Korea Data Systems v. Chiang

Filed 2/21/06 Korea Data Systems v. Chiang CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, David C. Velasquez, Judge. Affirmed in part, reversed in part, and remanded with directions. Motion to dismiss appeal of appellant Christina Chiang. Denied. Application for permission to file reply brief to opposition to motion to dismiss. Denied.

Ferruzzo & Worthe, Ferruzzo & Ferruzzo, James J. Ferruzzo and John R. Pelle for Defendants and Appellants.

Law Offices of D. Steve Cameron and D. Steve Cameron for Plaintiff and Respondent.

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Introduction

The plaintiff obtained a $5 million default judgment against defaulting defendants in a fraudulent conveyance case. The defaulting defendants first argue on appeal there was not substantial evidence supporting the trial court's finding that they participated in a conspiracy to fraudulently convey property. We conclude the trial court's finding was supported by substantial evidence of a fraudulent conveyance, and of the defaulting defendants' participation in a conspiracy to fraudulently convey property. The defaulting defendants next argue the entry of judgment in favor of some of the nondefaulting defendants required the trial court to enter judgment in their favor as well. For the reasons described post, we disagree. Finally, the defaulting defendants argue there was not substantial evidence supporting the amount of damages awarded against them. The statement of decision does not adequately explain the factual or legal basis for the court's decision that the defaulting defendants were liable for a judgment in the amount of $5 million. Therefore, we affirm in part, reverse in part, and remand with directions for the trial court to issue a new statement of decision and enter a new judgment based on that statement of decision.

Statement of Facts and Procedural History

Korea Data Systems, Co., Ltd., sued Julius Chiang, his brother Jay Chiang, and others for breach of contract. Korea Data Systems, Co., Ltd., obtained a judgment in April 1998, in the total amount of $9,428,832, and assigned the judgment to Korea Data Systems (USA), Inc. (KDS).

KDS then sued the following individuals and entities for fraudulent conveyance, for declaratory relief, to cancel an instrument, and to quiet title: Julius Chiang; Wen Chiang (Julius's wife); Yu Chang Chiang (Julius and Jay's father); En-Fu Chiang (Julius and Jay's mother); Chiang Family Investment Partnership; Yung Hao Wang; Chieh-Hui Yang; Eastern Computer, Inc. Systems and Engineering; Nancy Chang; Brenda Chang; Presidential, Incorporated; Christina Chiang (Jay's wife); 1243723 Ontario Inc.; Frances Chiang; Crystalview Technology Corp.; Warren Matthews; and Allen Chiang. Jay Chiang was not named as a defendant.

KDS alleged all defendants conspired to prevent it from collecting on the 1998 judgment by (1) facilitating the purchase of a property at 14 Rapallo in Irvine, California (the Rapallo property) by Yu Chang and En-Fu Chiang with money provided by Julius and Wen, and in which Julius and Wen lived rent free; (2) engaging in a series of fraudulent transfers of real property located at 6649 Dillman Street in Lakewood, California (the Dillman property), which was originally owned by Julius and Wen; (3) assisting in Julius's transfer of his community property interest in real and personal property to Wen; and (4) assisting in the transfer of assets that could have been used to satisfy KDS's judgment, and otherwise interfering with KDS's ability to collect on the judgment.[1]

The trial court entered defaults against Yu Chang Chiang, En-Fu Chiang, the Chiang Family Investment Partnership, Christina Chiang, and 1243723 Ontario Inc. (appellants or defaulting defendants). Certain other defendants were dismissed from the case or filed successful dispositive motions. The case went to trial against Crystalview, Julius Chiang, and Wen Chiang. A prove-up hearing was held on January 12, 2004, in connection with appellants' defaults.

The trial court issued a tentative decision and statement of decision on January 26, 2004, granting judgment in favor of KDS and against Wen Chiang in the sum of $152,186.48, and determining KDS should take nothing from appellants or Crystalview. On March 16, 2004, the trial court issued a second tentative decision and statement of decision.[2] The court again granted judgment in favor of KDS against Wen Chiang in the sum of $152,186.48, and again determined that KDS should take nothing from Crystalview. However, in the second statement of decision, the trial court granted judgment against appellants in the amount of $5,100,393.19.[3]

In its statement of decision, the trial court made the following findings regarding the appellants' liability: â€