CA Civ Code Section 3439.08

(a)

A transfer or obligation is not voidable under paragraph (1) of subdivision (a) of Section 3439.04, against a person that took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee or obligee.

(b)

To the extent a transfer is avoidable in an action by a creditor under paragraph (1) of subdivision (a) of Section 3439.07, the following rules apply:

(1)

Except as otherwise provided in this section, the creditor may recover judgment for the value of the asset transferred, as adjusted under subdivision (c), or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against the following:

(A)

The first transferee of the asset or the person for whose benefit the transfer was made.

(B)

An immediate or mediate transferee of the first transferee, other than either of the following:

(i)

A good faith transferee that took for value.

(ii)

An immediate or mediate good faith transferee of a person described in clause (i).

(2)

Recovery pursuant to paragraph (1) of subdivision (a), or subdivision (b), or subdivision (c) of Section 3439.07 of or from the asset transferred or its proceeds, or other property of the transferee, as applicable, by levy or otherwise, is available only against a person described in subparagraph (A) or (B) of paragraph (1).

(c)

If the judgment under subdivision (b) is based upon the value of the asset transferred, the judgment shall be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.

(d)

Notwithstanding voidability of a transfer or an obligation under this chapter, a good faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to the following:

(1)

A lien on or a right to retain an interest in the asset transferred.

(2)

Enforcement of an obligation incurred.

(3)

A reduction in the amount of the liability on the judgment.

(e)

A transfer is not voidable under paragraph (2) of subdivision (a) of Section 3439.04 or Section 3439.05 if the transfer results from either of the following:

(1)

Termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law.

(2)

Enforcement of a lien in a noncollusive manner and in compliance with applicable law, including Division 9 (commencing with Section 9101) of the Commercial Code, other than a retention of collateral under Sections 9620 and 9621 of the Commercial Code and other than a voluntary transfer of the collateral by the debtor to the lienor in satisfaction of all or part of the secured obligation.

(f)

The following rules determine the burden of proving matters referred to in this section:

(1)

A party that seeks to invoke subdivision (a), (d), or (e) has the burden of proving the applicability of that subdivision.

(2)

Except as otherwise provided in paragraph (3) or (4), the creditor has the burden of proving each applicable element of subdivision (b) or (c).

(3)

The transferee has the burden of proving the applicability to the transferee of subparagraph (B) of paragraph (1) of subdivision (b).

(4)

A party that seeks adjustment under subdivision (c) has the burden of proving the adjustment.

(g)

The standard of proof required to establish matters referred to in this section is preponderance of the evidence.