BRIAN L. GWARTZ et al., Plaintiffs and Respondents,
MICHAEL WEILERT et al., Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Fresno County No. 09CECG01032. Kristi C. Kapetan, Judge.
Wild, Carter & Tipton and Steven E. Paganetti for Defendants and Appellants.
Law Offices of Daniel B. Spitzer, Daniel B. Spitzer; and Cheryl A. Skigin for Plaintiffs and Respondents.
This appeal follows a highly publicized jury trial of a fraud claim arising from a $2.3 million sale of 15 acres of land that included a residence, riding arena and associated buildings, located on South Kings Canyon Road, Parlier, California. The plaintiffs who purchased the property obtained a judgment for $1, 553, 800, which included $850, 000 in punitive damages.
Plaintiffs were unsuccessful in attempting to collect the judgment and moved for various postjudgment orders. The trial court granted these motions and the orders issued have been referred to as the freeze order, the turnover order, the assignment order and the charging order. Among other things, the orders enjoined defendants and their agents from selling, spending, transferring or dissipating any of their assets, which included money in any deposit account. When plaintiffs learned that defendants had violated the orders, they filed a motion to dismiss the appeal under the doctrine of disentitlement. Plaintiffs’ moving papers identified 47 different transfers of money that violated the trial court’s orders.
The motion to dismiss presents a threshold question that must be decided before reaching the merits of the appeal. Based on our review of the motion and opposition papers, including a declaration from defendant Michael Weilert that did not deny any of the 47 transactions took place, and argument by counsel, we conclude the balance of the equitable considerations relevant to the disentitlement doctrine favor dismissal. It would be unjust to allow defendants to seek the benefits of an appeal while willfully disobeying the trial court’s valid orders and frustrating plaintiffs’ legitimate efforts to enforce the judgment.
We therefore grant plaintiffs’ motion to dismiss the appeal.
FACTS AND PROCEEDINGS
The plaintiffs in this lawsuit are Brian L. Gwartz and his wife, Cheryl A. Skigin, cotrustees of the Pendragon Trust.
Michael Weilert, M.D. (Weilert) and his wife, Genevieve Weilert, who also is known as Genevieve de Montremare (Genevieve),  are the defendants in this action. The following entities are owned or controlled by Weilert and Genevieve.
Defendants’ Related Entities
The M&G Weilert Family, L.P. (Weilert FLP) is a limited partnership owned 10 percent by Weilert, 40 percent by Genevieve, and 50 percent by the
Madonna della Pieta Trust, which is a living trust established in February 2009 with Genevieve as its sole trustee. It appears that the Weilert FLP has become the owner of many of the assets of Weilert and Genevieve including the next three entities discussed. In addition, defendants transferred investment real estate located in Clovis and Arroyo Grande to the Weilert FLP after the judgment was entered, but before the motions for a new trial and judgment notwithstanding the verdict were denied.
Michael Weilert, M.D., Inc. (MD Inc.), is a California corporation that has been in the business of providing medical service since 1981. Weilert once was the sole shareholder of MD Inc. Now, Weilert FLP is the sole shareholder of MD Inc. Weilert remains an employee of, and performs all the services associated with, the corporation. Those services are provided to Pathology Associates, the business under which Weilert conducts his medical practice as a pathologist.
Pathology Associates is a California general partnership that provides pathology services to physicians and hospitals. Weilert FLP is one of the general partners and holds a 10 percent ownership interest in Pathology Associates. Also, Weilert is the managing partner of Pathology Associates and, compared to the other partners, receives an additional draw of $2, 000 per month for acting in that capacity. At one time, MD Inc. received partnership draws from the Pathology Associates.
Sierra Pathology Building, LLC is a California limited liability company that owns the building occupied by Pathology Associates. Weilert FLP owns a one-ninth interest in Sierra Pathology Building, LLC.
Free Market Medical Systems, LLC (Free Market) is a California limited liability company that was formed shortly before the trial in this case. On April 5, 2013, Weilert testified (1) Weilert FLP had put $150, 000 into the company; (2) its purpose was to develop software products for use in medical offices; (3) its other member was Patricia Tam Ellis, a person familiar with software; (4) no application had been made for a copyright, design patent or other form of intellectual property; and (5) no written business plan existed. On May 3, 2013, Weilert testified he had made transfers of $100, 000 and $75, 000 into Free Market’s bank account in anticipation of future business expense because he expected “to start coding on projects” and would need to pay the programmer. At the time, Weilert was the sole signatory on Free Market’s bank account with Wells Fargo.
Belle Reve, LLC is a California limited liability company owned by Weilert and Genevieve.
After the judgment was entered in this case in October 2012, Weilert and Genevieve, along with MD Inc. and Weilert FLP filed petitions in bankruptcy court. Those bankruptcy proceedings are mentioned only briefly because (1) the transfers examined here occurred before the petitions were filed and (2) any bankruptcy stay that might have barred this court from moving forward in this matter has been lifted. (See pt. I.B.3, post.)
The Underlying Fraudulent Real Estate Sale
In March 2008, plaintiffs agreed to purchase approximately 15 acres of land from Weilert for $2.3 million. The property included a residence, a riding arena and associated buildings. The documents for the sale included (1) a California residential purchase agreement and joint escrow instructions, (2) a real estate transfer disclosure statement, (3) a buyer’s inspection advisory, and (4) supplemental statutory and contractual disclosures. All of these documents were prepared using preprinted forms published by the California Association of Realtors. In the real estate transfer disclosure statement, Weilert represented that he was not aware of any room additions, structural modification, or other alterations or repairs (1) made without the necessary permits (except for the pool house) or (2) not in compliance with building codes.
Plaintiffs alleged Weilert made misrepresentations regarding the property, including that (1) the construction of the residence had cost close to $2 million, (2) marble lions imported from Genevieve’s family in France came with the house, (3) the property had a private beach, and (4) the property had been permitted for a boat dock. Plaintiffs also alleged the parties agreed that Weilert would complete a covered riding arena, barn and irrigation system prior to the close of escrow.
In March 2009, plaintiffs filed a complaint against Weilert and Genevieve, alleging fraud and other causes of action arising ...