CA2DB243062-02

{ 0 8 8 C B 8 8 6 - A D B 0 - 4 D 3 A - 8 A F 4 - B 5 1 8 9E3D A D 03}
{141 393} {30-1 31 1 0 7 : 1 3 0 7 1 7} {11 0 41 3}

APPELLANT'S
BRIEF

C ase N o .

B243062
IN TH E CO UR T OF A PPEA L OF THE ST A T E OF C A LIFO R N IA
SEC O N D A PPEL L A TE D ISTR IC T
D IV ISIO N EIG H T

STEPHEN M. GAGGERO,
P la in tiff a n d Appellant,
vs.
KNAPP, PETERSEN & CLARKE; STEVEN RAY GARCIA;
STEPHEN M. HARRIS and ANDRE JARDINI,
Defendants a n d R espondents,
PA CIFIC C O A ST M A N A G EM EN T, INC.; 511 OFW LP;
G IN G ER B REA D C O U R T LP; M A LIB U B RO A D B EA C H LP;
M ARINA G LEN CO E LP; BLU H O U SE LLC; B O A R D W A LK
SUNSET LLC; and JO SEPH PR A SK E as Trustee o f
TH E G IG A NIN TRU ST, TH E A R EN ZA N O TRUST,
and TH E A Q U A SA N TE FO U N D A TIO N
A dditional Judgm ent D ebtors a n d Appellants
Hon. Robert L. Hess, Hon. M atthew St. George,
Hon. M urray Gross; Hon. V ictor G reenberg
Superior Court o f Los A ngeles County
L.A.S.C. Case No. BC286925

A P P E L L A N T S O P E N IN G B R IE F

EDWARD A. HOFFMAN, Bar No. 167240

LAW OFFICES OF EDWARD A. HOFFMAN
11755 WILSHIRE BOULEVARD, SUITE 1250
LOS ANGELES, CALIFORNIA 90025
(310) 442-3600
Attorney fo r A dditional Judgm ent D ebtors a n d Appellants

TO BE FILED IN THE COURT OF A PPE A L

COURT OF APPEAL,

S eC O lld

A P P E L L A T E DISTRICT, DIVISION

A P P -0 0 8
C o u rt of A p p e d C a s e N um ber

Eight

B243062

ATTORNEY OR PARTY VMThOUT ATTORNEY (N a m e S ta te B ar num ber, a n d s d d i v s )

S u p erio r C o u rt C am N u m b e r

E dw ard A. H offm an
(B ar 167240)
Law O ffices o f E d w a rd A. H offm a n
11755 Wilshirc Blvd., S uite 1250
Los Angeles, C A 90025
TELEPHON E H O - (3 10) 4 4 2 -3 6 0 0
FAX NO. (Optional)- (310) 442-46 00
e - m a ilA D D R E s s f o p u 3 /ia 0 - e a h @ h o ffm a n la w .e o m
a t t o r n e y f o r (N a m e y

BC286925
F O R C O U R T U SE O N L Y

P a c if ic C o a s t M a n a g e m e n t , e t aL, A d d iti o n a l J u d g m e n t D e b to r s

a p p e l l a n t /p e t i t i o n e r

S tephen M. G aggero , e t a l.

r e s p o n d e n t /r e a l p a r t y in i n t e r e s t

Knapp, Petersen & Clarke, e t a l .

CERTIFICATE O F INTERESTED ENTITIES O R P ER S O N S

(C heck one):

CD

INITIAL C E R T I F I C A T E

S U P P L E M E N T A L C E R TIFIC A TE

Notice: P l e a s e r e a d r u le s 8.208 a n d 8.488 b e f o r e c o m p le t in g th is form . You m a y u s e t h i s fo rm fo r t h e initial

certificate in an a p p e a l w h e n y o u file y o u r brief o r a p reb riefin g m o tio n , a p p lic a tio n , o r o p p o s it io n to s u c h a
m otion o r a p p lic a tio n in t h e C o u r t o f A ppeal, a n d w h e n y o u file a petitio n fo r a n e x t r a o r d i n a r y writ. You may
a ls o u s e th is f o rm a s a s u p p l e m e n t a l certifica te w h e n y o u learn of c h a n g e d o r a d d itio n a l in fo rm atio n th a t m u s t
b e d is c lo s e d .
1 This form is being subm itted on b e h a lf o f the follow ing party (nam e): P acific Const M anagem ent, el a L A d d itio n a l Judgm ent D c h i o t s
2. a
b. CEH

There are no interested entities or persons th a t m ust be listed in this certificate un d er rule 8.208.
Interested e n titie s o r persons required to be listed un d er rule 8.208 are as follows:
Full nam e o f interested
entity o r person

N ature o f in te re s t

(E xplain):

(1) T erraM ar Trust

(

2)

(3)
(4)
(5)

C ontinued on attachm ent 2.

The undersigned certifies th a t th e abo ve-listed persons o r entities (c o rp o ra tio n s , p artn e rs h ip s , firm s, o r any other
association, but n ot including g o v e rn m e n t entities o r th e ir a gen cies) h ave e ith e r (1) an o w n ersh ip In te re s t o f 10 percent or
more in the party if it is an entity; o r (2 ) a financial o r o th er interest in the o u tco m e o f th e pro ceed ing th a t the justices
should con sider in determ inin g w h e th e r to d isqualify th em selves, as d efined in ru le 8.208(e)(2).

Date: N o v e m b e r 4. 2 0 13

E dw ard A. H offm an
(TY PE C R PR IN T NAME)

(SIGN ATURE O F P A R T /O R ATTORNEY)

_____________________________________________________________________________________________ P a g e 1 o M

Form Approved for O pbonal U se

Judicial C o ir w l of C alfornia
A P P -008 [Rov J a n u a ry 1. 2009)

CERTIFICATE OF INTERESTED ENTITIES O R P E R S O N S

Cal "i*** court

ones arcs
tvw.v counM to c a 5 0 '.'

L e .v is N e x i.\0 A u io m a ie d C a lifo r n ia J u d ic ia l C o u n c il F o r m r

TA BLE O F C ON T EN T S
Table o f A u th o ritie s .......................................................................................................................v
Introduction .................................................................................................................................. 1
Statem ent o f A ppealability

.........................................................................................................2

Factual and Procedural H i s t o r y ..................................................................................................3

1.

1997-1998: C reating the Estate Plan...................................................................3

2.

2000-2002: Respondents Serve as G aggeros A ttorneys.............................. 4

3.

D ecem ber 12, 2002-January 8, 2008: The U nderlying

M alpractice C ase....................................................................................................5

4.

February 5, 2008 and M ay 19, 2008: The O riginal and First

A m ended Judgm ents............................................................................................. 5

5.

A pril 28, 2008-A ugust 19, 2010: G aggeros O riginal A ppeal..................... 5

6.

D ecem ber 28, 2010: The Second A m ended Judgm ent.................................. 6

7.

D ecem ber 12, 2002-Present: The Yura M alpractice C ase.............................6

8.

2009-2012: Respondents Conduct Post-Trial D iscovery Solely

as to Mr. G aggero.................................................................................................. 7

9.

October 21, 2011 - O ctober 3, 2012: Gaggero A ppeals a PostJudgm ent Discovery O rder.................................................................................. 8

10.

April 10, 2012: R espondents File their M otion to A m end the

Judgm ent to A dd A ppellants as Judgm ent D ebtors....................................... 8

11.

M ay 15, 2012: The Costs M em orandum and Fee M otion.............................8

12.

M ay 15, 2012: A ppellants and Gaggero O ppose the A lter-Ego

M otion.................................................................................................................. 10

13.

M ay 29, 2012: The Trial Court G rants the A lter-Ego M otion................... 10

14.

M ay 31, 2012: Gaggero Files a M otion to T ax.............................................. 11

15.

June 29, 2012: Gaggero and Respondents O ppose Each O th ers

M otions................................................................................................................ 11

16.

July 13, 2012: The Trial Court Grants R espondents Fee M otion
and D enies G aggerosM otion to T ax............................................................ 11

17.

July 16, 2012: Respondents Submit a Proposed A m ended

Judgm ent Directed at Both at Gaggero and A ppellants............................... 12

18.

A ugust 3, 2012: Appellants and Gaggero File their N otice o f

Appeal C hallenging the July 13 O rder......................................................... 12

19.

A ugust 6, 2012: This Court Stays Further Proceedings as to

A ppellants........................................................................................................... 13

20.

A ugust 6, 2012: The Trial Court Signs the Proposed A m ended

Judgm ent............................................................................................................. 13

Standards o f R eview ............................................................................................................... 14

A rg u m e n t.................................................................................................................................... 14
I.

A Reversal in Appeal B241675 W ill Require a Reversal H ere........................... 14

II.

The Third A m ended Judgm ent V iolates A ppellants Due Process Rights
Because R espondents Failed to Serve Them with Either the Fee M otion
or the Costs M em o......................................................................................................... 16

III.

A.

R espondents Failure to Serve A ppellants w ith Either Their Fee

M otion or Their Costs M em orandum Is Fatal to the Resulting
Judgm ent............................................................................................................. 17

B.

The Fee M otion and Costs M em orandum W ere Both Filed and
Served before A ppellants Becam e A dditional Judgm ent Debtors. . . . 18

C.

N either the N otice o f M otion nor the A ccom panying Points and
A uthorities Sought A ny R elief A gainst A ppellants.................................. 18

The Third A m ended Judgm ent Violated this C ourts A ugust 6 Stay Order
in Appeal B 2 4 1675........................................................................................................ 19

IV.

The Trial C ourt Erred by A w arding R espondents Fees and Costs that
Are N ot R ecoverable....................................................................................................... 21
A.

B.

V.

O nly a Small Fraction o f the A w arded Fees Are Even A rguably

R ecoverable...........................................................................................................21
1.

The Fees for R espondents A lter-Ego M otion W ere not

Incurred in Enforcing the Judgm ent...................................................21

2.

The Trial Court Im properly Included O ther NonR ecoverable Fees in the A w ard...........................................................23

3.

The Trial Court Had no A uthority to A w ard Fees for a

Pending A ppeal....................................................................................... 23

4.

Respondents also W ere not Entitled to Fees Incurred in

Seeking Fees and Costs Related to G aggeros Prior Appeal. . . 25

5.

Respondents W ere not Entitled to Fees they Incurred in

O ther C ases...............................................................................................25

M ost o f the Costs the Trial C ourt A w arded Are Likew ise Not
R ecoverable...........................................................................................................27
1.

Because R espondents Claimed Costs Only Connected to

Judgm ent-D ebtor Exam inations, the Trial Court Had no
A uthority to Award A ny Other C osts................................................ 27

2.

Respondents Forfeited their Claims for Non-Statutory

C osts...........................................................................................................28

3.

The Trial Court Im properly A warded the Fees and Costs

Charged by M essengers and Attorney Services.............................29

There Is Insufficient Evidence to Support Large Portions o f the Fee

and Costs A w ards............................................................................................................. 29
A.

There Is No Evidence That Some o f the Tim ekeepers W hose

Fees W ere Included in the Award Are A ttorneys........................................29

-iii-

B.

VI.

M any o f R espondents Billing Entries Are so H eavily Redacted

that It Is Im possible to Tell W hether the W ork W as Reasonable
and N ecessary for Enforcem ent o f the Judgm ent........................................ 31

By W aiting M ore than Four Years Before Pursuing A ppellants,

R espondents W ere Estopped to Claim Interest and Enforcem ent
Costs from Them .............................................................................................................. 33

C o n c lu s io n .................................................................................................................................... 35
Certificate o f W ord C o u n t .........................................................................................................37
P roof o f S e r v ic e ........................................................................................................................... 38

TA BLE O F AUTH OR ITIES

STA TE CASES
Alan v. A m erican H onda M otor Co., Inc.
(2007) 40 Cal.4th 894 ................................................................................................................. 13
A lexander v. A bbey o f the Chimes
(1980) 104 Cal.App.3d 3 9 .......................................................................................................... 35
Bankes v. Lucas
(1992) 9 Cal.App.4th 365 ...................................................................................................... 20
Berti v. Santa Barbara Beach Props.
(2006) 145 Cal.A pp.4th 70 ........................................................................................................21
Blue Ridge Ins. Co. v. Superior Court
(1988) 202 C al.A pp.3d 339 ...................................................................................................... 32
Blum enthal v. Superior Court
(1980) 103 Cal.App.3d 3 1 7 ........................................................................................................ 18
Chinese Yellow Pages Co. v. Chinese Overseas M arketing Service
(2008) 170 Cal.A pp.4th 868 .................................................................................................... 14
Chronicle Pub. Co. v. Superior Court
(1960) 54 Cal.2d 548 .................................................................................................................. 31
Elkins v. Superior Court
(2007)41 Cal.4th 1337 ............................................................................................................. 14
Encinitas Plaza Real v. Knight
(1989) 209 Cal.App.3d 996 ...................................................................................................... 24
Estate o f Jenanyan
(1982) 31 Cal.3d 703 ................................................................................................................ 16
Gaggero v. Yura
(2003) 108 Cal.A pp.4th 884 ................................................................................................. 5, 6

V'

G illan v. City o f San M arino

(2007) 147 C al.A pp.4th 1033

................................................................................................. 15

G ilm an v. D alby
(2009) 176 Cal.A pp.4th 606 ...................................................................................................... 15
G orm an v. Tassajara D evelopm ent Corp.
(2009) 178 C al.A pp.4th 44 ........................................................................................................29
H ernandez v. Superior Court
(2003) 112 Cal.A pp.4th 285 .................................................................................................... 31
H ollister Convalescent Hosp., Inc. v. Rico
(1975) 15 Cal.3d 660 ....................................................................................................................13
In re Jackson
(1986) 182 Cal.App.3d 439 ...................................................................................................... 20
In re M arriage o f Carlsson
(2008) 163 Cal.A pp.4th 281

...................................................................................................... 14

In re Sutter H ealth U ninsured Pricing Cases

(2009) 171 Cal.A pp.4th 495 ...................................................................................................... 18
Jaffa v- Pace Hi
(2008) 165 Cal.A pp.4th 927 .................................................................................................... 14
K rikorian Prem iere Theatres, LLC v. W estm inster Central, LLC
(2011) 193 Cal.A pp.4th 1075 ................................................................................................... 13
Ladas v. California State Auto. A s s n
(1993) 19 C al.A pp.4th761 ...................................................................................................... 30
Lucky U nited Properties Investm ent, Inc. v. Lee
(2010) 185 Cal.App.4th 125 ..................................................................................................... 28
M clntire v. Superior Court
(1975) 52 Cal.App.3d 7 1 7 ..........................................................................................................35

-vi-

M erced County Taxpayers Assn. v. Cordelia

(1990) 218 C al.A pp.3d 396 ....................................................................................................... 15
M oore v. California M inerals Products Corp.
(1953) 115 C al.A pp.2d 834 ....................................................................................................... 16
M unicipal Imp. Co. v. Thompson
(1927) 201 Cal. 629 ............................................................................................................. 19,20
O 'B rien v. Cseh
(1983) 148 Cal.App.3d 957 ...................................................................................................... 17
People v. Bravo
(1990) 219 Cal.App.3d 729 .................................................................................................... 20
Prevoyance M utuelle v. D istrict Court
(1879) 53 Cal. 495 ........................................................................................................................ 15
Price v. Whitman
(1857) 8 Cal. 4 1 2 .......................................................................................................................... 20
Purdy v. Johnson
(1929) 100 Cal.App. 4 1 6 .............................................................................................................15
Robertson v. Rodriguez
(1995) 36 Cal.App.4th 347 ...................................................................................................... 20
Ronald P. Slates, A P C v. G orabi
(20120) 189 C al.A pp.4th 1210 .......................................................................................... 14,22
Scoville v. Anderson
(1901) 131 Cal. 590 .................................................................................................................... 20
M arriage o f Colvin
(1992) 2 Cal.App.4th 1570 ...................................................................................................... 24
Slaw inski v. M ocettini
(1965) 63 C al.2d 7 0 ......................................................................................................................13

-vii-

Tanzola v. De Rita
(1955) 45 C al.2d 1 ........................................................................................................................31
U nnam ed Physician v. B oard o f Trustees o f Saint Agnes Med. Ctr.
(2001) 93 Cal.A pp.4th 607 ...................................................................................................... 24
Wells Fargo & Co. v. City a n d County o f San Francisco
(1944) 25 C al.2d 3 7 ......................................................................................................................15

F E D E R A L C A SE S
Anderson N at. Bank v. Luckett
(1944) 321 U.S. 233 [64 S.Ct. 599, 88 L.Ed. 692]

.............................................................. 17

G alpin v. Page
(1873) 85 U.S. 350 [21 L.Ed. 959, 18 W all. 3 5 0 ] .................................................................16
Roadw ay Exp., Inc. v. Piper
(1980) 447 U.S. 752 [100 S.Ct. 2455, 65 L.Ed.2d 488] ..................................................... 17

ST A T E ST A T U T E S
Code o f Civil Procedure
1 2 ................................................................................................................................................... 20
1 8 7 ....................................................................................................................................................8
6 3 1 . 8 ...............................................................................................................................................5
685.010 ...................................................................................................................................... 34
685.040 ............................................................................................................................... passim
685.070 ........................................................................................................................ 2 7 ,2 8 ,3 0
685.080 ................................................................................................................................. 10,28
708.110 ...................................................................................................................................... 27
904.1 ...............................................................................................................................................2
9 1 6 ................................................................................................................................................. 22
923 ............................................................................................................................................... 22
917.1 ............................................................................................................................................ 25
1033.5 ........................................................................................................................................ 29

-viii

Evidence Code
452 ........................................................................................................................................... 3 ,2 6
453 .........................................................................................................; ............................... 3. 26
G overnm ent Code
6800
20
70626 ........................................................................................................................................... 27
Cal. Const., art. I, 7 ....................................................................................................................... 17

FED ER AL STA TU TES

U.S. Const., 14th A rndt.......................................................................................................................17

STATE RULES
Cal. Rules o f Court, Rule 8 .1 0 4 ......................................................................................................13
Cal. Rules o f Court, Rule 8.204 .................................................................................................... 37
Cal. Rules o f Court, Rule 8.278 .................................................................................................... 24

SEC O N D A R Y SO U R C ES
Ahart, California Practice Guide: Enforcing Judgm ents a n d Debts
(Rutter 2012)
........................................................................................................... 2 4 ,2 8 ,3 5
A m .J u r.2 d ............................................................................................................................................. 19
W itkin, Cal. Procedure (5th ed., 2008) ..................................................................................10,16

-IX-

INTR O D U C TIO N
In case B241675, appellants- explained that they had been improperly deemed
the alter egos o f the original judgm ent debtor, Stephen G aggero, and named additional
debtors on the underlying judgm ent against him. That decision was based on multiple
errors by the trial court, and encouraged by respondents deceptive and m isleading
argum ents - a pattern w hich was far from over.
Two m onths after appellants were added to the case, the trial court ordered
them to pay alm ost $570,000 in interest and over $87,000 in fees and costs, and then
incorporated those aw ards into the third am ended judgm ent challenged in this appeal.
But the award was based on a fee motion and costs m em orandum w hich w ere filed
before appellants becam e judgm ent debtors and w hich had not asked for any relief
from them. Respondents had not even served the m otion or costs m em o on appellants,
denying them notice and an opportunity to be heard. W h ats more, the amended
judgm ent which included these sums was entered in violation o f the stay order this
court had issued the same day in B241675.
A lthough the award was ostensibly for costs o f enforcing the judgm ent against
Mr. Gaggero, most o f the fees it included were for the alter-ego m otion an effort to
modify the judgm ent rather than to enforce it. The court also aw arded fees for client
com m unication and other non-enforcem ent services. It aw arded fees for work by
people whom respondents never even claimed were attorneys, and for w ork on
entirely different cases. It even aw arded fees and costs incurred in an appeal that was
still pending in this court at the tim e, even though there w as no prevailing party in that
appeal and even though only this court could decide w hether either side would be

-T h e term appellants in this brief refers to the additional judgm ent

debtors, on w hose behalf it has been filed. They are Pacific Coast
M anagem ent, Inc. 511 OFW L.P., G ingerbread Court L.P., M alibu
Broadbeach, L.P., M arina G lencoe L.P., Blu House L.L.C., Boardw alk Sunset
L.L.C., and Joseph Praske as Trustee o f the Giganin T rust, the Arenzano T rust,
and the A quasante Foundation. Co-appellant Stephen G aggero, the original
judgm ent debtor, has separately appealed and is filing his own opening brief.

entitled to costs from the other. And many o f the billing entries on which the award
was based had been so heavily redacted that there is no way to know if they were
reasonable and necessary to enforce the underlying judgm ent.
The aw ard also included a variety o f non-recoverable costs such as
photocopying and m essenger services, along w ith other costs that are potentially
recoverable but w hich respondents had forfeited procedurally.
M aking m atters worse, the award made appellants responsible for more than
four y ears w orth o f interest and enforcem ent costs even though they had been added
to the case just two m onths earlier - inflating the judgm ent against them by almost a
m illion dollars by the time appellants paid it in N ovem ber 2012.
O f course, all o f this is in addition to the fact that the fee and costs aw ards will
necessarily have to fall if appellants w in a reversal in appeal B241675.

STA TEM EN T OF A PPEA L A B IL ITY

This appeal is taken from an order denying a m otion to tax costs and granting a
m otion for fees and costs, and from an am ended judgm ent incorporating that order.
A m ended judgm ents are appealable under Code o f Civil Procedure section 904.1.
subdivision (a)(1).- The prior order is appealable under section 904.1, subdivision
(a)(2) as an order made after a final judgm ent.

//
//

-A ll statutory citations herein are to the Code o f Civil Procedure unless

otherw ise noted.

FA C T U A L AND PR O C E D U R A L H ISTO RY

1.

1997-1998: C reating the Estate Plan.

Stephen Gaggero, a successful real estate investor and developer, hired attorney
Joseph Praske in 1997 to develop and im plem ent an estate plan on his b e h alf (Trial
RT1 602-604; Trial RT5 2720; B241675 CT1 124-125; B241675 CT3 411.)- Setting
up the estate plan took several months in 1997 and 1998. (B241675 CT1 127, 152163; B241675 CT2 192; B241675 CT3 411.) As part o f this process, Praske created
several limited liability com panies (LLC s) and limited partnerships (LPs) in
which Gaggero initially ow ned a m em bership or lim ited partnership interest.
(B241675 CT1 129-130; B241675 CT2 190-191, 212-213.)
A ppellants 511 OFW L.P., G ingerbread Court L.P., M alibu Broadbeach, L.P.,
M arina G lencoe L.P., Blu H ouse L.L.C., and Boardw alk Sunset L.L.C. were each
created by Praske to own a distinct piece o f G aggeros real property. (B241675 CT2
314-319, 360-B241675 CT3 370.)
Gaggero then transferred his properties to these LLCs and LPs. (B 2 4 1675 CT1
126, 162-163, 191.) He subsequently transferred his ow nership in those entities into
various trusts w hich Praske had established, including appellants A renzano Trust and
the A quasante Foundation. (B241675 CT2 191-193, 360-B241675 CT3 370.) He
separately transferred his personal residence to the Giganin Trust. (B241675 CT2 ] 93-

Citations to JA , Trial R T and O pn. refer to the joint appendix,

reporters transcript and opinion from G aggeros appeal o f the original
judgm ent, B207567. Citations to C T refer to the clerk s transcript in the
present appeal. The three hearing transcripts in this appeal are all cited by date
(to illustrate: 10-3-12 R T 1-2). Citations to the c lerk s and reporters
transcripts from one o f appellants other pending appeals start with the num ber
o f that appeal (to illustrate: B241675 CT1 1-2). A ppellants respectfully ask
the court to judicially notice the briefing and records in these related appeals
per Evidence Code sections 452, subdivision (d), and 453.
3

196.)
Praske has been the trustee o f each o f these trusts since they were formed.
^

4 i / 'r r

(tiz ^ io o t i

/ /

1 100-1 0

r\ ^

4 1

/*

/^irr ^

1 a /

^ 1

/; a z m o / D l . i z ivd; t f z ^ i o o l u

4 1

r\

h iz .) t>y respondents

own adm ission, Gaggero no longer owned the properties after he transferred them to
the LLCs and LPs, and no longer ow ned any interests in the LLCs or LPs after he
transferred them to the trusts. (B241675 CT1 28:2-7, 29:1-4, 29:21-22, 31:7-8, 31:811,31:11-12, 31:12-18, 31:18-20, 32:4-5, 33:13-15, 36:2-6, 40:4-6, 42:15-16;
B241675 CT3 428:15-17, 430:20-21, 432:3-5, 432:5-7, 432:7-9, 432:9-10, 432:1112 .)

The LLCs and LPs hired P raskes business m anagem ent com pany, appellant
Pacific Coast M anagem ent, Inc. (PC M ), to m anage their assets and finances.
(B241675 CT2 187-188, 195-196, 269.) Because P raskes expertise is in estate
planning rather than real estate m anagem ent, PCM engaged Gaggero as a consultant
to manage its clients real estate assets and to guide future purchases or sales.
(B241675 CT1 140; B241675 CT2 213-215, 360.) Gaggero also used PCM to
m anage his ow n financial affairs. (B241675 CT2 252-257; Trial RT4 1836-1839.)

2.

2000-2002: R espondents Serve as G aggeros A ttorneys.

In or around August o f 2000, Gaggero hired respondents - the law firm o f

Knapp, Petersen & Clarke, and attorneys Stephen Ray Garcia, Stephen M. Harris, and
A ndre J a r d in i- - to advise and represent him in several cases. (JA2 521-534; Trial
RT2 610-615.) One o f them was Gaggero v. Yura, L.A.S.C. No. BC239810 (the
Yura case), w hich sought to enforce an agreem ent to purchase real estate in Santa
M onica. (Trial RT2 619-620, 635-636; Trial RT3 1247; Trial RT4 2173; B241675
CT2 281-288.)

-T h e record often refers to respondents collectively as K PC .

4

Amid disputes about the quality o f their w ork, respondents resigned as

G aggeros attorneys and w ithdrew their representation in early 2002. (Trial RT3 908a a a

^nA

yuy, iz / a - iz /y,

1 ^n n

1 z a d -iz a y ;

t 1

t rT ' n

as i

t<

i r>rr 1 r\ r

r r\ \

.1

^ _.

i nai m o h d j o ; iria i h i iu j / d v j . ) n y men u aggero

had lost a summary judgm ent m otion in the Yura case - a result w hich different
attorneys successfully challenged on appeal. (G aggero v. Yura (2003) 108
Cal.A pp.4th 884, 896.)

3.

D ecem ber 12, 2002-January 8, 2008: The U nderlying M alpractice

Case.

Gaggero filed the underlying m alpractice case on D ecem ber 12, 2002. (CT1
18.) His second am ended com plaint, filed on A ugust 13, 2003, alleged several causes
o f action, including professional negligence and breach o f contract. (JA1 1-41.) The
case w as tried w ithout a jury from July 23 to Septem ber 10, 2007, w hen the trial court
granted respondents m otion for judgm ent under section 631.8. (Trial RT10 57375738; JA1 147; JA2 366.) On January 8, 2008, the court issued a 32-page statem ent
o f decision, w hich it had drafted itself, condem ning G aggeros ethics and his business
practices. (JA2 386-417.)

4.

February 5, 2008 and M ay 19, 2008: The O riginal and First

A m ended Judgm ents.

The judgm ent against Gaggero was entered on February 5, 2008. (JA2 421 423.) The court am ended the judgm ent on M ay 19, 2008, aw arding respondents
$1,202,944.50 in attorney fees and $124,702.90 in other costs, for a total o f
$1,327,674.40. (JA7 1884-1889.)

5.

April 28, 2008-A ugust 19, 2010: G aggeros O riginal Appeal.

Gaggero appealed the original judgm ent on A pril 28, 2010 in case no.
B207567. He then appealed the first am ended judgm ent on July 16, 2008 in case no.

B209522. Per the parties stipulation, this court later consolidated the appeals.

It

then affirm ed both judgm ents in an unpublished opinion on M ay 6, 2010. The

m j^v y |

f | |

iv u m u iu i

6.

a f ro n

n m

i ^ ^

ll o ^1^ f

1 O

^ ^

r">

^ r s s o

wGl> i ^ ^ u v u u u r-^uguoi 1 ? u i u m i ^ t a i .

D ecem ber 28, 2010: The Second A m ended Judgm ent.

On D ecem ber 28, 2010, the trial court am ended the judgm ent a second time,
aw arding respondents another $513,837.68 - consisting o f $192,723.90 in attorney
fees and $522 in costs for the appeal, along w ith $320,591.78 in accrued interest.
(B241675 CT1 114-116.) That interest was calculated at a daily rate o f $354.34
through N ovem ber 18, 2010, when the earlier m otion to amend was filed. (CT1 35:5-6
41:14-19.) This brought the total am ount o f the judgm ent against G aggero to
$1,841,535.08.-

7.

D ecem ber 12, 2002-Present: The Yura M alpractice Case.

Gaggero filed another m alpractice case against respondents the same day he
filed the underlying case. That lawsuit, Gaggero v. Knapp, Petersen & Clarke, et aL.
L.A.S.C. No. B C286924 (the Yura m alpractice case), arises from respondents work
in the Yura case. A lm ost eleven years after it was filed, it has not yet gone to trial.The trial is currently scheduled to begin in early 2014.

-T h e num bers do not quite add up because the fee aw ard in the
proposed am ended judgm ent included a $23 error in respondents1 favor.
-T h e details o f the Yura m alpractice case are not im portant to this
appeal, and appellants do not w ish to burden the court by adding m aterials
from that case to the already-substantial record here. In order to confirm the
dates and subject-m atter set forth above, appellants respectfully ask the court
to judicially notice the petition and record in a successful writ petition Gaggero
filed in D ivision Five earlier this year, Gaggero v. Superior C ourt, 2nd Dist.
No. B247494.
6

8.

2009-2012: R espondents C onduct Post-Trial D iscovery Solely as to

Mr. Gaggero.

Respondents conducted judgm ent-debtor discovery shout G aggeros finances,

taking his debtor exam and serving him w ith w ritten discovery. They took Praskes
third-party debtor exam on June 5, 2009. (B241675 CT2 357-B241675 CT3 377.)
The April 10, 2009 order to appear named Praske in his individual capacity and not as
a representative o f any entities. It directed him to testify about his know ledge o f
G aggeros finances and about any funds or assets he possessed w hich w ere owed to
Gaggero. It did not call for any inform ation about any o f the appellants. (B241675
CT2 357-358.)
R espondents w ritten discovery to Gaggero sought, inter alia, the trust
instrum ents for G iganin, Arenzano, and Aquasante. (B241675 CT2 329-354)
Gaggero - who had testified in 2007 that Praske was the one who had this information
(Trial RT4 1871-1872, 2133; Trial RT5 2770-2774) stated in response that he did
not have them. (B241675 CT2 3 3 3 - 3 3 4 R espondents did not move to compel
further responses, and instead brought their alter ego m otion just three weeks after the
responses were served. (B241675 CT1 24; B241675 CT3 354.)
Respondents did not exam ine Praske again, either as an individual or as a
representative o f any o f the appellants. They also failed to exam ine anyone else on
appellants behalf. They did not subpoena any records from appellants, nor did they
subpoena records concerning appellants from any third parties. They also did not

-In their alter-ego motion, respondents claim ed Gaggero had previously

refused to produce the docum ents despite a successful m otion to compel.
(B241675 CT1 33:18-34:6.) But that was m otion to compel further responses
to interrogatories, not to requests for production. (B241675 CT1 33:21-25.)
By definition, interrogatories do not call for production o f docum ents. Even
so, respondents com plained that Gaggero did not produce any docum ents in
response. (B241675 CT1 33:20, em phasis in original; see also B241675 CT1
53:21-23.)
7

serve appellants w ith any written discovery.

9.

O ctober 21, 2011 - O ctober 3, 2032: G aggero A ppeais a PostJudgm ent D iscovery Order.

On O ctober 5, 2011, the trial court granted a m otion by respondents to compel

Gaggero to provide responses to post-judgm ent interrogatories and imposed $2,000 in
related sanctions. (B236834 CT 71-74.) Gaggero filed a notice o f appeal from that
order on O ctober 21, 2011, com m encing case B236834. (B236834 CT 75-76.) This
court later dism issed the appeal on its own m otion on O ctober 3 ,2 0 1 2 , after defaulting
Gaggero for failing to file an opening b rie f The rem ittitur in that appeal was issued
on D ecem ber 5, 2012.

10.

A pril 10, 2012: Respondents File their M otion to A m end the

Judgm ent to Add A ppellants as Judgm ent Debtors.

On April 10, 2012-, respondents filed a m otion under section 187 to deem
appellants G aggeros alter egos and to further am end the judgm ent by nam ing them
additional judgm ent debtors. (B241675 CT1 24 - B241675 CT3 378.) A m ong
respondents m any argum ents was the claim that, because m any o f the appellants had
designated Praske as their agent for service, this com m onality som ehow m eant they
w ere G aggeros alter egos. (B241675 CT1 33:6, 39:7-8.) R espondents supported this
claim with extensive docum entation o f where legal papers could be served on the
various appellants. (B241675 CT2 308-319.)

11.

M ay 15, 2012: The Costs M em orandum and Fee M otion

On M ay 15, respondents filed a m em orandum o f costs after judgm ent seeking

$248,978.18 in additional post-judgm ent interest, $86,247.70 in attorney fees, and

-'All further dates were in 2012 unless otherw ise noted.

$1,474.55 in costs related to judgm ent debtor exam inations, and. (CT1 23-24.)- The
m em orandum did not seek costs under any o f the other categories listed on the form.
R espondents served the costs memo only on counsei for Mr. Gaggero. They did not
serve any o f the appellants or anyone acting on appellants b eh alf (CT1 25-27),
despite their exhaustive dem onstration five weeks earlier that they knew precisely
how to do so. (B241675 CT1 33:6, 39:7-8; B241675 CT2 308-319.)
At the same time, respondents filed a motion for aw ard o f post-judgm ent
enforcem ent costs and accrued interest . (CT1 28-CT2 214.) The m otion expressly
said it was being brought against Gaggero. (CT1 29:2-9, 31:2-4.) N either the notice
o f m otion (CT1 29-30) nor the mem orandum o f points and authorities (CT1 31-37)
said the m otion was being brought against appellants - who, o f course, had not yet
been added to the judgm ent. Like the costs m em o, the fee m otion was served only on
counsel for Gaggero and not on appellants or anyone acting on their behalf. (CT2 218220 .)
The m otion explained that respondents w ere seeking $354.34 in daily interest
for the 40-day gap before entry o f the second am ended judgm ent and $416.70 in daily
interest thereafter. (CT1 33:1-28, 3 4 :20-35:8,41:14-42:5.) The difference - which
am ounted to $32,354.28 by the time the motions w ere heard and to $62,959.68 by the
tim e appellants paid the judgm ent on N ovem ber 15, 2012 - was interest on the prior
$192,723.90 award o f fees and costs. (CT1 33:1-28, 34:20-35:8, 41:14-42:5.)
The notice o f m otion claimed respondents w ere entitled to $1,474.55 o f post
judgm ent enforcem ent costs pursuant to sections 685.040 and 685.080 (CT1 29:1314), but neither the mem orandum o f points and authorities (CT1 31-37) nor the
accom panying declaration o f counsel (CT1 38-42) explained w hat these costs were or
why they were recoverable.

-T h e memo stated that the interest was $569,569.96, but that amount
must have included the $320,591.78 aw arded on D ecem ber 28, 2010. (CT1
23.)
9

Respondents subm itted a proposed order along with their fee motion. (CT
Suppl 2-3.) Like the motion and the costs memo, it said nothing about any relief
Ofr'iinc' t

u g u u u i u n j urf
i tul ii va an pn pn ^a il il un ini tt ro' .

12.

M ay 15, 2012: A ppellants and G aggero O ppose the Alter-Ego

M otion.

A ppellants filed their opposition to the alter-ego m otion on M ay 15. (B241675

CT3 397-540.) Gaggero filed his opposition the same day. (B241675 CT3 379-396.)
Respondents filed com bined reply papers on M ay 21. (B241675 CT3 423-439.)

13.

M ay 29, 2012: The Trial Court G rants the A lter-E go M otion.

The trial court heard respondents alter-ego m otion on M ay 29, and granted it
in full. (B241675 CT3 540, 541-542.) The formal w ritten order twice states that
appellants were hereby added as judgm ent debtors. (B241675 CT3 541-542.) The
order did not state a new amount due. A ppellants filed a notice o f appeal three days
later, com m encing appeal B241675. (B241675 CT3 543-545.) They will not burden
this court by repeating w hat they said about the order in their opening b rief in that
appeal.

//
//

The M ay 29 order was actually a third am ended judgm ent even

though it was not labeled as such. There is no prescribed form for ajudgm ent.
Its sufficiency depends on w hether it shows distinctly that the issues have been
adjudicated. (7 W itkin, Cal. Procedure (5th ed., 2008) Judgm ent, 29, p.
569.) The order said twice that the appellants w ere hereby added as
judgm ent debtors, instead o f calling for respondents to submit a new proposed
judgm ent. (B 2 4 1675 CT3 541 -542.) Because it expressly modified the terms
o f the second am ended judgm ent, it was in itself a further am ended judgm ent
regardless o f its label.
10

14.

M ay 31, 2012: G aggero Files a M otion to Tax.

Gaggero filed a m otion to tax respondents costs memo on M ay 31. (CT Suppl
4-92.) The m otion was supported with spreadsheets breaking dow n w hat he had
identified as recoverable and non-recoverable fees and costs on each page o f
respondents invoices. (CT Supp 11-19) and w ith highlighted copies o f the bills
respondents had subm itted w ith their fee motion, indicating which ones Gaggero
objected to and why. (CT Supp 20-91.)

15.

June 29, 2012: G aggero and R espondents O ppose Each O thers

M otions.

Gaggero filed his opposition to the m otion for fees and costs on June 29. (CT2
221-237.) The opposition was substantially sim ilar to his motion to tax.
R espondents opposed G aggeros m otion to tax the same day. (CT Supp 93-99,)
U nlike the original motion, the reply was served on appellants counsel as well as
G aggeros. (CT Suppl 98-99.) B ut like the motion, the reply said nothing about
seeking relief from anyone besides Gaggero. (CT Suppl 94-97.)

16.

July 13, 2012: The Trial Court G rants R espon dents Fee Motion
and D enies G aggeros M otion to Tax.

The fee m otion and the motion to tax w ere both heard on July 13. (CT2 245.)

Respondents disagree w ith some o f G aggeros figures, since they

contest a num ber o f costs w hich he did not. They will explain which costs
were not recoverable in Part IV.B., p o st, but will not burden the court by
identifying here the items as to which they and Gaggero do not agree.
It appears that there was no reporter present at this hearing. A lthough
appellants had hoped to file either an agreed statem ent or a settled statem ent,
that process would have taken a considerable am ount o f time. That, in turn,
would make it difficult for this court to decide the present appeal before
(continued...)
11

Counsel appeared on behalf o f both respondents and Mr. G aggero, but there was no
appearance for appellants. (CT2 245.) The court granted the fee m otion in its entirety,
denied G aggeros m otion to tax, and dircctcd respondents to subm it an order and
revised judgm ent. (CT2 245.)

17.

July 16, 2012: R espondents Subm it a Proposed A m ended Judgm ent

D irected at Both at G aggero and A ppellants.

R espondents filed their proposed third am ended judgm ent on July 16, calling
for the addition o f all the am ounts they had sought in their fee m otion and their costs
memo. (CT2 249-250, 253-254.) Unlike the m otion and the memo, the proposed
judgm ent nam ed all o f the appellants as well as G aggero. (CT2 250.) It justified this
change by noting that appellants had by then been nam ed additional judgm ent debtors
(CT2 249-250), but said nothing about the fact that this had happened after the fee
m otion and costs memo were filed. It also failed to m ention that respondents had
served neither o f those docum ents on appellants, that appellants had filed no related
papers, or that appellants w ere not represented at the July 13 hearing. (CT2 249-250.)

18.

A ugust 3, 2012: Appellants and G aggero File their Notice o f Appeal

C hallenging the July 13 Order.

A ppellants and Gaggero filed a notice o f appeal from the fee and costs award

(...continued)
B 2 4 5 1 14, w hich concerns subsequent orders but in w hich the opening brief
has already been filed. There is little reason to believe anything rem arkable
happened at the hearing, and the m inute order confirm s that neither side
offered any testim ony at the hearing or introduced any new evidence. (CT2
245.) Because appellants w ere not present at the hearing and had received no
notice o f it, they could not have waived or forfeited any rights during the
hearing by either act or omission. None o f appellants argum ents are affected
by the lack o f a transcript.
12

on August 3. (CT2 24 6 -2 5 0 .)-

19.

A ugust 6, 2012: This Court Stays Further Proceedings as to

A ppellants.

A ppellants had filed a supersedeas petition as part o f case B241675 on July 19.
In response, the court issued a stay o f all proceedings in the trial court on August 6. It
later denied the supersedeas petition and lifted the stay on A ugust 30.

20.

A ugust 6, 2012: The Trial Court Signs the Proposed A m ended

Judgm ent.

The trial court signed respondents proposed third am ended judgm ent, without
change, the same day this court issued its stay order. (CT2 3 19-320.) The additional

A notice o f appeal filed after judgm ent is rendered but before it is

entered is valid and is treated as filed im m ediately after entry o f judgm ent.
(Cal. Rules o f Court, Rule 8.104(d)(1).) The court has discretion to do
likewise w here the judgm ent has m erely been announced. (Cal. Rules o f Court,
Rule 8.104(d)(2).) But it m ust exercise that discretion in a m anner consistent
w ith the w ell-established policy o f according [the] right [to appeal] in
doubtful cases when such can be accom plished w ithout doing violence to
applicable rules. (Alan v. A m erican Honda M otor Co., Inc. (2007) 40 Cal.4th
894, 901, quoting H ollister Convalescent H o s p I n c . v. R ic o (\9 1 5 ) 15 C al.3d
660, 674, in turn quoting Slaw inski v. M ocettini (1965) 63 C al.2d 70, 72.)
That is true even w here the appeal concerns the original judgm ent rather than
a subsequent amendment.
Even w here no final judgm ent has been entered, an aw ard o f fees and
costs is appealable because it is a collateral order w hich directs the payment
o f money and which is enforceable independent o f the entry o f the judgm ent.
(Krikorian Prem iere Theatres, LLC v. W estm inster Central, L L C (2011) 193
C al.A pp.4th 1075, 1083-1085.)
The August 6 docum ent was la b eled "Third A m ended Judgm ent but,
as we have seen, that label w as incorrect. The judgm ent was actually amended
(continued...)
13

fees, costs, and interest brought the overall am ount o f the judgm ent to $2,178,235.51.
(CT2 249-250.)

STA N D A R D S OF R EV IEW
D enying a party notice and an opportunity to be heard is reversible per se, and
not subject to harm less-error review. (Elkins v. Superior Court (2007) 41 Cal.4th
1337, 1357; In re M arriage o f Carlsson (2008) 163 Cal.A pp.4th 281, 291-293.)
The trial courts authority to award postjudgm ent fees is a legal question that
we independently review . (R onald P. Slates, A P C v. G orabi (20120) 189
C al.A pp.4th 1210, 1213; accord Jaffe v. Pacelli (2008) 165 Cal.A pp.4th 927. 934
[ w hether the trial court had the authority pursuant to Section 685.040 to issue such an
aw ard ... is a legal issue, w hich w e review de novo.].) If particular fee or cost items
are recoverable, the Court o f A ppeal review s the am ount o f the award for an abuse of
discretion. (Chinese Yellow Pages Co. v. Chinese Overseas M arketing Service (2008)
170 Cal.App.4th 868, 885.)
ARGUM ENT
I.

A R E V E R SA L IN A PPEA L B241675 W ILL R E Q U IR E A R EVER SA L

HERE.
W hen a judgm ent is reversed on appeal, all subsequent orders enforcing that

judgm ent fall along w ith it. That is w hat should happen here.
The orders and am ended judgm ent which appellants challenge were entered
pursuant to the M ay 29, 2012 judgm ent w hich nam ed appellants additional judgm ent
(...continued)
for the third time on M ay 29, when the court granted the alter-ego motions.
The court w as actually am ending the judgm ent for the fourth time on August
6. For the sake o f clarity, appellants will refer to the docum ent by its title even
though that title is not accurate.
14

debtors. The trial court determ ined that the fees and costs it aw arded w ere incurred to
enforce that judgm ent. (CT2 249-250.) Respondents w ere only able to obtain these
orders because they had won their prior m otion to add appellants to the judgm ent
against Mr. Gaggero.
But appellants have appealed the M ay 29 judgm ent in case B241675. If they
win, respondents will no longer be the prevailing parties. Any re lie f w hich the trial
court aw arded to them on that basis will have to be reversed. (G ilm an v. D alby (2009)
176 C al.App.4th 606, 620.)
Costs upon appeal are merely incidental to the ju d g m en t appealed from
[citation], and an order aw arding costs falls w ith a reversal o f that part o f the judgm ent
upon w hich it is based [citation]. (Purdy v. Johnson (1929) 100 Cal.App. 416, 420421; accord G illan v. City o f San M arino (2007) 147 C al.A pp.4th 1033, 1053 [reversal
o f judgm ent necessarily compels the reversal o f the aw ard o f fees as costs to the
prevailing party based on the judgm ent.]) They are incidental because they depend
upon how the court resolves the substance o f the p arties claim s. (W ells Fargo & Co.
v. City and County o f San Francisco (1944) 25 Cal.2d 37, 44.) Orders enforcing a
judgm ent are thus also incidental to that judgm ent. (La Societe Francaise d'Epargnes
et de Prevoyance M utuelle v. D istrict C ourt (1879) 53 Cal. 495, 552.) So if the
original M ay 29, 2012 judgm ent against appellants is reversed, the subsequent award
o f fees, costs, and interest cannot stand. N either can the am ended judgm ent that
incorporated them.
An order aw arding costs falls with a reversal o f the judgm ent on which it is
based. (M erced County Taxpayers Assn. v. Cardella (1990) 218 C al.A pp.3d 396,
402.) A defendant who was ordered to pay the p la in tiffs costs is therefore entitled to
relief from those costs when the judgm ent is reversed. [T]he successful party is
never required to pay the costs incurred by the unsuccessful party. (Purdy, supra, 100
Cal.App. at p. 421.) If appellants succeed in appeal B 241675, they cannot be made to
pay respondents fees or costs.

II.

THE TH IR D A M EN D ED JU D G M EN T V IO LA T E S A PP E L L A N T S
DUE PR O C E SS R IG H TS BEC A U SE R E SPO N D E N T S FAILED TO
SERVE TH EM W ITH EITH ER THE FEE M O T IO N O R TH E COSTS
M EM O.
The most fundamental com ponents o f due process are the right to notice and an

opportunity to be heard. As the U nited States Supreme C ourt explained 140 years ago,
It is a rule as old as the law, and never more to be respected than now.
that no one shall be personally bound until he has had his day in court, by
w hich is m eant, until he has been duly cited to appear, and has been afforded
an opportunity to be heard. Judgm ent w ithout such citation and opportunity
wants all the attributes o f a judicial determ ination; it is judicial usurpation and
oppression, and never can be upheld w here justice is justly adm inistered.
(G alpin v. Page (1873) 85 U.S. 350, 368-369 [21 L.Ed. 959, 18 Wall. 350].)
Even w here a court has generally obtained personal jurisdiction over a party for
purposes o f a case, it only gains jurisdiction to make particular orders w hen the
affected parties have received adequate notice and an opportunity to be heard. (Estate
o f Jenanyan (1982) 31 Cal.3d 703, 708.) W here a court issues such an order against a
party who received no such notice or opportunity, the court lacks jurisdiction to make
the order and it is therefor void. (M oore v. California M inerals Products Corp. (1953)
115 Cal.App.2d 834, 837 [due process violation w here judgm ent w as based on point
o f law raised with no w arning o f counsel and no opportunity given to ward o ff the
blow ].)
A fair hearing is denied w here, though personal jurisdiction has been
obtained, some later step is taken w ithout adequate notice. (2 W itkin, Cal.Proc.5th
(2008) Jurisd, 304, p. 916.) A ppellants were denied notice o f both respondents fee
motion and their claim for costs. Even by itself, respondents failure to give them
notice entitles appellants to a reversal.

//
//
16

A.

R espondents Failure to Serve A ppellants with E ither Their Fee

M otion or T heir Costs M em orandum Is Fatal to the R esuiting
Judgm ent.

Respondents served their fee m otion on counsel for Mr. G aggero, but did not
serve anyone acting on behalf o f any o f the appellants. (CT2 218-220.) They likewise
served G aggeros counsel w ith the costs m em orandum , but did not serve the
appellants or anyone acting on their behalf. (CT2 215-217.) These failures doom the
third am ended judgm ent as to appellants.
The requirem ents o f notice and an opportunity to be heard before being
subjected to a court order are fundamental to the very notion o f due process.
(Anderson Nat. B a n kv. Luckett ( 1944) 321 U.S. 233, 246 [64 S.Ct. 599, 88 L.Ed.
692].) This is as true o f an aw ard o f fees and costs as any other court order. The
United States Supreme Court has held that attorneys fees certainly should not be
assessed lightly or without fair notice and an opportunity for a hearing on the record.1'
(Roadway Exp., Inc. v. Piper (1980) 447 U.S. 752, 767 [100 S.Ct. 2455, 65 L.Ed.2d
488].) Such notice is m andated not only by statute, but also by the due process
clauses o f both the state and federal C onstitutions. ( O Brien v. Cseh (1983) 148
C al.A pp.3d 957, 961, citing Cal. Const., art. I, 7 and U.S. Const., 14th Amend.)
The failure to serve appellants would be fatal even if respondents had not
actually know n how to serve them. But they dem onstrably did know how to serve
appellants, since their alter-ego motion - w hich w as served and filed five weeks
before the fee m otion and costs memo - had pointed out that several o f them had
designated Praske as their agent for service, arguing that this fact som ehow showed
they were G aggeros alter egos. (B241675 CT1 33:6, 39:7-8.) They even supported
their alter-ego m otion w ith copies o f records containing the addresses where
appellants could be served w ith legal papers. (B241675 CT2 308-319.) Respondents
knew how to serve appellants. They ju st d id n t do it.
17

B.

The Fee M otion and Costs M em orandum W ere Both Filed and
Served before A ppellants Becam e A dditional Judgm ent Debtors.

Even if respondents had served their papers on appellants, appellants would

have had no reason to believe their rights were in jeopardy. After all, they had not yet
been added as judgm ent debtors. They w ere not parties to the case and could not be
ordered to pay the costs o f enforcing a judgm ent that had been entered against
som ebody else. (Blum enthal v. Superior Court (1980) 103 C al.A pp.3d 317, 320
[motion seeking sanctions against parties could not support sanction aw ard against
non-party attorney against whom motion has sought no relief].)
R espondents could have avoided this problem by w aiting ju st two more weeks
before seeking fees and costs. That way, a request for relief against appellants would
at least have been procedurally proper. O f course, had respondents w aited they would
also have had to serve their fee motion and costs memo on appellants. By acting
before the alter-ego m otion was decided, respondents were able to avoid doing so.

C.

N either the Notice o f M otion nor the A ccom panying Points and
A uthorities Sought Any R elief A gainst A ppellants.

There is yet another reason w hy appellants w ould not have had proper notice
even if respondents had served them with the costs memo and the fee motion: neither
docum ent asked for any relief against them.
A notice o f motion must state what relief the m oving party seeks and against
whom. (In re Sutter Health U ninsured Pricing Cases (2009) 171 C al.A pp.4th 495,
514 [request for relief that was stated in m otion but not in notice was ineffective].)
The notice o f respondents fee m otion said nothing about seeking relief from any o f
the (non-party) appellants. (CT1 28-30.) N either did the points and authorities (CT1

18

29-37), or even the supporting declaration o f counsel (CT1 38-42.) So even if

respondents had served the papers on appellants, the papers would have failed to put
them on notice that their rights were at stake or that they had reason to attend the July
13 hearing.

III.

THE TH IR D A M EN D ED JU D G M EN T V IO L A T E D T H IS C O U R T S
A U G U ST 6 STAY O R D ER IN A PPEA L B241675.
This courts stay order in B241675 w as entered on A ugust 6 - the same day the

trial court entered the third am ended judgm ent. The record does not say which
docum ent was entered first, and it contains no evidence that w hichever court acted
second was aware o f what the other court had done. Even so, this courts stay order
takes precedence over the am ended judgm ent. That judgm ent w as entered in violation
o f the stay, and is therefore void.
The law takes no notice o f fractions o f a day. Any fraction o f a day is deemed
a day unless in a particular case it is necessary to ascertain the relative order o f
occurrences on the same day. [M unicipal Imp. Co. v. Thom pson (1927) 201 Cal. 629.
632; accord 74 A m .Jur.2d Time 13 [Fractions o f a day generally are not considered
in the legal com putation o f time; the day on w hich an act is done or an event occurs
are w holly included or excluded. ]) B ecause the third am ended judgm ent and the stay
order w ere issued on the same day, the judgm ent cannot take precedence over the stay
regardless o f w hich came first.
Code o f Civil Procedure, section 12 and G overnm ent Code section 6800 both
state that [t]he time in w hich any act provided by law is to be done is com puted by
excluding the first day, and including the last, unless the last day is a holiday, and then
it is also excluded. Courts have applied this principle in many contexts since the

Because this inform ation m ust be contained in the notice o f motion,

respondents could not salvage their position even if it was hidden elsew here
in their papers.
19

earliest days o f this state. They have held that a partial day counts as a full day when
giving notice o f a hearing ( Thom pson, supra, 201 Cal. at p. 632), determ ining when a
bill becomes law if not signed by the governor {Price v. Whitman (1857) 8 Cal. 412.
416), determ ining when an attachm ent dissolves (Scoville v. A nderson (1901) 131 Cal
590, 592-596), and w hen m easuring both pre-sentence custody credits (People v.
Bravo (1990) 219 C al.A pp.3d 729, 735) and contem pt sentences. (In re Jackson
(1986) 182 C al.A pp.3d 439, 442-443.) A pplying these principles to the present case,
both the third am ended judgm ent and the stay order took effect at the same time.
Since orders from the Courts o f A ppeal trum p conflicting orders from the Superior
Court, the trial co u rts action must yield to this courts stay rather than the other way
around.
O rdinarily, a trial court may amend a judgm ent to add fees and costs even
while an appellate stay is in place. (Bankes v. Lucas (1992) 9 C al.A pp.4th 365, 368.)
T h ats because there is a specific exception to the stay rule, w hich allow s trial courts
to consider m otions for fees and costs while a stay is in place and then to incorporate
any fees and costs it awards into an am ended judgm ent. (Robertson v. Rodriguez
(1995) 36 Cal.A pp.4th 347, 360.) But this exception presum es that the motion is
properly before the trial court. Appellants have already shown that these motions
were not, because they had not been served w ith copies. The third am ended judgm ent
did not com e w ithin the fee-award exception, so it violated this co u rt's A ugust 6 stay
order.
//
//

20

IV.

TH E T R IA L C O U R T ERRED BY A W A R D IN G R E SPO N D E N T S FEES

A N D C O STS TH A T ARE NO T R E C O V ER A BLE.

A.

Only a Sm all Fraction o f the A w arded Fees Are Even A rguably

R ecoverable.

1.

The Fees for R espondents A lter-E go M otion W ere not

Incurred in E nforcing the Judgm ent.

W hen they opposed the motion to tax, respondents claim ed am ending the
judgm ent to add appellants w as a m eans o f enforcing the judgm ent, but did not even
try to explain their position. (CT Supp 96:14-97:4.) The best they could do was to
claim that the m otion w as directly related to their enforcem ent efforts. (CT Supp
97:2-3.) But section 685.040 says creditors may recover only costs ^ /e n fo rcin g a
judgm ent (em phasis added), not costs related to such enforcem ent.
R espondents position was simple to the point o f being simplistic. To them,
anything they did after obtaining the original judgm ent had to qualify as enforcing that
judgm ent. (CT2 239:14-15 [arguing that, because the judgm ent had already been
entered, the only rem aining task was to enforce the ju d g m e n t\ em phasis in
original].) That is a logical fallacy. That a task is perform ed after a judgm ent has
been entered does not make it a m eans o f enforcing the judgm ent. (Berti v. Santa
Barbara Beach Props. (2006) 145 Cal.A pp.4th 70, 77.)

Opposing an appeal is but the most obvious exam ple o f post-judgm ent
legal w ork that does not involve enforcem ent. A fter all, enforcem ent o f a
judgm ent is often stayed while an appeal is pending. (Sections 916-923.) If
opposing an appeal was a type o f enforcem ent, then it would be forbidden
when a stay was in place. That stays o f enforcem ent do not prevent judgm ent
creditors from opposing an appeal dem onstrates that such w ork is not a type
o f enforcem ent. So does the fact that many appeals including this one (continued...)
21

Section 685.040 also says that enforcem ent costs must be both reasonable and
necessary for that purpose in order to be recoverable. Since the judgm ent was
against Gaggcro, only enforcem ent efforts directed at G aggero could possibly qualify
as reasonable or necessary. Trying to am end the judgm ent to add new debtors was an
effort to change the judgm ent, not to enforce it. O nly after the judgm ent had been
changed could respondents take steps to enforce it against appellants - such as
obtaining the receiver and assignm ent orders w hich appellants have challenged in case
B245114.
That respondents may have found it useful to am end the com plaint does not
make the costs o f doing so recoverable. In R onald P. Slates, A P C v. G orabi (2010)
189 Cal.A pp.4th 1210, this court held that the costs o f litigating against a different
creditor over who had priority were not recoverable because they were about the risk
that the judgm ent debtor would be unable to pay - an uncertainty in the ju d g m en ts
value which rests on the happenstance o f [the debtors] w ealth. (Id. at p. 1215.) As
the court explained, W ere [the debtors] wealthier, w ith assets sufficient to satisfy
both judgm ents, [the] battle over priority would have been unnecessary. It seems
unlikely that the Legislature intended a section 685.040 postjudgm ent fee award to
turn on w hether the judgm ent debtor had sufficient assets to satisfy all judgm ents
against him. M ore plausibly, the Legislature envisioned the propriety o f an attorney
fee award as turning on the judgm ent deb to rs postjudgm ent conduct, w ith the
Legislature intending that the judgm ent debtors possible liability for postjudgm ent
fees serve as encouragem ent for the debtors cooperation in satisfying the judgm ent.
(Id.)
M oving to am end the judgm ent to add creditors other than Gaggero was not an
effort to enforce it against Gaggero. It also was not an effort to enforce the judgm ent

-(...co n tin u e d )
proceed after a judgm ent has been paid. And so does the fact that some
respondents are actually judgm ent creditors rather than judgm ent debtors.
22

against appellants, since there was no judgm ent against them at the time. Since the
alter-ego m otion was not a way to enforce the judgm ent against either Gaggero or
appellants, the associated fees and costs are not recoverable.

2.

The Trial C ourt Im properly Included O ther NonR ecoverable Fees in the Award.

M any o f the fee items on counsels invoices w ere for com m unicating with
respondents and their insurance carrier, St. Paul Travelers, or for other routine tasks.
(CT1 133, 135; CT2 138, 139, 142, 143, 159, 170, 185, 196, 202.) The time spent on
those tasks w as not spent enforcing the judgm ent. Even if respondents or their insurer
are w illing to pay for these items, the work involved w as not part o f the enforcem ent
effort and is not recoverable.

3.

The Trial C ourt Had no A uthority to A w ard Fees for a

Pending Appeal.

R espondents bills contain several entries for work on an unspecified appeal,

including prelim inary w ork on a m otion to dism iss that was never filed. (See, e.g.,
CT1 132-133, CT2 134, 138, 143, 196, 199-200, 205-209.) The only appeal that was
pending at the tim e was case num ber B236834, w hich Mr. G aggero had filed on
O ctober 21, 2011 to contest the trial courts O ctober 5 order granting a motion to
compel interrogatory responses and im posing $2,000 in sanctions. (B236834 CT 7176.) This court dism issed the appeal on its ow n m otion a year later, on O ctober 3,
2012.

That appeal was still pending w hen respondents filed their fee m otion and costs
m em orandum on M ay 15, 2012. It was also still pending w hen the court granted their
m otion and denied G aggeros m otion to tax on July 13, and w hen the court entered the
third am ended judgm ent on August 6.
23

A trial court has no authority to aw ard fees incurred in a pending appeal. A fter
all, until the appeal has been decided, there is no prevailing party. W hile those fees
and costs m ight later have becom e recoverable, they could not be aw arded unless and
until respondents prevailed in this court.
W ith few exceptions, only the party that prevails in an appeal is eligible to
recover associated costs - including fees where allowed. (Cal. Rules o f Court, Rule
8.278(a)(1).) The Court o f Appeal has discretion to make the prevailing party bear its
own costs. (Cal. Rules o f Court, rule 8.278(a)(5).) A lternatively, the court can
apportion costs betw een opposing parties[.] (Ahart, C alifornia Practice Guide:
Enforcing Judgm ents and D ebts (Rutter 2012)

14:65.) It m ay even order a

successful respondent to pay the costs o f an unsuccessful appellant. ( U nnam ed

Physician v. B oard o f Trustees o f Saint Agnes Med. Ctr. (2001) 93 Cal.App.4th 607,
632.) The decision was this courts to make, and even this court co u ld n 't make it until
the appeal was over. The trial court had no authority to make it w hile the appeal was
in progress.
In addition to seeking fees they were not yet entitled to ask for, respondents
followed the w rong procedure by asking for them as costs o f enforcing the judgm ent
under section 685.040. A prevailing party that wishes to recover fees incurred on
appeal must file a m em orandum o f costs in the superior court within 40 days after the
clerk sends notice o f issuance o f the rem ittitur . (Cal. Rules o f Court, rule 8.278(a)(1);
accord Ahart, supra, ^ 14:98.) The claim m ust wait until the rem itittur has been
issued, and even then it has nothing to do w ith section 685.040.
A ttorney fees recoverable on appeal ... generally m ay be requested from the
appellate court while the appeal is pending or from the trial court after the rem ittitur
has issued. (Ahart, supra, U 14:115.) The Court o f A ppeal m ay forbid the trial court
to award appellate attorney fees even to the prevailing party (Encinitas Plaza Real v.
Knight (1989) 209 C al.A pp.3d 996, 1003-1004) or may order it to delay ruling on any
such claim until after other related appeals have been decided. (See M arriage o f
24

Colvin (1992) 2 Cal.App.4th 1570, 1582.) W hen the trial court acted in July and
A ugust o f 2012, neither it nor the parties knew w hether appeal B236834 would
succccd or fail. Even if they could have som ehow presum ed it wouid fail, they could
not know w hether this court would accept, reject or limit respondents claim for fees.
The decision was this courts to make, not the trial courts.

4.

R espondents also W ere not Entitled to Fees Incurred in

Seeking Fees and Costs Related to G aggeros Prior Appeal.

R espondents claim also included fees they incurred while seeking their fees
and costs for G aggeros original appeal, B207567. (CT2 160, 202.) But respondents
w ork in that appeal was to preserve the judgm ent, not to enforce it. Indeed, because it
was a costs-only appeal and thus subject to an autom atic stay (Code Civ. Proc.,
917.1, subd. (d)), respondents were fo rb id d en to enforce it until the appeal had been
decided in their favor. They w ould have done the same work even if Gaggero had
posted a bond or paid the judgm ent in full, leaving nothing to enforce. Since their
efforts in that appeal w ere not a m eans o f enforcing the judgm ent, neither were their
subsequent efforts in the trial court to recover the fees and costs they had incurred in
this court.
The trial court was thus required to tax the costs bill in the full am ount o f
appellate fees and costs respondents w ere seeking, and to deny the fee motion to the
same extent. A ppellants cannot be made to pay those fees.

5.

R espondents W ere not Entitled to Fees they Incurred in

O ther Cases.

Portions o f the fee award were for services respondents counsel perform ed in
other cases but billed in this case. (CT 24, 71, 73-74.) Those services necessarily
were not related to enforcing the judgm ent in this case and are not recoverable.
One o f those cases was Bunge v. 511 O F W LP, L.A .S.C. No. SC 100361, which
25

was still pending at the tim e o f the award. (CT2 135, 136, 142, 143.) Respondents were
not even parties to that case. A nother was Sulphur M ountain v. Knapp, Petersen &
Clarke, ei al., V entura S.C. No. CIV 214486 - a m alpractice case against respondents in
w hich co-appellant M alibu B roadbeach LP w as one o f the plaintiffs. (CT2 139.) Gaggero
was not a party to that case. The plaintiffs prevailed in that case and were awarded over
$111,000 in fees and alm ost $13,500 in costs. R espondents filed their notice o f appeal
in that case on O ctober 29, 2004, com m encing appeal no. B 178942. D ivision Six o f this
court issued a decision on July 25, 2005, affirm ing the judgm ent in part and reversing it
in part. The reversal was only as to a portion o f the costs aw ard.
The third am ended judgm ent in this case thus quite literally awards fees to
respondents for work on a case in which they were ordered to p a y fees - and it makes
those fees payable by M alibu Broadbeach, w hich had won the earlier case and
received a fee award against respondents. That M alibu B roadbeach did not have to
pay any o f respondents fees in that case was res ju dicata and not open to re
examination. But the award would have been im proper even w ithout this disregard
for history, since w ork respondents perform ed on the Sulphur M ountain case was not
a reasonable and necessary part o f enforcing their judgm ent in this case.

//
//

A ppellants respectfully ask the court to take judicial notice o f the

decision in that case pursuant to Evidence Code sections 452, subdivision (d),
and 453.

B.

M ost o f the Costs the Trial Court A w arded Are Likew ise Not
Recoverable.

1.

Because R espondents C laim ed Costs Only Connected to

Judgm ent-D ebtor E xam inations, the Trial Court Had no
A uthority to Award A ny O ther Costs.

A side from attorney fees, respondents costs m em o sought only one type o f
cost - $1,474.55 in approved fees on application for order for appearance o f
judgm ent debtor, or other approved costs under Code Civ. Proc. 708.110 et seq. on
line l.f. (CT1 23.) The memo did not seek any recovery for preparing and issuing
abstract o f judgm ent (line l.a), recording and indexing abstract o f judgm ent (line
1.b), filing notice o f judgm ent lien on personal property (line 1.c), issuing writs o f
execution (line l.d), or levying officers fees (line l.e) (CT1 23.) The fee motion
stated only a $1,474.55 total costs am ount w ithout explaining the nature o f those
costs. (CT1 29:13-14, 36:22-25.)
B ecause the only costs which respondents asked for w ere those associated with
judgm ent debtor exams, those are the only costs the trial court had authority to give
them. But respondents evidence does not show any such costs. The closest it comes
is three items, for $91, $100, and $106, for m essengers to deliver orders for
appearance to Mr. Gaggero. (CT2 144, 160.) The attached invoices show that they
w ere payments to an attorney service and not to a court. (CT 2 145, 162, 168.) These
were not court fees and thus were not recoverable.
A judgm ent creditor may also claim statutory fees for recording and indexing
abstracts o f judgm ent. (Section 605.070, subdivision (a).) But respondents made no
such claim. (CT 23.) The attorney bills did include charges for recording abstracts o f
judgm ent in Los A ngeles, Ventura, Riverside, San Diego, San Luis Obispo, and San
Bernardino counties. (CT2 171, 185.) The am ounts stated for these charges were
often more than the $30 statutory fee allow ed by G overnm ent Code section 70626,
27

subdivision (b)(2). So even if the trial court was allow ed to give respondents some
com pensation for these paym ents, it w as not allow ed to give them the entire amount.
R espondents invoices also included such cost items as basic photocopying
(CT2 136, 139, 196, 203), copying by various courts and governm ent offices (CT2
171,185), filing fees for motions and ex parte applications (CT2 160. 185), and
transcripts on appeal . (CT2 160, 209.) None o f these items are recoverable as a
m atter o f right. (Section 685.070.) And respondents did nothing to show they should
be aw arded as discretionary costs.

2.

R espondents Forfeited their C laim s for N on-Statutory Costs.

Even if respondents m ight otherw ise have been able to recover costs that are
not expressly allow ed by statute, they forfeited those claim s by not supporting them in
the fee motion.
Enforcem ent costs w hich are not recoverable as a m atter o f right may only be
awarded if the judgm ent creditor seeks them via a noticed motion. (Sections 685.040,
685.080; accord Lucky United Properties Investment, Inc. v. Lee (2010) 185
Cal.App.4th 125, 138.) A costs m em orandum is not sufficient, since the judgm ent
creditor must both describe the costs claim ed and state their am ount in the notice
o f motion. (Section 685.080(b); accord Ahart, supra,

6:39.)

Granted, respondents called their fee m otion a m otion for aw ard o f post
judgm ent enforcem ent costs and accrued interest . (CT1 28.) But what m atters is the
m otions substance, not its title. The notice o f m otion stated the am ount o f costs
respondents were seeking, but did not describe the costs claim ed as required by
section 685.080, subdivision (b). (CT1 29:13-14.) The only costs described in the
body o f the m otion were attorney fees. (CT1 31-37.) And while the respondents
counsel declared - without factual or legal explanation - that the costs her firm had
billed were reasonable and necessary (CT1 41:11), she did not even say how much
the firm was seeking, let alone what those costs w ere for, w hy they were necessary, or
28

w hy the am ounts charged w as reasonable.

Even if counsels declaration could som ehow establish that the costs were
reasonable and necessary for som ething, it did not explain w hy they were either
reasonable or necessary for the enforcem ent o f the judgm ent. That is w hat section
685.040 requires. A llow able costs shall be reasonably necessary to the conduct o f
the litigation rather than merely convenient or beneficial to its preparation. (Section
1033.5, subd. (c)(2).) So even if the claim had not been procedurally defaulted, there
was no substantial evidence to support the award.

3.

The Trial Court Im properly A warded the Fees and Costs

C harged by M essengers and A ttorney Services.

M uch o f respondents claim for costs was for m essengers and attorney services.
(CT2 144, 145, 150-152, 160, 162, 167-168, 174, 179, 187, 190, 192.) Courts have
some discretion to award m essenger fees, but only upon a factual show ing that the
fees were reasonable and necessary . (G orm an v. Tassajara D evelopm ent Corp.
(2009) 178 Cal.App.4th 44, 75.) Respondents made no such showing.

V.

TH ERE IS IN SU FFIC IEN T E V ID EN C E TO SU PPO R T LARG E

PO R T IO N S OF THE FEE AND C O STS A W A R D S.
A.

There Is No Evidence T hat Som e o f the Tim ekeepers W hose Fees

W ere Included in the A w ard Are Attorneys.

Over $20,000 o f the fee award was for work perform ed by Lori S. Blitstien,
Howard M. Fields, Susy K oshkakaryan, Scott N ew m an, Kam ran K. N ouri, and
Vikram Sohal. Respondents did not say who these individuals were, w hat positions
they held or why their rates are reasonable. There is no declaration stating that any o f
them are attorneys. For all w e know, they may all be accountants, paralegals,

29

investigators or other non-law yer staff.

Sections 685.040 and 685.070(a)(6) authorize only claim s for attorneys fees .
They say nothing about fees for any other personnel. W ithout p ro o f that these
individuals are attorneys, there is insufficient evidence to support any aw ard for their
fees.
Their fees cannot be justified as discretionary costs, either. As we have already
seen, respondents waived their claim to discretionary costs by failing to explain or
justify them in their motion. A s a result, respondents may recover only costs
awardable as a m atter o f right under section 685.070(a) - a section w hich does not
authorize fees for non-lawyers.
Respondents bore the burden o f p ro o f on their motion. (Ladas v. California
State Auto. A s s n (1993) 19 Cal.A pp.4th 761, 774-776.) To recover these attorney
fees, respondents had to at least offer substantial evidence that the personnel who did
the work are attorneys. W ithout such evidence, they failed to carry their burden.
None o f the fees billed by these individuals should have been awarded.
Blitstien billed 0.6 hours at $285 per hour, for a total o f $171. (CT2 141, 153.)
Fields billed 44.1 hours at $260 per hour and 10.8 hours at $285 per hour, for a total
o f $14,544. (CT2 141, 153, 158, 198, 201.) K oshkakaryan billed 0.6 hours at $120
per hour, for a total o f $72. (CT2 198.) N ewm an billed 5.7 hours at $260 per hour and
5.0 hours at $240 per hour, for a total o f $2,682. (CT2 137, 146, 156, 201, 214.)
Nouri billed 8.2 hours at $195 per hour, for a total o f $1,599. (CT2 198.) Sohal billed
5.7 hours at $260 per hour, for a total o f $1,482. (CT2 204.) This am ounts to $20,550
billed by individuals whom respondents did not even claim w ere attorneys.

M ost o f respondents fee claim was for w ork perform ed by lead

counsel Randall M iller and his associate, Austa W akily.
M iller was
respondents trial counsel, and W akily - who at least declared that she was an
attorney (CT1 38:4-5) - handled the July 13 motions. A ppellants do not
dispute the sufficiency o f the evidence that they are attorneys.
30

A bsent a declaration attesting that these individuals were attorneys, there was
insufficient evidence to aw ard attorney fees for their work. At a m inim um , appellants
were entitled to a chance to oppose this claim and object to this evidence an
opportunity respondents denied them by failing to properly serve their fee motion.
They should not have to pay so much money w ith no evidence to prove it was
recoverable.

B.

M any o f R espondents B illing Entries Are so H eavily Redacted that

It Is Im possible to Tell W hether the W ork W as R easonable and
N ecessary for Enforcem ent o f the Judgm ent.

By redacting portions o f the billing statements., respondents im plicitly claimed

that the redacted inform ation is privileged or otherw ise protected from disclosure - a
claim they made expressly in their reply to the fee m otion after G aggero com plained
about the redactions, by claim ing the redacted inform ation described their collection
strategy. (CT2 242:5-12.) B ut the burden o f establishing that a privilege applies rests
with the party asserting it. (Chronicle Pub. Co. v. Superior Court (1960) 54 Cal. 2d
548, 565; Tanzola v. De Rita (1955) 45 C al.2d 1, 6.) Respondents did nothing more
than claim that the privilege applies. (CT2 242:5-12.) That is not enough.
There is sim ply no w ay to say w hether the work reflected in these entries was
related to the enforcing the judgm ent at all, let alone w hether it w as reasonably
necessary for that purpose, w hether it took a reasonable am ount o f time, or w hether it
duplicated other work.
A ppellants have found no case law defining w hat m ay be redacted from billing
statements in order to preserve a privilege. They submit, how ever, that it makes no
sense to allow redaction o f information that w ould have to be disclosed in a privilege
log w ere the same inform ation sought during discovery. The purpose o f a 'privilege
log is to provide a specific factual description o f docum ents in aid o f substantiating a
claim o f privilege in connection w ith a request for docum ent production. (Hernandez
31

v. Superior C ourt (2003) 112 Cal.A pp.4th 285, 291-292.) Such a description is
necessary so that the court can evaluate the claim o f privilege. {Blue Ridge Ins. Co. v.
o,

Ljuycr iv f

s '1____ * / i n o o \ ' i a ' )

y^uuri

j l \j

-> j o o n

v_ai.ri.pp.JU J J 7 ,

-> a

t t

_______________________________________________-

O C I C , lCIspUllUCIllb c m i l l i c u

privilege by redacting the very inform ation the court w ould need in order to decide
w hether a privilege exists. Even if appellants had been able to oppose these claims,
neither they nor the court could have m eaningfully review ed the billing records with
so much inform ation improperly withheld. They cannot do so now, either. N either
can this court. The necessary inform ation sim ply isnt in the record.
The redactions have hobbled appellants ability to defend their interests.
R espondents have used redactions to insulate their claim for fees by creating the mere
appearance o f privilege w ithout providing any m eans to test w hether the appearance is
accurate. Such gam esm anship should not be tolerated, and every redacted entry
should have been excluded from any fee award.
Redacting billing statem ents that are used as exhibits to a fee motion deprives
both the opposing parties and the court o f any m eans to review the reasonableness and
necessity o f the service being billed. W hile redactions may be proper w here the
subject inform ation is covered by a recognized privilege, redacting non-privileged
inform ation serves no legitim ate interest o f the m oving parties. There is thus no
justification for the interference it causes to the non-m oving parties and the courts.
Respondents argued that the redacted text related to their strategy in pursuing
appellants, and that revealing it m ight have enabled Mr. G aggero to thwart that
strategy. (CT2 2 4 2 :8 -1 1 .)^ As we have already seen, adding appellants to the
judgm ent was not a m eans o f enforcing it, let alone one that was reasonable and
necessary. R espondents statem ent that this is w hat the redacted entries were about
thus concedes that none o f them were properly recoverable.

They made no such claim as to appellants, further dem onstrating that

the m otion was directed only at Gaggero.
32

M ore to the point, even if respondents had a legitim ate reason to redact some o f
the billing entries, the fact rem ains that the redacted entries do not reveal enough
inform ation to dccidc w hether they w ere reasonably related to enforcing the judgmenr.
If respondents needed the redactions, then respondents had to either explain what was
m issing and why it was privileged or else forfeit the associated fees.
A fee m otion is not a guessing game. Respondents bore the burden o f proving
that each item on their bills was recoverable. They did not meet that burden as to the
redacted entries. W hether they had a good reason for not m eeting that burden is beside
the point.
Even if respondents had to choose betw een proving their claims or keeping
their secrets, they chose to keep their secrets. That m ight have been a reasonable
decision. But it carried a price, and the price had to fall on either the parties who had
failed to carry their burden o f proof or on the parties who were prevented from seeing
the evidence against them.
A court has no authority to rule in favor o f a party that fails to meet its burden
o f proof - especially w here the p ro o f is available but the party intentionally withholds
it. A ppellants respectfully subm it that the trial court was required to deny
respondents fee m otion - and grant the motion to tax - as to each o f these entries.

VI.

BY W A IT IN G M O R E T H A N F O U R Y E A R S B E F O R E PU R SU IN G
A P P E L L A N T S , R E S P O N D E N T S W E R E E S T O P P E D T O C L A IM
IN T E R E S T AND E N F O R C E M E N T C O S T S F R O M T H E M .
The third am ended judgm ent included an aw ard o f alm ost $570,000 in interest

w hich had accrued since Mr. Gaggero w as first ordered to pay respondents attorney
fees and costs 50 m onths earlier, on M ay 19, 2008. But as appellants showed in their
opening brief in appeal B241675, respondents were fully aware by 2007 - at the latest
- o f all the information on w hich they based their alter-ego argum ents in 2012.
(B241675 AOB 70-75.) Indeed, appellants have dem onstrated that this delay would
33

doom the alter-ego finding even if the law and the facts w ere otherw ise on
respondents5 side. (B241675 AOB 70-75.)
But even if this court som ehow believes respondents delay did not bar the
alter-ego motion, it should at least hold that the delay barred their claim for interest
and for the costs o f enforcing the judgm ent in the interim. A ppellants w ere not held
liable for the second amended judgm ent until M ay 29, 2012. There was no reason for
them to pay the judgm ent before then, so they had no opportunity to prevent interest
from accum ulating in the meantime or to act before respondents incurred significant
costs to enforce the judgm ent.
R espondents judgm ent against Mr. Gaggero began accruing interest at the
statutory rate o f 10% per year as soon as it was entered on M ay 19, 2008. (Section
685.010, subd. (a).) Had appellants been named in that judgm ent from the start they
could have paid it before any significant am ount o f interest had accrued. Respondents
alone prevented that from happening, and they did it by letting years go by before
seeking any relief against appellants.
If w hat respondents did here is proper, then judgm ent creditors will have an
incentive let interest accum ulate for years and to run up their legal bills in futile
enforcem ent efforts against the original debtor before taking action against purported
alter egos with deeper pockets. At the same time, no person or business entity will

R espondents were awarded $192,723.90 in enforcem ent costs just

through N ovem ber 18,2010 (B241675 CT1 114-116) and another$87,722.25
for further costs through July 13, 2012. (CT2 249-250.) A ppellants w ere thus
ordered to pay a total o f $280,446.15 in enforcem ent costs, literally all o f
w hich had been incurred before they w ere added to the judgm ent. They were
also ordered to pay $32,354.28 in interest that had accrued on the earlier costs
award. (CT1 33:1-28, 34:20-35:8, 41:14-42:5.) Interest on these awards
continued to accrue at $76.83 per had until appellants paid the judgm ent on
N ovem ber 15, 2012, adding yet another $9,604.32 to the am ount they
ultimately paid. And as they will dem onstrate in appeal B247780, they were
hit w ith yet another amended judgm ent on January 13, 2013 w hich awarded
(continued...)
34

be able to tell w hether he may be required to pay not only som ebody e lse s judgm ent
but years o f interest on that judgm ent which he had no chance to preem pt by paying
sooner.
Parties who w ish to add new defendants or judgm ent debtors must act with due
diligence. (M clntire v. Superior Court (1975) 52 C al.A pp.3d 717, 721; Ahart, supra, ^
6:1574.) Even w here a genuine alter ego could have been added to a judgm ent earlier,
a creditor who sits on his rights may not belatedly have it nam ed an additional
judgm ent debtor. (Alexander v. A bbey o f the Chim es (1980) 104 C al.A pp.3d 39, 48.)
Public policy thus requires judgm ent creditors to be vigilant and not to delay once
they have identified a potential new debtor. A llow ing respondents to benefit from
their inexcusable delay would give them and other judgm ent creditors perverse
incentives, and w ould underm ine the policy behind M clntire and Alexander.

C O N C LU SIO N
The fee and costs aw ards will necessarily fail if appellants win their prior
appeal, B241675. But that is ju st one o f many reasons w hy this court should reverse
the third am ended judgm ent. Respondents failed to give appellants notice o f their
claims for fees and costs, w hich consisted prim arily o f non-recoverable items and
w hich respondents had largely forfeited. The award violated this co u rts August 6,
2012 stay order in B241675. A nd it was inflated by hundreds o f thousands o f dollars
due to interest and enforcem ent costs that respondents w ere able to add to their claim
only because they w aited more than four years before they even began to pursue
appellants.

(...continued)
an additional $155,090.70 in fees and costs o f enforcem ent. The grand total
o f enforcem ent costs and interest aw arded on those costs is thus $477,495.45
- on top o f hundreds o f thousands o f dollars in interest on the original award
against Gaggero - a tidy profit w hich respondents and their counsel obtained
precisely because they w aited so long to take action against appellants.
35

For all these reasons, Appellants 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., and Joseph Praske as Trustee o f the Giganin
Trust, the Arenzano Trust, and the Aquasante Foundation respectfully ask this court to
reverse the third amended judgment and the related awards of fees and costs.
D a te d : N o v e m b e r 4 , 2 0 1 3

R esp ectfu lly su b m itted ,

LAW OFFICES OF EDWARD A. HOFFMAN

Edward A. Hoffman
Attorneys for Appellants Pacific Coast
Management, Inc. 511 OFW L.P.. Gingerbread
Court L.P., Malibu Broadbcach, L.P.. Marina
Glencoc L.P., Blu House L.L.C., Boardwalk Sunset
L.L.C., Joseph Praske as Trustee for Giganin Trust,
Arenzano Trust, and Aquasante Foundation

36

CERTIFICATE OF WORD COUNT

(Cal. Rules of Court, rule 8.204(c)(1))
The text o f this Brief consists of 10,707 words as counted by the Corel
WordPerfect version 36.0.0.429 (also known as WordPerfect X6) word-processing
software with which it was written.
DATED: November 4. 2013

Respectfully submitted,

Edward A. Hoffman
Law Offices o f Edward A. Hoffman
Attorney for Appellants 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 T i i i s l
Arenzano Trust, and Aquasante Foundation

37

PROOF OF SERVICE BY MAIL

I. Edward A. Hoffman, declare as follows:
I am over eighteen (18) years o f age and not a party to the within action. My
business address is 1 1755 Wilshire Boulevard. Suite 1250. Los Angeles, California
90025. On November 4, 2013,1 served the within
APPELLANTS OPENING BRIEF
on cach of the 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:
Office o f the Clerk
Supreme Court of California
350 McAllister Street
San Francisco, CA 94102-3600
(Submitted electronically to Court of
Appeal)

Randall A. Miller
Attorney
Miller LLP
515 South Flower Street, Suite 2150
Los Angeles, CA 90071-2201
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
(Courtesty 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 November 4, 2013 at Los Angeles, California.

Edward A. Hoffman

38