the judgment is void as a matter of law because the rendering court granted relief it had no authority to grant. The judgment should not have granted Bonfield a double recovery in the form of (1) the right to levy execution on the fraudulently transferred assets and (2) a money judgment of over $300,000. Accordingly, the judgment will be modified to eliminate the double remedy. The judgment as modified will be affirmed.
FACTS AND PROCEEDINGS
Salak Litigation
In November 2003, Bonfield filed a breach of contract action against Salak, Sharon Bonfield v. Amy Salak et al., Kern Superior Court No. S-1500- CV-251717, that requested specific performance of a contract that would give her ownership of a horse named Junebug (Salak action). Later, Bonfield amended her complaint against Salak to include a cause of action for abuse of process.
The Salak action was tried to a jury during February 2005. The jury awarded Bonfield $260,000, including $20,000 in punitive damages, and possession of Junebug. The superior court entered judgment in the Salak action on March 9, 2005. Salak filed an appeal from the judgment on June 8, 2005.
The judgment in the Salak action was affirmed by this court. (Sharon Bonfield v. Amy Salak (Sept. 3, 2008, F048246) [nonpub. opn.].)
Less than a week after Salak filed her notice of appeal, she filed a voluntary petition for a chapter 7 bankruptcy. In November 2005, Bonfield filed an adversarial proceeding against Salak, Coffey and Figlieno in the bankruptcy court. Bonfields complaint in the adversarial proceeding asserted, among other things, that while the Salak action was pending, Salak fraudulently transferred horses to Coffey and Figlieno. Transferees opening appellate brief asserts that the complaint against them in the adversarial proceeding was dismissed by the bankruptcy court.
This factual assertion is not supported by a citation to the record as required by California Rules of Court, rule 8.204(a)(1)(C). Further, our review of the appendices filed by the parties did not reveal any such dismissal.
All further references to rules are to the California Rules of Court, unless indicated otherwise
Fraudulent Transfer Action
On May 2, 2006, Bonfield filed her complaint against Transferees in Kern Superior Court, case No. S-1500- CV-258035. The next day, the superior court issued a temporary restraining order and order to show cause why a preliminary injunction should not issue. The temporary restraining order prohibited Transferees from removing or relocating any livestock or horses claimed to be owned by Transferees from an address at Steinhoff Road, Frazier Park, California, which it described as the present address of the horses.
The address appears to be Coffeys. It appears under his name on a check that he made payable to Salak and dated June 12, 2006.
The complaint, temporary restraining order, and order to show cause were served on Transferees and proofs of service were filed with the superior court within a few days.
On May 18, 2006, Transferees submitted objections to the preliminary injunction to the superior court. The superior court filed the objections but indicated that a filing fee of $960 was required for the three first appearances. On May 23, 2006, the objections and other papers submitted by Transferees were rejected by the superior court for failure to pay filing fees.
On May 23, 2006, the clerk of the superior court sent Keystone Farms, LLC a rejection notice and returned a notice and request for stay of proceedings. The rejection notice indicated Transferees were required to pay first appearance fees and Keystone Farms, LLC needed to be represented by an attorney.
Transferees opening appellate brief asserted that they "filed answers to the complaint twice. The first answers were filed on June 19, 2006 but not rejected by the clerk until June 28, 2006. (AA 10-11)" Transferees also asserted that the "second answer was filed, paid for, and accepted by the clerk on December 13, 2006, (AA 9) just before the entry of the default ...."
Appellants appendix contains a copy of an answer to complaint that is dated June 5, 2006, and is signed by the Transferees. The copy is not stamped by the clerk of the superior court and it is not mentioned in the docket included by the parties in their appendices. Transferees assertion that the answer was rejected on June 28, 2006, is not supported by the docket entry for that date. That entry states that a rejection or correction note was sent "[t]o Jerry Coffey in pro per. Returning Cross Complaint. A first appearance fee required of $320.00. An answer usually accompanies a cross complaint."
The docket indicates that (1) an answer was filed by Figlieno on December 14, 2006, (2) the answer was stricken on August 29, 2007, (3) the first appearance fee was ordered refunded to Figlieno, and (4) the fee had been "received from Amy Salak on January 10, 2007, evidence by Receipt #288577." A copy of Amy Salaks check No. 304 payable to the Kern County Superior Court in the amount of $320 is included in the record. The check is dated December 13, 2006, and the bank processing information placed on the back of the check indicates the check was deposited to the countys bank account on January 12, 2007. The receipt issued by the clerk of court upon receiving the check is not part of the appellate record.
On June 9, 2006, the superior court granted Bonfields request for a preliminary injunction.
On June 22, 2006, the clerk of court entered the defaults of Transferees.
On June 28, 2006, Coffey filed a notice of automatic stay that notified the superior court of Salaks bankruptcy case and the adversary proceeding that Bonfield had initiated in the bankruptcy court. The notice also asserted that the assets alleged to have been fraudulently transferred were subject to the jurisdiction of the bankruptcy court, and the automatic stay prevented further proceedings in this case.
Less than two weeks later, the superior court filed a minute order stating that the papers filed by Coffey did not support a stay of the action.
At a case management conference held on October 30, 2006, the court set the matter for an order to show cause regarding the dismissal of the case and stated the hearing would be vacated if a default judgment was entered earlier.
Bonfield submitted a request for judgment on December 13, 2006, and the superior court signed the judgment the same day.
Paragraph 2 of the judgment included a finding that on or about January 15, 2005, Salak transferred five horses to Figlieno without receiving reasonably equivalent value in exchange. The horses, with the value assigned to them in the judgment, are: Rococo ($80,000), Godspeede ($60,000), Boomer Slew ($75,000), Carmen ($20,000) and Juno (no value stated). Paragraph 3 of the judgment included a similar finding with respect to Coffey and three horses: Puddle-Up ($100,000), Unchained Melody ($3,500) and Liberty Belle ($3,500). The values assigned to the seven horses (Juno had no value assigned) totaled $342,000.
Transferees argue that Bonfield greatly inflated these values. They support their argument with a March 8, 2005, appraisal Bonfield submitted in the Salak action. That appraisal gave price ranges of (1) $5,000 to $10,000 for Boomer Slew compared to the $75,000 value listed in the default judgment, (2) $15,000 to $30,000 for Rococo compared to the $80,000 value listed in the default judgment, and (3) $2,500 to $5,000 for Puddle-Up compared to the $100,000 value listed in the default judgment.
Paragraph 6 of the judgment stated that Bonfield "may levy execution against the [eight horses] in satisfaction of the judgment entered in [the Salak action.]"
In addition, paragraph 7 of the judgment stated that Bonfield "shall also have and recover judgment in the total sum of $300,213.42 jointly and severally against [Transferees]." (Boldface and underlining omitted.) Paragraph 8 awarded Bonfield over $18,400 in prejudgment interest. Paragraph 9 authorized Bonfield to recover costs in the amount of $1,044.63.
On February 28, 2007, the superior court issued an order authorizing the Kern County Sheriff, as levying officer, to enter the private premises at an address on Steinhoff Road in Frazier Park and seize the eight horses listed in the judgment.
In April 2007, Transferees filed an ex parte application to restrain or quash the writ of execution or to stop the sheriffs sale. The application was denied. The application is not part of the appellate record. Papers filed by Bonfield in the superior court describe the application as follows: "On April 19, 2007 Carol Figlieno, Keystone Farm, LLC and Jerry Coffey unsuccessfully applied ex parte for an order stopping the Sheriffs Sale scheduled to take place that day. (SeeOldaker Decl. at ¶¶ 58-59.)"
On May 21, 2007, Transferees filed an ex parte motion and motion shortening time to set aside the default. The ex parte application was denied without prejudice.
On May 25, 2007, Coffey and Figlieno filed another ex parte application for order shortening time for hearing on motion to set aside default. The application was granted and a hearing was set for June 13, 2007.
The motion asserted that a declaration of the Transferees previous attorney, Phillip W. Gillet, Jr., admitted that the failure to answer was his fault and that Gillett was too busy to do the work that he had been paid to do even though he told his clients that everything was okay.
On June 13, 2007, the superior court filed a minute order denying the motion to set aside the default. The minute order stated that the moving parties had failed to establish that either the default or the default judgment was entered through their mistake, inadvertence, surprise or excusable neglect or through their attorneys fault and, therefore, the moving parties burden under section 473, subdivision (b) had not been met.
The minute order was confirmed in a written order prepared by counsel for Bonfield that the superior court signed and filed on July 5, 2007.
On June 25, 2007, Coffey and Figlieno filed a motion for reconsideration to set aside the default judgment.
On August 29, 2007, the superior court denied the motion for reconsideration and ordered the answer filed by Figlieno on December 14, 2006, stricken "as having been improperly filed after entry of default and judgment ...." The superior court also ordered the clerk of the court to refund Figlienos first appearance fee of $320.
Transferees filed a notice of appeal in August 2007. The notice of appeal stated that Transferees appealed "from the Judgment entered on June 13, 2007, in Department 4 of the above-entitled court. [¶] Notice of Entry of Judgment was served by Plaintiff and Respondent Sharon Bonfield on July 10, 2007."
The notice of appeal contains errors. First, the judgment was filed on December 13, 2006, not June 13, 2007. The June 13, 2007, date is when the superior court issued a minute order denying the motion to set aside the default. Second, no notice of entry of a judgment was filed on July 10, 2007. On that date, Bonfield filed a notice of entry of the July 5, 2007, order denying the motion to set aside the default.
DISCUSSION
I. Direct Appeal of the Judgment
A. Contentions of the Parties
Transferees opening appellate brief contains a section with the heading "The Judgment Itself." That section appears to argue that the judgment violated section 585, subdivision (b) because the amount of the judgment awarded was not based on the allegations stated in Bonfields complaint. Transferees assert that Bonfields original complaint did not give an exact amount of damages, but "allege[d] damages in collecting the assets transferred, not the entire judgment against Salak."
Section 580, subdivision (a) provides that when no answer is filed, "[t]he relief granted to the plaintiff ... cannot exceed that demanded in the complaint ...." Section 585, subdivision (b) contains a similar limitation. (See Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489, 494 [when no specific amount of damages is demanded, the complaint does not provide adequate notice and does not pass muster under § 580].)
Bonfield contends that Transferees discussion of the judgment itself should be disregarded because (1) Transferees never appealed from the judgment and (2) Transferees time to appeal from the December 13, 2006, judgment had expired before they filed their notice of appeal.
B. Analysis
1. Interpretation of notice of appeal
In civil appeals, "[t]he notice of appeal must be liberally construed." (Rule 8.100(a)(2).) For example, describing an order as a judgment or vice versa, will not invalidate a notice of appeal. (Holden v. California Emp. etc. Com. (1950) 101 Cal.App.2d 427, 430-431.)
For purposes of this appeal, we will assume that the Transferees notice of appeal, which mentions a judgment, can be interpreted liberally to include the only judgment entered in this case even though the date given in the notice of appeal for the judgment was not correct.
2. Failure to provide proper support
Transferees factual assertions regarding the contents of Bonfields complaint are not supported by citations to the appellate record as required by rule 8.204(a)(1)(C). Moreover, Transferees did not include the complaint in their appellants appendix and it does not appear elsewhere in the appellate record. As a result, we cannot confirm the accuracy of Transferees factual assertions regarding the contents of the complaint. Therefore, Transferees have failed to affirmatively show reversible error on the ground that the judgment violated section 585, subdivision (b). (See Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [general principle of appellate practice is that error must be shown affirmatively by appellant].)
3. Timeliness
Transferees appeal cannot be regarded as a timely direct appeal from the December 13, 2006, judgment because the August 2007 notice of appeal was not filed within 180 days of the entry of the judgment. (Rule 8.104(a)(3).) Furthermore, Transferees motion to set aside the default did not extend the 180-day period. (Rule 8.108(c)(3).)
Therefore, we conclude that Transferees appeal is limited to the postjudgment orders denying the motion to set aside the default and the default judgment.
II. Mandatory Relief Under Section 473
A. Statutory Language
A mandatory relief provision was added to section 473, subdivision (b) in 1988 and expanded in 1991 and 1992. (See 8 Witkin, Cal. Procedure (4th ed. 1997) Attack on Judgment in Trial Court, § 195, pp. 701-702.) The mandatory relief provision states:
"Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorneys sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorneys mistake, inadvertence, surprise, or neglect." (§ 473, subd. (b), italics added.)
B. Superior Courts Reasoning
The superior courts minute order stated that Transferees burden under section 473, subdivision (b) had not been met. It also stated that the moving party Transferees had failed to establish that either the default or the default judgment was entered through their attorneys fault. The written minute order is explained further by statements made by the superior court during the hearing on June 13, 2007:
"[I]t isnt an issue of Gillets diligence in bringing a motion within six months of the judgment so far as mandatory relief goes, but it doesnt support mandatory relief. His declaration doesnt support it. There is just no evidence to support it presented by his claimed affidavit of fault because none of what he says goes to, either, the entry of default or the entry of the default judgment. It simply goes to his timing of a motion to set aside one or the other."
The superior court identified the cause of the entry of default as follows: "There is simply a demonstration of various decisions made by the clients over time, as they did not comply with the various time limits." Expanding on this statement and the fact that the default was entered before any answer was filed, the superior court said: "And there was plenty of notice to all the parties as to the entry of default about, which they chose to do, virtually, nothing at all except to rely on somebodys discussions concerning Sal[a]ks Chapter 13 proceeding." More bluntly, the superior court stated: "Its all client neglect."
The court also noted that Gillet was not an attorney of record until January 2007, after the default judgment had been entered, and his declaration did not indicate that he was participating in the case when the default was entered.
C. Analysis
1. Requisite finding of fact
The first issue raised by the parties is whether the superior court made the finding referenced in the exception to the mandatory relief provision. Under that exception, the mandatory relief provision does not apply when "the court finds that the default or dismissal was not in fact caused by the attorneys mistake, inadvertence, surprise, or neglect." (§ 473, subd. (b).)
We conclude that the superior court made the finding referenced in the exception. First, the written minute order stated that the moving party Transferees had failed to establish that either the default or the default judgment was entered through their attorneys fault. Second, the superior courts statement during the June 13, 2007, hearing that "[i]ts all client neglect" necessarily implies that attorney fault was not a partial cause of the default or default judgment. Therefore, Transferees have not demonstrated the superior court committed reversible error by failing to make a finding of fact required by statute.
2. Attorney affidavit
The next issue concerns whether Transferees submitted an attorneys sworn affidavit that complies with the mandatory relief provision in section 473, subdivision (b).
Transferees papers on appeal are deficient in two ways. First, Transferees opening appellate brief describes statements purportedly made by Gillet in a declaration, but does not support these references with a citation to the record as required by rule 8.204(a)(1)(C). Second, Transferees appellants appendix does not contain a copy of a declaration by Gillet. As a result, Transferees have failed to demonstrate the existence of an attorneys affidavit that satisfies the requirements of the mandatory provisions of section 473, subdivision (b). It necessarily follows that Transferees have failed to show that the superior court improperly applied the law to such an affidavit.
The respondents appendix contains a declaration of Gillet dated May 18, 2007, that was submitted in support of an ex parte application to shorten the time for hearing Transferees motion to set aside the default. In that declaration, Gillet stated that (1) he was aware of the six-month time limitation in section 473 for setting aside default judgments, (2) he had intended to file such a motion in early April 2007, (3) he did not file the motion as planned because he was busy with other work, and (4) he took responsibility for the delay in filing the motion to set aside the default judgment. The declaration also contained Gillets legal opinion "that the default taken in this case concerning property of the bankruptcy estate and/or co-debtors under 11 U.S.C. section 1301 while the chapter 13 bankruptcy case was pending is void."
The superior court correctly interpreted Gillets declaration when it said that the declaration did not go to the entry of default or entry of the default judgment, but simply went to the timing of the motion to set aside the default or default judgment. As such, for purposes of section 473, the declaration is not "an attorneys sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect" that resulted in a default or default judgment. Accordingly, the May 18, 2007, declaration is not a satisfactory attorney sworn affidavit for purposes of the mandatory relief provision in section 473, subdivision (b).
Transferees also attempt to show Gillets fault based on information contained in their own declarations and e-mails exchanged with Gillet. This attempt must fail because the statute requires a sworn attorneys affidavit to demonstrate that the attorneys mistake, inadvertence, surprise, or neglect resulted in the default or default judgment. Section 473, subdivision (b) does not provide for mandatory relief when an attorneys fault is demonstrated by other means. Accordingly, we need not analyze the various factual assertions made by Transferees in support of their claim for mandatory relief.
In summary, Transferees failed to present the superior court with an attorneys sworn affidavit sufficient to demonstrate that they were entitled to mandatory relief under section 473.
III. Discretionary Relief Under Section 473
A. Statutory Language
Section 473, subdivision (b) also provides that a "court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment ... or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect." The procedures for obtaining such relief are set forth in the second sentence of that subdivision, which provides:
"Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment ... or proceeding was taken." (Ibid.)
The six-month time limitation of section 473 is jurisdictional; the court has no power to grant relief under section 473 once the time has lapsed. (Rutan v. Summit Sports, Inc. (1985) 173 Cal.App.3d 965, 970 (Rutan).) The period begins to run when the clerk enters the default, not from the time the judgment is entered, unless the defendant merely wants relief from the default judgment, not entry of default. (Ibid.)
"The reason for the rule is that vacation of the judgment alone ordinarily would constitute an idle act; if the judgment were vacated the default would remain intact and permit immediate entry of another judgment giving the plaintiff the relief to which his complaint entitles him. [Citations.] [¶] Nonetheless, the `default and default judgment are separate procedures. [Citation.] The latter does not necessarily have any bearing on, and may be set aside without disturbing, the former." (Ibid.; see Sugasawara v. Newland (1994) 27 Cal.App.4th 294 [Rutan states rule for discretionary relief provision, not the mandatory relief provision added to § 473 after Rutan was decided].)
B. Standard of Review
A superior courts ruling on a motion for discretionary relief under section 473 is reviewed on appeal for an abuse of discretion. (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 257.)
Generally, the abuse of discretion standard of review is a deferential one. Deference, however, is not appropriate where a superior court exercises its discretion to deny relief for a default under section 473. (Elston v. City of Turlock (1985) 38 Cal.3d 227, 235.) Because of the strong public policy preference for the resolution of disputes on their merits, "[d]oubts are resolved in favor of the application for relief from default [citation], and reversal of an order denying relief results [citation]." (Ibid.) "Unless inexcusable neglect is clear, the policy favoring trial on the merits prevails." (Ibid.; cf. Zamora v. Clayborn Contracting Group, Inc., supra, 28 Cal.4th at p. 258 [superior court did not abuse its discretion in granting relief].)
C. Superior Courts Reasoning
The superior court addressed discretionary relief under section 473, subdivision (b) at the June 13, 2007, hearing:
"Discretionary relief is, usually, deemed to be six months from the entry of default because its an idle act to set aside a judgment and not set aside a default; so if the time has run on the default, the—and absent a showing of any sort of reason to have discrete and relief as to the judgment where a default cant be set aside, then there is no relief on the setting aside the judgment. [¶] ...[¶]
"Now, in the discretionary relief area, there is no showing the time has run with regard to the default. There is no showing of any discrete reason to treat the judgment independently of the default. The default would not be set aside. It would be a futile act to set aside the judgment."
Near the end of the hearing, the superior court stated that "[t]here is no showing of excusable neglect." When this statement is combined with the superior courts earlier statement that "[i]ts all client neglect," it appears the superior court found that the neglect of the Transferees was not excusable.
Consequently, it appears that the superior court had two separate reasons for denying discretionary relief under section 473. First, only the default judgment had been entered within the six-month period prior to Transferees motion, and vacating the default judgment would have been an idle act. (See Rutan, supra, 173 Cal.App.3d at p. 970.) Second, Transferees had failed to demonstrate that the default judgment had been entered as a result of a mistake or excusable neglect. In other words, Transferees neglect was inexcusable.
D. Analysis
Transferees appellate reply brief contends:
"Even if Attorney Gillet is not held responsible for his bad legal advice prior to formal retainer, [Transferees] were clearly under the impression that the case was stayed by the Bankruptcy action. They filed a Notice of Bankruptcy Stay (AA 10 and 11) and indeed, the assets at the crux of [Bonfields] case were being examined by the Bankruptcy court and this case should have been stayed. The notice of rejection of [Transferees] Notice of Bankruptcy stay was made, but [Transferees] never received notice of it. (AA 10) [Bonfield] alleges that [Transferees] simply ignored this lawsuit, when in fact, they did take action in several different forms, and were actually under the impression the case was stayed."
Transferees factual assertion that they never received notice that their notice of bankruptcy stay was rejected is not supported by their citation to the record. Page 10 of the appellants appendix is a page from the superior courts docket. The only entry for July 10, 2006, states: "Papers filed by Mr. Coffey 6/28/06 as notice of automatic stay do not support [a] stay of action Number 258035." There is no indication on this page of the docket that Transferees did not receive notice of the superior courts ruling regarding the automatic stay. Respondents appendix contains a copy of the July 10, 2006, minute order as well as a declaration of mailing from the clerk of the superior court that indicates a copy of the minute order was mailed to each of the Transferees at a post office box in Frazier Park.
In view of the appellate record, we must conclude that Transferees failed to establish the accuracy of their factual assertion that they were not notified that the lawsuit was not stayed. Rather, it appears the superior court found that they had been notified and chose to ignore the courts ruling, which the court concluded amounted to inexcusable neglect. (See Security Truck Line v. City of Monterey (1953) 117 Cal.App.2d 441, 445 [defense counsels mistaken belief that the action was stayed did not justify relief under § 473].) Accordingly, Transferees have failed to demonstrate that the superior court abused its discretion in denying their request for discretionary relief under section 473, subdivision (b).
IV. Relief from Void Judgment
A. Statutory Text and Arguments Raised
Section 473, subdivision (d) provides that "[t]he court ... may, on motion of either party after notice to the other party, set aside any void judgment or order." For purposes of this provision, a judgment is void on its face if "the court ... exceeded its jurisdiction in granting relief which the court had no power to grant ...." (Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228, 1239.)
Page 9 of Transferees opening appellate brief contends that "the amount of the judgment is not reasonable or legal. In no case would [Transferees] be responsible for the entire judgment against Salak, but only for the assets transferred and the costs to seize them." At page 4 of that brief, Transferees assert that Bonfield has seized the assets that were the subject of her fraudulent transfer claim and, therefore it was not proper to hold Transferees liable to her for the entire amount of her separate judgment against Salak.
Thus, it appears Transferees are contending that (1) the judgment is void because the superior court exceeded its jurisdiction by granting relief which it had no power to grant and (2) this court should grant relief under section 473, subdivision (d).
In their supplemental letter briefs, the parties disagree about whether Transferees motion to set aside the default judgment was based in part on section 473, subdivision (d). Transferees cite to an oral statement to the superior court and their motion for reconsideration and contend they directly referenced the content of section 473, subdivision (d), even though the references left out the letter "d."
B. Basis for Appellate Review of Issue
We conclude that the matters in the record cited by Transferees are ambiguous and that it is plausible to interpret those matters as references to the authority contained in section 473, subdivision (d).
Alternatively, if the issue is regarded as being raised for the first time on appeal, we conclude that it is within our discretion to consider whether to set aside the default judgment pursuant to section 473, subdivision (d). Specifically, this court has the discretion to consider a theory presented for the first time on appeal when it involves only a legal question determinable from uncontroverted facts that could not be altered by the presentation of additional evidence. (Redevelopment Agency v. City of Berkeley (1978) 80 Cal.App.3d 158, 167; see 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 398, p. 450.)
In this appeal, the question whether the relief granted in the judgment exceeded the relief authorized by law is a purely legal question involving the application of provisions of Californias version of the Uniform Fraudulent Transfer Act (Civ. Code, § 3439 et seq.) (UFTA). Furthermore, the facts relevant to the application of its provisions are uncontroverted. Therefore, it is within the discretion of this court to consider whether the judgment is void under section 473, subdivision (d).
We choose to exercise that discretion and consider the issue because doing so will promote judicial efficiency. Our resolution of this issue will (1) spare the court system further proceedings or a new lawsuit by Transferees collaterally attacking the validity of the judgment and (2) clarify questions concerning damages in the malpractice action against Gillet that is pending in Kern Superior Court and may reduce the judicial resources expended to resolve that case.
C. Judgment Granted Relief Beyond That Authorized by UFTA
Civil Code section 3439.07 sets forth the relief that a creditor bringing a fraudulent transfer case may obtain under the UFTA. Subject to the limits contained in Civil Code section 3439.08, a creditor may obtain "[a]voidance of the transfer ... to the extent necessary to satisfy the creditors claim." (Civ. Code, § 3439.07, subd. (a)(1).) Where a creditor has obtained a judgment against a transferor-debtor—such as the judgment Bonfield obtained against Salak—"the creditor may levy execution on the asset transferred or its proceeds." (Civ. Code, § 3439.07, subd. (c).)
Subdivision (b) of Civil Code section 3439.08 addresses judgments that a creditor may obtain against a transferee:
"Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under paragraph (1) of subdivision (a) of Section 3439.07, the creditor may recover judgment for the value of the asset transferred, as adjusted under subdivision (c), or the amount necessary to satisfy the creditors claim, whichever is less. The judgment may be entered against the ... [¶] ... first transferee of the asset ...."
Subdivision (c) of Civil Code section 3439.08 provides that "[i]f the judgment under subdivision (b) is based upon the value of the asset transferred, the judgment shall be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require."
The UFTA allows a creditor to levy execution on the fraudulently transferred assets or obtain a money judgment subject to the limitations imposed by Civil Code section 3439.08. Either remedy puts the creditor in essentially the same position that he or she would have occupied had there been no fraudulent transfer. The UFTA, however, does not authorize a creditor to invoke both remedies.
In this case, the judgment authorized Bonfield to levy execution on eight horses that were transferred by Salak. The judgment also awarded Bonfield a money judgment in the amount of $300,213.42 plus prejudgment interest of $18,424.06, which represented the full amount of the judgment obtained against Salak. This double remedy clearly exceeds the relief that the court had the power to grant under the UFTA or under other law. Because of the excessive relief, the judgment is void on its face. (Rochin v. Pat Johnson Manufacturing Co., supra, 67 Cal.App.4th at p. 1239.) Thus, pursuant to section 473, subdivision (d), the motion to set aside the default judgment should have been granted.
If Bonfields claim is viewed as having been brought under the common law rather than the UFTA, then the relief available would have been limited by the principle that a money judgment is not justified absent proof that the transferred property is not available. (Hy-Lo Unit & Metal Products Co. v. Ryon (1937) 21 Cal.App.2d 38, 43.)
In her supplemental letter brief, Bonfield argues that she is entitled to execute on the transferred property and recover an amount of money equal to the loss in value of the property due to the delay in execution caused by the fraudulent transfer. Bonfield cites Civil Code section 3439.07, subdivision (a)(3)(C), which refers to "[a]ny other relief the circumstances may require." Her application for the default judgment, however, did not seek this type of relief, and we deem that particular theory of recovery forfeited. In other words, we review the judgment based on what Bonfield actually chose to present, not on alternatives that may or may not have been available but she chose not to present.
With respect to the appropriate disposition of this appeal, we conclude that we can eliminate the defect in the judgment that renders it void. Therefore, there is no need to remand this case to the superior court for further proceedings to cure the defect. The power to remedy a defective judgment is illustrated by the cases in which a default judgment is erroneous because the damages awarded exceeded those pled. In those situations, the appropriate action for the appellate court is to modify the judgment to the maximum amount warranted by the complaint. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) ¶ 5:257, p. 5-62; see Ostling v. Loring (1994) 27 Cal.App.4th 1731, 1743.)
In this case, Bonfield has obtained the benefit of the transferred assets as a result of the sheriffs sale conducted in April 2007. Consequently, the duplicative nature of the relief contained in the judgment can be cured by eliminating the award of a money judgment and prejudgment interest. Accordingly, we will modify the judgment.
D. Restitution
Transferees have not filed a motion requesting this court to invoke its authority under section 908 and order restitution of money or property that Bonfield may have obtained by executing on or enforcing the terms of the judgment contained in paragraphs 7 and 8. (See Walter E. Heller Western, Inc. v. Tecrim Corp. (1987) 196 Cal.App.3d 149, 162 [defendants motion resulted in appellate court directing trial court to order restitution].) Therefore, if a dispute regarding restitution arises, that dispute can be presented in the first instance to the superior court by way of a motion for restitution. (See Schubert v. Bates (1947) 30 Cal.2d 785, 789 [power to order restoration after a reversal of a judgment is inherent in trial court]; Holmes v. Williams (1954) 127 Cal.App.2d 377, 379 [ordinarily, a party is entitled to restitution of property taken by virtue of a judgment that has been reversed].)
DISPOSITION
The December 13, 2006, judgment is modified so that paragraphs 7 and 8 on page 3 are stricken. As so modified, the judgment is affirmed. The parties shall bear their own costs on appeal.
We concur:
CORNELL, Acting P.J.
KANE, J.