Case Name:   Sawsan Isaac v. Danipaul Daniels, et al.

 

Case No.:       1-14-CV-265296

 

Demurrer to Plaintiff’s Complaint and Motion to Strike [Defendant’s] Name from the Complaint by defendant Pauline Daniels; Demurrer and Motion to Strike Plaintiff’s Complaint by defendant Karen Jones

 

“A debtor’s transfer or obligation is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation with actual intent to hinder, delay, or defraud any creditor.”  (Civil Code §3439.04, subd. (a).) “A creditor may bring an action for relief from a fraudulent transfer or obligation.”  (8 Witkin, California Procedure (4th ed. 1997) Enforcement of Judgment, §471, p. 468; see also Civil Code §3439.07, subd. (a)(1).)

 

In demurring to the complaint, defendant Pauline asserts that she is Danipaul’s sister. Pauline asserts the complaint fails for two reasons: (1) no debt existed at the time of the alleged transfer; and (2) the alleged fraudulent transfer occurred prior to Plaintiff’s marriage to Danipaul. The debt at issue (or alluded to) in the complaint is Danipaul’s obligations arising from the underlying family law dissolution proceedings, e.g., child support, etc. (See Complaint, ¶¶13 and 23.)

 

According to defendant Pauline, the complaint does not identify any actual debt owed by Danipaul to Plaintiff. Pauline seems to suggest that no legal obligations have been imposed upon Danipaul in the underlying family law proceedings. Pauline’s argument ignores a basic principle of demurrers. “A demurrer tests only the legal sufficiency of the pleading.  It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213 – 214.) Here, although the complaint does not provide specifics, the complaint does allege that Plaintiff is attempting to collect on “Family Law Claims against Danipaul.” (See Complaint, ¶23.) Pauline is attempting to assert extrinsic facts into this analysis which is improper on a demurrer. Moreover, as defined above, a fraudulent transfer may occur “before or after” the creditor’s claim arises. Thus, the fact that Danipaul transferred assets before an actual debt existed is not determinative.

 

Defendant Pauline’s second argument fails for the same reasons. Pauline asserts the alleged transfers occurred prior to Plaintiff’s marriage to Danipaul. First, this is an extrinsic fact. Second, it directly contradicts the allegation that the transfer occurred at or near the Separation Date. (Complaint, ¶14.) The court must accept Plaintiff’s factual allegations as true.

 

As a further basis for demurrer, Pauline contends the complaint lacks specificity. Pauline then cites to legal authority requiring specificity when pleading fraud. However, the claim here is not for fraud, but for fraudulent transfer. No case has held that fraudulent transfer must be pleaded with specificity.

 

Finally, Pauline argues the complaint does not sufficiently allege that she had an intent to hinder, delay or defraud. “Intent, like knowledge, is a fact.  Hence, the averment that the representation was made with the intent to deceive the plaintiff, or any other general allegation with similar purport, is sufficient.” (5 Witkin, California Procedure (4th ed. 1997) Pleading, §684, p. 143.) Here, the allegation of intent can be found at paragraphs 23 through 26. Moreover, Actual fraud may be inferred from certain types of conduct, i.e. “badges of fraud.”  There are 11 such badges of fraud:

 

• Whether the transfer or obligation was to an insider;
• Whether the debtor had retained possession or control of the property transferred after the transfer;
• Whether the transfer or obligation was disclosed or concealed;
• Whether the debtor was sued or threatened with suit before the transfer was made or obligation was incurred;
• Whether the transfer was of substantially all of the debtor’s assets;
• Whether the debtor has absconded;
• Whether the debtor had removed or concealed assets;
• Whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
• Whether the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
• Whether the transfer had occurred shortly before or shortly after a substantial debt was incurred; and
• Whether the debtor had transferred the essential assets of the business to a lienor who had transferred the assets to an insider of the debtor.

 

(See Civ. Code, §3439.04(b)(1).)

 

Significantly, “whether a conveyance is made with fraudulent intent is a question of fact.”  (Annod Corp, v. Hamilton & Samuels (2002) 100 Cal.App.4th 1286, 1294; see also Filip v. Bucurenciu (2005) 129 Cal.App.4th 825, 834 (Filip).)  “There is no minimum number of factors that must be present before the scales tip in favor of finding of actual intent to defraud. This list of factors is meant to provide guidance to the trial court, not compel a finding one way or the other.” (Filip, supra, 129 Cal.App.4th at p. 834.)

 

Although the caption of her motion also states that it includes a motion to strike, defendant Pauline’s memorandum of points and authorities argues only in support of a demurrer.

 

 

Accordingly, defendant Pauline Daniels’s demurrer to complaint and motion to strike Pauline Daniels’s name from the complaint is OVERRULED/ DENIED.

 

Although not expressly stated as such, the court understands defendant Karen Jones to be asserting, among other things, the doctrine of exclusive concurrent jurisdiction. (See Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal.App.3d 781—“the rule of exclusive concurrent jurisdiction does not require absolute identity of parties, causes of action or remedies sought in the initial and subsequent actions. [Citations.] If the court exercising original jurisdiction has the power to bring before it all the necessary parties, the fact that the parties in the second action are not identical does not preclude application of the rule. Moreover, the remedies sought in the separate actions need not be precisely the same so long as the court exercising original jurisdiction has the power to litigate all the issues and grant all the relief to which any of the parties might be entitled under the pleadings. [Citation.]”) Defendant Karen Jones’s demurrer to the complaint of plaintiff Sawsan Isaac on the ground that there is another action pending between the same parties on the same cause of action [Code Civ. Proc., §430.10, subd. (c)] is SUSTAINED WITHOUT LEAVE TO AMEND.  Under the rule of exclusive concurrent jurisdiction, plaintiff Sawsan Isaac’s complaint filed under case number 1-14-CV-265296 is hereby abated. Plaintiff Sawsan Isaac may assert her claims against all defendants in the family law action, case number 1-12-FL-162522.