Case Name: ANTHONY TRAN v. ADVANCED TECHNOLOGIES, ET AL.

Case No.: 16CV292520

This action stems from a failed partnership venture. Currently before the court is the demurrer by Plaintiff/Cross-Defendant Anthony Tran to the Cross-Complaint filed by Defendants/Cross-Complainants Advanced Technologies Inc. (“ATI”) and Andre LaForge and Cross-Defendant Apache Tech., Inc. (collectively, “Cross-Defendants”). The Cross-Complaint alleges three claims to set aside fraudulent transfer. While the caption page lists a claim for breach of fiduciary duty as well, no such claim is alleged in the body of the cross-complaint.

For the second time in this case, the demurring party has failed to comply with Code of Civil Procedure (“CCP”) §430.41, which requires parties to meet and confer before filing a demurrer. Plaintiff’s counsel is admonished to read and comply with CCP §430.41 in the future.

“In reviewing the sufficiency of a complaint against a general demurer, we are guided by long settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed.’” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “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 [or cross-complainant’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 [brackets added].)

As previously explained in this case, the court cannot consider extrinsic evidence in ruling on a demurrer. Specifically, the court has not considered the declaration of Plaintiff’s counsel, submitted with the reply, documents attached to that declaration, or any arguments dependent upon such extrinsic evidence.

Plaintiff demurs to the entire cross-complaint on four grounds (see Plaintiff’s notice of demurrer, which lacks page numbers, at “2:1-21.”)

First, Plaintiff’s demurrer to the entire cross-complaint on uncertainty grounds is OVERRULED. Uncertainty is a disfavored ground for demurrer and is typically sustained only where the pleading is so bad the responding party cannot reasonably respond. (See Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616 [“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.”]) Here, it is apparent from Plaintiff’s other arguments that he understands what the Cross-Complaint is at least trying to allege and that there is no true uncertainty.

Second, Plaintiff’s demurrer to the entire cross-complaint on the ground that ATI and Apache Tech lack standing to sue because they “are not parties to the Agreements,” is OVERRULED. It is not necessary to be a party to an agreement, oral or written, to have standing to bring a claim to set aside a fraudulent transfer. It is not otherwise apparent from the face of the Cross-Complaint that any Cross-Complainant lacks standing.

Third, Plaintiff’s demurrer to the entire cross-complaint on the ground that “the pleading does not state facts sufficient to constitute a cause of action for fraudulent transfer because . . . [Cross-Complainants] fail to state how they would be entitled to any sale proceeds” is OVERRULED. This argument does not describe a failure to state an essential element of a fraudulent transfer claim.

Civ. Code §3439.04, in pertinent part, states: “(a) A transfer made or obligation incurred by a debtor is voidable 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 as follows: (1) With actual intent to hinder, delay, or defraud any creditor of the debtor. (2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor either: (A) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or (B) Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.” An action to set aside an alleged fraudulent transfer must generally be brought within four years of the transfer. (See Civ. Code §3439.09.)

“Whether a conveyance is made with fraudulent intent is a question of fact, and proof often consists of inferences from the circumstances surrounding the transfer.” (Filip v. Bucurenciu (2005) 129 Cal.App.4th 825, 834.)

The allegations in the Cross-Complaint at 17-21, assumed to be true for purposes of demurrer, adequately allege that the Cross-Complainants are creditors of Plaintiff and that Plaintiff, for the purpose of defrauding creditors, has within the last four years transferred assets, technology and parcels of real estate he owned to third parties, family members and/or close associates for no consideration. Cross-Complainants’ ability to prove any of these allegations is irrelevant on demurrer.

 

Fourth, Plaintiff’s demurrer to the entire cross-complaint on the ground that “it cannot be ascertained whether the contract alleged . . . is written, oral or implied by conduct . . .” is OVERRULED. The only two contracts expressly referenced in the Cross-Complaint are clearly written, with copies attached to the Cross-Complaint at exhibits 1 and 2.

 

These four grounds are the only grounds for demurrer properly stated in the Notice. The additional argument made in the points and authorities that there is another action pending between these parties (referring to case no. 2012-1-CV-236232) would not be a basis for sustaining a demurrer if it had been properly raised. As stated in the prior demurrer order (where this same ground for demurrer was properly raised against Plaintiff’s Complaint and was overruled), “[s]trictly speaking a demurrer on this ground is only available where there is another action pending in a different California Superior Court, not different departments of the same Superior Court. A motion to consolidate pursuant to CCP §1048 may be made where multiple actions are pending in the same Superior Court. In any event, a demurrer on this ground requires the same parties to be in the same relationship in both actions, and for identical causes of action to be alleged. (See Plant Insulation Co., supra, at 789; Bush v. Sup. Ct. (1992) 10 Cal.App.4th 1374, 1384.) Here, Defendant Advanced Technologies Innovation has not been a party in case no. 2012-1-CV-236232 since October 2013 and the same causes of action are not alleged in both actions.”

 

The additional argument made (but not properly raised) in the points & authorities that the cross-claims are time-barred would also not be a basis for sustaining the demurrer. “A complaint showing on its face the cause of action is barred by the statute of limitations is subject to general demurrer.” (Iverson, Yoakum, Papiano & Hatch v. Berwald (1999) 76 Cal.App.4th 990, 995.) The running of the statute must appear clearly and affirmatively from the dates alleged; it does not suffice that the complaint might be barred. (Committee for Green Foothills v. Santa Clara County Board of Supervisors (2010) 48 Cal.4th 32, 42.) Generally, the limitations period starts running when the last element of a cause of action is complete.” (NBCUniversal Media, LLC v. Super. Ct. (2014) 225 Cal.App.4th 1222, 1231.) Here it is not apparent from the face of the Cross-Complaint that the cross-claims are time-barred and the