Case No.

S
IN THE

SUPREME COURT OF CALIFORNIA

STEPHEN M. GAGGERO,

Plaintiffand Appellant,
vs.
KNAPP,PETERSEN & CLARKE;STEVEN RAY GARCIA;
STEPHEN M. HARRIS and ANDRE JARDINI,

Defendants and Respondents;

PACIFIC COAST MANAGEMENT,INC.; 511 OFW LP;
GINGERBREAD COURT LP; MALIBU BROAD BEACH LP; MARINA
GLENCOE LP; BLU HOUSE LLC; BOARDWALK SUNSET LLC; and
JOSEPH PRASKE as Trustee of
THE GIGANIN TRUST,THE ARENZANO TRUST,
and THE AQUASANTE FOUNDATION

Additional Judgment DebtoYs and Appellants

After a Decision by the

COURT OF APPEAL, SECOND APPELLATE DISTRICT, DIVISION EIGHT
Case No. B245114

PETITION FOR REVIEW

EDWARD A. HOFFMAN,Bar No. 167240
LAW OFFICES OF EDWARD A. HOFFMAN
11755 WILSHIRE BOULEVARD,SUITE 1250
LOS ANGELES, CALIFORNIA 90025
(310} 442-3600
eah@hoffinanlaw.com

Attorneyfor Additional Judgment Debtors, and Appellants

Pacific Coast Management, Inc., et al.

ISSUES PRESENTED
Pursuant to California Rules of Court, rule 8.512(d)(2), petitioners respectfully
ask this Court to grant review in the present matter and hold it pending the final
disposition in the related case 5222843.
WHY REVIEW SHOULD BE GRANTED
Petitioners respectfully ask this Court to grant review in the present matter and
hold it pending the final disposition in the related case 5222843, which seeks review
5.

ofthe decision in GaggeYo v. Knapp Peterson & ClaYke et al., 2nd Dist. No. B24167
That appeal and this one both arose from the same Superior Court case and were

decided concurrently after being consolidated for purposes of oral argument.

Case B241675 challenged an order adding ten additional debtors to an existing
judgment. The present appeal challenges a subsequent amended judgment in the same
matter imposing an award of attorney fees and costs against the original and additional
judgment debtors. That amended judgment will have to be summarily reversed if
appellants ultimately prevail in B241675. But if the Court grants review in that case
and not in this one, the judgment in this case could become final while the lead case is
still pending. Petitioners seek agrant-and-hold order pursuant to California Rules of
Court, rule 8.512(d)(2) to prevent that from happening.
STATEMENT OF THE CASE
On May 29, 2012, the trial court amended a prior judgement against petitioner
Stephen M. Gaggero to add ten new debtors. They were petitioners Pacific Coast
Management, Inc., 511 OFW LP, Gingerbread Court LP, Malibu Broad Beach LP,
Marina Glencoe LP, Blu House LLC, and Boardwalk Sunset LLC. and Joseph Praske
as Trustee ofthe Giganin Trust, the Arenzano Trust, and the Aquasante Foundation.
(Collectively the "AJDs".) They all appealed that order in 2nd Dist. No. B241675.
They later appealed an August 6, 2012 amended judgment in the same case.
That appeal is 2nd Dist. No. B243062.(CT2 319-320.) The present appeal, No.
B245114(brought by the AJDs but not Gaggero), challenges two sets of orders, dated
September 13 and October 3, 2002, appointing a receiver and assigning various rights.

The appeals were briefed separately, but the Court of Appeal consolidated them
solely for the purposes of oral argument. It affirmed all three sets of underlying orders
in full on November 7, 2014.
Petitioners have filed a substantive petition for review ofthe decision in
B241675. That petition is Sup. Ct. No. S222843.'-~ In order to prevent the other two
appellate decisions from becoming final while 5222843 is pending, petitioners ask the
Court to grant review in each pursuant to California Rules of Court, rule 8.512(d)(2)
and hold them pending the outcome of S222843.
If petitioners ultimately prevail in B241675, they will be entitled to summary
reversals in B243062 and B245114. Judgments and orders made in furtherance of
prior judgments necessarily fall if the prior judgment falls (see Purdy v. Johnson
(1929) 100 Cal.App. 416, 420-421; Gillan v. City ofSan Marino (2007) 147
Cal.App.4th 1033, 1053) unless they become final first. That is why they have
brought this petition.
The AJDs argued in the present appeal, inter alia, that they had been denied due
process because the first set of motions was briefed and argued while an appellate stay
was in place.(AOB 24-27.) They also argued that they were denied a meaningful
opportunity to be heard as to the second set of motions, since the court regarded the
September 13 orders as final and thus did not consider the merits of their claims.
(AOB 27-36.) They further argued that there was insufficient evidence to support the
orders, which had been based on Gaggero's conduct rather than the AJDs'.(AOB 3641.) They also urged that the court had given them inadequate time to comply with the
judgment before the orders were made, with just four business days passing from the
time the judgment became enforceable against the AJDs until the second set of

'-~It already has a case number because the Court of Appeal denied a
third-party publication request and forwarded it to this Court. There were no
such requests in B243062 or B245114,so they do not yet have case numbers
in this Court.

motions was filed.(AOB 41-42.) The appeal also urged that various provisions ofthe
orders were improper(AOB 42-59) and that the AJDs would be entitled to a full
reversal ifthey prevailed in appeal B241675.(AOB 22-24.)
The Court of Appeal affirmed the September 13 and October 3, 2012 orders in
full. It agreed that the September 13 orders were improper, but it also held that the
trial court had given them a full and fair hearing on October 3 and had thereby mooted
the defects in the earlier order.(Opn. 9-10.) It found the evidence sufficient, holding
that the alter-ego finding made it proper to attribute Gaggero's conduct to the AJDs.
(Opn. 10-12.) Similarly, in light ofthe time that had passed since judgment was
entered against Gaggero, the court rejected the argument that the AJDs should have
had more time to pay the judgment.(Opn. 11.) It also rejected appellants' challenges
to the terms of the orders.(Opn. 12-13.)
The court summarily denied the AJDs' rehearing petition on December 8,
2014.
//
//

K~

CONCLUSION
Although petitioners are not asking the Court to review the merits ofthe
decision in this appeal, they respectfully ask it to grant review and hold the case so
that they will not lose any of their rights if the Court ultimately rules in their favor in
5222843.

Dated: December 17, 2014

Respectfully submitted,

LAW OFFICES OF EDWARD A. HOFFMAN

,~'"
Edward A. Hoffinan
Attorneys for Petitioners Pacific Coast
Management, Inc. 511 OFW L.P., Gingerbread
Court L.P., Malibu Broadbeach, L.P., Marina
Glencoe L.P., Blu House L.L.C., Boardwalk Sunset
L.L.C., Joseph Praske as Trustee for Giganin Trust,
Arenzano Trust, and Aquasante Foundation

CERTIFICATE OF WORD COUNT

(Cal. Rules of Court, rule 8.504(d)(1))
The text of this Brief consists of909 words as counted by the Corel
WordPerfect version 16(also known as WordPerfect X6) word-processing software
with which it was written.
DATED: December 17, 2014

Respectfully submitted,

Edward A. Hoffinan
Law Offices of Edward A. Hoffinan
Attorney for Petitioners Pacific Coast
Management, Inc., 511 OFW L.P.,
Gingerbread Court L.P., Malibu
Broadbeach, L.P., Marina Glencoe L.P., Blu
House L.L.C., Boardwalk Sunset L.L.C.,
Joseph Praske as Trustee for Giganin Trust,
Arenzano Trust, and Aquasante Foundation

EXHIBIT A

Filed 11/7/14

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

for
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing.or rel ing on opinions not certified
publication or ordered published, except asspecified by rule 8.1115(b). This opinion Xas not been certified for publication
or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT
DIVISION EIGHT

COURT OF APPEAL SECOND DIST.

~~

Nov 07, 2014

JOSEPH A. LANE, Clerk

STEPHEN M. GAGGERO,
Plaintiff;

B245114

Sina Lui

Deputy Clerk

(Los Angeles County

Super. Ct. No. BC286925)

PACIFIC COAST MANAGEMENT,INC.

et al.,
Appellants,
v.
KNAPP,PETERSEN & CLARKE et al.,
Defendants and Respondents.

APPEAL from an order ofthe Superior Court for the County of Los Angeles.
Robert L. Hess, Judge. Affirmed.

Law Offices ofEdward A. Hoffman and Edward A. Hoffman for Appellants.

Miller, Randall A. Miller and Steven S. Wang for Defendants and Respondents.

SUMMARY
In May 2010, we affirmed a judgment against plaintiff Stephen M. Gaggero in a
malpractice lawsuit he brought against defendants Knapp,Petersen &Clarke and several
of its principals. (Gaggero v. Knapp, Petersen &Clarke(May 6, 2010, B207567)
[nonpub. opn.](Gaggero ~.) The judgment included an attorney fee award of more than
$1.2 million. In a separate opinion filed today, we have affirmed an order granting
defendants' motion to add seven entities and the trustee of three trusts as additional
judgment debtors to the judgment. (Gaggero v. Knapp, Petersen &Clarke (Nov. 7,
2014, B241675)[nonpub. opn.](Gaggero II or the alter ego case).)
After the trial court issued orders appointing a receiver and assigning financial
rights to defendants, several ofthe additional judgment debtors satisfied the judgment.
Additional judgment debtors now appeal from the orders appointing the receiver and
from the assignment orders. We affirm the orders.
FACTS
We have described the genesis and development of this litigation in Gaggero II,
filed simultaneously with this opinion, and will not repeat it here except as needed to
understand the current appeal. In a nutshell: Plaintiff is a real estate developer who,
years ago, under the tutelage of estate lawyer Joseph Praske, devised an "estate plan"
under which he transferred his personal assets, then amounting to some $35 or
$40 million, to limited partnerships and limited liability companies, and then transferred
those entities to three trusts, with Mr. Praske as trustee. This had the effect, he believed,
of denuding him of all his personal assets and insulating him from the necessity of paying
his judgment creditors. We concluded otherwise in Gaggero II, affirming the trial court's
finding that the trustee of the three trusts and the seven entities that comprised the trust
assets were plaintiff's alter egos and were liable for the judgment.
A few weeks after the trial court amended the judgment to include the additional
judgment debtors, defendants took plaintiff's debtor exam. Plaintiff testified that, since
the judgment was entered against him, he has never had the resources to pay it. In his
answers to demands for documents relating to his three trusts and the rest ofthe estate
2

plan, he said (in addition to objecting to them all) that he was "unable to comply"
because he had no documents, and that the trustee ofthe trusts(whom we have found to
be his alter ego) had possession ofthe documents and refused to provide them to him.
On July 30, 2012, two months after the trial court amended the judgment,
defendants filed two motions, one asking the court to appoint a receiver to enforce the
judgment, and the other asking the court to assign the judgment debtors' rights to receive
monies from third parties to defendants (and restraining them from transferring or
changing the right to payment). Defendants argued, among other things, that plaintiff,
along with trustee Praske and counsel,"have done nothing but delay, obstruct, and abuse
the discovery process to thwart [defendants'] enforcement efforts" on the judgment.
Various procedural developments followed.
Additional judgment debtors filed a supersedeas petition in the alter ego case, and
on August 6, 2012, we issued a stay of proceedings in the trial court to enforce the
judgment against additional judgment debtors. The stay was lifted and the petition
denied on August 30, 2012.
Also on August 6, the trial court entered a third amended judgment, adding
postjudgment enforcement costs and accrued interest(as of July 13, 2012)to the
judgment, bringing it to $2,178,235.51.
The next day, the trial court took the receivership and assignment motions off
calendar as to additional judgment debtors because ofthe stay. The motions remained on
calendar as to plaintiff, and the court ruled that if the stay were lifted, it would consider
hearing the motions on shortened notice as to additional judgment debtors.
On August 23, 2012, the trial court heard the receivership and assignment motions
as to plaintiff. There was no appearance by additional judgment debtors. The court
indicated its tentative ruling was to grant the motions, and plaintiff was given a week to
submit objections to defendants' nomination of Jay Adkisson to serve as the receiver.
The court, after a discussion ofthe proposed assignment order, said,"Well, that's the
order," but then said that the court would "re-review" the proposed order. (Counsel had

prepared the proposed orders before the stay was issued, and the court observed there
were "certain judgment debtors as to whom the proceedings are presently [stayed]....")
On September 6, 2012, after the stay was lifted, defendants filed a second set of
receivership and assignment motions, this time directed against the additional judgment
debtors, for hearing on October 3, 2012.
On September 13, 2012,the trial court entered an order granting defendants'
motion for appointment of a receiver, and appointing Mr. Adkisson as the receiver ofthe
judgment debtors. The order was based on defendants' proposed order prepared for the
August 23 hearing, with interlineations by the court. The order named both plaintiff and
the additional judgment debtors. The order stated (in the court's handwriting) that the
court was "aware that the Temporary Stay Order issued by the Court of Appeals was
vacated on 8/30/2012." The court also signed the assignment order, directed at plaintiff
and additionaljudgment debtors, again stating the court was aware the stay had been
vacated. The assignment order assigned the judgment debtors' rights to payments due or
to become due from third parties to defendants "until the payment of the judgment in the
amount of$2,178,235.51 plus postjudgment interest and allowable costs is paid in full."
On September 20, 2012, additional judgment debtors filed their opposition to
defendants' second set of receivership and assignment motions, including objections to
the proposed order for appointment of a receiver and evidentiary objections.
On October 3, 2012, all parties appeared through counsel at the hearing, as did the
receiver. Additional judgment debtors filed last-minute declarations about their
willingness to sell one of their properties, and their counsel explained they were willing
and able to pay the judgment but needed time to sell assets or borrow money; they were
"serious about trying to get this worked out without being subjected to a receivership."
The trial court viewed this offer as "kind of vague, kind of conceptual, and what it does is
promise significant additional delay." The record also reflects some confusion about
whether the receivership and assignment orders the court entered on September 13
applied to additional judgment debtors. The court thought they did, but counsel for both
sides pointed out that additional judgment debtors did not participate in the August 23
D

hearing and had had no opportunity to be heard. The parties then discussed additional
judgment debtors' objections, and the court took the matter under submission.
Later the same day, the court signed and filed (1) an "Amended Order for the
Appointment ofReceiver" and (2)a "Reissued Order for Assignment of Rights and Order
Restraining Judgment Debtors." The amended receivership order stated that the motion
was heard on August 23 as to plaintiff and on October 3 as to the remaining judgment
debtors; required the judgment debtors to post an undertaking to stay enforcement of the
order; appointed Mr. Adkisson as the receiver and ordered that any bond and oath
previously posted would stand. The reissued assignment order recited that the
defendants' motion was heard on both dates, assigned the judgment debtors' rights to
present and future payments to defendants until payment ofthe judgment in full, enjoined
judgment debtors from disposing of any rights subject to the order, and required an
undertaking to stay its enforcement.
On November 5, 2012, one month later, the receiver applied ex parte for
instructions and authorization to approve a financing transaction arranged by four of the
additional judgment debtors that would allow them to pay the judgment in full. After
extensive discussion, the court signed a modified version ofthe proposed order,
authorizing the receiver to facilitate the transaction, which involved borrowing against
the equity in real properties to pay existing loans and converting equity into cash to
satisfy the judgment. The receiver was to receive the funds necessary to satisfy the
judgment, plus $30,000 to cover his fees and expenses; pay defendants; authorize the
escrow holder to file a satisfaction ofjudgment executed by defendants; and file a final
accounting.
Shortly thereafter, the transaction was completed. An acknowledgement of full
satisfaction ofthe judgment was recorded in Los Angeles County on November 14, 2012,
and filed with the trial court on December 3, 2012. On April 12, 2013, the trial court

approved the receiver's final accounting, discharged the receiver and terminated the
receivership.l
Meanwhile, on November 13, 2012, additional judgment debtors appealed from
the receivership and assignment orders the court made on September 13, 2012. On
December 3, 2012,they appealed from the amended receivership order and reissued
assignment order the court made on October 3, 2012.
DISCUSSION
1.

Preliminary Motions
The entry ofthe receivership and assignment orders had the desired effect. As

mentioned above, the judgment was satisfied, the receiver made his final accounting, and
the trial court discharged the receiver and terminated the receivership.
Then, after the record was filed in this case, defendants moved to dismiss the
appeal as moot, arguing that we cannot grant any effective relief. They point out the
assignment order has expired by its own terms, and in Kato v. Busick(1916) 174 Cal.
118, the court held that where there was no property in the custody ofthe court and no
receiver against whom a writ could operate, the questions raised by a writ petition were
moot, and "no good reason exists for deciding whether or not the original appointment of
the receiver was justified." (Id. at pp. 121, 122.)
While the argument has some force, we conclude we must decide the appeal.
"Appellate courts generally will not review matters that are moot." (Mercury
Interactive Corp. v. Klein (2007) 158 Ca1.App.4th 60, 78.) A matter is moot if the

reviewing court's decision"` "can have no practical impact"'"or where"` "no

effective relied''"can be granted. (Ibid.) "An appeal will be decided, however, where
part but not all ofthe controversy has been rendered moot." (Ibid.)

We grant defendants' motion for judicial notice ofthese three documents, which
were filed after the entry ofthe September 13 and October 3, 2012 orders that are the
subject ofthis appeal.
1

Here, additional judgment debtors point out that a ruling in their favor would
entitle them to recover the $30,000 they paid in receiver's fees, as well as a substantial
sum in attorney fees and costs defendants were later awarded in connection with their
assignment and receivership motions. Under these circumstances, we cannot say that an
appellate ruling on the orders will have "no practical impact," and so we conclude the
appeal is not moot.
2.

The Merits of the Appeal

The court may appoint a receiver "[a]fter judgment, to carry the judgment into

effect." (Code Civ. Proc., 564, subd.(b)(3).) Under section 708.620, the court may
appoint a receiver to enforce a judgment "where the judgment creditor shows that,
considering the interests of both the judgment creditor and the judgment debtor, the
appointment of a receiver is a reasonable method to obtain the fair and orderly
satisfaction ofthe judgment." The availability of other remedies"`does not, in and of
itself, preclude the use of a receivership. [Citation.] Rather, a trial court must consider
the availability and efficacy of other remedies in determining whether to employ the
extraordinary remedy of a receivership. [Citation.]' [Citation.]" (Gold v. Gold(2003)
114 Ca1.App.4th 791, 807.) "In appeals from orders appointing receivers,just as in other
cases, the appellant must show injury as well as error ...." (Snidow v. Hill(1948)84
Ca1.App.2d 702, 708.) We review a trial court's decision to appoint a receiver for abuse
of discretion. (Gold v. Gold, supra, at pp. 807-808.)
Upon application by a judgment creditor, the court may order a judgment debtor to
assign to the judgment creditor "all or part of a right to payment due or to become due,
whether or not the right is conditioned on future developments ...." (Code Civ. Proc.,
708.510, subd.(a).) In determining whether to order an assignment,"the court may
take into consideration all relevant factors ...." (Id., subd.(c).) The judgment creditor
"may apply to the court for an order restraining the judgment debtor from assigning or
otherwise disposing ofthe right to payment that is sought to be assigned." ( 708.520,
subd.(a).) The court may issue an order restraining the judgment debtor "upon a
showing of need for the order." (Id., subd.(b).) Restraining orders are reviewed for
7

abuse of discretion. (E.g., Biosense Webster, Inc. v. Superior Court(2006) 135

Ca1.App.4th 827, 834 [temporary restraining order].)
Additional judgment debtors raise a host of reasons they say justify reversal ofthe
receivership and assignment orders. None ofthem has merit.
a.

Procedural claims

Additional judgment debtors first contend the September 13 orders violated this
court's August 6 temporary stay(which was vacated on August 30)and are void. This is
so, they say, because the trial court held a hearing on the matter on August 23, and they
had no notice and opportunity to be heard at that hearing, because of the stay. These
arguments are based on the fact that the September 13 orders were directed at them as
well as plaintiff, even though it was clear the August 23 hearing involved only plaintiff.
While there was some confusion surrounding the trial court's intent in the
September 13 orders, that makes no difference because any error or irregularity in those
orders did not prejudice anyone. The court entered and issued amended orders on
October 3, after additional judgment debtors had a full opportunity to be heard on the
issues. In short, it simply does not matter whether the September 13 orders were void or
not; the only pertinent orders are those the court made on October 3.
Additional judgment debtors claim, however, they did not have a full opportunity
to be heard on October 3, because the court had already made up its mind on September
13. They contend the court did not give them a chance to meaningfully oppose the
motions and, since the court apparently thought it had already decided the motions as to
additional judgment debtors on September 13,"[b]y definition, the court was prejudiced
against [them] when they tried to make their case." They say the court denied them their
due process rights "because it quite literally never gave them a chance to persuade it
before it made up its mind."
We do not agree with this view ofthe record of proceedings of October 3.
Initially, the court appeared to believe its September 13 orders applied to additional
judgment debtors as well as to plaintiff. But counsel for defendants then explained to the
court that the additional judgment debtors "didn't have a chance to oppose [the previous

orders], so we've refiled the same motions." The court then heard further argument on
the objections additional judgment debtors had to the proposed receivership order.
Moreover, the court had already heard, at considerable length, the arguments counsel
made about why they should be permitted to pursue their proposal for resolving the
matter without being subjected to a receivership. Indeed, the trial court entertained
declarations on that subject that additional judgment debtors filed on the day ofthe
hearing. On this record, there is no basis for their claim they did not receive "a fair
hearing before an impartial judge" on October 3.
In a related argument, additional judgment debtors assert the court "demonstrated
bias" against them because it ruled on the receivership and assignment orders based on
plaintiff's previous conduct over the course of several years, rather than judging them "by
their own actions since entering the case" and "giving them a chance to prove
themselves." They contend they were given "no opportunity whatsoever to show their
good faith" and should have been given the chance to pay the judgment before being
placed into receivership and subjected to an assignment order.
This claim is meritless, as it does not take account ofthe fact that the trial court
previously found that additional judgment debtors and plaintiff are alter egos, a
conclusion we affirm today in Gaggero II. The evidence in that case showed that
additional judgment debtors are controlled by plaintiffto serve his own ends, one of
which was to place his personal assets beyond the reach of legitimate creditors. The
evidence showed plaintiff had control over Mr. Praske and over the assets ofthe three
trusts and all ofthe entities owned by them, including "[b]uying and selling, financing,
trading, everything." (Gaggero II, supra, B241675 at p. 6.) Consequently, it was
entirely proper for the trial court to decide that receivership and assignment orders were
appropriate, and necessary, based on plaintiff's lengthy history of stonewalling and
refusing to pay legitimate judgments against him. This was not, in any way, shape or
form,"bias" against additional judgment debtors.

b.

Sufficiency of the evidence

Additional judgment debtors contend the evidence was insufficient to support the
orders appointing a receiver and the assignment order. They say defendants did not seek
any lesser remedies, and additional judgment debtors did not defy any court orders, did
not refuse to answer any discovery, and had done "nothing remotely improper."
Again, this ignores the trial court's earlier finding and the supporting evidence that
plaintiff dominates and controls the additional judgment debtors, using the trusts that own
the other additional judgment debtors as his own personal piggybank. Thus the insistence
by additional judgment debtors that trustee Praske himself was never asked to and never
refused to produce any documents(and therefore additional judgment debtors should be
treated as though they have nothing to do with plaintiff's litigation conduct and are
writing on a clean slate) is meritless. On the contrary, as we concluded in Gaggero II, it
was eminently reasonable for the trial court to infer that Mr. Praske was complicit in
plaintiff's refusal to produce any documents relating to the trusts or any other part of
plaintiff's estate plan. (Indeed, as we have noted above, plaintiff's most recent refusal to
produce trust or estate plan documents asserts that Mr. Praske has them and has refused
to provide them to plaintiff.) Consequently, the extensive arguments the additional
judgment debtors make about their bonafides and their claims that plaintiff's conduct
"had nothing to do with [additional judgment debtors]" are entirely divorced from reality.
The evidence was more than sufficient to justify the appointment of a receiver as
well as the assignment order. The trial court was cognizant of all the evidence relating to
the alter ego status of plaintiff and additional judgment debtors, and had presided over the
underlying malpractice case as well. As a consequence, the court was intimately familiar
with plaintiffls long history of unremitting efforts to avoid paying his legitimate
creditors. The trial court's comments at the October 3 hearing demonstrate exactly why
the receivership order was a "reasonable method to obtain the fair and orderly satisfaction
ofthe judgment" and why no lesser remedies would do. A few examples:
"I understand the [judgment] debtor discovery was taken from Mr. Gaggero sort of
kicking and screaming, you know, with great reluctance. But aside from that, ...this
10

case goes back several years .... And basically Mr. Gaggero has, as far as I can see,
taken the stonewall position as far as paying this (judgment). [] [T]o say that he has
resisted any effort to either, number one, pay sums that were owed prior to [judgment], or
to pay it once the ~judgmentJ was entered is an understatement ofthe case. [] So, you
know,...it's been worse [than) trying to pull teeth without anesthetic for the creditors."
And, when counsel said that additional judgment debtors "haven't had a chance to
show that we have been able to participate responsibly in this case," the court replied:
"Well, the problem is that Mr. Gaggero has been less than forthcoming. I read the
transcript of the [judgment] debtor examination where he refused to say where he lives
and refused to give information that was perfectly appropriate. [] ... [] ...And,
frankly, my general understanding is that this web of entities was set up by Mr. Gaggero
in consultation with various people essentially to make him judgment proof.... I think
there is evidence that has been presented to that effect, and indeed I have some
recollection of Mr. Gaggero's own testimony at trial."
Consequently, when counsel asked to continue the hearing to give additional
judgment debtors a chance "to make that sale [of one oftheir properties] happen," the
court refused, pointing out that,"on the basis of what I have before me today, I do not
have a high degree of confidence that will happen within a reasonable period of time."
The court aptly described the offer to sell a property "a theoretical offer which has not yet
been reduced to anything that would be enforceable." The court concluded: "And I
know the history of Mr. Gaggero on that. He doesn't want to pay [judgments] against
him .... [] ... It's hard for me to say that given this history, given my understanding
of the facts, given my understanding ofthe relationship between Mr. Gaggero and these
different persons and entities [(additional judgment debtors)], that that [the receivership
and assignment] shouldn't [be] allowed] to go forward."
In short, as the trial court's comments make clear, the record fully supports the
conclusion that the appointment of a receiver was "a reasonable method to obtain the fair
and orderly satisfaction ofthe judgment"(Code Civ. Proc., 708.620); that the

11

assignment order was necessary; and that plaintiff's stonewalling tactics could properly
be attributed to additional judgment debtors in light oftheir alter ego relationship.
c.

The scope and terms of the receivership order

Additional judgment debtors argue that, even ifthe court was justified in imposing
a receivership, the terms ofthe order were excessive and oppressive. They object to
numerous provisions, first challenging the receiver's authority "to administer and manage
all of Alter Ego Judgment Debtors' business affairs, funds, assets, choses in action and
any of its other property ...." They also object to the receiver's authority to
"[i]nvestigate all ofthe Judgment Debtors' assets and liabilities including ...the nature
and extent of any ...involvement with ...any business entities, corporations,
partnerships or joint ventures involved with Judgment Debtors, and any litigation." They
object to the receiver's authority to "request and receive tax returns," and they ask us to
hold that a receiver cannot have authority to access attorney-client communications(even
though the order says nothing on this subject). And they say it was unreasonable to
require them to turn over possession of all"`financial books, records and ownership
documents' "relating to assets and liabilities within seven court days ofthe appointment.
None ofthese objections to the scope ofthe order has merit. The only "authority"
additional judgment debtors cite for the claim that a receiver cannot be authorized to
"manage all [their] business affairs" is Tucker v. Fontes(1945)70 Ca1.App.2d 768, 775,
where the court was quoting the defendant's argument based on a treatise of unknown
date. Additional judgment debtors object to a host of other provisions, apparently on the
same ground, saying they are "precisely the powers a receiver may not have ...." But
they offer no legal authority or argument specifying why these powers should be found
improper. In their reply brief, additional judgment debtors concede that "there is no
formal bar on ordering a receiver to manage a business," and they "apologize for the
error." They merely state, without elaboration, that the order was not justified here.
That is not a sufficient basis for reversing the order.
The same is true ofthe claim that the receiver's power to "[i)nvestigate" was
improper. Additional judgment debtors again cite no authority, and it seems clear that the
12

receiver's duty to marshal assets to satisfy the judgment would necessarily require an
investigation by the receiver to find the necessary assets. (See Code Civ. Proc., 568
["The receiver has ...power ... to take and keep possession ofthe property, to receive
rents, collect debts, to compound for and compromise the same, to make transfers, and
generally to do such acts respecting the property as the court may authorize."].)
Nor do any ofthe other objections to the scope ofthe order merit reversal. We
have found the appointment of a receiver was proper. There is nothing to be gained at
this stage, after the receivership has been terminated and the receiver discharged, in
considering on appeal provisions never used by the receiver.
d.

The scope of the assignment order

Additional judgment debtors similarly contend the assignment orders were "wildly
improper," were "designed to prevent[them] from paying their lawyers," and assigned
payments they "would otherwise have made to various entities and individuals, most of
whom were not parties." They cite to the provisions assigning to defendants the rights to
monies due or to become due that were "held in the name oforfoY the benefit ofor
accessible to JUDGMENT DEBTORS that [were] in the possession, control, custody, or
due to" specified individuals, including Mr. Praske, plaintiff, various lawyers and others.
We fail to see any impropriety, and additional judgment debtors cite no legal authorities
supporting their contentions. Nor do they demonstrate any prejudice resulting from any
of these provisions.
Finally, additional judgment debtors complain that defendants' notice of motion
did not mention they were seeking an order restraining additional judgment debtors from
disposing of any rights subject to the assignment order, and therefore the restraints
"exceeded the court's jurisdiction and are void." The memorandum accompanying
defendants' motion expressly discussed the court's authority to restrain the judgment
debtors and the need for a restraining order. The suggestion that additional judgment
debtors were "not alert[ed]" to "the nature ofthe order being sought" is specious.

13

DISPOSITION
The orders are affirmed. Defendants shall recover their costs on appeal.

GRIMES, J.

We concur:
RUBIN, Acting P. J.

FLIER, J.

14

EXHIBIT B

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT
DIVISION 8

December 8, 2014

STEPHEN M. GAGGERO,
Plaintiff and Appellant,
v.
KNAPP,PETERSON & CLARKE et al.,
Defendants and Respondents,
PACIFIC COAST MANAGEMENT,INC. et al.,
Appellants.
B245114
Los Angeles County No. BC286925

THE COURT:
Petition for rehearing is denied.

cc:

David Blake Chatfield

Randall A. Miller
Steven Seawhan Wang
Edward A. Hoffman
File

PROOF OF SERVICE
I, Edward A. Hoffinan, declare as follows:
I am over eighteen (18) years of age and not a party to the within action. My
business address is 11755 Wilshire Boulevard, Suite 1250, Los Angeles, California
90025. On December 17, 2014, I served the within
PETITION FOR REVIEW
on each ofthe following, by placing a true copy thereof in a sealed envelope with
postage fully prepaid, in the United States mail at Los Angeles, California, addressed
as follows:
Randall A. Miller
Steven Wang
Attorneys
Miller LLP
515 South Flower Street, Suite 2150
Los Angeles, CA 90071-2201

Office ofthe Clerk

Court of Appeal, Second Appellate
District, Division Eight
300 South Spring Street
Los Angeles, CA 90013

Clerk of Court Civil

Los Angeles Superior Court
111 North Hill Street
Los Angeles, CA 90012

David Blake Chatfield

Attorney
Westlake Law Group
2625 Townsgate Rd., Suite 330
Westlake Village, CA 91361

Clerk, Department 24
Los Angeles Superior Court
111 North Hill Street
Los Angeles, CA 90012
(Courtesy copy for Delivery to the Hon.
Robert L. Hess)
I declare under penalty of perjury that the foregoing is true and correct and that
I signed this declaration on December 17, 2014 at Los Angeles, California.

Edward A. Hoffman

.~