Filed 12/18/18 Campbell v. Nay CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
| SHIRLEY JEAN CAMPBELL,
Plaintiff and Respondent;
v.
DON NAY et al.,
Defendants and Respondents;
NABILA SAMSUM et al.,
Cross-Defendants and Respondents;
CRYSTAL BERGSTROM,
Claimant and Appellant.
| D073220
(Super. Ct. No. 37-2015-00030820- CU-CO-CTL)
|
APPEAL from an order of the Superior Court of San Diego County, Joel R. Wohlfeil, Judge. Affirmed.
Crystal Bergstrom, in pro. per., for Claimant and Appellant.
D'Egidio Licari Townsend & Shah, Michael A. Licari; Law offices of Mary A. Lehman and Mary A. Lehman, for Plaintiff and Respondent.
I
INTRODUCTION
Judgment creditor Crystal Bergstrom appeals from an order denying her motion under Code of Civil Procedure[1] section 708.470, subdivision (c), for entry of judgment against Shirley Campbell and Nabila Samsum, who she asserts wrongfully paid her judgment debtors Donald and Orly Nay (the Nays) to settle this action, in derogation of her judgment lien.[2] We affirm the order as we conclude the court properly denied the motion because Bergstrom has not established the Nays received any money or property subject to Bergstrom's judgment lien.
II
BACKGROUND
A
Campbell transferred two properties to a real estate agent. The real estate agent later transferred the two properties to Capital Asset Recovery, Inc. (Capital). At the time, the real estate agent was the sole shareholder of Capital. Campbell subsequently transferred two other properties to Capital.
After a dispute arose between Campbell and the real estate agent and Campbell asked the real estate agent to transfer the properties back to her, the real estate agent engaged Donald Nay to devise an asset protection plan for the properties. As part of the plan, the real estate agent sold his shares in Capital to another entity. Capital then transferred the four properties to Mike TZ, Inc. (Mike TZ).
At the time of the property transfers from Capital to Mike TZ, Orly Nay was Capital's president, chief executive officer, secretary, and one of its two directors. Donald Nay was Capital's chief financial officer and its other director. Orly Nay was also Mike TZ's incorporator, chief executive officer, secretary, and one of its two directors. Donald Nay was Mike TZ's chief financial officer and its other director. The Nays were not owners or shareholders of Mike TZ. CDV Family Living Irrevocable Trust was Mike TZ's shareholder.[3]
Campbell sued the real estate agent, Capital, Mike TZ, the Nays, and others to regain title to the four properties, claiming she was fraudulently induced to part with them. Capital, Mike TZ, the Nays, and other parties affiliated with the Nays filed a cross-complaint against Campbell, Samsum, and others.
The parties to the complaint and cross-complaint agreed to settle their dispute under terms requiring Campbell to pay Mike TZ's counsel $150,000 and Mike TZ to transfer the properties back to Campbell. Campbell was not represented by counsel when she entered the settlement agreement.
After Mike TZ transferred the properties to Campbell and Campbell paid Mike TZ's counsel the $150,000, Mike TZ's counsel transferred $93,130.14 of the settlement proceeds to Mike TZ. The Nays were not paid any money from the settlement.
B
Bergstrom has a judgment against the Nays for more than $3 million. Before the parties settled this action, Bergstrom filed and served a notice under section 708.410, subdivision (a), asserting a judgment lien against any proceeds the Nays might obtain.
Because of Bergstrom's judgment lien, any settlement in favor of the Nays required Bergstrom's written consent or the court's authorization. (§ 708.440, subd. (b).) Consequently, Campbell had a duty not to pay any settlement proceeds to the Nays without Bergstrom's written consent or the court's authorization. (Pangborn Plumbing Corp. v. Carruthers & Skiffington (2002) 97 Cal.App.4th 1039, 1044 (Pangborn).) No such consent or court order was obtained in this case.
After learning of the settlement in this action and as a remedy for the lack of Bergstrom's written consent to or the court's authorization of the settlement, Bergstrom filed a motion under section 708.470, subdivision (c), to enforce the judgment lien against Campbell. Capital, Mike TZ, the Nays, and the other parties affiliated with the Nays opposed the motion, arguing in part that Mike TZ was not Bergstom's judgment debtor and the Nays did not receive any benefit from the settlement.
Campbell also opposed the motion, arguing in part that she did not have notice of the lien. She also argued that only the Nays had the obligation and ability under section 708.440, subdivision (b), to obtain the court's approval of the settlement and, therefore, the court should require Mike TZ or its counsel to pay the settlement proceeds to Bergstrom.[4]
After considering the parties' papers and arguments, the court denied Bergstrom's motion for entry of judgment. The court found "section 708.470 is not implicated because a transfer of property subject to the lien did not occur, and money was not paid to the judgment debtor. There is no evidence demonstrating ... Donald Nay and Orly Nay have received any benefit from the settlement between Shirley Campbell and Mike TZ, Inc., except for a dismissal of this action. Although Orly Nay is an officer of the corporation, the Nays are not owners or shareholders of Mike TZ, Inc. Mike TZ, Inc. is not a judgment debtor, and is a validly existing corporate entity that is in good standing with the California Secretary of State."
III
DISCUSSION
"A judgment creditor who has a money judgment against a judgment debtor who is a party to a pending action ... may obtain a lien ..., to the extent required to satisfy the judgment creditor's money judgment, on ...: [¶] ... Any cause of action of such judgment debtor for money or property that is the subject of the action ...." (§ 708.410, subd. (a)(1).)
With an exception not applicable here, "unless the judgment creditor's money judgment is first satisfied or the lien is released, ... no compromise, dismissal, settlement, or satisfaction of the pending action ... may be entered into by or on behalf of the judgment debtor, without the written consent of the judgment creditor or authorization by order of the court .... " (Code Civ. Proc., § 708.440, subd. (a).) "Upon application by the judgment debtor, the court in which the action ... is pending ... may, in its discretion, after a hearing, make an order described [authorizing a settlement] that may include such terms and conditions as the court deems necessary." (Id., subd. (b).)
"If the court determines that a party (other than the judgment debtor) having notice of the lien ... has transferred property that was subject to the lien or has paid an amount to the judgment debtor that was subject to the lien, the court shall render judgment against the party in an amount equal to the lesser of the following: [¶] (1) The value of the judgment debtor's interest in the property or the amount paid the judgment debtor. [¶] (2) The amount of the judgment creditor's lien created under this article." (§ 708.470, subd. (c).)
Judgment lien statutes must be strictly construed. (Casa Eva I Homeowners Assn. v. Ani Construction & Tile, Inc. (2005) 134 Cal.App.4th 771, 780 (Casa Eva); Pangborn, supra, 97 Cal.App.4th at p. 1056.) In addition, judgment lien statutes "must be implemented to prevent the judgment debtor, with or without the active assistance of other parties to the settlement agreement, from structuring a settlement so it receives benefits while evading the lien of the judgment creditor, absent appropriate equitable considerations." (Oldham v. California Capital Fund, Inc. (2003) 109 Cal.App.4th 421, 430.)
"The party seeking the section 708.470 order bears the burden of persuading the court that the order should be granted. [Citations.]" (Casa Eva, supra, 134 Cal.App.4th at p. 781.) We review a court's order denying a motion under section 708.470, subdivision (c), for abuse of discretion. (Casa Eva, at p. 778; Pangborn, supra, 97 Cal.App.4th at p. 1049.) "[T]he question on appeal is whether or not, as a matter of law, the trial court complied with the applicable statutory law." (Pangborn, at p. 1049.)
Here, the record shows Bergstrom had a judgment lien in this action on the Nays' causes of action for money or property. (§ 708.410, subd. (a)(1).) Campbell transferred $150,000 to counsel for Capital, Mike TZ, the Nays, and the other parties affiliated with the Nays in exchange for Mike TZ transferring the four properties back to Campbell. Counsel retained part of the $150,000, presumably for attorney fees and costs, and paid the remainder to Mike TZ. There is no evidence the Nays ever held title to the four properties at issue in this action. There is also no evidence the Nays received any part of the $150,000 settlement proceeds. Although there is some evidence the Nays have a history of felonious conduct and of using improper asset protection methods (see fn. 3, ante), the record does not establish the Nays engaged in such conduct in this case. Absent evidence Campbell paid the Nays money or received property from the Nays in derogation of Bergstrom's judgment lien, Bergstrom has not established she is entitled to a judgment against Campbell under section 708.470, subdivision (c).
IV
DISPOSITION
The order is affirmed. Campbell is awarded her appeal costs.
McCONNELL, P. J.
WE CONCUR:
HUFFMAN, J.
O'ROURKE, J.
[1] Further statutory references are to the Code of Civil Procedure unless otherwise stated.
[2] Samsum is Campbell's niece. She held Campbell's power of attorney and acted on Campbell's behalf at various relevant times. She did not file a respondent's brief in this appeal.
[3] The record does not identify the trust's trustees and beneficiaries.
In 1993, the Nays were convicted of grand theft, forgery, and making a false entry in a book of records.
In 2004, a bankruptcy court denied the Nays a discharge in their chapter 7 bankruptcy case in part because the court found they had concealed their property and the property of the bankruptcy estate by fabricating the transfer of the property to a fictional person while still maintaining control of the property.
[4] Campbell's lack of notice was disputed by another, peripheral party to the action and the court did not reach the issue below. For purposes of this appeal, Campbell is not arguing lack of notice as a basis for upholding the court's order.
