Whitehouse

A creditor attaches real property. The party claiming ownership of the property asserts a third party claim pursuant to Code of Civil Procedure section 720.110 et seq. The third party has the burden of proving an interest in the subject property by a preponderance of the evidence. (§ 720.360.)

We hold that when a creditor resists the claim by asserting the property has been fraudulently transferred to the third party, the creditor must prove this allegation by a preponderance of the evidence.

Facts

On December 18, 1991, respondent, American Universal Insurance Company (American) brought an action against Hill Top Developers Inc., Six Corporation, and One Hundred Thirteen Corporation, seeking the judicial foreclosure and sale of three parcels of secured realty, a mini-mart and two apartment houses. It also sought recovery of any deficiency.

At the time the action was filed, all of the stock in Hill Top was owned by Sammy Jo Reeder, appellant, and Wayne Reeder, her husband at the time. Appellant, Interstate Underground Warehouse & Industrial Park, Inc. (Interstate), is a wholly owned subsidiary of Hill Top. Each spouse possessed a one-half interest in Hill Top. The…