Tassone

Gonzalo and Felicitas Tovar and their son Nefi Tovar appeal from a judgment entered in favor of Agostino and Catherine Tassone for fraudulent transfer. Appellants argue that there cannot be a fraudulent transfer, as to a creditor, of property subject to a declaration of homestead because such property is exempt from creditors up to the value of the homestead. We agree and reverse the judgment in its entirety.

Factual and Procedural Summary

In 1980, respondents sued appellants Gonzalo and Felicitas Tovar alleging fraud in the sale of real property. In October 1980, after suit was filed, appellants Gonzalo and Felicitas Tovar executed and recorded a declaration of homestead on their house. By grant deed, dated and delivered February 11, 1986, Gonzalo and Felicitas Tovar conveyed the house as a gift to their son, appellant Nefi Tovar, and his wife, Sylvia Tovar. Shortly after that, on May 1, 1986, Nefi Tovar and his wife sold and deeded the house to a third party for $90,000. Both deeds were recorded on May 5, 1986.

At the time of the sale, the applicable homestead exemption was $55,000. The net proceeds on the sale were $36,675.05, paid to Nefi Tovar and his wife. Nefi…