09.06.12 motion appointment receiver [conformed]

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RANDALL A 1YIILLER (Bar No. 116036)
AUSTA WAKILY (Bar No. 257424)
MILLERLLP
51.5 South Flower: Street, Suite 2150
Los Angeles, CA 90071-2201
Telephone: 800.720.2126
Facsimile: 888.749.5812
"J'":'>,. .. I
CONFo:amDCO'PY
OIUGINAL FILED
SUPERIOR, COUR,T OFCALIFORNIA
COUNTY OF LOS ANGELES
Attorneys for K:NAPP, PETERS~N & CLARKE,
STEVEN RAY GARCIA, STEPHEN M. HARlUS
and ANDRE JARDINI
5EP 6·' 2012
John A. Clarke, Executive Officer/Clerk
BY /ll....~ ,Deputy
" Mat)' Flores .
SUPERIOR COURT OF CALIFORNIA
STEPHEN M. GAGGERO, an individual,
PACIFIC COAST MANAGEMENT, INC., a
Corporation; GINGERBREAD COURT LP, a
Limited Partnership; 511 OFW, LP a Limited
Partnerstup; MALIBU BROADBEACH LP, a
Limited Partnership; MARINA GLENCOE
LP, a Limited Partnership; BLU HOUSE LLC,
a Limited Liability Company; BOARDWALK
SUNSET LLC, a Limited Liability Company;
JOSEPH PRASKE, Trustee of GIGANIN
TRUST; JOSEPH PRASKE,.· Trustee of
ARENZANb TRUST; and JOSEPH
PRASKE, Trustee of AQUASANTE
FOUNDATION,
Plaintiffs and Judgment Debtors,
v.
KNAPP, PETERSEN & CLARKE, STEVEN
RAY GARCIA, STEPHEN M. HARlUS and
ANDRE JARDIN1,
Defendants and Judgment Creditors.
CASE NO.: BC286925
[Assigned for all pmposes to Judge Honorable
Judge Robert 1. Hess, Department 24]
NOTICE OF MOTION AND MOTION
FOR APPOINTMENT OF RECEIVER;
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
MOTION; DECLARATION OF AUSTA
WAKILY; REQUEST FOR JUDICIAL
NOTICE .
Judge:
Date:
Time:
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Honorable Robert 1. Hess
October 3, 2012
8:30AM.
NOTICE OF MOTIONAND MOTIONFORAP;POINTMENT OF RECEIVER

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1 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
2 Please take notice that on October 3, 2012 at 8:30 a.m. at 111 North Hill Street, Los
3 Angeles, California 90012 or as soon thereafter as the matter may be heard, Defendants and
4 Judgment Creditors Knapp, Petersen and Clarke, Steven Ray Garcia, Stephen Harris, and Andre
5 Jardini (KPC) will move this Court to appoint a receiver to enforce the KPC's Judgment in the
6 amount of $2,178,235.51 plus post-judgment interest and allowable costs is paid in fulL
7 This motion is made pursuant to Code of Civil Procedure Sections 564 et seq, 708.610, et
8 seq, and 917.5 on the following grounds:
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1. A receiver may be appointed (1) to carry the judgment into effect. Code Civ. Proc.
§ 564(3); (2) to dispose of the property according to the judgment, or to preserve it during the
pendency of an appeal. Code Civ. Proc. § 564(4); (3) to enforce the judgment where the judgment
creditor shows that, considering the interests of both the judgment creditor and the judgment
debtor, the appointment of a receiver is a reasonable method to obtain the fair and orderly
satisfaction of the judgment. Code Civ. Proc. § 708.620; or (4) in all other cases where necessary
to preserve property or rights of any party. Code Civ. Proc. § 564(9).
2. The Judgment Debtors have not paid any amount towards satisfaction of the
Judgment.
3. There is no reasonable alternative remedy to enforce KPC's judgment and the
appointment of a receiver will serve the interest of both the judgment creditors and judgment
debtors.
4. The Judgment Debtors are required to post a bond pursuant to Code of Civil
Procedure section 917.5 to stay enforcement ofthe order appointing a receiver.
23 This motion is based upon this notice of motion, motion, the attached memorandum of
24 points and authorities, the accompanying Declaration of Austa Wakily, Request for Judicial
25 Notice, and, all pleadings and papers on file in this action, and such additional facts and argument
26 as may be presented at or before the time ofthe hearing.
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NOTICE OF MOTION AND MOTION FOR APPOINTMENT OF RECEIVER

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Dated: September 6,2012 MILLERLLP
By: ~~(k~t~,-~C~·JJc:.....::......:,L"F----()_
RANDALL A. MILLER, ESQ: ~
AUSTA WAKILY,ESQ.
Attorneys for Defendants, KNAPP, PETERSEN &
CLARKE, STEVEN RAY GARCIA, STEPHEN M.
HARRlS and ANDRE JARDINI
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NOTICE OF MOTION AND MOTION FOR APPOINTMENT OF RECEIVER

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1 Judgment Creditors KPC submit this Motion to Appoint a Receiver to enforce the
2 judgment against the Alter Ego Judgment Debtors. This Court tentatively granted KPC's Motion
3 to Appoint a Receiver against the original Judgment Debtor Stephen Gaggero on August 23,2012.
4 Because the alter ego Judgment Debtors obtained a Temporary Stay Order which the Court of
5 Appeal lifted on August 30, 2012 the hearing on the motion was taken off calendar. KPC now
6 seeks an Order appointing a Receiver to enforce the judgment against the alter ego Judgment
7 Debtors. KPC also seeks an order appointing Jay Adkisson (nominated by KPC) or David
8 Pasternak (nominated by Mr. Gaggero) to serve as the Receiver for all Judgment Debtors. See
9 generally Request for Judicial Notice.
10 I. INTRODUCTION
11 Judgment Debtors Stephen Gaggero, aided by counsel, David Chatfield, David Esquibias,
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and Joseph Praske have done nothing but delay, obstruct, and abuse the discovery process to
thwart KPC's enforcement efforts on a judgment now exceeding $2.1 million. This Court may
recall, during the May 29, 2012 hearing on KPC's Motion to Amend the Judgment to add
Gaggero's alter ego entities statements by counsel, Esquibias that he "will make sure that [KPC's]
counsel has a copy of the trust documents." He further averred that as counsel for the trusts "we
intend to completely and fully cooperate with the requests for documentation. There is no
reason why it should not be disclosed." Further still, he assured this Court that it is his "practice
to be open with this Court and with opposing counsel, to befair and clear and transparent." See
Declaration ofAusta Wakily (Decl. AW '114, Exh. A at 9:15-18; 9:20-24; 10:20-24).
KPC has not received any trust documents or the benefit of these statements. Instead,
counsel for Gaggero, Chatfield, on the day of KPC's hearing for a Motion to Compel Production
of Documents submitted to KPC's counsel an untimely third amended response asserting that
"Mr. Praske refused" to produce documents upon Gaggero's request. (Decl. AW'II'II 8-9, Exh. D).
This is in stark contrast to the assurances ofPraske's counsel at the May 29 hearing when he was
requesting this Court assistance in delaying the hearing on KPC's motion. After years of enduring
MOTION TO APPOINT RECEIVER

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1 costly and protracted law and motion, facing baseless opposition at each turn, with zero return
2 KPC has no other remedy but to seek an order appointing a receiver to enforce their judgment.
3 California law permits the appointment of a receiver after judgment: (1) to carry the
4 judgment into effect; (2) preserve property pending appeal; (3) and to aid in the execution of a
5 judgment where the judgment creditor shows that, considering the interests of both the judgment
6 creditor and the judgment debtor, the appointment of a receiver is a reasonable method to obtain
7 the fair and orderly satisfaction of the judgment. KPC is entitled to a receiver on all of this
8 grounds.
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The facts of this present post-judgment enforcement are especially appropriate for the
appointment of a receiver. Gaggero has secreted his assets behind a complex estate plan involving
numerous entities, trusts, and a foundation- only ten of which have been added as Judgment
Debtors under the alter ego doctrine. Gaggero's counsel, complicit in the obstruction efforts have
refused to disclose any information pertaining to the structure ofthe estate plan asserting only self-
serving statements that the assets are "not attachable," the trusts are irrevocable, or that :K.PC has
provided "no evidence" that the trusts or entities are his alter egos.
The appointment of a receiver will also serve the interests ofthe Judgment Debtors. For
example, counsel for the alter Judgment Debtors maintain "unnamed third" parties rights will be
"trammeled" on if KPC enforces their judgment against the assets of the trust or foundation. A
receiver can verify those assertions and execute on property accordingly. The Judgment Debtor's
interest will also be protected to the extent the obligation will be satisfied rather than to incur post-
judgment interest of 10% per annum plus allowable post-judgment enforcement costs. Notably,
the Judgment Debtors will avoid an inevitable contempt order given their bad faith conduct in
obstructing KPC's enforcement efforts and disregarding Court orders. KPC therefore respectfully
requests that this Court appoint a receiver to enforce the judgment.
Finally, KPC respectfully requests that this Court Order the Judgment Debtors to post an
undertaking, pursuant to Code of Civil Procedure section 917.5, in an amount consistent with the
requirements for a money jUdgment, of $4,356,471.02. If however the undertaking is given by an
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1 admitted surety insurer KPC respectfully requests the undertaking to be in the amount of amount
2 of$3,267,353.26.
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FACTUAL AND PROCEDURAL BACKGROUNDl
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A. KPC'S JUDGMENT AGAINST STEPHEN GAGGERO AND THE ALTER
EGO JUDGMENT DEBTORS
This Court, on May 19,2008 entered a judgment against Gaggero totaling $1,327,697.40.
(Decl. AW ~~ 2-3). The judgment included an award of KPC attorneys' fees in the amount of
$1,202,994.50 plus costs in the amount of $124,702.90. (Id). The Court of Appeal affirmed the
judgment and awarded KPC additional costs incurred in defending the judgment on appeal. (Id., at
~ 3). KPC was awarded an additional $192,723 for attorney fees and $522 in costs incurred on
appeal. (Id). An amended judgment reflecting the augmented fee award and accrued post-
j~dgment interest in the amount of $320,591.78 was entered on December 28,2010. (Id.)
KPC subsequently filed a Motion to Amend the Judgment to add Pacific Coast
Management, Inc., 511 OFW LP, Gingerbread Court LP, Malibu BroadBeach LP, Marina Glencoe
LP, Blu House LLC, Boardwalk Sunset LLC, Joseph Praske as trustee of the Giganin Trust,
Joseph Praske as trustee the Arenzano Trust, and Joseph Praske as trustee Aquasante Foundation
as Judgment Debtors. (Id., at ~~ 4, 14 Exh. A, H). The motion was granted on May 29,2012. (Id.,
at ~ 4). The alter ego Judgment Debtors immediately filed a notice of appeal, but have not posted
an undertaking to stay enforcement of the judgment pursuant to this Court's order on June 27,
20 2012. (Id).
21 Finally, KPC sought an award of post-judgment enforcement costs and accrued interest in
22 the amount of 87,722.25 and $569,569.96 respectively. (Id., at ~~ 6-7, Exh. C). This Court granted
23 KPC's request in fulL (Id., at ~ 7). KPC's judgment now totals $2,178,235.51. (Id., at ~ 9). The
24 Judgment Debtors have not paid any amount towards the judgment, thus, the full amount remains
25 due plus post-judgment interest and allowable costs. (Id).
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1 KPC respectfully requests that this Court take judicial notice ofthe pleadings and files in this
case pursuant to California Evidence Code Sections 452(d) and (h).
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1 B. THE JUDGMENT DEBTORS HAVE AVOIDED THEIR OBLIGATION ON
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THE JUDGMENT THROUGH AS AN ASSET PROTECTION PLAN
This Court may recall, Judgment Debtor Stephen Gaggero as part of asset protection plan
implemented in 1997 transferred all his assets, worth $35,000,000, to various companies and
partnerships in which he had full ownership interests. (Id., at Ij[ 14, Exh. H). Gaggero as a further
effort to conceal his assets transferred his ownership interests in the entities to trusts and a
foundation of which he is the trustor and manager. (Id). He appointed his estate planning attorney
Joseph Praske, as the trustee ofthe trusts and foundation in the estate plan. (Id). Praske also serves
as the President of the corporate entities in the estate plan, general partner of the partnerships, and
manager of the limited liability companies. (Id). Gaggero, however, retained full control of all
assets in the estate plan. (Id., at Ij[Ij[ 3, 12, 14, 15 Exh. A, F, H, I). Using this estate plan as a shield,
Gaggero has avoided his obligation on a $1,520,943.30 judgment affIrmed on appeal, now
$2,178,235.51. (Id).
UJ ID. DISCUSSION
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A. TillS COURT HAS AUTHORITY TO APPOINT A RECIEVER
This Court may appoint a receiver after judgment to: (1) to carry the judgment into effect.
Code Civ. Proc. § 564(3); (2) to dispose of the property according to the judgment, or to preserve
it during the pendency of an appeal. Code Civ. Proc. § 564(4); (3) to enforce the judgment where
the judgment creditor shows that, considering the interests of both the judgment creditor and the
judgment debtor, the appointment of a receiver is a reasonable method to obtain the fair and
orderly satisfaction of the judgment. Code Civ. Proc. § 708.620; or (4) in all other cases where
necessary to preserve property or rights of any party. Code Civ. Proc. § 564(9). This Court has
clear authority to appoint a receiver to enforce the KPC's judgment. The appointment rests largely
in the discretion of the trial court. Maggiora v. Palo Alto Inn, Inc. (1967) Cal.App.2d 706, 710-
711. The discretion is sufficiently broad that an order based upon facts with which reasonable
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1 minds might differ with respect to the necessity for the receiver will not be reversed. Armbrust v.
2 Armbrust (1946) 75 Cal.App.2d 272,275-276
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The receiver in a post-judgment enforcement acts for the benefit of the judgment creditor
in enforcing a judgment, however, the appointment is made by judicial discretion and the receiver
is under the direction and control of the court. Morand v. Superior Court In and For City and
County ofSan Francisco (1974) 38 Cal.App.3d 347, 350. A receiver's statutory powers include
the power to bring and defend actions in his capacity as receiver, to take and keep possession of
the property, to receive rents, collect debts, to compound for and compromise the same, to make
transfers, and generally to do such acts respecting the property as the Court may authorize. Code
Civ. Proc. § 568. A receiver does not take possession of the property in question in his own name
rather the receiver serves as an officer and agent ofthe Court. Lesser & Son v. Seymour (1950) 35
Cal. 2d 494, 499. Given the Judgment Debtors complex estate plan involving numerous entities
and commercial properties and the Judgment Debtors refusal to cooperate in post-judgment
discovery, the appointment of a receiver is necessary to enforce the present judgment.
B. THE APPOINTMENT OF A RECIEVER IS APPROPRIATE WHERE TIDRD
PARTIES HAVE CONTROL OF PROPERTY SUBJECT TO EXECUTION
This appointment of a receiver to aid in the execution of judgment is proper where there
are reasonable grounds to believe that judgment debtor or third parties have control ofproperty
which rightfully should be subject to execution. Morand, supra 38 Cal.App.3d at 350.There is
substantial evidence that Gaggero has secreted his assets now held by various third parties. (Decl.
AW ~~ 4, 14, Exh. A, H). During the debtor exam Gaggero testified that as a consultant with PCM
he earns a compensation of $3,000 each month plus the use a car and payment for gas for the car.
(Id., at ~ 12, Exh. F at 10:24-25, 17:3-5,20:6-19,21:18-20,23:6-14). PCM does not provide
Gaggero with any checks in his name- instead they retain it in an "account" for his benefit. (Id., at
~ 12, Exh. F at 16:17-25, 17:3- 5). Gaggero in turn can request money from PCM for various
expenses or Gaggero simply uses PCM's credit card which he carries with him. (Id., at ~ 12, Exh.
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Fat 11:22-25,21:18-20). Notably, Praske is complicit in perpetrating tbis fraud. (rd., at '11'1113, 14,
Exh. H, G) (Exh. G: Praske declaration asserting that entities maintain "separate" bank accounts)
Alternatively, Gaggero testified that PCM provides him with bis compensation in cash "or
else they pay for things for me." (Id., at '1112, Exh. F at 20:1-4). Gaggero could not provide any
details as to how the account was managed, who managed it, and how much PCM owed bim. (Id.,
at '1112, Exh. F at 17:13-15, 19:6-19). Further still, Gaggero explained that the credit card provided
by PCM was for "business purposes" yet Gaggero was in charge of making the decision as to what
constitutes "business purpose." (Id., at '1112, Exh. F at 12:2-5, 12-13; 14:17-25, 15:1-5). Recall,
Gaggero testified in the trial of the underling lawsuit that PCM's business purpose included
"managing bis life." (Id., at '1114, Exh. Hat 11:4-10).
Gaggero's debtor examination testimony also confirmed that PCM is not the only third
party entity used to conceal bis funds. (rd., at '1112, Exh. F at 15:25-25, 16:1-7,27:11-12). Gaggero
testified that he recently went on a vacation to Ecuador wbich he paid for with bis money. (Id., at'll
12, Exh. F at 16:4-6, 16:21-22). Although he took the trip witbin the last five months he had
substantial memory lapse relating to details of the trip. (Id., at 'II 12, Exh. F). When pressed,
however, he explained that he paid for the trip with his money. (rd., '1112, Exh. F at 16:4-6, 16:21-
22 ). When further asked how he paid for it he explained that it was prepaid by a third party. (rd., 'II
12, Exh. F at 28:24-25). Thus, Gaggero uses third parties to make payments using his money for
his expenses. In doing tbis Gaggero does not retain anytbing in bis name and can continue
asserting that he does not have any money or assets to pay towards satisfaction of the judgment.
The appointment of a receiver is an appropriate remedy to investigate and identify assets
belonging to Gaggero.
C. THE APPOINTMENT OF A RECIEVER CAN ALLEVIATE THE ALTER EGO
JUDGMENT DEBTORS CONCERNS RELATING TO TIDRD PARTIES
The alter ego Judgment Debtors immediately appealed tbis Court's order amending the
judgment to add the alter ego judgment debtors. (DecL AW at 'II 4). According to the Judgment
Debtors KPC presented "no evidence" that the trusts and entities are the alter ego judgment
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debtors of Gaggero. (Id., at ~~ 4, 16 Exh. A). As part of this counsel for the alter ego entities
asserted that KPC's enforcement will be an improper taking of their assets. (Id., at ~ 5, Exh. B).
While this argument ignores the substantial evidence submitted with KPC's motion including the
testimony of Gaggero, Praske, and his accountant -the Judgment Debtors have persisted in
asserting the frivolous arguments rejected by this Court. (Id). Notably, counsel for the alter ego
Judgment Debtors continues to assert that the trusts and entities are separate from Gaggero and
that enforcement efforts will harm purported third parties.
After this Court confIrmed that KPC's judgment was for the payment of money requiring a
bond to stay enforcement Esquibias sent a letter warning KPC and their law firm Miller LLP of
liability by unidentified third parties should they seek to enforce their judgment pending appeal
of the order amending the judgment (without an undertaking). (Dec. AW at ~ 10, Exh. E).
Nevertheless, to the extent there are bona fIde third parties who have any interest in the estate and
not additional sham entities- a receiver can preserve those assets to alleviate the concerns of the
unidentifIed third parties and Praske while protecting KPC's rights in enforcing their judgment.
Accordingly, a receiver will benefIt all parties in this regard.
D. A RECIEVER WILL PROTECT THE INTERESTS OF ALL PARTIES
The Enforcement of Judgments Law (EJL) permits a court to appoint a receiver to enforce
a judgment where the judgment creditor shows that, considering the interests of both the judgment
creditor and the judgment debtor, the appointment of a receiver is a reasonable method to obtain
the fair and orderly satisfaction of the judgment. Code Civ. Proc. § 708.620. Additionally, a
receiver may aid in collecting rights assigned pursuant to an assignment order. Code Civ. Proc. §
708.510(a). The Judgment Debtor's interest will also be protected to the extent the obligation will
23 be satisfIed rather than to incur post-judgment interest of 10% per annum plus allowable post-
24 judgment enforcement costs. Additionally, the Judgment Debtors will avoid an inevitable
25 contempt order given their bad faith conduct.
26 In addition to the reasons stated above supporting the benefIt of a receiver for all parties,
27 KPC is prepared to fIle with this motion a motion for assignment of rights and order restraining
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Judgment Debtors. (DecL AW ~ 11). KPC, respectfully requests that the receiver appointed to
enforce the judgment enforce the assignment order, ifgranted by this Court.
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E. THE APPOINTMENT OF A RECEIVER IS THE ONLY REMEDY TO
ADDRESS THE UNIQUE POST-JUDGMENT NEEDS OF TIDS CASE
1. The Judgment Debtors Use of a an Asset Protection Plan Involving
Numerous Entities Makes the Appointment of a Receiver Necessary to
Enforcing their Judgment
The appointment of a receiver has been upheld in a case similar to the present. Crocker
Nat. Bank v. O'Donnell (1981) 115 Cal.App.3d 264, 266 involved a judgment debtor who
conducted his profession (medical) as a corporation of which he was sole shareholder, used the
corporation funds as his own, and used corporate checking account for his personal expenses such
as to prevent his creditors from reaching his earnings. Id In fact, the Court of Appeals in that case
went further to hold that service of motion for appointment of a receiver on the debtor constituted
service on the corporation notwithstanding that the corporation was not named as a debtor.
Crocker Nat. Bank, supra 115 CaLApp.3d at 266 -267.
The Judgment Creditors conduct is far more egregious and clearly supports the necessity of
appointing a receiver. As noted above, Gaggero has implemented a complex asset protection plan
involving multiple layers of sham entities, off-shore trusts, and a foundation, in which he has
concealed his assets. (Decl. AW ~~ 4, 5, 12-15, Exh. A, B, F, G, H, and I). Gaggero and his
attorneys have taken every opportunity to frustrate KPC from pursing their judgment, including
appealing any adverse judgment regardless of merit. (Id., at ~ 7-9, 12,14, 16, Exh. D, E, I). As a
direct result of the Judgment Debtors unscrupulous tactics in avoiding the jUdgment, KPC has
incurred substantial attorneys' fees and costs and zero return on the judgment.
Notably, the alter ego Judgment Debtors with assets exceeding $35 million now claim they
do not have the funds to post an undertaking to stay enforcement of their judgment. The reality is
that the appeals are baseless and posting an undertaking will result in KPC enforcing their
judgment. A receiver is necessary intervene in such blatant disregard of the Court's orders and to
carry KPC's judgment into effect.
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2. The Judgment Debtors Have Made It Clear That They Will Not Cooperate
With Post-Judgment Discovery
Chatfield's delay tactics have been well documented in relation to KPC's enforcement
efforts. (Id., at ~~ 4-5, 7-8, 15, Exh. A, B, D, and I). Additionally, as noted above counsel for the
alter ego Judgment Debtors, Esquibias has failed to follow through on his assurances to this Court
that he will make sure KPC's counsel receives a copy of the trust documents noting that there is
no reason why it should not be disclosed. (Id., at ~ 4, Exh. A at 9:15-18). His statements that it is
his "practice to be open with this Court and with opposing counsel, to be fair and clear and
transparent" has not been demonstrated in any manner in connection with the present case. (Id., at
~ 4, Exh. A at 10:20-24). Contrary to these statements, Praske has refused to turn over any
documents KPC requested in the document request.
F. THE JUDGMENT DEBTORS MUST POST AN UNDERTAKING TO STAY
ENFORCEMENT OF TIDS ORDER AND RECEIVER'S BOND
The perfecting of an appeal does not stay enforcement of the judgment or order if the
judgment or order appealed from appoints a receiver, unless an undertaking in a sum fixed by the
trial court is provided. Code Civ. Proc. § 917.5. Additionally, the undertaking must be given on
condition that if the judgment or order is affirmed or the appeal is withdrawn, or dismissed, the
appellant will pay all damages which the respondent may sustain by reason of the stay in the
enforcement of the judgment. Id. KPC respectfully requests that this Court Order the Judgment
Debtors to post an undertaking, in an amount consistent with the requirements for a money
judgment, for $4,356,471.02 unless the undertaking is given by an admitted surety insurer in
which case the amount of undertaking necessary to stay enforcement of this Order is
24 $3,267,353.26. Code Civ. Proc. §§ 917.5, 917.1(b).
25 Finally, given the record in this case, KPC proposes a Receiver's bond in the amount of
26 $10,000 pursuantto Rule 3.1178 ofthe California Rules of Court.
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1 G. KPC NOMINATES JAY ADKISSON OR DAVID PASTERNAK TO SERVE AS
THE RECEIVER AS TO ALL JUDGMENT DEBTORS
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3 Pursuant to California Rules of Court 3.1177 each party appearing at the hearing on a
4 noticed motion for the appointment of a receiver may suggest in writing one or more persons for
5 appointment a receiver. Cal. R. Ct. 3.1177. KPC nominates Jay D. Adkisson or David Pasternak to
6 serve as the Receiver in this action. See RJN, Exh. K, L, M.
7
8 IV. CONCLUSION
9 For the foregoing reasons KPC's motion for the appointment ofa receiver should be granted.
10 Additionally, the Judgment Debtors must post an undertaking pursuant to section 917.5 ofthe Code
11 of Civil Procedure in the amount of $4,356,471.02 unless the undertaking is given by an admitted
12 surety insurer in which case the amount of undertaking necessary to stay enforcement of this
13 Order is $3,267,353.26.
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Dated: Septem~er 6, 2012 MILLERLLP
By:

~ UJrJ/)
RANDALL A. MILLER, ES~
AUSTA WAKILY,ESQ.
Attorneys for Knapp, Petersen & Clarke, Steven Ray
Garcia, Stephen M. Harris, and Andre Jardini
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DECLARATION OF AUSTA WAKILY IN SUPPORT OF MOTION TO APPOINT
RECEIVER
I, Austa Wakily, declare:
1. I am an attorney licensed to practice law by the State Bar of California. I am an
associate at the law firm Miller LLP and the attorney ofrecord for the defendants and judgment
creditors, Knapp, Petersen & Clarke, Steven Ray Garcia, Stephen Harris, and Andre Jardini
(collectively referred to as "KPC") in this action. I am also the attorney of record in another
lawsuit involving judgment debtor Stephen Gaggero against KPC for purported legal malpractice.
I drafted the motions described below and I am familiar with its contents. I also appeared at the
hearing for each motion I drafted below. I make the following declaration based on my personal
knowledge and would be competent to testify to the facts below.
2. KPC obtained a judgment against Gaggero on May 19, 2008 in the amount of
$1,327,697,994.50 and amended on December 28, 2010 to include attorney fees and costs after
Gaggero unsuccessfully appealed the underlying judgment.
3. KPC's May 19, 2008 judgment included an award of KPC attorneys' fees in the
amount of $1,202,994.50 plus costs in the amount o{ $124,702.90. Gaggero appealed the
judgment which was affIrmed on appeal.' KPC obtained an additional $192,723 for attorney fees
and $522 in costs incurred on appeal. An amended judgment reflecting the augmented fee award
and accrued post-judgment interest in the amount of $320,591.78 was entered on December 28,
2010 reflecting the judgment totaling $1,841,535.80.
4. KPC flIed a Motion to Amend the Judgment to add PacifIc Coast Management,
Inc., 511 OFW LP, Gingerbread Court LP, Malibu BroadBeach LP, Marina Glencoe LP, Blu
House LLC, Boardwalk Sunset LLC, Joseph Praske as trustee of the Giganin Trust, Joseph
Praske as trustee the Arenzano Trust, and Joseph Praske as trustee Aquasante Foundation as
Judgment Debtors. The motion was granted on May 29, 2012. The judgment debtors appealed
the order on June 1,2012. A true and correct copy ofthe reporter's transcript ofthe May 29,2012
hearing is attached as Exhibit A. I was present at the hearing. The reporter's transcript accurately
reflects the statements on that date.
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5. KPC filed an ex-parte application on behalf of KPC for an order requiring an
undertaking by the Judgment Debtors to stay enforcement on June 27, 2012. I attended the
hearing on June 27, 2012. At the hearing this Court granted the ex-parte application in full
requiring the Judgment Debtors to post an undertaking in the amount of $4,356,471.02. The
Judgment Debtors did not post an undertaking to enforcement of the judgment against the alter
ego Judgment Debtors. A true and correct copy of the reporter's transcript for the June 27, 2012
hearing on the ex-parte application is attached as Exhibit B. I was present at the hearing on the
ex-parte application. The reporter's transcript accurately reflects the statements made on that
date.
6. KPC filed Motion for an Award of Post-Judgment Enforcement Costs and Accrued
Interest. I attended the hearing on this motion on July 13, 2012. At the hearing, after oral
arguments, this Court granted KPC's motion awarding $87,722.25 in costs and $569,569.96 in
accrued interest. The Judgment Debtors have not paid any amount towards the judgment.
7. KPC's Judgment now totals $2,178,235.51 plus post-judgment interest and any
further allowable post-judgment enforcement costs. Additionally, KPC'sjudgment is enforceable
against Mr.. Gaggero and the alter ego Judgment Debtors. Attached as Exhibit C is a true and
correct copy of the Notice of Ruling on KPC's motion for an award of post-judgment
enforcement costs and the Order granting the Motion to Amend the Judgment to add the alter ego
Judgment Debtors.
8. KPC also filed a Motion to Compel documents requested in the Request for
Production ofDocuments (RFD) (Set Two) set for hearing on July 20,2012 in department 90A. I
drafted the RFD (Set Two) and met and conferred with counsel for Gaggero, Chatfield over the
course of five months to obtain documents. In response to a meet and confer letter I drafted on
April 2, 2012 Chatfield served amended responses on April 30, 2012 removing impro:perly
asserted boilerplate objections.
9. I attended the hearing on the Motion to Compel on July 20, 2012. At the hearing
Chatfield handed me supplemental responses. The responses re-inserted boilerplate objections. I
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did not have time to review the responses and which was not timely filed before the Court and not
part ofthe ruling. Attached as Exhibit D is a true and correct copy ofthe responses.
10. I received a letter from David Esquibias on July 5, 2012 after this Court's ruling on
the ex-parte application. A true and correct copy ofthe letter is attached as Exhibit E
11. I have prepared and plan to file a Motion for Assignment of Rights and Order
Restraining Judgment Debtors concurrently with this motion and set for hearing on the same date
on August 23,2012.
12. I conducted the debtor examination of Stephen Gaggero on June 20, 2012.
Attached as Exhibit F is true and correct copy of excerpts from the debtor examination. The
debtor examination transcript accurately reflects the testimony of Gaggero given on that date.
13. Attached as Exhibit G is a true and correct copy of the Declaration of Joseph
Praske submitted in support of the alter ego Judgment Debtors Opposition to KPC's Motion to
Amend the Judgment to Add the Alter Ego Judgment Debtors.
14. Attached as Exhibit H is a true and correct copy of KPC's Motion to Amend
Judgment to add alter ego Judgment Debtors.
15. Attached as Exhibit I is a true and correct copy of Gaggero's responses to KPC's
post-judgment special interrogatories and a letter from Chatfield to counsel for KPC, Howard
Fields, in response to requests for further information.
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct and that this declaration was executed on September ~, 2012 at
Los Angeles, California.
Aus y .,
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SUPERIOR COURT OF THE STATE OF CALIFORNIA.
FOR THE COUNTY OF LOS ANGELES
DEPARTMENT LA 24 HON. ROBERT L. HESS, JUDGE
.STEPHEN GAGGERO, AN INDIVIDUAL; ET AL.,
PLAINTIFF,
)
)
-VS-
KNAPP, PETERSEN & CLARKE,
)CASE NO.
)BC286925
)
)
STEPHEN RAY GARCIA, STEPHEN M. HARRIS
AND ANDRE JARDINI,
)
)
DEFENDANTS. )
)
REPORTER'S EXPEDITED TRANSCRIPT OF PROCEEDINGS
APPEARANCES:
FOR THE PLAINTIFF:
TUESDAY, MAY 29, 2012
DAVID CHATFIELD
ATTORNEY AT LAW
2625 TOWNSGATE RD
. SUITE 330
WESTLAKE VILLAGE, CA 91361
FOR THE DEFENDANTS: MILLER LLP
BY: RANDALL A. MILLER
BY: AUSTA WAKILY
---- 515 -S-mJT-H-FLOWER STREET --
SUITE 2150
LOS "ANGELES, CA 90071
FOR NEW JUDGMENT DEBTORS: DAVID ESQUIBIAS
2625 TOWNSGATE ROAD
SUITE 330
VOLUME 1 OF 1
---PAGES---l--.z-8---
CAROL L. CRAWLEY, CSR #7518

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LOS ANGELES, CALIFORNIA; TUESDAY, MAY 29, 2012
DEPARTMENT 24 HONORABLE ROBERT L. HESS JUDGE
11:50 A.M.
APPEARANCES: (AS NOTED ON TITLE PAGE)
(CAROL L. CRAWLEY, OFFICIAL REPORTER.
MR; CHATFIELD: DAVID CHATFIELD ON BEHALF OF THE
PLAINTIFF.
MR. ESQUIBIAS: GOOD MORNING, YOUR HONOR.
DAVID ESQUIBIAS ESPECIALLY APPEARING FOR
JOSEPH PRASKE TRUSTEE OF THE GIGANIN TRUST, TRUSTEE
OF THE ARANZANO TRUST, AND THE AQUASANTE FOUNDATION
AND VARIOUS LLC'S AND LP'S THAT ARE NOTED IN OUR
PLEADING AS A GENERAL PARTNER AND/OR MANAGING MEMBER.
I WOULD LIKE TO NOTE FOR THE RECORD THAT
JOSEPH PRASKE IS NOT A PARTY TO THIS ACTION.
M·S: WAKILI : GObb ·MORNING,AtJSTAWAKltIFOR
DEFENDANT, KNAPP, PETERSEN & CLARKE.
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22 THE COURT: THIS IS A MOTION TO AMEND THE JUDGMENT
23 TO ADD JUDGMENT DEBTORS ON THE THEORY THAT VARIOUS
.24 .TRUSTS FOUNDATIONS, .AND OTHER BUSINESS. ENTITIES
26 THEY SHOULD BE LIABLE FOR OR THEIR ASSETS -- SHOULD
27 BE REACHABLE FOR COLLECTION TO THE JUDGMENTS AGAINST
28 HIM.
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1 I HAVE A VERY SUBSTANTIAL AMOUNT OF EVIDENCE
2 ON THE NATURE OF THESE RELATIONSHIPS THAT HAS BEEN
3 SUBMITTED TO ME IN CONNECTION WITH THIS MOTION, AND
4 FRANKLY IT LOOKS TO ME LIKE THESE ARE APPROPRIATE
5 MOTIONS.
6 I SEEM TO HAVE QUITE A SHOWING HERE THAT IN
7 FACT, MR. GAGGERO CONTROLS THESE -- DIRECTS THE
8 MONIES AND WILL.
9 AND SINCE WE HAVE, YOU KNOW, IT SEEMS TO ME
10 THAT THE MOTION HAS SOME MERIT, SO LET ME START WITH
11 MR. GAGGERO'S COUNSEL, AND SEE WHAT YOU WOULD LIKE TO
12 SAY ON THIS POINT, SIR.
13 MR. CHATFIELD: YOUR HONOR, IFI MAY START AS
14 REALLY THE PARTY IN INTEREST -- I REPRESENT THE
15 TRUSTEE WHO CONTROLS THESE ASSETS WITHIN THESE
16 TRUSTS.
17 IF I MAY RESPOND TO THE COURT FIRST, I WOULD
18 APPRECIATE THAT.
19 THE COURT: WELL, THE TRUSTEE HAS TO BE -- THE
-10 ~~ TRUSTEE GETS NAMED, ~~~ BOT -IT- IS --REALLY THE -TRUST-THAT
21 HIS ASSETS ARE BEING SOUGHT.
22 MR. ESQUIBIAS: THE CORPUS OF THE TRUST --
23 THE COURT: I DON'T UNDERSTAND THAT THEY ARE
24 SEEKING TO ADD _YOU IN ANY OTHER CAPACITY PERHAPS THAN
- - - - ------2-5- ---AS--T-RtJ-S-T-EE-;---~------~-~---~----~----~----------- ------------------ ----------
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26 THERE IS CERTAINLY NO INDIVIDUAL CAPACITY.
27 MR. ESQUIBIAS: CORRECT. WE DON'T BELIEVE THAT
28 ANYONE IS SEEKING MR. PRASKE.

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WE DON'T BELIEVE THAT KPS IS TRYING TO SAY
THAT MR. PRASKE AS PERSONAL LIABILITY, THAT WE DON'T
BELIEVE.
THE COURT: AND I DIDN'T GET THAT OUT OF THEIR
PAPERS.
MR. ESQUIBIAS: WHAT WE DO BELIEVE, IS THAT THE
ASSETS, WHICH MR. PRASKE CONTROLS ARE ASSETS THAT ARE
BEING SOUGHT, AND BECAUSE THESE ASSETS ARE CONTAINED
WITHIN IRREVOCABLE TRUSTS -- OR EVEN IF THEY WERE
REVOCABLE, THE FACT IS THAT THESE ARE IRREVOCABLE
TRUSTS THAT THERE ARE CERTAIN PROCEDURES THAT NEED TO
BE FOLLOWED WHEN YOU ARE TRYING TO OBTAIN OR CONTROL
LEVY OR GARNISH THE ASSETS OF TRUSTS.
AND I WOULD NOTE FOR THE.RECORD; THAT THE
PROBATE COURT HAS THE EXCLUSIVE JURISDICTION OF TRUST
MATTERS UNDER PROBATE CODE 17000, WHICH SPECIFICALLY
STATES THAT ACTIONS AND PROCEEDINGS BY OR AGAINST A
CREDITOR ARE VESTED IN THAT COURT AND MORE
IMPORTANTLY, BECAUSE THE ASSETS IN THIS PARTICULAR
MOTION ARE BEING· S6UGi-t'r-:SY--A. J'UiTGMENT -C::RJ~~-DrTOR,
NOTICE UNDER THE PROBATE CODE NEEDS TO BE PROVIDED OF
THIS MOTION TO THE VESTED CURRENT INCOME AND
PRINCIPAL AND REMAINDER BENEFICIARIES OF THESE
TRUSTS.
26 BENEFICIARY NOR WAS NOTICE PROVIDED TO THE TRUSTEE OF
27 THESE TRUSTS, AND,NOTICE WOULD BE REQUIRED UNDER
28 PROBATE CODE 17203.
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AND LAST, PROBATE CODE 18200 SPECIFICALLY
STATES THAT THE ASSETS OF AN IRREVOCABLE TRUST ARE
NOT AVAILABLE TO THE SETTLERS CREDITORS, WHICH IS THE
CASE HERE.
TO THE EXTENT THAT THERE WAS FRAUDULENT
CONVEYANCE, THEN IT WOULD BE MADE POTENTIALLY
AVAILABLE.
BUT, AS THE MOVING PARTY HAS CONCEDED IN
,
THEIR OWN DOCUMENTS THAT THE FRAUDULENT CONVEYANCE
CAUSE OF ACTION IS UNAVAILABLE TO THEM DUE TO THE
STATUTE OF LIMITATIONS, FRAUDULENT CONVEYANCE IS THE
ONLY EXCEPTION TO PROBATE CODE SECTION 18200 AND
PROBATE CODE SECTION 15403.
I SEE THE COURT IS LOOKING AT THE PROBATE
CODE --
THE COURT: JUST A MINUTE.
MR. ESQUIBIAS: -- I WOULD LIKE TO POINT OUT JUST
ONE CASE.
THE COURT: MAY I ASK WHERE THIS ARGUMENT APPEARS
4
MR. ESQUIBIAS: IT DOES NOT APPEAR. THE SUBSTANCE
OF THE ARGUMENT WAS FILED.
THE COURT: IS THERE A REASON, IS THERE A REASON
I 24 YOU ARE MAKING AN ARGUMENT NOW THAT AP·PARENTLY GOES
I------~-2-5----T-e--o-tJ-R-I-S-SI-eT-I-eN-?--------------------------------------~----------------
26 IS THERE A REASON WHY, IF THIS IS A
27 MERITORIOUS ARGUMENT, IT-WAS NOT INCLUDED IN THE
28 OPPOSITION?
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1 MR. CHATFIELD: I CAN TELL THE COURT THAT I AM
2 SPECIALLY APPEARING FOR THE PURPOSE OF ARGUING
3 JURISDICTION AND NOTICE.
4 I HAVE NO EXPLANATION AS TO WHY IT WASN'T IN
5 THE OPPOSITION. I AM LATE TO THIS PARTY ..
6 THE COURT: THE NOTICE OF SPECIAL APPEARANCE TO
7 OPPOSE AN OPPOSITION WAS FILED MAY 15TH.
8 MOVING PAPERS WERE FILED APRIL 10TH, AND AS I
9 LOOK AT YOUR PAPERS HERE, I DON'T EVEN GET A SNIFF OF
10 THESE ARGUMENTS, QUITE FRANKLY.
11 MR. ESQUIBIAS: I WOULD AGREE. BUT I DON'T
12 BELIEVE THE FACT THAT THEY WERE NOT RAISED IN THAT
13 DOCUMENT DOES NOT PRECLUDE THE ARGUMENT TODAY.
14 THE COURT: WELL, WHY? SO MY QUESTION IS, IF
15 THESE ARE ESSENTIAL ARGUMENTS, WHY DID YOU HOLD THEM
16 BACK SO THAT THEY COULD NOT RESPOND TO THEM?
17 MR. ESQUIBIAS: IT WAS NOT DESIGNED TO AMBUSH THE
18 MOVING PARTY.
19 THE COURT: IS IT ANYTHING OTHER THAN AMBUSH
~~20-~ THdtJGH,-- ~AT~THI-$~-Pb1NT?-
21 MR. ESQUIBIAS: I CAN SEE HOW IT IS PERCEIVED AS
22 THAT BY THIS COURT, AND PERHAPS MOVING PARTIES XXXJD
23 THIS MATTER CAN BE CONTINUED TO BRIEF IT AND TO ALLOW
24 THEM TO RESPOND TO TkESEARGUMENTS.
26 MR. ESQUIBIAS: I AM PREPARED TO DO SO.
27 THE COURT: SO THAT, AGAIN, RAISES THE QUESTION --
28 THIS 18 THE TIME AND PLACE FOR THE HEARING DN THIS

6
1 MOTION.
2 MS. WAKILI: CAN I MAKE ONE BRIEF POINT ON THIS?
3 HAD HE BRIEFED IT OR RAISED IT IN HIS OPPOSITION,
4 MR. PRASKE HAS TESTIFIED UNDER IN.A DEBTOR EXAM,
5 THESE ARE OFFSHORE TRUST$.
6 ARANZANO IS AN OFFSHORE TRUST. THEY HAVE
7 NEVER BEEN FILED WITH ANY COURT IN CALIFORNIA OR THE
8 UNITED STATES, SO THESE ARE ESSENTIALLY VERY SECRET
9 DOCUMENTS THAT ARE PRIVATE.
10 THEY HAVE INDEPENDENT CONFIDENTIALITY
11 PROVISIONS THAT BOUND PRETTY MUCH THE TRUSTOR THE
12 TRUSTEE, SO THEY WON'T BE SOMETHING YOU WILL FIND IN
13 A PROBATE COURT AND ACCORDING TO MR. PRASKE -- THAT
14 IS SOMETHING THAT HE SAID HE NEVER FILED, AND AGAIN
15 HAD WE HAD ANY IDEA THIS WOULD BE AN ARGUMENT THEY
16 WOULD RAISE WE WOULD HAVE PULLED EXCERPTS FROM THE
17 DEBTOR EXAMINATION TO ADDRESS THAT.
18 THE COURT: I DON'T DISAGREE, BUT DO I HAVE ANY
19 EVIDENCE? JUST A SECOND. DO I HAVE ANY EVIDENCE IN
20
21 MR. ESQUIBIAS: RAISED BY OPPOSING COUNSEL?
22 THE COURT: NO, YOUR FACTUAL ASSERTIONS. YOU HAVE
23 CHARACTERIZED THESE AS IRREVOCABLE AND SUBJECT TO
24 THIS THAT AND THE OTHER. I DON' 'l' KNOW . HOW DO I
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26 WHERE IS THE EVIDENCE TO SUPPORT IT?
27 MR. ESQUIBIAS: YOU WILL NOT FIND IT IN OUR
28 P1.EAblING THAT WAS FILED.
T------·-~--·-·

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1 THE COURT: IS THERE ANYTHING IN THEIRS, THAT WILL
2 DO IT?
3 MR. ESQUIBIAS: I HAVE THE PLEADINGS THAT I HAVE
4 REVIEWED IN PREPARATION FOR TODAY'S HEARING, DID NOT
5 SHOW OTHER THAN THEIR OWN STATEMENTS IN THEIR
6 PLEADINGS WHICH ARE CONSIDERED ADMISSIONS THAT THE
7 TRUSTS ARE IRREVOCABLE.
8 THE COURT: HAS THERE -- HAS MR. PRASKE TAKEN THE
9 POSITION, THAT THE TRUSTS THEMSELVES ARE
10 CONFIDENTIAL?
11 MR. CHATFIELD: I HAD NOT PARTICIPATED IN THAT
12 PRIOR DISCOVERY THAT COUNSEL TALKS ABOUT, BUT I WILL
13 SAY THIS, ON BEHALF OF MR. PRASKE --
14 THE COURT: AND THAT THE TERMS OF THE TRUST
15 THE TRUST DOCUMENTS OUGHT NOT TO BE PRODUCED?
16 MR. ESQUIBIAS: I WILL SAY THIS ON BEHALF OF
17 MR. PRASKE, .THAT IF NOTICE IS PROVIDED TO THE ALL THE
18 VESTED CURRENT INCOME AND PRINCIPAL BENEFICIARIES
19 THE COURT: HAS MR. -- AND HOW WOULD THEY DO THAT?
.. _- _. - -.. _.
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21 TRUST DOCUMENTS TO COUNSEL UPON NOTICE TO THE
22 BENEFICIARIES.
23 THE COURT: HOW WOULD THEY KNOW WHO THE
24 BENEEICIARIES ARE?
26 DOCUMENTS THEMSELVES HAVE NOT BEEN PRODUCED UNDER A
27 CLAIM OF CONFIDENTIALITY.
£0 A~ THIS POINT, YOU ARE ASSERTING A SERIES
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OF THINGS WHICH FIND NO EVIDENTIARY SUPPORT AND THE
REASON THEY HAVE NO EVIDENTIARY SUPPORT, AND YOUR
OBJECTIONS ARE VERY INTERESTING, IS THAT YOU HAVE, AS
I UNDERSTAND IT, YOU OR MR. GAGGERO HAVE PRECLUDED
THE OTHER SIDE FROM ACCESS TO THE VERY INFORMATION
THAT YOU CLAIM IS NECESSARY FOR THEM TO GIVE NOTICE.
THAT IS NOT A SITUATION THAT IS REASONABLY
CALCULATED TO GIVE RISE TO A SYMPATHETIC HEARING.
FOR YOU TO SAY, WELL YOU CAN'T GO FORWARD WITHOUT
GIVING NOTICE TO ALL THESE PEOPLE, AND BY THE WAY WE
WON'T TELL YOU WHO IS ENTITLED TO GET NOTICE. HOW DO
I RESOLVE THAT?
MR. ESQUIBIAS: YOU HONOR, I HAVE A RESPONSE. I
HAVE A RESOLUTION.
I AM NEW TO THIS CASE. I WILL MAKE SURE THAT
OPPOSING COUNSEL HAS A COPY OF THE TRbsT DOCUMENTS,
SO THAT SHE CAN APPRISE THE SITUATION HERSELF. SHE
CAN GIVE NOTICE.
THE COURT: WELL, APPARENTLY, WAS MR. PRASKE
MS. WAKILI: I BELIEVE HE WAS REPRESENTED BY
MR. CHATFIELD.
THE COURT: OKAY. WHAT DO I DO WITH THAT? IF HE
WAS REPRESENTED BY MIL CHATFIELD AT THE DEPOSITIONS,
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26 DO WITH THAT?
27 MR. ESQUIBIAS: I DON'T KNOW ANYTHING ABOUT ANY
rI 28 DEPOSITIONS. r WAS NOT PRESENT, BUT r-WILL TELL-THE I·
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1 COURT NOW, AND OPPOSING COUNSEL, I NOW REPRESENT
2 MR. PRASKE IN HIS CAPACITY AS TRUSTEE OF THESE
3 TRUSTS, AND WE INTEND TO COMPLETELY AND FULLY
4 COOPERATE WITH THE REQUESTS FOR THE DOCUMENTATION.
5 THERE IS NO REASON WHY IT SHOULD NOT BE
6 DISCLOSED.
7 THE COURT: IS THERE A REASON WHY YOU DON'T HAVE
8 THEM TODAY?
9 MR. ESQUIBIAS: I DO HAVE THEM TODAY BUT THEY ARE
10 MY VERSIONS WITH MY MARKINGS ON THEM. I AM NOT AWARE
11 OF THE REASON WHY THEY WERE NOT PROVIDED IMMEDIATELY
12 TO COUNSEL, BECAUSE I THINK ONCE COUNSEL DOES SEE
13 THEM -- NOTES THAT THEY ARE IRREVOCABLE NOTES, THE
14 ASSETS WERE TRANSFERRED TO THESE TRUSTS MANY, MANY
15 YEARS AGO. READ PROBATE CODE SECTION 18200. I JUST
16 THINK THAT WE CAN RESOLVE THIS ISSUE FAIRLY QUICKLY.
17 MS. WAKILI: YOUR HONOR, COULD I GET SOME
18 CLARIFICATION ON COUNSELS RESPONSE RIGHT NOW?
19 THE COURT: JUST A SECOND.
--2-0 -MR~ ESQUIBIA-g-:-- -1TI8 - I,;m1'--MY-PRAC::'J:'ICE '::'-RATRER-,--
21 LET ME RESTATE THAT IT IS MY PRACTICE TO BE OPEN WITH
22 THIS COURT AND WITH OPPOSING COUNSEL, TO BE FAIR AND
23 CLEAR'AND TRANSPARENT -- TO THE BEST THAT I CAN BE.
24 I INTEND TO DO THAT. GOINGF'ORWARD, I_WOULD
26 TO DISCLOSURE OF THESE TRUST DOCUMENTS, THAT THEY BE
27 USED BY OPPOSING COUNSEL FOR PURPOSES ONLY FOR THIS
MOTION AND FOR GXVING NOTICE, AND THAT 1T IS NOT TO
9

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1 BE MADE.
2 THE DOCUMENTS ARE NOT TO BE MADE PUBLIC OR
3 USED FOR·ANY OTHER REASON.
4 THE COURT: YOU COULD HAVE APPLIED FOR A
5 PROTECTIVE ORDER TO THAT EFFECT IN A TIMELY FASHION.
6 YOU SEE, MR. PRASKE HAS PREVIOUSLY BEEN
7 REPRESENTED BY COUNSEL FOR MR. GAGGERO. SORT OF
8 LOOKS LIKE THEY ARE JOINED AT THE HIP.
9 MR. ESQUIBIAS: I VIEW THAT AS PROBLEMATIC, YOUR
10 HONOR, AND THAT IS WHY --
11 THE COURT: IN CONNECTION WITH THIS MOTION, THIS
12 IS NOT A SITUATION WHERE MR. PRASKE, DURING THESE
13 PRECEDING TIMES, HAS HAD INDEPENDENT COUNSEL.
14 HE HAS USED MR. GAGGERO AS COUNSEL, WHICH
15 SUGGESTS TO ME -- CERTAINLY LEADS TO AN INFERENCE,
16 THAT THE POSITIONS TAKEN WERE COORDINATED POSITIONS.
17 AND, WHAT I HAVE HERE SUGGESTS, COMING IN AT
18 THIS POINT IN TIME, RAISING ARGUMENTS ORALLY, THAT
19 WERE NOT IN THE PAPERS, ASSERTING EVIDENCE THAT HAS
-- -20
21 SAYING, WELL YOU HAVE GOT TO DELAY IT JUDGE, THIS
22 THAT AND THE OTHER THING.
23 I WANT TO DO ALL THE THINGS THAT MR. PRASKE
24 HAS NOT _DONE, WHEN: HE WAS REPRESENTED BY MR.
f------------~---z-5-- ~G__A_G_G-E-Re '-s--eetJNS-E-b-.--S-ME-b-b-S--b-I~K:-E--MeR-E-BE-b-A-Y:-.--------- ------ -------
26 MR. ESQUIBIAS: I AM NOT SEEKING AN EXTRAORDINARY
27 AMOUNT OF TIME TO CONTINUES THIS. I THINK IT COULD
r 28 BE JUST DAYS IN ORDER FOR THE DOCUMENTS TO BE

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TRANSFERRED OVER TO OPPOSING COUNSEL.
THE COURT: WHY WAS THIS NOT BROUGHT OUT IN
ANYTHING UNTIL I ASKED YOU WHAT THE FACTUAL BASIS FOR
THE ORAL ASSERTIONS YOU WERE MAKING?
MR. ESQUIBIAS: ALL I CAN TELL YOU, YOUR HONOR, IS
THAT I HAVE BEEN PRACTICING PROBATE LAW FOR 20 YEARS.
ORAL ARGUMENTS ARE COMMON PLACE. IT IS A DIFFERENT
COURTROOM WITH DIFFERENT SETS OF RULES, AND I
APOLOGIZE THAT I AM NOT FAMILIAR WITH THE CIVIL
COURTS OR THE RULES OF THIS COURT.
BUT, THE FACT REMAINS THAT WE HAVE TO GIVE
NOTICE TO THESE VESTED PRINCIPAL AND INCOME
BENEFICIARIES, 30 DAYS.
THE COURT: I DON'T KNOW THAT THERE ARE VESTED
INCOME AND PRINCIPAL BENEFICIARIES. I HAVE BEEN
DENIED THAT INFORMATION AS DEFENSE COUNSEL HAS BEEN
DENIED THAT INFORMATION.
MR. ESQUIBIAS: I SEEK TODAY TO RIGHT THAT WRONG.
THE COURT: WHAT, IF ANYTHING ELSE ARE YOU
-- -OF}'ERING---tNWAT--OF'IN'FORMATTON---THA-T -HAS BEEN -- --- - --- --
PREVIOUSLY WITHHELD?
MR. 'ESQUIBIAS: IT IS HARD FOR ME TO ANSWER THAT
I 23 QUESTION BECAUSE I DON'T KNOW WHAT HAS BEEN
I 24 PREVIOUSLY WITHHELQ. I HAVE ONLY BEEN IN THIS CASE
_-I- - - - - -----2-5-- ----1-4-D-A-Y--s-:- -----------
I 26 THE COURT: I SUSPECT IT HAS BEEN A LITTLE LONGER
27 THAN THAT, BECAUSE IT TOOK SOME TIME ~O PREPARE THE
28 DOCUMENT , UNLESS YOU DIDN 1 T PREPARE IT ~

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MR. ESQUIBIAS: I BELIEVE ALL THE INFORMATION
CONTAINED IN THE TRUST INSTRUMENTS AND PERHAPS
FUNDING DATES OF THE ASSETS IN THOSE TRUSTS WOULD BE
SUFFICIENT. I DON'T KNOW OF ANY OTHER INFORMATION
THAT WOULD BE REQUIRED FOR THIS COURT OR OPPOSING
COUNSEL TO MAKE THE CONCLUSION THAT THE ASSETS ARE
UNREACHABLE.
THE COURT: SO, YOU WISH TO PROVIDE NOT THE
ENTIRETY OF THE INFORMATION BUT ONLY A PART OF THAT?
MR. ESQUIBIAS: WE WOULD ONLY WANT TO PROVIDE
12
INFORMATION THAT IS EITHER AGREED UPON BETWEEN MYSELF
AND OPPOSING COUNSEL OR IF WE COULD NOT COME TO SOME
TYPE OF AGREEMENT, WHATEVER THIS COURT WOULD
DETERMINE TO BE RELEVANT.
THE COURT: HOW WOULD I KNOW WITHOUT YOU PROVIDING
EVERYTHING? I HEAR AT BEST A CONTINGENT OFFER.
MR. ESQUIBIAS: I PLAN TO HAVE A MEET AND CONFER
WITH OPPOSING COUNSEL TO FIND OUT WHAT IN PARTICULAR
THEY ARE INTERESTED IN KNOWING ABOUT THESE TRUSTS,
BUT--:nr MY- M:rJ:,:rI5~-ACC-ORDING-TO tHE-tAW- AND ACCORDING TO
THE DOCUMENTS THEMSELVES, I KNOW IN MY MIND WHAT
INFORMATION THEY NEED.
I REMAIN OPEN TO PERSUASION FROM OPPOSING
COUNSEL AS TO ADDITIONAL.INFORMATION,
:·--------------2'-,5----M-R-.-C-ri-AT-F-I-E-IJEl---==----------- ----------- ---------.------ ------.
Ir---
26 MR. CHATFIELD: WELL, YOUR HONOR, AN ISSUE THAT
27 LOOMS OVER THIS IS THAT, WHAT THE DEFENDANTS SEEK TO
bO HERE 18 IMPE.RMISSrBLE OUTslbE REVERSE PIERCING.

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1 THE COURT: I READ THE ARGUMENT IN DETAIL, AND I
2 READ THE AUTHORITIES, AND FRANKLY I AM NOT PERSUADED
3 BY THAT. IT IS WELL ESTABLISHED THAT YOU CAN PIERCE
4 IF THE TRUST IS -- IF ONE OR MORE OF THE TRUSTS, FOR
5 EXAMPLE, IS AN ALTER EGO OF MR. GAGGERO, THE CASE LAW
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IS WELL ESTABLISHED THAT YOU CAN GO IN TO THE TRUST.
YOU DON'T NAME THE TRUST. YOU HAVE TO GO AT IT
THROUGH THE TRUSTEE, BUT I DON'T THINK THERE IS A LOT
OF DOUBT ABOUT THAT, AND THE CASE ONE OR MORE RECENT
CASES ON THIS IS GREENSPAN, G-R-E-E-N-S-P-A-N
V-L-A-D-T LLC, 191 CAL APP. 4TH, 486, AND THAT HAS A
GOOD DEAL TO SAY ABOUT THIS.
AND, IF YOU, YOU KNOW, THE BASIC PARAMETERS
OF AMENDING THE JUDGMENT ARE ARTICULATED IN HALL,
H-A-L-L G-O-O-D-H-U-E, H-A-I-S-L-E-Y, AND BARKER
VERSES M-A-R-C-O-N-I CONFERENCE CENTER BOARD, 41 CAL
APP. 4TH, 1551.
AND THERE IS A BUNCH OF OTHER CASES THAT
APPLY ON THIS.
MR. CHATFIELD:
HAVING ENTERED THE AWARD APPROVING THE ARBITRATION IN
22 THAT GREENSPAN CASE, THAT THE COURT ON PAGES 513
23 THROUGH 514 OF GREENSPAN STATED THAT IN POSTAL
24 __ INSTANT PRESS VERSUS KAZO CORP THE CQURT OF APPEAL
26 VEIL IS NOT PERMITTED IN CALIFORNIA.
27 THAT IS, THE CORPORATE VEIL WILL NOT BE-
28 PIERCED TO -£ATISFY TREDEBT OF AN J:N'olV1DOAL
1--------------------

14
1 SHAREHOLDER--
2 THE COURT: RATHER THIS COURT EXPLAINED THE ALTER
3 EGO DOCTRINE WILL ONLY BE APPLIED TO AN INDIVIDUAL
4 SHAREHOLDER LIABLE FOR A CORPORATE DEBT WHERE THE
5 INDIVIDUAL IS HAS DISREGARDED THE CORPORATE FORM BUT
6 THAT IS NOT --
7 MR. CHATFIELD: AT THE VERY NEXT SENTENCE, YOUR
8 HONOR, IT SAYS THIS CASE DOES NOT INVOLVE OUTSIDE
9 REVERSE PIERCING. AND WHY IS THAT? BECAUSE THE
10 JUDGMENT WAS AGAINST TWO ENTITIES, AND THEY WERE
11 SEEKING TO BRING INDIVIDUALS IN AS ADDITIONAL
12 JUDGMENT DEBTORS. NOT -- THIS WAS NOT A CASE WHERE
13 THERE WAS A JUDGMENT AGAINST AN INDIVIDUAL, AND THEY
14 WERE TRYING TO GO AFTER THE TRUST.
15 THE COURT: THIS ISA SITUATION WHERE, KPC IS
16 SEEKING TO HOLD THE SPECIALLY APPEARING PARTIES
17 LIABLE FOR GAGGERO'S DEBT WHERE THEY ARE ALLEGED TO
18 BE THE ALTER EGOS OF GAGGERO.
19 MR. CHATFIELD: THAT IS TYPICAL OUTSIDE REVERSE
20
21 IS NOT RECOGNIZED IN THE STATE OF CALIFORNIA. I HAVE
22 PROVIDED YOU WITH AUTHORITY ON THAT, PLUS THERE ARE
23 AT MY LAST VIEW, 24 OTHER UNPUBLISHED DECISIONS WHICH
24 STATE EXACTLY THE SAME THING. YOU CANNOT IMPOSE
:-- ----- ---2-.']- -L-r-ltB-rI:,-I-TY-1tND-B-R-I-N-<:~--I-N---E-NTJ:-TJ:-E-S--TG-S-A-T-I-S-Fy-kN------- - ------
26 INDIVIDUAL'S DEBT. AND EVEN IF THE STATE RECOGNIZED
27 OUTSIDE REVERSE PIERCING, WHICH IT DOESN'T, YOU, WOULD
28. HAVE TO GO THROUGH AN ADlYtT10DJAL ANALYS IS WHICH THIS
. _ - - - _ . _ - - -

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COURT DISPOSED OF IN ITS OWN STATEMENT OF DECISION.
THE COURT: I KNOW WHERE YOU ARE GOING ON THAT.
GO AHEAD AND SAY IT. YOU ARE WRONG, BUT I KNOW.WHERE
YOU ARE GOING. BECAUSE I READ IT IN YOUR PAPERS.
YOU ARE SUGGESTING THAT THE FACT THAT AT TRIAL
MR. GAGGERO PUT ON NO EVIDENCE THAT HE WAS SUING ON
BEHALF OF PCM TO RECOVER THE ATTORNEY'S FEES, IS
SOMEHOW DISPOSITIVE. IT IS NOT. THAT WAS A COMMENT
ON THE FAILURE OF MR. GAGGERO TO PRODUCE CERTAIN
EVIDENCE IN THE TRIAL WHEN IT WAS DIRECTED TO THE
ISSUE OF DAMAGES, HIS DAMAGES THAT HE WAS CLAIMING
AGAINST KNAPP PETERSEN & CLARKE SO, YOU KNOW. I SAW
WHAT YOU SAID IN YOUR PAPERS, AND I AM SORRY IT IS
NOT --
MR. CHATFIELD: WHAT I AM SAYING IS SOMETHING A
LITTLE DIFFERENT.
I AM GOING BY YOUR FINDINGS OF FACT, AND YOU
STATED ON PAGE 16 OF YOUR STATEMENT OF DECISION THAT
UNLESS OTHERWISE SPECIFICALLY STATED, THE FACTS SET
-- -to-RTH --BELo~r ARE ·-Et'fHE R-- UNO :CS PllTED -ORRE PRE SENT T·Ho~rE
WHICH THE COURT FINDS TO BE TRUE BY THE PREPONDERANCE
OF THE CREDIBLE EVIDENCE, AND THEN IN THE FINDINGS OF
FACT ON PAGE 18, THE COURT STATED THAT IN 1995 AND
1996 GAGGERO DID EXTENSIVE ESTATE PLANNING WHICH
26 TRANSFERRED TO VARIOUS CORPORATIONS, TRUSTS
27 FOUNDATIONS.
28 HE RE~AfNEb ABSOLUTELY NO OWNERSHIP INTEREST

16
1 AND NO CONTROL.
2 THE COURT: IS THERE A DOT DOT DOT IN THERE? DID
3 YOU OMIT SOME OF THE WORDS THAT I PUT IN THERE?
4 MR. CHATFIELD, DID YOU OMIT SOME OF THE WORDS THAT
5 WERE IN THE ORIGINAL, IN THE STATEMENT OF DECISION?
6 MR. CHATFIELD: I AM SUMMARIZING THAT.
7 THE COURT: YES, BECAUSE YOU ARE OMITTING FOR THE
8 PURPOSE THERE IS SOMEWHERE IN THERE FOR THE
9 PURPOSE OF TRYING TO SHIELD THEM FROM CREDITORS.,
10 MR. CHATFIELD: ACTUALLY, WHAT THE COURT SAID
11 RELATING TO CREDITORS WAS, THAT ALTHOUGH GAGGERO USED
12 THREATS, BLUSTERS AND ULTIMATUMS TO ATTEMPT TO
13 DISCHARGE THE KNBC CREDITORS
14 THE COURT: I SAID OTHER THINGS. I SAID OTHER
15 THINGS.
. .
16 MR. CHATFIELD: YOU ALSO SAID THAT KNBC'S CLAIM
17 WAS PAID EARLY IN 2002 BY FULL PAYMENT PLUS INTEREST
18 AND AWARDED ATTORNEYS FEES, AND YOU ALSO STATED THAT
19 THE SLOCOM CLAIM WAS WITHDRAWN AND DISMISSED.
--- 2"0"-"' --"._- -". --- t-H"E--C(5U-R"T" :---"- -NOW-,-- S r-R";"-- -"T-R-KT---HAS"-"-N0THT"N-G --TO- -D"O- -"WITH" -- -.. ".- - ---"----"..
21 THIS CASE. THAT HAS NOTHING TO DO WITH THE ISSUES
22 BEFORE THE COURT: THE STATEMENT OF DECISION THE
23 COURT ENTERED, WHICH HAS BEEN AFFIRMED BY THE COURT
24 OF APPEALS, IS NOT DISPOSITIVE OF ANY ISSUE BEFORE
f- ----------z-5-----T-H-E-e-etJ-R-':p--T-e-BA~-.---------------------------------------------- -----
26 IF -- IS THERE ANYTHING ELSE YOU WOULD LIKE
27 TO SAY.
28 MR. CHATFIELD: YES. -KPC HAS NOT MET ITS BURDEN
T

I '.
17
1 OF SHOWING THAT THE BUSINESS ENTITIES OR PRASKE WERE
2 GAGGERO ALTER EGOS. KPC PRESENTED NO EVIDENCE THAT
3 THE BUSINESS ENTITIES OR PRASKE'S CONTROLLED THE
4 LITIGATION OR WERE VIRTUALLY REPRESENTED IN THE
5 ACTION. IN FACT --
6 THE COURT: DOES THE FACT THAT THEY -- IT LET ME
7 START OUT WITH THIS PREDICATE, MR. CHATFIELD, I THINK
8 THAT THEY HAVE MADE A PRIMA FACIA CASE THAT THESE
9 ENTITIES ARE ALTER EGOS OF MR. GAGGERO. AND IF I DO
10 THAT, THERE IS NO DOUBT THAT MR. GAGGERO CONTROLLED
11 THE UNDERLYING LITIGATION. THESE ARE NOT INDEPENDENT
12 ENTITIES AS I SEE THEM. AND IF THEY ARE ALTER EGOS
13 OF MR. GAGGERO, AND MR. GAGGERO CONTROLLED THE
14 LITIGATION WHICH HE UNDOUBTEDLY DID, THEN WHAT?
15 MR. ESQUIBIAS: YOUR HONOR, IF I MAY RESPOND.
16 THE COURT: NO, MR. CHATFIELD CAN RESPOND TO THIS.
17 HE WAS ONE OF THE ATTORNEYS WHO REPRESENTED
18 MR. GAGGERO DURING THE TRIAL PROCEEDINGS OR IN POST
19 TRIAL.
i··· .- ",2-0-"'- --- --_.. - _. MR-.--- tHAT-F-f'E1~t) :-... _- I, ._. P"IR-S-t- "OF- AtL-~ ---FAIL -- To-·· .- --- .-.---. -- ..
21 UNDERSTAND HOW THE COURT HAS REACHED THE CONCLUSION
22 THAT ALL OF THE ELEMENTS OF ALTER EGO HAVE BEEN
23 FULFILLED WITHOUT ANY EVIDENCE SUPPORTING IT WHEN WE
24 HAVE PROVIDED THE COURT WITH DECLARATIONS. AND ALSO,
L. :J T-I1-E~El-E-F-~m)1tNT-S~I11tV-E-J:>-R-(J-V-I-L)'~El--T-I1-E-eOtYR-T~W-I-T-H~E-V-I-BE-Ne-E--- ~---
26 AS TO THE CORRECTNESS OF THE SETUP OF THE PARTICULAR
II
~- --
ENTITIES == TIlE STATUS OF TIlE ENTITIES AS BEING IN27
28 GOOD STANDING INTBE STATE OF CA-L:LFORNIA, THAT THE
•

18
1 ENTITIES HAVE -~ IT IS IN THE DECLARATION OF
2 MR. PRASKE THAT IS IN MR. ESQUIBIAS'S BRIEF, THAT THE
3 COMPANIES ARE SEPARATE AND DISTINCT FROM MR. GAGGERO,
4 AND THAT THERE IS NO EVIDENCE TO SUPPORT THE
5 CONCLUSION OTHERWISE.
6 AND AGAIN,· EVEN IF THEY WERE TO BE FOUND TO
7 BE THE ALTER EGO, YOU CANNOT TAKE A JUDGMENT AGAINST
8 AN INDIVIDUAL AND DO OUTSIDE REVERSE PIERCING TO ADD
9 ENTITIES AS NEW JUDGMENT DEBTORS.
10 THE COURT: WELL, YOU KNOW, THE EXHIBITS ATTACHED
11 TO THE MOTION CONTAIN TESTIMONY OF BOTH MR. GAGGERO
12 AND MR. PRASKE SHOWING THAT THE ONLY INTEREST OF THE
13 SPECIALLY APPEARING PARTIES IS TO PROTECT 100 PERCENT
14 OF MR. GAGGERO'S ASSETS, BOTH PERSONAL AND BUSINESS.
15 PRASKE IS THE ONLY TRUSTEE OF THE TRUST AND
16 FOUNDATION INVOLVED IN THE MOTION. HE IS ONE OF ONLY
17 TWO OFFICERS IN PCM. PCM PAYS EVERYTHING AT
18 GAGGERO'S WISHES WITHOUT RESISTANCE OR HESITANCE.
19 PRASKE IS ALSO THE REGISTERED AGENT FOR SERVICE OF
21 EVIDENCE SHOWS THAT MR. GAGGERO'S OWN ACCOUNTANT
22 TESTIFIED UNDER PENALTY OF PERJURY THAT THE GAINS AND
23 LOSSES FOR THE ASSETS AND THE ESTATE PLAN, ULTIMATELY
24 FLOW THROUGHMR.GAGGERO'S TAX RETURNS, WHICH IS MORE
---·-·------L-5----E-V-I-DE-N-C-E-L,-F-~I:JT-E-R-E-GO-S-T"A"T-tJ-S--.--·-----·----·----------- --.~ -.--
26 GAGGERO CONTROLLED THE LITIGATION. HE DID SO
27 BY THE WAY OF THE FINANCIAL ASSETS OF THE SPECIALLY
28 APPEARING PARTIE£. THEIR INTERESTS AREALtGNED WITH

19
1 MR. GAGGERO. WITHOUT THEM -- WITHOUT MR. GAGGERO
2 THEY WOULDN'T EVEN EXIST. MR. PRASKE TESTIFIED THAT
3 THE SOLE PURPOSE OF THE EXISTENCE OF THE SPECIALLY
4 APPEARING PARTIES IS TO HOLD MR. GAGGERO'S ASSETS.
5 THEY ARE ONE IN THE SAME. THAT IS THE BOTTOM LINE.
6 MR. CHATFIELD: WELL, YOUR HONOR, I DON'T KNOW
7 WHERE YOU ARE GETTING THIS.
8 THE COURT: YOU MEAN OTHER THAN THE EXHIBITS, YOU
9 KNOW, IF I WERE INCLINED, WHICH I AM NOT, I COULD GO
10 DOWN AND SITE THE PAGE AND LINE NUMBERS OR PAGE
11 NUMBERS IN THE EXHIBITS WHERE THE DIFFERENT
12 COMPONENTS OF THAT FLOW FROM, BUT, YOU KNOW, I AM NOT
13 INCLINED TO DO THAT.
14 MR. CHATFIELD: WELL, YOUR HONOR, I HAVE LOOKED AT
15 THE PAGE AND LINE NUMBERS AND THE TESTIMONY WHICH IS
16 ATTACHED TO THE MOTION, AND I HAVE SEEN THAT THE
17 QUOTATIONS IN THE MOTION AND IN THE REPLY BRIEF ARE
18 NOT WHAT THE PEOPLE ACTUALLY SAID.
19 FOR EXAMPLE, A QUESTION WAS ASKED --
-_.. --- --
20 THE COURT:
21 THEMSELVES. I READ THE EXHIBITS.
22 MR. CHATFIELD: AS I.SAID, THE MOTION TAKES
23 MR. PRASKE'S TESTIMONY OUT OF CONTEXT.
24. THE COURT: .WHAT ASPECT OF MR. PRASKE' S TEST:r:MONY
26 PAGE AND LINE NUMBERS YOU THINK ARE TAKEN OUT OF
27 CONTEXT.
28 MR. ESQUIBIAS: YOUR HONOR, IF 1 MAY lNTERRUPT.
I
·~I-·--

20
1 THE COURT: THIS IS MR. CHATFIELD'S ARGUMENT.
2 MR. ESQUIBIA~: HE IS ARGUING ABOUT SOMETHING
3 ABOUT MY CLIENT WHO I REPRESENT.
4 THE COURT: HE IS ARGUING ABOUT SOMETHING FROM
5 WHEN HE REPRESENTED YOUR CLIENT. ARE YOU TALKING
6 ABOUT THE TESTIMONY IN THE JUDGMENT DEBTOR EXAM?
MR. CHATFIELD: NO, YOUR HONOR.7
8 THE COURT: WHICH TESTIMONY ARE YOU TALKING ABOUT
9 IN THE URA CASE?
10 MR. CHATFIELD: YES, YOUR HONOR, AND TELL ME
11 I DID NOT REPRESENT HIM IN THE URA CASE, YOUR
12 HONOR.
13 THE COURT: WHOM DID YOU REPRESENT, MR. GAGGERO?
14 MR. CHATFIELD: NO, I WAS NOT. I WITHDREW AS
15 ATTORNEY OF RECORD IN THAT CASE PRIOR TO TRIAL.
16 MR. BOSWICK REPRESENTED MR. GAGGERO.
17 THE COURT: WHAT IS THE PORTION OF THE TESTIMONY
18 THAT YOU THINK WAS TAKEN OUT OF CONTEXT, SIR?
19 MR. CHATFIELD: WELL--
---20-- -----
21 MR. CHATFIELD: IN EXHIBIT G.
22 THE COURT: THE PRASKE CROSS-EXAMINATION
23 JUNE 13TH, 2005.
24 MR. CHATFIELD: THE QUESTION WAS ASKED ON PAGE
+-~---------L-.5---±e-eJ:I-.--------------------------~------------------------ -~--
r--
I-,-
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26 THE COURT: JUST A MINUTE. I AM TRYING TO FIND
27 THIS.
28 MR. CEA'1'FXEtD: ALL RIGHT.

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THE COURT: I HAVE PAGE 1001.
MR. CHATFIELD: WELL, STARTING ON PAGE 1000 GOING
THROUGH 1001. MR. PRASKE TESTIFIED THAT MR. GAGGERO
MAKES RECOMMENDATIONS TO HIM, BUT THAT MR. PRASKE IS
THE ONLY ONE THAT CAN MAKE THE DECISIONS. AND IF YOU
GO
THE COURT: BUT MR. -- PAGE 1000 HE SAYS THAT
MR. GAGGERO, HE HAS GOT THE TRUST AND THE LLC'S THESE
ENTITIES WANT TO BUY A PIECE OF PROPERTY. MR. PRASKE
IS THE TRUSTEE, BUT MR. GAGGERO IS THE MANAGER, AND
HE TELLS MR. PRASKE WHAT HE WANTS TO DO.
MR. CHATFIELD: THAT IS NOT THE WAY I READ THE
TESTIMONY. I READ THE TESTIMONY TO SAY THAT
MR. GAGGERO IS ONE OF THE PEOPLE WHO WORKS AT THE
MANAGEMENT COMPANY AND MAKES RECOMMENDATION TO
MR. PRASKE, AND MR. PRASKE MAKES THE DECISION AS TO
WHAT TO DO.
THE COURT:
QUESTION: PAGE 1,000, LINE 22.
WANT TO BUY THIS GREAT PIECE OF PROPERTY.
WHAT SHOWING MUST MR. GAGGERO MAKE TO YOU IN
ORDER TO SATISFY YOU AS THE TRUSTEE WITH
24 FIDUCIARY DUTIES,_THAT I AM GOING TO RELEASE
--------L-5---------FtJND3---FCYR-TJi-AT-P-rE-e-E--(')-F-]:l-R-(')-]:l-E-:R.-T-Y-?---------------------
26 ANSWER: .SUCCESSFUL HISTORY OF
27 MAKrNG POSITIVE, SUCCESSFUL
28 TRANSACTIONS -.
._ - - - - - - - - - - - - - - -

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,
QUESTION: THAT IS IT?
ANSWER: THAT IS THE MOST IMPORTANT
THING.
QUESTION: SO, MR. GAGGERO SAYS I
WANT MONEY AND YOU SAY, HOW MUCH?
ANSWER: WELL, NO.
QUESTION: SO WHAT IS THE PROCESS?
ANSWER: IF IT IS WITH REGARD TO
MAKING INVESTMENTS FOR THE BENEFIT
OF THE TRUST,HE MAKES A
RECOMMENDATION ON A PROPERTY
INVESTMENT. I WILL FOLLOW THAT
RECOMMENDATION.
WHAT IS OUT OF CONTEXT?
MR. CHATFIELD: WHAT IS OUT OF CONTEXT IS THAT
MR. GAGGERO IS NOT THE DECISION MAKER. THE TRUSTEE
IS THE DECISION MAKER.
THE COURT: MR. PRASKE IS FOR ALL INTENTS AND
PURPOSES A RUBBER STAMP. AND THE TESTIMONY THAT YOU
-t:fIRECTE-b---ME---TTs-eONF-IRMS TR-AT-IF- HE--MAKES- -THE----
RECOMMENDATION, MR. PRASKE DOES IT. IT IS A LITTLE
HARD TO INTERPRET THAT LANGUAGE ANY OTHER WAY.
1 2 3 MR. CHATFIELD: WELL, HE GOES ON TO SAY ON THAT
I
I 24 PAGE; 'fEAT ONLINE 14 LINE 15 IT SAYS --I - -- - - - - - - -
22
-j------------2-5-~-_---~~tJ-E-s-'I'-I-eN-:--I-:kM-T-RY-I-NG--IN-M-Y-eW-N---------------1---------
26 MIND TO DISTINGUISH THAT DIFFERENT
27 FROM MR.GAGGERO SAYING I WANT MONEY
1--
! 28 AND YOU SAYING HOW MUCH,BECAUSE --
r------~-------------------------

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AND THEN ANSWER IS BECAUSE AND
THEN --
QUESTION: WHY ARE YOU DRAWING A
DISTINCTION BETWEEN THOSE TWO?
ANSWER: BECAUSE IF HE CAME TO ME
AND SAID I WANT $2,000,000 TO SPEND
IN LAS VEGAS. I MIGHT SAY NO. IN
OTHER WORDS IT HAS TO BE FOR THE
BENEFIT OF THE TRUST?
ANSWER: YES.
QUESTION: YES?
ANSWER: YES.
THE COURT: OKAY. SO, I WANT THE -- GAGGERO SAYS
I WANT THE TRUST TO BUY THIS PROPERTY AND MR. PRASKE
SAYS YES, SIR, YES,' SIR, THREE BAGS FULL AND SIGNS
THE CHECK.
MR. CHATFIELD: THAT IS NOT NECESSARILY SO, YOUR
HONOR, ALTHOUGH --
THE COURT: WHAT ABOUT MR. PRASKE'S TESTIMONY
MR. CHATFIELD: HIS TESTIMONY IS THAT MR. GAGGERO
MAKES THE RECOMMENDATION, AND HE MAKES THE DECISION
IT IS NOTHING IN THERE THAT SAYS THAT.
THE COURT: WHAT DO YOU DO THEN, SIR, WITH_THE
r-----------Z5- --nTRKC~-WSWER?'------------------------------------------------
i 26 QUESTION: SO WHAT IS THE PROCESS?
i 27 ANSWER: IF IT IS REGARD TO MAKING
28 INVtSTMtNTS FOR TH~ BENEfIT OF THE

'~1 1")"
24
1 TRUST, AND HE MAKES A RECOMMENDATION
2 ON A PROPERTY INVESTMENT, I WILL
3 FOLLOW THAT RECOMMENDATION. SOUNDS
4 LIKE NO EXERCISE OF DISCRETION BY
5 MR. PRASKE. HE SAYS DO IT, YOU
6 KNOW, IT IS LIKE, YOU KNOW --
7 MR. ESQUIBIAS: I COMPLETELY DISAGREE, YOUR HONOR.
8 THE COURT:_ WHEN MR. GAGGERO SAYS JUMP, MR. PRASKE
9 SAYS HOW HIGH ON HIS WAY UP.
10 MR. ESQUIBIAS: AS A PERSON SITTING HERE LISTENING
11 TO THE STATEMENTS NOT INVOLVED IN THE DEPOSITION --
12 THE COURT: THAT IS TRIAL TESTIMONY, SIR. THIS IS
13 TRIAL TESTIMONY.
14 MR. ESQUIBIAS: AS A PERSON LISTENING TO TRIAL
15 TESTIMONY, I CAN TELL YOU IT SOUNDS LIKE HE DOES
16 EXERCISE DISCRETION THAT HE DETERMINES WHETHER IT IS
17 FOR THE BENEFIT OF THE TRUST.
18 THE COURT: DO YOU HAVE ANY DIFFERENT POINTS YOU
19 WISH TO MAKE, MR. CHATFIELD? THE ONLY REASON WE
- -- - -- ------20----- DEALT WITH THAT PARTIcTfLAR-O-NKrS--THAT--WAS-TR8---0NE- --- - -------- - --
21 YOU POINTED ME TO. THERE ARE OTHER -- THERE ARE
22 PLENTY OF OTHER STUFF.
23 MR. CHATFIELD: WELL, YOUR HONOR, I DISAGREE THAT
24 THE EVIDENCE SHOWS ALTER EGO, AND AGAIN, - L STATE TBAT
-------------L-5-----E""V-E-N---I-F-I-T--El-I-D--3It()W-kI:JT-E"R--E-~O,-T-rtE"-()-N-L-Y--WA-Y-y-()tr-e--AN---------I----
26 PIERCE IN TO THE ENTITIES IS THROUGH OUTSIDE REVERSE
27 ALTER EGO WHICH IS N()T-PERMITTED rN THE STATE OF
CALIFORNIA.
I
Ir------ - - - - - - - - - - - - - -

25
1 THIS IS A JUDGMENT AGAINST AN INDIVIDUAL, AND
2 YOU ARE TRYING ~O MAKE AN ENTITIES AND THEIR ASSETS
3 SUBJECT TO JUDGMENT AGAINST AN INDIVIDUAL.
4 THE COURT: IF I AM JOHN JONES, AND I SET UP A
5 JOHN JONES TRUST, AND I DUMP ALL MY ASSETS IN TO IT,
6 AND I RUN IT AS MY PIGGYBANK, ARE YOU SUGGESTING THAT
7 JOHN JONES TRUST CAN'T BE REACHED?
8 MR. ESQUIBIAS: ACTUALLY, YOUR HONOR --
9 THE COURT: I DON'T THINK SO.
10 MR. ESQUIBIAS: I WOULD ACTUALLY SAY, YES, THAT'S
11 CORRECT.
12 THE COURT: I DON'T THINK SO.
13 MR. ESQUIBIAS: THAT IS THE LAW UNDER 141 CAL APP.
14 4TH, 25 A 2006-CASE, DIVISION ONE OF THE FOURTH
15 DISTRICT.
16 THE COURT: AND THEN THAT SEEMS TO RUN COUNTER TO
17 GREENSPAN, BECAUSE GREENSPAN SAYS THAT YOU CAN GO IN
18 TO THE TRUST THE ALTER EGO DOCTRINE, MAY APPLY TO THE
19 TRUSTEE -- THE TRUST THROUGH THE TRUSTEE, AND
20
21 CITES GREENSPAN.
22 MR. ESQUIBIAS: I WILL TELL YOU WHAT -- SAYS IN
23 THAT REGARD, YOUR HONOR, IT SAYS THAT --
.24 THE COURT: .1 WILL TAKE THE 2010-CASE.OU'l' Of OUR
26 AUTHORITY.
27 I AM PERSUADED BY THE SHOWING THAT THESE
28 PERSONS AND ENTITIES ARE AtTER :EGOS OF MR. GAGGER.O

26
1 AND CLEARLY, CLEARLY, IT WOULD BE INEQUITABLE NOT TO
2 PIERCE THE VEIL -- NOT TO GET OUT THESE ENTITIES
3 WHICH ARE HIS ALTER EGO. SINCE HE HAS THIS
4 SUBSTANTIAL JUDGMENT AGAINST HIM, AND HE HAS
5 ATTEMPTED TO USE THESE DEVICES TO PUT HIS ASSETS
6 BEYOND THE REACH OF LEGITIMATE CREDITORS, AND WE HAVE
7 HAD A FULL AND FAIR OPPORTUNITY TO LITIGATE THIS.
8 I AM NOT RESPONSIBLE FOR WHEN MR. PRASKE GETS
9 NEW COUNSEL. I AM NOT RESPONSIBLE FOR WHAT ARGUMENTS
10 NEW COUNSEL MAKES OR DOESN'T MAKE IN HIS OPPOSITION.
11 I KNOW AT THE MOMENT THERE IS ZERO EVIDENCE
12 TO SUPPORT, ZERO EVIDENCE IN THE RECORD TO SUPPORT
13 THE POSITION THAT THERE IS A PLETHORA OF -- I DON'T
14 KNOW WHO THESE PEOPLE ARE.
15 AND IN FACT, I DO KNOW THAT MR. PRASKE WAS
16 EXTRAORDINARILY VAGUE WHEN HE WAS QUESTIONED AT TRIAL
17 ABOUT THE IDENTITIES OF THESE BENEFICIARIES SUPPOSED
18 BENEFICIARIES.
19 YOU KNOW, THE DECISION WAS MADE LONG AGO TO
r--- ---- -- - - - - - 10-- --- -KEEp-THE-Tl~.-oST---DOCURENTS-(jU-T - OT -TRg-HANDS--OFTBE-- - -
21 DEFENSE, AND NOW TO TRY AND INVOKE THE TERMS OF IT,
22 YOU KNOW, WITHOUT GIVING IT TO THE OTHER SIDE. HAVE
23 IT, YOU KNOW -- THERE IS A LITTLE BIT OF AN ANALOGY,
i
24 BERE, TO THE ASSERTION OF THE ATTORNEY-CLIENT
I
~.- ~------2-5- --P-R-I-V-I-I:JE-@-E-~---T-HE-G-E-N-E-RA-I:JRtJ-I:JE--I-S--T-H-AT~T-H-E'------------~--- -----
I
r
26 ATTORNEY-CLIENT PRIVILEGE CANNOT BE ASSERTED AS BOTH
27 A SWORD AND ASHIELD,AND IF YOU IN PRETRIAL
28 DISCOVERY ASSERT THE ATTORNEY-CLIENT PRIVILEGE , TO

27
1 PROTECT CERTAIN THINGS AGAINST DISCLOSURE, ORDINARILY
2 YOU ARE NOT GOING TO BE ALLOWED TO ALL OF A SUDDEN AT
3 THE LAST MINUTE, DROP IT AND SAY BOY OH BOY, NOW WE
4 HAVE GOT ALL THIS STUFF, WE KNOW WE HAVEN'T TOLD YOU
5 ABOUT IT BUT WE ARE NOW MAKING THE DECISION TO WAIVE
6 IT. THAT IS ONLY AN ANALOGY, I HAVE GOT TO TELL YOU
7 THE -- THIS IS A SITUATION WHERE THESE ISSUES HAVE
8 BEEN PERCOLATING FOR A LONG TIME, AND THERE IS A
9 FUNDAMENTAL UNFAIRNESS TO MAKING KPC JUMP THROUGH ALL
10 THESE HOOPS TO COLLECT THE JUDGMENT AND SAYING NO, NO
11 YOU CAN'T HAVE X, Y, AND Z, AND THEN COMING IN AT THE
12 LAST MINUTE MAKING ARGUMENTS NOT SET FORTH IN THE
13 PLEADINGS WEIGHS ON EVIDENCE, NOT BEFORE THE COURT
14 AND SAYING JUDGE GIVE US A DO OVER.
15 THERE IS A FUNDAMENTAL UNFAIRNESS TO THAT.
16 MR. CHATFIELD: WELL, YOUR HONOR, I WOULD
17 RESPECTFULLY WOULD SAY THAT THE REASONING BEHIND IS
18 THERE IS A FUNDAMENTAL UNFAIRNESS FOR BRINGING IN
19 OTHER PEOPLE WITH OTHER INTERESTS WHO DIDN'T ATTEND A
21 THE COURT: MR. GAGGERO CONTROLS THESE ENTITIES.
22 THEY ARE HIS ALTER EGO, THE EVIDENCE FIRMLY PERSUADES
23 THE COURT OF THAT.
24 MR. ESQUIBIAS: YOUR HONQR, lWO_ULD THINK THAT - __
26 THIS SYSTEM, AND MR. GAGGERO IS THE GUY WHO IS -- YOU
27 KNOW,THIS IS WHAT HE DID. AND· HE DID IT FOR· THESE
28PURP~SES. HE TOLD ME SO, IN THE TRIALr TO SHIELD HIS
I.r--_.-

· ~ ? l
28
1 ASSETS FROM CREDITORS. I BELIEVE THAT WAS HIS
2 TESTIMONY ON CROSS EXAMINATION AT THE TRIAL IN THIS
3 CASE.
4 MR. CHATFIELD: I BELIEVE THAT IS INCORRECT, YOUR;
5 HONOR. THAT WAS YOUR CONCLUSION, BUT WHAT I DON'T
6 UNDERSTAND IS HOW WITHOUT ANY EXAMINATION OF THESE
7 ENTITIES PACIFIC COAST MANAGEMENT, 511 OCEAN FRONT
8 WALK LP, GINGERBREAD COURT LP, MALIBU BROAD BEACH LP,
9 MARINO GLENCO LP, BLU HOUSE LLC AND BOARDWALK SUNSET
10 LLC, HOW YOU CAN DETERMINE THAT THEY ARE ALL HIS
11 ALTER EGO.
12 THE COURT: THE MOTION IS GRANTED.
13 THE ORDER HAS BEEN SIGNED. DEFENSE TO GIVE
14 NOTICE. THANK YOU.
15
16
17
18
19
----2d
21
22
23
24
~--~~--~----z-5-:~~--~--------~----------~~-----~-----------------------1------
26
27
28
I
-r---

<') J-I!'~' ,.
f-
I, -
- :- - - - - - - - - -
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
DEPT. LA 24 HONORABLE ROBERT L HESS r JUDGE
STEPHEN GAGGERO r AN INDIVIDUAL;
PLAINTIFF r
-VS-:
KNAPP r PETERSEN & CLARKE r
DEFENDANTS.
STATE OF CALIFORNIA
SS
)
)
) CASE NO.
)BC286925
) REPORTER'S
) CERTIFICATE
)
)
Ir CAROL L. CRAWLEY r OFFICIAL REPORTER OF THE
SUPERIOR COURT OF THE STATE OF CALIFORNIA r FOR THE COUNTY OF
LOS ANGELES r DO HEREBY CERTIFY THAT THE FOREGOING PAGES r
1-28 COMPRISE A FULL r TRUEr AND CORRECT TRANSCRIPT OF THE
PROCEEDINGS HELD ON MAY 29 r 2012 r IN DEPARTMENT 24 OF THE
LOS "ANGELES COURT IN THE MATTER OF THE ABOVE-ENTITLED CAUSE.
DATED THIS 10TH DAY OF JULY r 2012
-=:-=-::t=-=-tvt--=----:::1==-===-=~""===_::=_=_:::_I_..:r........CSR #7518
CAROL PORTER

07/05/2012 11:10 8052571140 DAVID A ESQUIBIAS PAGE 01/03
Certified Sp!I!:c(alist in E$tat~ Planning,
Tru~t and Probate Law
The State Bar ofCalifornia
Board of Legal Sp~oialization
Master ofLaws in Taxation
DATE:
TO:
FAX NUMBER:
NUMBER OF PAGES:
FROM:
FAX NUMBER;
MESSAGE:
DAVID A. ESQUIBIAS
ATTORNEY Al LAW
262:5 TOWNSGATE ROAP, SUITE 330
WESTLAKE VILLAGE, CALIFORNIA 91361
TELEPHONE (805) 267-1141
Fax (805) 267-1140
FACSIMILE TRANSMITTAL
July 5, 2012
Austa Wakily, Esq.
888-749-5812
Three (3)
(including cover page)
David A. Esquibias
(805) 267-1140
Gaggero v. Knapp, Petersen & Clarke ("KPC")
Original to follow by mail.
TH1S MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH
IT IS ADPRESSED, AND MAY CONTAIN INFORt-mTION THAT IS PRIVILEGED, CONFIDENTIAL,
AND EXEMPT fROM DISCLOSURE UNDER ApPLICABLE LAW. If THE READER OF THIS
MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE
fOR DELIVERING THIS MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIfIED
THAT DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS COMMUNICATION 1S STRICTLY
PROHIBITEP. IF yOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY
US IMMEDIATELY BY TELEPHONE, AND RETURN THE ORIGINAL MESSAGE TO US AT THE
ADDRESS ABOVE VIA THE U.S. POSTAL SERVICE. THANK YOU.
C';,rcular 230 Disclosure: IRS regulations require us to advise you that,
unless oth.n:wise specifically noted, any federal tax advice contained in this
tl:";i3.nsmission (inclt..1.d.ing any attachments f enclosures, or other a.ocompanying
materials) is not intended or written to be used, and it cannot be used, by
any taxpaye.r for the purpose of avoiding penalties; furthermore, this communi-
cation was not intended or written to support the promotion or marketing of
any of the transactions or matters it addresses.

07/05/2012 11:10 8052571140 DAVID A ESQUIBIAS PAGE 02/03
DAVID A. ESQUIBIAS
OAVID A. E:~Ot,J18IAS .. t
"'t,J"rH o. J'o1l;;,JRROW
TIl"IACY H. KI't!ZMAN
;;:1;12$ 'rOWNSGA,"I'E: AOAD, $U~TE: .930
WESTLAKE VlLLAOE. CJl,.Ll:;FrORN"lA 9.1.361
Tr::rLEPHONI;: (B05) 267-1141
FA¢'$IMILE: (90r;) 2a7'~II""O
www.trustandfamilylaw.com
SHANNON VAN NEST, PARALEGAl.
·';:;I>FITll'"ll::tI 9PE:CIA~15T • I!:S'I'A'l'E
I"IJ:I.NNIN.:l, TRUST ANti PI'!OBATE: lAW
THe; oTATI!:: l!:!AR OF (;AI...II'"OI'lNIA eOA~1,") QI'"
LEGAIw l;if'I!::CIALIZATlQN
iMASTE:R OF I.AWe IN TAXATION
Randall A. Miller, Esq.
Austa Wakily, Esq.
Miller LLP
515 South Flower Street
suite 2150
July 5, 2012
Los Angeles, California 90071-2201
Re: Gaggero v. Knapp, Petersen & Clarke (IiKPC")
Case Number BC286925
Dear Counsel:
P,,$.I"'"ILI!:Y BLA5E:R, I"ARAI.&G.....L,
SE!RYL ..JOHNSON, PARAI...Ii:OiiAI.
As you know, my office represents the New Judgment
Debtors in the above referenced case. As you also know, my
clients maintain they have been denied due process in this
case by the trial court and are appealing their involvement
in this case to the Court of Appeal.
You are placed on notice by declarations filed in. this
case and other evidence in your possession that the rights
of my clients and unnamed third parties are being trammeled
by your firm's actions on behalf of your clients. As stated
in the declaration of Joseph Praske dated June 26, 2012,
none of the judgment debtors in this case are in a position
to post a bond in the amount ordered by the court.
One of the purposes of this letter is to request that
your firm agree to refrain from any action relating to
execution on the assets of the New Judgment Debtors during
the pendency of the appeal, including the recording of any
abstracts of judgment, imposition of liens, or any other
method slandering tit . Any execution on the assets shall
cause my clients and unnamed third parties irreparable
injury, including but not limited to impairment of their
ability to do business, damage to their reputation, and
loss of revenue.
Based upon the current status of the law, it is most
likely that our clients' appeal will be successful and the

07/05/2012 11:10 8052571140
Randall A. Miller, Esq.
Austa Wakily, Esq.
Miller LL1'
July 5, 2012
DAVID A ESQUIBIAS
Re: Gaggera v. Knapp, Petersen & Clarke ("KPC")
Case Number BC286925
Page 2 of 2
trial court's error will not exonerate your firm or your
clients from any and all damages suffered by our clients
and unnamed third parties. Therefore, Mr. Praske again
offers to enter into a stipulation between our clients
wherein the New Judgment Debtors agree not to convey,
encumber, pledge, or hypothecate any of their assets
outside of the ordinary course of business during the
pendency of the appeal and your clients agree to refrain
from execution.
The other purpose of this letter is to advise you
that, should your clients reject our offer and our request
that your firm refrain from any execution on the assets of
the New Judgment Debtors during the pendency of the appeal,
our clients will hold your firm and your clients
accountable for the damages caused thereby.
Very Truly Yours,
DhE: sd
PAGE 03/03

1
1 SUPERIOR COURT OF THE STATE OF CALIFORNIA
2 COUNTY OF LOS ANGELES
3
STEPHEN M. GAGGERO, )
4 an individual, )
)
5 Plaintiff, )
)
6 -vs- ) Case No.: BC286924
)
7 KNAPP, PETERSEN, & CLARKE, )
STEPHEN RAY GARCIA, STEPHEN )
8 M. HARRIS, and ANDRE JARDIDI)
)
9 Defendants. )
____________________________)
10
11
DEBTOR'S EXAMINATION OF STEPHEN M. GAGGERO
12
LOS ANGELES, CALIFORNIA
13
WEDNESDAY, JUNE 20, 2012
14
15
16 ATKINSON-BAKER, INC.
COURT REPORTERS
17 (800) 288-3376
www.depo.com
18 REPORTED BY: JANE HONG-ELSEY; CSR NO. 11975
FILE NO: A605E3C
19
20
21
22
23
24
25

2
1 SUPERIOR COURT OF THE STATE OF CALIFORNIA
2 COUNTY OF LOS ANGELES
3 STEPHEN M. GAGGERO, )
an individual, )
4 )
Plaintiff, )
5 )
-vs- ) Case No.: BC286924
6 )
KNAPP, PETERSEN, & CLARKE, )
7 STEPHEN RAY GARCIA, STEPHEN )
M. HARRIS, and ANDRE JARDIDI)
8 )
Defendants. )
9 ____________________________)
10 Debtor's Examination of STEPHEN M. GAGGERO, taken on
11 behalf of Judgment Creditors, at 111 North Hill
12 Street; Department 1A, Los Angeles, California,
13 commencing at 11:00 a.m., on Wednesday, June 20, 2012
14 before Jane Hong-Elsey, CSR No. 11975.
15
16
17
18
19
20
21
22
23
24
25

3
1 A P P E A R A N C E S
2 FOR JUDGMENT CREDITOR:
3 MILLER, LLP
BY: AUSTA WAKILY, ESQ.
4 515 SOUTH FLOWER STREET
SUITE 2150
5 LOS ANGELES, CA 90071
6
7
FOR THE JUDGMENT DEBTOR:
8
DAVID BLAKE CHATFIELD, ESQ.
9 WESTLAKE LAW GROUP
2625 TOWNGATE ROAD
10 SUITE 330
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

4
1 I N D E X
2 WITNESS: STEPHEN GAGGERO PAGE
3 BY: MS. WAKILY 5
4 EXHIBITS:
5 No. Description Marked
6 1 TRANSCRIPTS 105
7 2 TRANSCRIPTS 115
8 3 TRANSCRIPTS 116
9 4 INSURANCE APPLICATION 148
10 5 QUITCLAIM DEED 176
11
QUESTIONS WITNESS INSTRUCTED NOT TO ANSWER
12
PAGE LINE
13
15 13
14
54 11
15
62 21
16
63 23
17
64 6
18
104 8
19
114 17
20
137 12
21
205 23
22
INFORMATION TO BE SUPPLIED
23 (NONE)
24
25

5
1 LOS ANGELES, CALIFORNIA, WEDNESDAY, JUNE 20, 2012; 11:00 A.M.
2 STEPHEN GAGGERO,
3 having first been duly sworn, was
4 examined and testified as follows:
5 MS. WAKILY: Austa Wakily for judgment creditor.
6 Knapp, Peterson, Clarke.
7 MR. CHATFIELD: Davis Chatfield of judgment debtor,
8 Stephen Gaggero.
9 E X A M I N A T I O N
10 BY MS. WAKILY:
11 Q. Okay. So Mr. Gaggero, you've had your deposition
12 taken before?
13 A. Yes.
14 Q. And you're familiar with the ground rules in terms
15 of speaking up so the court reporter can hear you?
16 A. Yes.
17 Q. If you need a break, let me know and we can take
18 one.
19 A. Okay.
20 Q. If there's a question pending, I'd just like to get
21 an answer to that before you go. I appreciate -- I
22 understand there's urgency to those circumstances.
23 If you don't understand a question, let me know.
24 I'm sure you will. But if you answer my question, I will
25 assume that you understood it.

6
1 Do you understand that?
2 A. Yes.
3 Q. So I'll just get to the basics first. You
4 understand you owe the judgment creditor in this case a money
5 judgment, correct?
6 MR. CHATFIELD: Objection. Mischaracterizes the
7 judgment.
8 Q. (BY MS. WAKILY): All right. Aside from the whole
9 costs, you know there's a judgment entered against you in
10 this case where you're ordered to pay about 1.5 million
11 dollars?
12 A. I know there's a judgment against me in favor of
13 KPC for about a million and a half dollars.
14 Q. Do you understand that judgment means you have to
15 pay that amount?
16 A. Yes.
17 Q. All right. Have you paid that amount?
18 A. No.
19 Q. Is there a reason you haven't paid?
20 A. I don't have the money.
21 Q. Okay. Do you have the resources to get that money?
22 A. Yes.
23 Q. Okay. And how can you get that money?
24 A. There's a lawsuit pending against KPC for well in
25 excess of that; two million dollars. And I suspect that when

7
1 that is adjudicated, there will be sufficient funds to pay
2 them.
3 Q. Okay.
4 A. From the money they pay me.
5 Q. Okay. So besides that, is there any resources you
6 have?
7 A. Not I can think of.
8 Q. Have you ever had the resources to pay KPC?
9 A. Since I was born?
10 Q. Since the judgment was entered against you.
11 A. No.
12 Q. You've --
13 A. Other than the case that's against KPC which has
14 been pending since --
15 Q. Okay.
16 A. -- during the time that judgment was awarded.
17 Q. So from 2008 to -- I believe, first judgment was
18 entered, May 19, 2008. So since that time forward, you've
19 never had the funds to pay the judgment amount in any amount?
20 A. Was the judgment entered in 2008 or 2010 after the
21 Court of Appeals?
22 Q. It was affirmed in 2010. But as of 2008, did you
23 have the funds to pay it?
24 A. I don't remember.
25 Q. You don't remember if you had the 1.5 million

8
1 dollars in 2008?
2 A. I didn't have 1.5 million dollars in the bank, if
3 that's what you're asking. I don't remember what, if any,
4 resources I had in 2008, other than the malpractice lawsuit
5 against your client.
6 Q. So you don't know if you had 1.5 million dollars in
7 resources?
9 Q. Okay. Did you ever have 1.8 million dollars in
10 resources?
11 A. In my life?
12 Q. Uh-huh.
13 A. Yes.
14 Q. When?
15 A. I can't remember but long ago.
16 Q. How long ago?
17 A. I have to remember when it was that I had it. And
18 I'm just not clear on when it was.
19 Q. All right. So do you currently live in a house or
20 an apartment?
21 A. I live in a double-wide trailer.
22 Q. A mobile home?
23 A. Yeah. I think you call it mobile home.
24 Q. Manufactured home?
25 A. Yes. It has axles.

9
1 Q. What city is that in?
2 A. Ventura. Yes.
3 Q. And how much -- do you pay rent for it?
4 A. Yes.
5 Q. How much?
6 A. $1,000 a month.
7 Q. Who do you pay rent to?
8 A. The owner.
9 Q. Who's the owner of that?
10 A. Canada Larga Land and Livestock Company. That's
11 the title owner.
12 Q. Canada Larga? And is it an LLC?
13 A. Yes.
14 Q. So it's Livestock Company, LLC?
15 A. Yes.
16 Q. Do you know where that's incorporated? What
17 jurisdiction?
18 A. No.
19 Q. Is it California?
20 A. I don't know.
21 Q. Do you have a car?
22 A. No.
23 Q. Do you use somebody's else car to travel?
24 A. Yes.
25 Q. Who's car do you use?

10
1 A. Pacific Coast Management.
2 Q. How often do you use their car?
3 A. Varies.
4 Q. Do you have to ask somebody's permission to use
5 that car?
6 A. No.
7 Q. Do you have keys to that car?
8 A. Yes.
9 Q. Do you have them with you now?
10 A. I don't think I do. Yeah, I do.
11 Q. Did you use that car to drive here?
12 A. No.
13 Q. So is it basically they're letting you use that car
14 as your personal car?
15 A. I don't know what the actual term would be. It's a
16 company car that they provide me with as part of my
17 compensation.
18 Q. So you're entitled to it at all times then or only
19 when on business?
20 A. I guess I'm entitled to it at all times unless they
21 revoke the privilege.
22 Q. So it's part of your compensation?
23 A. Correct.
24 Q. So they pay for the gas for your car?
25 A. Yes.

11
1 Q. Do you know how much how did they pay for the gas
2 in your car?
3 A. I don't understand the question.
4 Q. So, let's say you're running on empty and you have
5 to get gas.
6 A. Okay.
7 Q. Do you pay for it yourself and they reimburse you?
8 Or do you have a card they give you? How do you pay for the
9 gas?
10 A. Well, sometimes I just pay for it myself with cash
11 in my pocket. And sometimes I fill up from a gas tank on the
12 ranch where I live. But it is -- sometimes it just depends.
13 Q. How do you pay for it when you go to the -- other
14 than cash, how do you pay for it?
15 A. Pacific Coast Management pays for it.
16 Q. So they reimburse you or someone picks you up at
17 the gas station?
18 A. I don't ask for reimbursement all the time.
19 Q. Let's say you don't have the card. Do they give
20 you a card to use?
21 A. A gas card? No.
22 Q. A credit card?
23 A. Yes.
24 Q. A credit card. Okay. Do you have that credit card
25 with you?

12
1 A. No.
2 Q. And do they have any limitations on their credit
3 card?
4 A. Business purposes. If it's something that's not a
5 business purpose, then I have to reimburse it.
6 Q. What do they define as a business purpose?
7 A. Anything that has to do with the business of
8 Pacific Coast Management.
9 Q. Okay. What have you used that card for?
10 A. Business purposes. And if I use it for something
11 personal, I have to reimburse them.
12 Q. Have you ever used it for something personal?
13 A. Yes.
14 Q. How often do you use it -- how often do you use it
15 for personal --
16 A. Rarely.
17 Q. Do you know how much it's used for personal?
18 A. How much? How much or how many times or --
19 Q. Price. Money. Large expenses. Small expenses.
20 What? Dinner. Movies?
21 A. No. I usually -- I can't tell you exactly but not
22 very often for small expenses.
23 Q. Do you know how much you use on the credit card per
24 month on an estimate?
25 A. No. For me personally?

13
1 Q. For you, yeah. For you personally and for business
2 purposes.
3 A. I'm not -- very little for me personally. And it's
4 not every month. And for -- I'm not sure.
5 Q. Would you be able to -- how would you find out how
6 much you get from Pacific Coast Management in the credit
7 card?
8 A. I don't get anything from Pacific Coast Management
9 for the credit card.
10 Q. How much -- would you be able to determine how much
11 you use Pacific Coast Management's money per month?
12 A. I don't use their money.
13 Q. You use the credit card, don't you?
14 A. Yes, but then I pay them back for it.
15 Q. Okay. That's only for your personal use, is that
16 not correct?
17 A. Correct.
18 Q. If you're doing something for business purposes,
19 you can use the credit card, right?
20 A. Yes.
21 Q. Do you have to reimburse them for that?
22 A. No. That's --
23 Q. How much do they -- does that -- part of the credit
24 card use, how often do you use the credit card for business
25 purposes?

14
1 A. That would be Pacific Coast Management's business
2 and they're not a debtor here. So I'm not going to discuss
3 what their expenditure are by me or --
4 Q. Do you work for them?
5 A. Yes.
6 Q. Okay. So it's part of your compensation?
7 A. What is part of my compensation?
8 Q. They pay for your gas and give you a car?
9 A. The automobile is provided as part of my
10 compensation; that's correct.
11 Q. What type of car is it?
12 A. It's a Toyota.
13 Q. They also provide you a credit card?
14 A. No. They don't provide me a credit card. They
15 provide a credit card that's a credit card.
16 Q. They've given it to you to you use?
17 A. To use for business expenses. And if I ever get
18 into a pinch and I have to use it for myself, if I do, I have
19 to pay them back.
20 Q. Who reviews that?
21 A. Myself. And as to what I have to reimburse, I
22 review it, and I write on it, and I pay them back.
23 Q. So you make the determination whether the credit
24 card you're using, that's been provided to you by Pacific
25 Coast Management for business purposes, is actually business

15
1 purposes?
2 A. For the most part yeah.
3 Q. Is there anyone else that has oversight as to
4 whether you're possibly improperly using their money?
5 A. I'm not sure.
6 Q. Do you review the bill every month then?
7 A. No.
8 Q. Do you review the bill at all?
9 A. If there's a question about a charge, I might
10 review it. Typically I keep the receipts and write on them.
11 And if it's a personal expense, then it's deducted from my
12 compensation.
13 Q. Okay. Besides you, does anyone else at Pacific
14 Coast Management have a credit card that Pacific Coast
15 Management has provided to them to use for business purpose?
16 MR. CHATFIELD: Objection. That involves an
17 inquiry into a third party that's not part of this
18 litigation. Instruct the witness not to answer any questions
19 about the personnel of Pacific Coast Management or the
20 business.
21 Q. (BY MS. WAKILY): Okay. Have you traveled out of
22 state for personal reasons?
23 A. Yes.
24 Q. When was the last time you traveled out of state?
25 A. I don't remember. I think several months ago. I

16
1 don't remember exact dates.
2 Q. Where did you go?
3 A. I went to Ecuador.
4 Q. Who paid for your travel?
5 A. I did.
6 Q. With what money?
7 A. My money.
8 Q. How much money do you have?
9 A. When?
10 Q. Right now. Total. Everything.
11 A. I don't know total everything. On my person, I
12 have $9.00.
13 Q. Okay. When you --
14 A. On my person.
15 Q. Okay. Do you have a bank account?
16 A. No.
17 Q. When you went to Ecuador, how much did it cost you?
19 Q. Did it cost more than $1,000?
20 A. Yes.
21 Q. Where did you get the $1,000?
22 A. From my money.
23 Q. Where do you keep that money?
24 A. In an account at Pacific Coast Management.
25 Q. You keep your personal money with Pacific Coast

17
1 Management?
2 A. As I earn it.
3 Q. How much is your compensation with Pacific Coast
4 Management?
5 A. $3,000 a month.
6 Q. So they pay you $3,000 a month?
7 A. Yeah.
8 Q. And you have $1,000 a month in expenses for your
9 rent, correct?
10 A. I do.
11 Q. Okay. And what other expenses do you have? Food?
12 How much do you spend on food?
13 A. I don't know. I don't keep track of it.
14 Q. Do you have an estimate?
15 A. No.
16 Q. Do you spend $200 on food?
17 A. I don't know how much I spend on food.
18 Q. Do you normally cook at home?
19 A. Sometimes.
20 Q. Do you ever eat out?
21 A. Sometimes.
22 Q. Okay. And do you ever take people out to eat?
23 A. Sometimes.
24 Q. Okay. Have you ever purchased a meal out at a
25 restaurant that was over a $100?

18
1 A. Sometimes.
2 Q. Have you ever purchased a meal at a restaurant that
3 was over a $100?
4 A. Yes.
5 Q. And you would pay for that?
6 A. Sometimes.
7 Q. So you don't have any idea how much you pay for
8 food per month?
9 A. That's correct.
10 Q. At least a $100 a month?
11 A. Yes.
12 Q. Okay. Do you think $500 a month?
13 A. I'm not going to guess. I don't know.
14 Q. How would you be able to figure that out for me?
15 Do you have documents that would reflect that?
16 A. No.
17 Q. You don't keep track of your finances with
18 documents?
19 A. There's no documents. I don't keep track of my
20 food expenditures. No.
21 Q. Would you be able to keep track of how much you
22 spend a month, personally?
23 A. I suppose I could start doing that but I have not.
24 Q. How would you start doing that?
25 A. I suppose I could -- I don't know -- write it down

19
1 every time I spend money.
2 Q. Is there another way like, for example, reviewing
3 the statements in this account that you keep at Pacific Coast
4 Management?
5 A. I don't think so.
6 Q. Okay. What type of an account is that you keep
7 with Pacific Coast Management?
8 A. I'm not sure it's just a an account.
9 Q. Is it a bank account?
10 A. Not a bank account that's just mine, no.
11 Q. Who's is it then if it's not yours?
12 A. Not mine.
13 Q. You keep your money in an account that's not yours?
14 A. Pacific Coast Management --
15 Q. Keeps your --
16 A. -- keeps my money.
17 Q. Okay. How do they keep your money?
18 A. I'm not sure.
19 Q. Who would know at Pacific Coast Management?
20 A. I'm not exactly sure what your question is.
21 Q. You're saying that your compensation from Pacific
22 Coast Management -- you get a compensation of $3,000?
23 A. Correct.
24 Q. You're saying Pacific Coast Management keeps that
25 compensation?

20
1 A. No. They give it to me.
2 Q. How do they give it to you?
3 A. In cash. Or else they pay for things for me. They
4 write checks on my behalf.
5 Q. Okay.
6 A. Or -- yeah. If they happen to write a check on my
7 behalf for something, that would be deducted from my $3,000
8 or they'll give me cash.
9 Q. A moment ago you mentioned you had an account you
10 kept with Pacific Coast Management.
11 A. It's an accounting or what not.
12 Q. You meant accounting? Okay.
13 A. I don't know the word.
14 Q. Basically, your funds are kept with whatever funds
15 they have or are they separate?
16 A. Well, they keep track of my $3,000.
17 Q. Is that kept in a separate account from their's?
18 A. I don't know.
19 Q. Do you who know who would know?
20 A. No.
21 Q. Who writes your checks for you?
22 A. Well, I don't have checks written for me very often
23 but if it's a check is written on my behalf, it would be
24 written by Pacific Coast Management.
25 Q. Who -- a person who individually -- writes your

21
1 checks for you on your behalf?
2 A. Different times. It depends when.
3 Q. Who? Just tell me the last person who wrote a
4 check for you.
5 A. I don't know the last time there was a check given
6 to me. I don't remember. It's been so long.
7 Q. When was the last time you were paid?
8 A. Every month.
9 Q. Okay. When was the last time -- who gave you the
10 cash or check? Or how did you receive that last $3,000?
12 Q. You don't remember how you received it?
13 A. No, because I don't always get -- somebody doesn't
14 hand me $3,000 every month. It's kept in an account. And if
15 I spend it all, I spend it. If I don't, it stays -- accrues
16 to the next month.
17 Q. You don't necessarily get $3,000 a month?
18 A. If I need cash, then I will ask for cash. And to
19 the extent I have cash available, I will get what cash I
20 need.
21 Q. Do you keep track of how much you're making?
22 A. I told you $3,000 a month.
23 Q. Do you keep track of how it accumulates? So for
24 example, lets say this month you don't take $3,000. And
25 then, next month you also don't take $3,000. And then you

22
1 have a few expenses you deduct. Do you keep track of what
2 your actual final balance would be with Pacific Coast
3 Management?
4 A. Sometimes.
5 Q. Sometimes. How do you do that sometimes?
6 A. I ask how much money is available for me.
7 Q. Who do you ask?
8 A. I'll ask different people at Pacific Coast
9 Management.
10 Q. I need names. Who do you ask?
11 A. I'm not going to give you the --
12 Q. This is directly relevant to your compensation.
13 I'm fully entitled to this.
14 MR. CHATFIELD: No. I don't agree.
15 MS. WAKILY: This is -- I'm asking him who pays him
16 his money.
17 THE WITNESS: Pacific Coast Management pays me.
18 Q. (BY MS. WAKILY): Who at Pacific Coast Management?
19 I'm entitled to that.
20 A. It's a corporation.
21 Q. There's a person who writes checks. A corporation
22 doesn't literally write checks.
23 A. There's several people.
24 Q. Do you write your own checks?
25 A. No.

23
1 Q. Is there -- is there another person who actually
2 does write your checks?
3 A. There are other people. I don't get checks.
4 Q. Okay. Are you making somebody up? Even somebody
5 who actually would hand you $3,000?
6 A. If I asked for $3,000 and I had $3,000 coming to
7 me, there are several people who would hand me the $3,000.
8 Q. Has anyone ever handed you $3,000 at Pacific Coast
9 Management?
10 A. I don't remember if anybody's handed me $3,000 at
12 Q. Has anyone ever wrote you a check for $3,000 at
13 Pacific Coast Management?
15 Q. Are you an employee of Pacific Coast Management?
16 A. No.
17 Q. You're an independent consultant?
18 A. Yes.
19 Q. Who's your boss?
20 A. Praske.
21 Q. Does he write your checks for you?
22 A. He may have. I just don't know.
23 Q. Does he keep track of your money for you?
24 A. I'm not sure. You have to ask him.
25 Q. Is there anyone at Pacific Coast Management that

24
1 would be able to tell me how much money you have with them?
2 I need to know how much money you have with Pacific Coast
3 Management. Who would I ask?
4 A. You can ask Joe Praske.
5 Q. Is there anyone else besides Joe Praske?
6 A. I would say he would be the one that you would most
7 likely -- most likely would be the one that you would talk to
8 about Pacific Coast Management's business.
9 Q. I'm not asking about Pacific Coast Management. I'm
10 asking how much money they have of yours -- your money at
12 MR. CHATFIELD: Asked and answered then.
13 MS. WAKILY: He just avoided the answer. He said
14 Joe Praske but then he said he was going to answer about
16 Q. (BY MS. WAKILY): I'm very specifically asking you,
17 who at Pacific Coast Management would tell me the balance of
18 money you have, Mr. Gaggero, with them? The amount of money
19 you're entitled to that's deposited or kept with them.
20 A. Probably ask Joseph Praske.
21 Q. Other than Joseph Praske, anyone else?
22 A. I think you have to ask Joe Praske.
23 Q. Okay. Would I be asking him as president of
24 Pacific Coast Management or in some other capacity?
25 A. That's up to you how you want to do it.

25
1 Q. Do you know how it's structured?
2 A. What's structured?
3 Q. How Pacific Coast Management handles their money.
4 You don't know that?
5 A. You have to ask Joe Praske.
6 Q. I'm sure I will but you don't know how that works,
7 though?
8 A. How what works?
9 Q. How they handle your money.
10 A. They have an account.
11 Q. You don't know actually how they handle it. You
12 don't know how the account works, do you?
13 A. They subtract and add to it.
14 Q. Are you guessing or do you know if that --
15 A. I assume that's how you keep track of an account.
16 Q. I would assume that, too. So you spent -- when you
17 went to Ecuador, how much did you spend?
19 Q. Do you have a copy of the ticket, plane ticket?
20 A. No.
21 Q. How did you -- did Pacific Coast Management
22 purchase the ticket for you?
23 A. No.
24 Q. Did someone else purchase the ticket for you?
25 A. No.

26
1 Q. You paid for it in cash?
2 A. No.
3 Q. How did you pay for it?
5 Q. When did you go?
6 A. I don't remember exactly but several months ago.
7 Q. Several being like five, four, three? What? How
8 many?
9 A. Less than five.
10 Q. Less than five months ago, you went to Ecuador?
11 A. Yes.
12 Q. You don't know how much it cost you?
13 A. No.
14 Q. You flew there?
15 A. I did.
16 Q. Did you fly just regular plane? First class?
17 Business class?
19 Q. You don't? Do you normally fly first class?
20 A. No.
21 Q. Do you normally just fly regular? Coach?
22 A. Yes.
23 Q. Would you be able to figure out what days you went?
24 Is there some record?
25 A. Not that I'm aware of. Not that I can recall right

09.06.12 motion appointment receiver [conformed]

09.06.12 motion appointment receiver [conformed]

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