1

2 E]{DORSEDFILED
3
SAN iIATEOCOT,NTY

4 FEB 2 3 2012

5 Glortoffie SupenorCoud
By SANB$,HFS
6

'1

I SUPENOR COI]RT OF THE STATE OF CALIFORNIA

9 IN AND FOR TTIE COI.JNTY OF SAN MATEO
10

11 KATE PALEY and WORD DIAMONDS, LLC CaseNo.: CM9470l

L2
Plaintiffs! ORDERS RE DEFEDNANTS' MOTIONS
13 FOR SIIMMARY ADJTJDICATION AND
v. SIJMMARYJUDGMENT
14
RADAR NETWORKS, INC., NOVA
15 SPIVACK STEVE HAII, BARIS
KARADOGAN, ROSS LEVINSOHN, EVRI, DATE: l-27-12
16 TIME: 9:00 A.M.
INC. and Does l-100 inclusive,
11
DEPT:23
Defendants-
18

19

20

2!
22

23 The following motions came on regularty for hearing at 9.00 A.M. on January 27, 2Ot2
24
before Departm ent 23 of tle San Mateo Superior Cour! the Hon. V. Raymond Swope

presiding:

21
o The Motion for Summary Judgment by Defendant Ewi, Inc. @ereafter'Ewi");

28

futr Re Def€odants' Motions for Surnrnary Adjudication and Srmary Judgnent - I

1
The motion by Defendant Ewi for Summary Adjudication that the Second Cause of
2
Action for Fraudulent Conveyance under Civil Code section 3439.04, the Third
3
Cause of action for Fraudulent Conveyance under Civil Code section 3439.05, the
4

5
Ninth Cause of Action for Accounting, the Tenth and Eleventh Causes of Action for

6 Conversioq the Twelfth Cause of Action for Unfair Compaition, and the Thirteenth
7
Cause of Action for Constructive Trust are without merit;
I
o The Motion for Summary Iudgment by Defendant Ross Levinsohn (hereafter

"Levinsohn");
10

11 o The motion by Defendant Levinsohn for Summary Adjudication that the Second

l2 Cause of Action for Fraudulerf Conveyance under Civil Code section 3439.04 and

13
the Third cause of action for Fraudulent conveyance under civil code section
I4
3439.05 are without merit;
15

I6 o The Motion for Summary Judgment by Defendant Steve Hall (hereafter "Hall");

L7 . The motion by Defendant Hall for Summary Adjudication that the Second Cause of

Action for Fraudulent conveyance under civil code section 3439.04 the Third
19
cause of action for Fraudulent conveyance under civil code seclion 3439.05, and
20
the Seventh Cause of Action for Breach of Fiduciary Duty are without merit
2T

22 Rishi Bandari, Esq. of Mandel Bhandari LLP and Doug colt, Esq. of colt wallerstein

23
appeared on behalf of Plaintiffs Kate Paley and Word Diamonds LLC. Steve Willey, Esq. and

Duq, Grahar4 Esq. of Savitt, Bruce & Willey LLP appeared on behalf of Defendant Ewi, Inc. -
25
Eric Amdursky, Esq. of O'Melveny & Myers LLP appeared on behalf of Defendant Levinsohn.
z6

2'7
Christopher Wanger, Esq. of Manatt Phelps & Phillips IIP appeared on behalf of Defendant

2A

Ord€r Re Defedants' Motions for Surunary Adjudicatiqr ard Sumury Judgnent - 2

1
Hall. After the court received the papers filed by the parties and heard the arguments of
2
counsel, the matter was submitted.
3

5
Standard for Summary Judgment and Summery Adjudication

6 On motion for summary judgment or summary adjudication, the moving party bears the
'7
initial burden of production to make a prima facie showing that there are no triable issues of
B

material facr. (Aguitu v. Atlantic Rictfield Co. (2@1) 25 Cal.4'h 826, 850.) "There is no
9

obligation on the opposing party...to establish anything by affidavit unless and until the moving
10

party has by affidavit stated facts establishing every element ... necessary to zustain a judgment
11

L2 in his favor." (Consamer Caase, Inc. v. SmileCAre (2001) 9l Cal.App.4s 454, 465') A

Defendant moving for summary judgment bears the burden of persuasion that one or more
13

14
elements of the cause of action in question'cannot be established" or "that there is a complete
15

defense" thereto. (Aguitar v. Attantic Richfetd Co. Q}Ol) 25 CaL4s 826, S50.)
76

11 once the moving party has met the initial burden above, the burden shifts to the

18 opposing party to produce admissible evidence showing a triable issue of fact exists. (CCP $
19
q:Z(pxl); Green v. Ralee Engineering Co. (1998) 19 Cat 4t' 66,72.\ Tlte opposing party may
20
not rely upon allegations of denials in the pleadingg rather it must set forth the specific facts
2I
showing that a triable iszue of marefial fact exists. (ccP $ 437c(p)(l); futto Ana Unifed
22

23 Schoot Dist. V. Orange County Develop. Agency (2001) 90 Cal.App.4t 404, 4ll) The

24 pleadings serve as the "outer measure of materiality" in a summary judgment motio4 and the
25
motion may not be granted or denied on isnres not raised by the pleadings. (Goverranent
26
Employees hrs. Co. v. Supenor Court QO}O) ?9 Cal App.4s 95,98; Laabs v. City of Victorville
2'7

28
(2008) 163 cal.App.46 1242, 1258.)

ordef R€ Defqxlarts' Motions for Summary Adjudication and Summary Judgm€nt - 3

 1
A. PlaintifPs Strnding To Assert Fraudulent Conveyance Claims
2
All moving Defendants assert that Plaintiff Paley lacks standing to bring a fraudulent
3
conveyance claim because at the time of the conveyance, Plaintiff Paley was a stockholder, not
4

5
a creditor, because the Notes issued to her had been properly converted to Preferred stock

6 pursuant to the terms ofthe documents.

't
Paragraph 2.1 of the Convertible Promissory Note provides that "the principal balance
I
and all accrued interest of this Note will convert automatically into shares of the Company's
9

Next Equity Securities." The provision further provides: "If the Net Equity Financing does not
10

11 occur prior to the Due Date but M,000,000 or more in aggregate principal amount of Notes,

1.2 including this Note, have been issued under the Purchase Agreement and are outstanding the
13
principal balance and all accrued interest on tlis Note will convert into shares ofthe Company's
t4
Series B Preferred Stock upon demand by the Lender following September 30, 2009. ftfulVEwi
15

undisputed Fact 16, Levinsohn Undisprted Fact 11; 2008 convertible Promissory Note
15

(hereafter
*2008 Note"), Exhibit B to 2008 Note wanant and Purchase Agreement (hereafter
r'l
18 2008 warrant Agreement"), Document RDRPROD0002I472, Exhibit c to Declaration of
19
Stephen Hall (hereafter'Tlall Declaration").)
20
Paragraph L8 of the 2008 Warrant Agreement defines "Next Equity Securities" as
2t-
..equity securities issued and sold to investors in the Company's Next Equity Financing."
22

23 (Levinsohn Fact 13, Id. at RDRPRoD0002l46l.) Paragraph 1.5 of the 2008 warrant
24
Agreement defines Next Equity Financing as "the next transaction ... in which the Company
25
issues and sells shares of equity securities ... to investors with gross proceeds to the Company
26
of not less than $4,000,000, including the cancellation of indebtedness upon conversion of any
2'7

promissory notes." Gtdvpwi undisputed FaCi. 17, Ievinsohn Undisputed Fac'|" 12.)

Ordq Re Def€ndsnts' Motions for Summary Adjudication ald Suotrury Judgnent - 4

 1
Additional Debt plus cancellation of Paley's debt totaling $3,157,807.97 exceeded $4 Million.
2
(See Hall/Evri Fact 22, Levinsohn Fact 18.)
3
This court does not find the language ofthe 2008 Warrant Ag'eement and the 2008 Note
4

5
to be ambiguous and therefore holds that the interpretation of these documents are matters of

6 pure law. The 2008 Warrant Agreement and 2008 Note contemplate several circumstances
'l
under which one or more convertible notes may convert to Preferred Stock, One circumstance
8
is provided in the third sentene of Par4graph 2.1 of the 2008 Notes which provides that a
9
Lender may demand conversion after September 30, 2009 if the aggregate principal amount of
10

11 tlle notes, including the 2008 Note issued to Plaintiff Paley, exceeds $4 Million. A different

L2 circumstance is the automatic conversion provided in the first sentence of Paragraph 2.1 ofthe
t-3
2008 Note if, pursuant to the definition ofNext Equity Financing in Paragraph 1.5 of the 2008
r4
Warrant Agreement, gross proceeds from the issuance or sale of shares or equity, including
15

cancellation of indebtedness ofany promissory notes, exceeds $4 Million

t6

11 The iszue presented here is whether the $4 Million sale triggering automatic conversion

under Paragraph 2.1 includes the amount of debt subject to automatic conversion. This court
19
concludes that it does not, i.e. that to trigger automatic conversion, there must be some
20
combination ofsales and cancellation of other debt that totals $4 Million and that the amount of
21

22
debt whose cancellation triggers automatic conversion excludes the debt zubject to automatic

conversion.

24
First, the language ofthe documents infers that automatic cancellation occurs "wften the

company issves md sells shares...with gross proceeds of not less than M,000,000." @aragraph
26
1.5, 2008 warrant Agreement litalics added].) while Paragraph 1.5 expressly provides that the
2-1

2A M Million may include "cancellalion of indebtedness upon conversion of any promissory

Order Re Defendanls' Motions for Summary Adjrdication ard Sumna-y Judgmetrt - 5

 1
notes," that language would appear to refer to cancellation of promissory notes other than the
2
2008 Note issued to Plaintiff Paley because (a) Paragaph 2.1 permits Lenders to demand
3
conversion when the aggregale notes, including this note, exceed M Million, and (b) Paragraph
4

1.5 does not contain the language "including this note" used by the parties elsewhere to specifr

6 that value of the instant note was to be included in the calculation of the M Million amount.
'7
The provision "cancellation of indebtedness upon conversion of any promissory notes"
8
following the provision providing that $4 Million was a prerequisite to automatic conversion in
9
Paragaph 2.1 of the 2008 note would only make sense if interpreted to refer to a voluntary
10

11 demand for conversion, as compared to the automatic conversion provision of Paragraph 2. 1.

l2 Defendants' proposed interpretation of the 2008 Note to permit automatic conversion whenever
13
accrued principal and interest on the Paley Note exceeded M Million would infer that the only
14
prerequisite to automatic conversion of the Paley Note was the passage of time.
15

Since this court concludes that the debt and accrued intaest subject to automatic
16

t-l cancellation when the Next Equity Financing occurs, could not be included in determining

18 whether PlaintiffPaley's 2008 Note automatically converted, and since Defendants' Undisputed
19
Facts show that the proceeds, excluding Paley's debt, did not exceed $4 Million, this court
20
concludes tlat the conditions precedent to automatic conversion of Plaintiff Paley's debt were
21

22
not satisfied, that Plaintiff Paley is tlerefore a creditor, and, therefore, that Defendants have

23 failed to establish a prima facie case that Plaintiff Paley lacks standing to bring one or more

24
fraudulent conveyance claims.

Even if this court were to adopt a different interpretation of the automatic conversion
26
feature ofthe 2008 Note PlaintiffPaley has offered evidence creating a triable issue of material
2'7

28 fact conceming whether the total value, including the Paley's 2008 Note and accrued interest,

Order Re Defqrdants' Motions for Sumnury Adjudication ad Surrnary Judgnant - 6

 1
exceeded $4 Million. Thus even if a prima facie case were deemed to exist, Defendants'
2
motions for summary adjudication ofthe second and third causes of action on the grounds that
3
PlaintiffPaley lacked standing is DENIED.
4

5
B. Merit of Frrudulcnt Conveyance Claims Against Evri

6 Defendant Ewi seeks summary adjudication as to the Second Cause of Action for
7
Fraudulent Conveyance under Civil Code section 3439.04, the Third Cause of action flor
I
Fraudulent Conveyance under Civil Code section 3439.05 on the glounds that Ewi acquired
9
Radar asets for reasonably equivalent value.
10

11 Evri cites In re JN Corp. (9i Cir. 2010) 617 F.3d 1102, ll09 [appeal of bankruptcy

I2 case involving fraudulent conveyance] for the proposition that the evaluation of reasonably

13
equivalent value takes into consideration all ofthe specific circumstances affecting the value of
14
the asset, including t}le desire for a speedy, bulk sale. Herg Ewi argues that because Radar was
15

in extreme distress and because the sale permitted Radar to avoid bankruptcy and foreclosure
16

7'1 that was threatening, the Ewi deal was a good deal. Ewi argues that the last minute competing

18 offer for Radar patents was too late and too uncertain. Since the Ewi deal assred that creditors
I9
would be paid, Ewi argues that the Evri deal was the best deal from the standpoint of the
20
creditors. At oral argument, Ewi essentially argued that the weight ofthe evidence prevented a
2l
reasonable jury from finding that the value paid by Ewi was not reasonable value under the
22

23 eigent circumstances that existed.

24
There are two problems with Ewi's argument and the evidence offered to support it-
25
First, Ewi's argument, if taken to its logical conclusio4 essentially assefts that exigent
26
circumstances make any ofer qualify as reasonable equivalent value, i.e. that the actual offer
21

2B
price is irrelevant to the issue of reasonable equivalent value if there is no equally viable

m€r Re Def€adar s' Motions for Summary Adjudication and Surnmary Judgment - 7
 1
altemative offer on the table at the moment the sale is made. This court declines to hold as a
2
matter of law that exigent circumstances make the value received irrelevant to the issue of
3
reasonable equivalent value. Second, this court finds that Ewi has failed to establish a prima
4

5
facie case as to whether, from the standpoint of Radar, exigent circumstances existed. While

6 Radar's defrult on certain debt created a likelihood that foreclosure would require Radar to
'l
cease business activity, Ewi's own evidence establishes that the transfer of all Radar assets to
I
Ewi, would also require Radar to immediately cease business activity. If all available
9
altematives would result in an immediate cessation of Radar business activity, there was no
10

11 exigent n€ed for Radar to select a specific alternative. Similarly, if foreclosure by a senior lien

T2 holder would result in the transfer of Radar assets to that lien holder with other creditors going

13
unpaid, then the creditors are the parties facing exigent circumstances, not Radar.
1-4
While a jury could find that the evidence provided by Ewi is sufiicient to support a

verdict that the Evri deal qualified as reasonably equivalent value under all the circumstances, it
76

1'1 is not clear, and no authority is cited for t}e proposition that this evidence is zufficient to entitle

1B Ewi to judgrnent as a matter of law. This court cannot hold as a matter of law that a greater
T9
amount, such as the $2.75 Million ofrered by Intellectual ventures, prorated equally among all
20
of the unsecured creditors, would not have been better frorn the standpoint of all of the
21-

22
creditors. (See Monastra v- Konica Business Machines (1996) 43 Cal.App.4m 1629, 1644

23 [summary judgment denied because of zubstantial evidence that debtor did not receive

reasonably equivalent valuel.) This court finds that Ewi has faited to establish a prima facie
25
case that Evri is entitled to judgment as a matter of law.
26
Even if this court were to assume that a prima facie case had been established, Plaintiff
2'7

28 Paley has provided zubstantial evidence creating a triable issue of material fact. First, Plaintiff

Ord€r Re Defendants' Motions for Srnnnary Adjudication ad Surunary Judgm€nt - 8

 1
Paley has offered evidence that rais€s an inference that the $2.75 Million from Intellectual
2
Ventures was a firm ofler by a sophisticated party. During oral argument, Ewi ridiculed the
3
evidence supporting the Intellectual Ventures offer; however, Evri's argument goes to the
4

5
weight to be given that evidence, not whether the evidence raises triable issres of material fact.

6 Second Plaintiff has ofered evidence creating a triable issue of material fact as to whether the

,1
Intellectual Ventures offer provided a non-exclusive license to Radar that could have been sold
I
for additional revenue. Third Plaintiff has ofiered widence creating a triable issue of material
9
fact as to whether Vulcan (and therefore Ervi) was willing to pay more than it ultimately paid
10

11 for Ewi's assets. Fourth, Plaintiff has raised a triable issue of material fact concerning whetlter

72 Radar possessed an asset that it never bothered to 'aironetize, its claims against Ewi for violation

of patents. @xhibit c-31, c40, c-42, C45 to Declaration of Rishi Bhandari.) while a jury
I4
may ultimately weigh the evidence and find in favor of Ewi, Ewi's instant motion for surnmary
15
adjudication that the Second and Third causes of Action are without merit must be DENIED.
16

L"7 C. Merit of Fraudulent Convcyance Claims Agrinst Levinsohn

1B Levinsohn seeks summary adjudication on the grounds that he did not receive any direct
L9
or indirect benefit from the sale of Radar assets to Awi. Levinsohn's Undisputed Facts do not
20
establish a prima facie case that Levinsohn is ettitled to judgrnent as a matter of law.
2L

22
Levinsohn concedes that Fuse received 909,690 shares ofEwi common stock as a rezult ofthe

23 Radar-Ewi assets sale. While Fuse may have ultimately lost $6 Million on the investment as a

24
whole, that loss would have been greater ifa portion ofthe 909,690 shares of stock had not been

transferred to Fuse.
26
Even if this court were to deem that l,evisohn had established a prima facie case that he
2-l

28 is entitled to judgment as a matter of law, Plaintiff Paley asserts that other evidence provided by

Ords Re Def€s&flts' Motions for Sumnury Adjudication ard Sunmary Judgnent - 9

 1
Levinsohn establishes a triable issue of material fact as to whether Levinsohn personally
2
benefited from the Radar-Ewi assets sale. First, Levinsohn's own declaration establishes that
3
the fund received payment of $271,000 in payment of the face amount of its unsecured Radar
4

5
note which personally benefitted Levinsohn because (a) the Levinsohn fund received money,

6 (b) Levinsohn's obligation to his partners was Iessened, (c) l.evinsohn's compensation to his
1
partners was increased. Plaintiff Paley's evidence includes an email fiom Ross Levinsohn to
8
Nova Spivack stating: "I'm out on a limb with my firm here, and they will not approve a dime
9
unless we are tracking everything by the penny and look how we spend every dollar---"
10

11 (Exhibit C-61 to Declaration of Rishi Bhandari, Exhibit 34 to Deposition of Levinsohn ) A

12 triable issue of fact exists as to whether Levinsohn enhanced his reputation by providing a soft
13
landing by orchestrating a fuIl payment ofthe unsecured note for his partners.
L4
This court has already held that prestige qualifies as a benefit for purposes of fraudulent
t-5

transfer cause of action. (3-2-l I Transcrrpt before Hon. Smtt ["There are benefits other than
16

L'7 money...that people receive. -.Prestige [and] power are a couple that come to mind"].)

1.8 Furthermore, the notion advocated by Defendant Ewi and endorsed by Defendant Levinsohn
t9
that an emergency existed because, absent the Ewi deal, some Radar creditors would receive
20
less favorable treatment, raises an inference that the individuals who responded to such
2L
"emergency," including Defendant Levinsohrq received some benefit from the transfer of
t,

23 Radar assets to Ewi. Defendant Levinsohn's motion for summary adjudication of the second

24
and third cause of action for Fraudulent Conveyance is DENIED.

26

28

Ord,er Re Def€ndants' Motions for Sumnrary Adjudication ard Surunary Judgment - l0

1 D. Merit of Fraudulent Conveyance Chims Against Eall
2
Hall seeks summary adjudication on the grounds that he did not receive any direct or
3
indirect benefrt from the sale ofRadar assets to Evri, The pleadings serve as the "outer measure
4

5
of materiality" in a summary judgment motion and the motion rnay not be granted on issues not

5 raised in the pf eadings. (Govemment Employees hs. Co. v- Superior Court (2000) 79
Second Amended Complaint alleges that "As
'7
Cal.App.46 95, 9S.) Paragraph 69 of the
I
Managing Director of Vulcan Capiral (which was the largest singfe shareholder of both Ewi and

Radar), and as the person responsible for overseeing Vulcan Capital's investment in Radar and
10

Ewi, Mr. Hall had a direct financial interest in the tramaction berween Radar and Ewi. Indeed,
11

72 based on information and belief, the amount of compensation that Mr. Hall receives as a result

13
of his participation in Vulcan Capital depends on the success of certain Vulcan Capital

investments, including investments in Radar and Ewi. Thus, Defendant Hall stood to receive a
15
personal financial benefit from Radar's fraudulent conveyance ofall ofits assets to Ewi."
16

11 undisputed Facts 23-29 establish tllat Hall did not own stock in Radar or Ewi and that

18 he did not receive money, property, or other consideration from the Radar assets sale.

19
However, Flatl's Undisputed Facts do not establish that Flall did not benefrt in his capacity as
20
Director of Vulcan Capital or as a participant in Vulcan Capital. Thuq Hall's Undisputed Facts
?1

22
do not establish that Hall is entilled to judgrnent as a matter of law on the issues alleged in the

Second Amended Complaint..

24
Even if Hall were deemed to have established a prima facie case, Plaintiff Paley's
25
evidence establishes that Hall has a contractual right to particip*e in the "carried interest" to
26
which the management companies for vulcan funds invested in Radar and EwL that he has a
21

2a contractual right to receive profits generated by that fund, and that the Radar-Ewi transaction

Ord,er Re Defendants' Motions for Sumnrary Adjudication and Suuuary Judgnent - I I

1

3
permitted Hall and Vulcan to recognize a tax loss, which was highly advantageous because Hall
4

and Vulcan had substantial taxable income. fHall Deposition at 16:12-17:23 and 258.2-259:25.)

6 An email from Nova Spivack to Sonja Erickso4 Nova Spivack states "I think that we need to
1
point out to Steve H that for months he has been saying Vulcan could use the write offand now
8
he is happy to have the company shut down and take the write of;" @xhibit C-33 to
9

Declaration of Rishi Bhandari, Exhibit 92 to Deposition of Sonja Erickson.)

10

11 Finalty, the notion advocated by Defendant Ewi and endorsed by Defendant Hall that an

t2 emergency existed because, absent the Ewi deal, some Radar creditors would receive less

13
favorable treatment, raises an inference that the individuals who responded to such
14
,'emergency," including Defendant Hall, received some benefit from the transfer of Radar assets
15
to Ewi. This evidence creates a triable issue of material fact as to whether llall received a
16

L7 direct benefit from Radar-Ewi asset sale. Defendant Hall's motion for summary adjudication of

1B the second and third causes of action for fraudulent conveyance is DENIED.
19
E. Merit of Breoch of Fiduciery Duty Claim Against Hall
20
Hall also seeks summary adjudication of the Seventh Cause of Action for Breach of
2l
22
Fiduciary Duty in connection with the conversion of the 2008 Note to equity. While this court

has held that the terms of the controlling documents did not authorize Defendant Radar to

24
automatically convert Paley's 2008 Note to equity, this court finds that Defendant Hall did not
25
breach a fiduciary duty owed to Plaintiff Paley in connection with his participation in the
26
decision to mnvert the note. Defendant Hatl's motion for summary adjudication that the
2'l

28 Seventh Ca.use of Action is wirhout merit is GRANTED.

Ord€r Re Defodads' Motions for Surunary Adjudication and Summary Judgnent - 12

T

3
F. Merit of Conversion end Unfeir Conpetition Claims
4

5
The Tenth cause of Action asserts a claim for conversion by word Diamond against

6 Ewi for valuable property Word Diamond conveyed to Radar. The Eleventh Cause of Action

1
asserts a claim by Paley against Ewi for conversion of her note and the proceeds thereof The

I
Twelfth Cause of Action asserts a claim by Paley against Evri or unfair competition. Ewi seeks
9
summary adjudication on the grounds it never received any Word Diamond or Paley property.
10

11 Defendants' evidence establishes a prima facie case Ewi is entitled to judgment as a mattet of

12 law with regard to both conversion claims as Evri has established that it never possessed the

13
cash Paley paid or any other ass€t claims by Word Diamond or Paley.
14
Neither Word Diamond or Paley offer any evidence controverting the evidence provided
15
by Ewi. While this court has already held that Radar did not have the right to convert the Paley
15

17 note to equity, Ervi was not involved in that action and did not take possession of either the note

18 or stock belonging to Paley. While Paley's money may have been used to improve assets that
19
Ervi purchased, such improvement did not convert that assets to property of either Word
20
Diamond or Paley. Further, while the assets acquired by Evri may ultimately be determined to
2T

quali$ as a fraudulent conveyance, there was no conversion as Radar and Ewi reached an
22

23 agreement on the value to be to be paid by Ewi for title to such assets and Evri consented to

24
Ewi's possession of such property. Ewi's motion for summary adjudication of the Tenth,

Eleventh and Twelfth causes of Action for conversion and unfair competition is GRANTED.
26

2'7

28

Ord€r Re Defendar s' Motiors for Swnmary Adjudication and Smnary Judgm€nt - 13
 1

3
G. Merit of Accounting and Constructive Trust Claims
4

5
While Ewi has established that it has not taken possession of property owned by Word

6 Diamond or Paley, this court has already determined that triable issues of material fact exist as
'7
to whether property conveyed to Ewi qualifies as a fraudulent conveyance. In the event that
8
Plaintiff Paley ultimately prevails on either fraudulent conveyanc€ claim, a court of equity may
9
find that plaintiff Paley is entitled to the equitable remedies of Accounting and Construaive
10

11 Trust with regard to the assets fiaudulently conveyed. Ewi's motion for summary adjudication

t2 of the Accounting and Constructive Trust causes of action is DENIED.

13

74
E. Conclusion
15
The motion for zumrnary judgment by Defurdant Ewi is DENIED. The motion by
L6

\'7 Defendant Ewi ficr summary adjudication that the Second Cause of Action for Fraudulent

18 Conveyance under Civil Code section 3439.04, the Third Cause of action for Fraudulent

Conveyance under Civil Code section 3439.05, the Ninth Cause of Action for Accounting and
20
the Thirteenth cause of Action for constructive Trust are without merit is DENIED. The
21-

22
motion by Defendant Ewi that Tenth and Eleventh Causes of Action for Conversion, and the

23 Twelfth Cause of Action for Unfair Competition are without merit is GRANTED.
24
The Motion for summary Judgment by Defendant Levinsohn is DENIED. The motion
25
by Defendant Irvinsohn for Summary Adjudication that the Second Cause of Action for
26
Fraudulent Conveyance under Civil Code section 3439.04 and the Third Cause of action for
2'1

2B Fraudulent Conveyance under Civil Code section 3439-05 are without merit is DENIED.

Ord€r R€ Def€ndants' Motions for Suqunary Adjudication ard SurnrnaryJudgnent - 14

 1 The Motion for Summary Judgment by Defendant tlall is DENIED. The motion by

2
Defendant Hall for Summary Adjudicafion tbat the Second Cause of Action for Fraudulent
3
Conveyance under Civil Code section 3439.04 and the Third Cause of Action for Fraudulent
4

conveyance under civil code section 3439.05 are without merit is DENIED. The motion by
5

5 Defendant Hall that the Seventh Cause of Action for Breach of Fiduciary Drty is without merit

7
isGRANTED.
B
IT SO ORDERED.

Dated: February 22, 2Ol2

10

11

12

13
Judge ofthe Superior Court
'l-4

15

16

1'7

18

19

20

2l-

22

23

24

25

2'7

2A

Order Re Defsrdants' Motions for Summary Adjudication ard Sunrnary Jtrdgm€nt - l5