HABERBUSH v. CHARLES AND DOROTHY CUMMINS FAMILY LIMITED PARTNERSHIP
Filed 5/31/06
CERTIFIED FOR PARTIAL PUBLICATION*
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
DAVID R. HABERBUSH, as Assignee, etc., Plaintiff and Appellant, v. CHARLES AND DOROTHY CUMMINS FAMILY LIMITED PARTNERSHIP, Defendant and Appellant, | B175947 (Los Angeles County Super. Ct. No. NC032874) |
DAVID R. HABERBUSH, as Assignee, etc., Plaintiff and Respondent, v. BARRY L. VANTIGER, Defendant and Appellant, | (Los Angeles County Super. Ct. No. NC032872) |
DAVID R. HABERBUSH, as Assignee, etc., Plaintiff and Respondent, v. GEMMEL PHARMACY GROUP, INC., Defendant and Appellant. | (Los Angeles County Super. Ct. No. NC032873) |
APPEALS from judgments of the Superior Court for the County of Los Angeles. Judith A. Vander Lans, Judge, and Joseph E. DiLoreto, Judge. Reversed and remanded with directions.
Moneymaker & Moneymaker and Richard M. Moneymaker for Defendants and Appellants and for Cross-respondent Charles and Dorothy Cummins Family Limited Partnership.
SulmeyerKupetz, Alan G. Tippie and Marcus A. Tompkins for Plaintiff, Respondent and Cross-appellant.
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SUMMARY
These consolidated appeals involve an assignment for the benefit of creditors. The assignee brought three lawsuits, under Code of Civil Procedure section 1800, to avoid and recover preferential transfers. In the published portion of this opinion, we disagree with the majority opinion in Sherwood Partners, Inc. v. Lycos, Inc. (9th Cir. 2005) 394 F.3d 1198 (Sherwood Partners), and conclude that Code of Civil Procedure section 1800 is not preempted by the federal Bankruptcy Code. In the unpublished portion of the opinion, we conclude the judgments for the assignee must be vacated, because the assignee improperly submitted, and the trial court erroneously considered, additional evidence from the assignee after the parties agreed to submit the case on stipulated facts. Although a trial court has discretion to reopen a matter in order to take further evidence, the consideration of additional evidence must be preceded by a motion from the party desiring to present the evidence, or by an order on the court's own motion notifying both parties that further evidence will be received. In this case, no motion was made, no court order issued permitting the submission of additional evidence, and no further hearing was held. The trial court did not effectuate the parties' agreement to submit the case on stipulated facts, did not follow procedures for summary adjudication, and did not conduct a bench trial. Because the procedure employed by the trial court had no foundation in court rules, and resulted in a decision based on additional evidence filed by one party to which the other party did not respond, the judgments must be reversed and the causes remanded to the trial court for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
On August 1, 2001, Carolyn's Country Pies, Inc. (Carolyn's) executed a voluntary general assignment for the benefit of creditors. (Code Civ. Proc., § 493.010.) Plaintiff David R. Haberbush (Haberbush) was the assignee. In his capacity as assignee for the benefit of Carolyn's creditors, Haberbush brought three lawsuits, under Code of Civil Procedure section 1800, to avoid and recover certain payments as preferential transfers. Haberbush obtained judgments in each of the three cases, subject to a setoff of $150,000 for sums advanced to Haberbush that were found to have accrued to the benefit of Carolyn's creditors. The defendants in each case – Charles and Dorothy Cummins Family Limited Partnership (Cummins FLP), Barry L. Vantiger (Vantiger) and Gemmel Pharmacy Group, Inc. (Gemmel) – appealed, and Haberbush cross-appealed on the setoff issue.
We summarize first the applicable legal principles. Then, in the unpublished portion of the opinion, we describe the general substance of the lawsuits Haberbush filed and the proceedings in the trial court that resulted in the judgments for Haberbush.
I. The Legal Principles.
Under Code of Civil Procedure section 1800, the assignee of a general assignment for the benefit of creditors may recover any transfer of the property of the assignor – to whom we will refer as the debtor – under certain conditions. Transfers of the debtor's property may be recovered by the assignee if the transfer was made:
(1) to or for the benefit of a creditor;
(2) on account of an antecedent debt owed by the debtor before the transfer;
(3) while the debtor was insolvent;
(4) within 90 days before the assignment, or between 90 days and one year before the assignment if the creditor, at the time of the transfer,
(a) was an â€
