Los Angeles Federal Credit Union v. Ahmad CA2/8

BACKGROUND

After suffering a serious illness in his old age, Muhammad transferred about $229,000 in cash to the Ahmads and placed three pieces of real property in an irrevocable trust. Then Muhammad and his new wife incurred approximately $32,000 in debt with LAFCU. In 2018, Muhammad stopped making payments on that debt to LAFCU. LACFU obtained a default judgment against Muhammad, who later died with no assets. In the action underlying this appeal, LAFCU then sought to collect the judgment from the Ahmads, on the theory that Muhammad’s transfers to them were fraudulent within the meaning of the Uniform Fraudulent Transfers Act, specifically Civil Code section 3439.04.1 Following a bench trial, the trial court found LAFCU had failed to prove Muhammad had an actual intent to hinder, delay or defraud LAFCU and entered judgment in favor of the Ahmads. The Ahmads then sought attorney fees pursuant to section 1717. The trial court denied their motion, finding that the Ahmads had not shown any contractual or statutory

Further undesignated statutory references are to the Civil Code.

2 authority allowing them to recover attorney fees from LACFU as the prevailing parties. The…