Luc v. Chien – A Cautionary Tale

These three appellate opinions depict the classic story of a plaintiff enjoying victory in a civil proceeding, only to but find recovery illusory. The plaintiff files a fraudulent conveyance action and scores a money judgment against the conveyee. However, the fraudulent conveyee declines payment.

When pressed for payment the fraudulent conveyee files Chapter 7. Claiming that she was the victim of wrongful conduct, the plaintiff files an action to exempt the debt from the discharge under Bankruptcy Code Section 523(a)(6) [willful and malicious conduct].

The victim however, runs out of luck and loses.

The first appellate opinion describes her victory against the landlord.
LUC v CHIU 3/30/2001

The second appellate opinion describes her victory against the conveyee.

LUC v CHIEN 10/28/2003

The third appellate opinion describes the conveyee’s victory in securing a discharge of the debt.

LUC v CHIEN 2/7/2008

City of San Francisco v. Esmas

In City of San Francisco v. Esmas, the City of San Francisco faced the uphill task of unwinding multiple fraudulent conveyances.

After the city obtained a judgment against the defendants for running an illegal “flophouse”, the defendants transferred the property through a series of transactions which left the chain of title hopelessly tangled.

The following documents provide insight into the multiple steps used by the city to unwind the fraudulent conveyances and sell the property free and clear of the debtors’ interest.

First, the city obtained a Restraining Order. Next a receiver was appointed. The receiver was then able to sell the property. The Sheriff Sale Order, as well as the Order Allowing Access to Property, Second Restraining Order, and Amended Sale Order can be viewed by clicking on the preceding links.

Ultimately the fraudulent conveyees appealed the order. You can view the Appellate Decision here.

This case provides the reader with a narrative commencing from the first restraining order to the appellate decision, which is a rarity in fraudulent conveyances. The seminal aspect of this case is that the trial court vacated six separate post judgment transfers in a post judgment trial. The court found that the debtor had made a series of fraudulent conveyances and vacated all of them .

The Defendant Has Not Written You the Check, Now What?

Originally published in The Federal Lawyer, February 2010. Reprinted with permission. Copyright The Federal Lawyer.

By David J. Cook

This article provides a field manual for dealing with a defendant or judgment debtor who fraudulently conveys assets in the face of a high dollar judgment.

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