2013-00155057-CU-FR

Chung S. Kim vs. Loretta A. Migliori

Nature of Proceeding: Hearing on Demurrer

Filed By: Malysiak, Spencer T.

Defendant Ronald Migliori’s Demurrer to the Complaint is overruled.

Defendant’s Request for Judicial Notice of the U.S. District Court decision and
judgment in the IRS case is granted only as to findings of fact in the order and the
judgment. However, the Court does not judicially notice any inference to be drawn
from such judgment such as to whether plaintiffs would have been able to reach any of
the property at issue due to a purported superior lien of the IRS. The Request is
denied as to the truth of the contents of the levy documents. Further, a demurrer
cannot be turned into a contested evidentiary hearing through the guise of having the
court take judicial notice of documents whose truthfulness or proper interpretation are
disputable. (Unruh-Haxton v. Regents of Univ. of Cal. (2008) 162 Cal.App.4th 343, 365.)

Plaintiff alleges causes of action for Fraudulent Transfer and Conspiracy against
Ronald Migliori. Plaintiffs were landlords of property leased to defendant LCL
Administrators, Inc. Plaintiffs Filed an action (Case No. 32-2011-00100860) for breach
of lease against Ronald’s wife, Loretta Migliori, and the corporation LCL Administrators
in April of 2011 and obtained a judgment on December 27, 2012, in the amount of
$198,621.56. Ronald had notice of the breach of lease action and filed a dissolution
action (11FL03162) on May 18, 2011. The Marital Settlement Agreement was reached
during the time the other action was pending, and became a judgment on November
28, 2011. The Marital Settlement Agreement awarded all of the community assets to
Ronald and all of the liabilities to Loretta, with the alleged fraudulent purpose to
prevent plaintiffs from reaching property that could have been executed on if Loretta
had received her fair share of community property.

Plaintiffs allege causes of action against Loretta Migliori, Ronald Migliori and LCL
Administrators for Fraudulent Conveyance and Conspiracy.

Under the Uniform Fraudulent Transfer Act, a plaintiff must allege facts sufficient to
show “…a transfer by the debtor of property to a third person undertaken with the intent
to prevent a creditor from reaching that interest to satisfy its claim.” Whether a transfer
is fraudulent is a question of fact, and proof often consists of inferences from the
circumstances surrounding the transfer. See Filip v Bucurenciu (3rd DCA 2005) 129
Cal.App.4th 825, 829-830, 834. A transfer is fraudulent if it was intended to hinder,
delay, or defraud any creditor of the debtor.” See Civil Code section 3439.04(a)(1).
The Uniform Fraudulent Transfer Act applies to a property settlement agreement in a
Marital Settlement Agreement. Mejia v Reed (2005) 31 Cal.4th 657, 668-669.

The facts are sufficient to alleged a fraudulent transfer and/or conspiracy to commit
fraudulent transfer on behalf of Ronald Migliori. The plaintiff is not alleging a claim for
fraud, therefore the specificity rule with regard to fraud does not apply.

Defendant relies on many facts outside of the pleadings in an attempt to prove that the
transfer could not have been fraudulent because there were so many existing prior
liens on the property that plaintiffs will not be able to prove that there would have been
any assets left to levy on if Loretta had received her share of the marital property.
Defendant also argues that the division of assets was equal if the “exempt property” is
not counted. The issue of what property was or was not exempt or whether the pre-
existing liens would have left nothing left for plaintiffs to levy on is beyond the scope of
the pleadings on demurrer.

Answer to be filed on or before June 6, 2014.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.