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![Tanzola v. De Rita
(1955) 45 Cal.2d 1 ........................................................................................................................31
Unnamed Physician v. Board o f Trustees o f Saint Agnes Med. Ctr.
(2001) 93 Cal.App.4th 607 ...................................................................................................... 24
Wells Fargo & Co. v. City and County o fSan Francisco
(1944) 25 Cal.2d 3 7 ......................................................................................................................15
FEDERAL CASES
Anderson Nat. Bank v. Luckett
(1944) 321 U.S. 233 [64 S.Ct. 599, 88 L.Ed. 692] .............................................................. 17
Galpin v. Page
(1873) 85 U.S. 350 [21 L.Ed. 959, 18 Wall. 3 5 0 ] .................................................................16
Roadway Exp., Inc. v. Piper
(1980) 447 U.S. 752 [100 S.Ct. 2455, 65 L.Ed.2d 488] ..................................................... 17
STATE STATUTES
Code of Civil Procedure
§ 1 2 ................................................................................................................................................... 20
§ 187....................................................................................................................................................8
§ 6 3 1 .8 ...............................................................................................................................................5
§ 685.010 ...................................................................................................................................... 34
§ 685.040 ............................................................................................................................... passim
§ 685.070 ........................................................................................................................ 27,28,30
§ 685.080 ................................................................................................................................. 10,28
§ 708.110 ...................................................................................................................................... 27
§ 904.1 ...............................................................................................................................................2
§ 9 1 6 .................................................................................................................................................22
§ 923 ............................................................................................................................................... 22
§917.1 ............................................................................................................................................ 25
§ 1033.5 ........................................................................................................................................ 29
-viii](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-11-2048.jpg)
![FACTUAL AND PROCEDURAL HISTORY
1. 1997-1998: Creating the Estate Plan.
Stephen Gaggero, a successful real estate investor and developer, hired attorney
Joseph Praske in 1997 to develop and implement an estate plan on his behalf (Trial
RT1 602-604; Trial RT5 2720; B241675 CT1 124-125; B241675 CT3 411.)- Setting
up the estate plan took several months in 1997 and 1998. (B241675 CT1 127, 152-
163; B241675 CT2 192; B241675 CT3 411.) As part of this process, Praske created
several limited liability companies (“LLCs”) and limited partnerships (“LPs”) in
which Gaggero initially owned a membership or limited partnership interest.
(B241675 CT1 129-130; B241675 CT2 190-191, 212-213.)
Appellants 511 OFW L.P., Gingerbread Court L.P., Malibu Broadbeach, L.P.,
Marina Glencoe L.P., Blu House L.L.C., and Boardwalk Sunset L.L.C. were each
created by Praske to own a distinct piece of Gaggero’s real property. (B241675 CT2
314-319, 360-B241675 CT3 370.)
Gaggero then transferred his properties to these LLCs and LPs. (B 241675 CT1
126, 162-163, 191.) He subsequently transferred his ownership in those entities into
various trusts which Praske had established, including appellants Arenzano Trust and
the Aquasante Foundation. (B241675 CT2 191-193, 360-B241675 CT3 370.) He
separately transferred his personal residence to the Giganin Trust. (B241675 CT2 ]93-
- Citations to “JA”, “Trial RT” and “Opn.” refer to the joint appendix,
reporter’s transcript and opinion from Gaggero’s appeal of the original
judgment, B207567. Citations to “CT” refer to the clerk’s transcript in the
present appeal. The three hearing transcripts in this appeal are all cited by date
(to illustrate: 10-3-12 RT 1-2). Citations to the clerk’s and reporter’s
transcripts from one of appellants’ other pending appeals start with the number
of that appeal (to illustrate: B241675 CT1 1-2). Appellants respectfully ask
the court to judicially notice the briefing and records in these related appeals
per Evidence Code sections 452, subdivision (d), and 453.
3](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-15-2048.jpg)
![on August 3. (CT2 246-250.)-
19. August 6, 2012: This Court Stays Further Proceedings as to
Appellants.
Appellants had filed a supersedeas petition as part o f case B241675 on July 19.
In response, the court issued a stay of all proceedings in the trial court on August 6. It
later denied the supersedeas petition and lifted the stay on August 30.
20. August 6, 2012: The Trial Court Signs the Proposed Amended
Judgment.
The trial court signed respondents’ proposed third amended judgment, without
change, the same day this court issued its stay order. (CT2 3 19-320.)— The additional
—”A notice of appeal filed after judgment is rendered but before it is
entered is valid and is treated as filed immediately after entry of judgment.”
(Cal. Rules of Court, Rule 8.104(d)(1).) The court has discretion to do
likewise where the judgment has merely been announced. (Cal. Rules of Court,
Rule 8.104(d)(2).) But it must exercise that discretion in a manner consistent
with “the well-established policy of ‘according [the] right [to appeal] in
doubtful cases ‘when such can be accomplished without doing violence to
applicable rules.’” (Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th
894, 901, quoting Hollister Convalescent H o sp In c. v. R ico(915) 15 Cal.3d
660, 674, in turn quoting Slawinski v. Mocettini (1965) 63 Cal.2d 70, 72.)
That is true even where the appeal concerns the original judgment rather than
a subsequent amendment.
Even where no final judgment has been entered, an award of fees and
costs is appealable because it is a collateral order which directs the payment
of money and which is enforceable independent of the entry of the judgment.
(Krikorian Premiere Theatres, LLC v. Westminster Central, LLC (2011) 193
Cal.App.4th 1075, 1083-1085.)
—The August 6 document was labeled"Third Amended Judgment” but,
as we have seen, that label was incorrect. The judgment was actually amended
(continued...)
13](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-25-2048.jpg)
![fees, costs, and interest brought the overall amount of the judgment to $2,178,235.51.
(CT2 249-250.)
STANDARDS OF REVIEW
Denying a party notice and an opportunity to be heard is reversible per se, and
not subject to harmless-error review. (Elkins v. Superior Court (2007) 41 Cal.4th
1337, 1357; In re Marriage o f Carlsson (2008) 163 Cal.App.4th 281, 291-293.)
“The trial court’s authority to award postjudgment fees is a legal question that
we independently review.” (Ronald P. Slates, APC v. Gorabi (20120) 189
Cal.App.4th 1210, 1213; accord Jaffe v. Pacelli (2008) 165 Cal.App.4th 927. 934
[“whether the trial court had the authority pursuant to Section 685.040 to issue such an
award ... is a legal issue, which we review de novo.”].) If particular fee or cost items
are recoverable, the Court of Appeal reviews the amount of the award for an abuse of
discretion. (Chinese Yellow Pages Co. v. Chinese Overseas Marketing Service (2008)
170 Cal.App.4th 868, 885.)
ARGUMENT
I. A REVERSAL IN APPEAL B241675 WILL REQUIRE A REVERSAL
HERE.
When a judgment is reversed on appeal, all subsequent orders enforcing that
judgment fall along with it. That is what should happen here.
The orders and amended judgment which appellants challenge were entered
pursuant to the May 29, 2012 judgment which named appellants additional judgment
— (...continued)
for the third time on May 29, when the court granted the alter-ego motions.
The court was actually amending the judgment for the fourth time on August
6. For the sake of clarity, appellants will refer to the document by its title even
though that title is not accurate.
14](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-26-2048.jpg)
![debtors. The trial court determined that the fees and costs it awarded were incurred to
enforce that judgment. (CT2 249-250.) Respondents were only able to obtain these
orders because they had won their prior motion to add appellants to the judgment
against Mr. Gaggero.
But appellants have appealed the May 29 judgment in case B241675. If they
win, respondents will no longer be the prevailing parties. Any relief which the trial
court awarded to them on that basis will have to be reversed. (Gilman v. Dalby (2009)
176 Cal.App.4th 606, 620.)
“Costs upon appeal are merely incidental to the judgm ent appealed from
[citation], and an order awarding costs falls with a reversal of that part of the judgment
upon which it is based [citation].” (Purdy v. Johnson (1929) 100 Cal.App. 416, 420-
421; accord Gillan v. City o fSan Marino (2007) 147 Cal.App.4th 1033, 1053 [reversal
ofjudgment “necessarily compels the reversal of the award of fees as costs to the
prevailing party based on the judgment.”]) They are incidental because they depend
upon how the court resolves the substance of the parties’ claims. (Wells Fargo & Co.
v. City and County o fSan Francisco (1944) 25 Cal.2d 37, 44.) Orders enforcing a
judgment are thus also incidental to that judgment. (La Societe Francaise d'Epargnes
et de Prevoyance Mutuelle v. District Court (1879) 53 Cal. 495, 552.) So if the
original May 29, 2012 judgment against appellants is reversed, the subsequent award
of fees, costs, and interest cannot stand. Neither can the amended judgment that
incorporated them.
“An order awarding costs falls with a reversal of the judgment on which it is
based.” (Merced County Taxpayers’Assn. v. Cardella (1990) 218 Cal.App.3d 396,
402.) A defendant who was ordered to pay the plaintiffs costs is therefore entitled to
relief from those costs when the judgment is reversed. “[T]he successful party is
never required to pay the costs incurred by the unsuccessful party.” (Purdy, supra, 100
Cal.App. at p. 421.) If appellants succeed in appeal B241675, they cannot be made to
pay respondents’ fees or costs.](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-27-2048.jpg)
![II. THE THIRD AMENDED JUDGMENT VIOLATES APPELLANTS’
DUE PROCESS RIGHTS BECAUSE RESPONDENTS FAILED TO
SERVE THEM WITH EITHER THE FEE MOTION OR THE COSTS
MEMO.
The most fundamental components of due process are the right to notice and an
opportunity to be heard. As the United States Supreme Court explained 140 years ago,
“It is a rule as old as the law, and never more to be respected than now.
that no one shall be personally bound until he has had his day in court, by
which is meant, until he has been duly cited to appear, and has been afforded
an opportunity to be heard. Judgment without such citation and opportunity
wants all the attributes of a judicial determination; it is judicial usurpation and
oppression, and never can be upheld where justice is justly administered.”
(Galpin v. Page (1873) 85 U.S. 350, 368-369 [21 L.Ed. 959, 18 Wall. 350].)
Even where a court has generally obtained personal jurisdiction over a party for
purposes of a case, it only gains jurisdiction to make particular orders when the
affected parties have received adequate notice and an opportunity to be heard. (Estate
o f Jenanyan (1982) 31 Cal.3d 703, 708.) Where a court issues such an order against a
party who received no such notice or opportunity, the court lacks jurisdiction to make
the order and it is therefor void. (Moore v. California Minerals Products Corp. (1953)
115 Cal.App.2d 834, 837 [due process violation where judgment was based on point
of law raised “with no warning of counsel and no opportunity given to ward off the
blow”].)
“A fair hearing is denied where, though personal jurisdiction has been
obtained, some later step is taken without adequate notice.” (2 Witkin, Cal.Proc.5th
(2008) Jurisd, § 304, p. 916.) Appellants were denied notice o f both respondents’ fee
motion and their claim for costs. Even by itself, respondents’ failure to give them
notice entitles appellants to a reversal.
//
//
16](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-28-2048.jpg)
![A. Respondents’ Failure to Serve Appellants with Either Their Fee
Motion or Their Costs Memorandum Is Fatal to the Resuiting
Judgment.
Respondents served their fee motion on counsel for Mr. Gaggero, but did not
serve anyone acting on behalf of any of the appellants. (CT2 218-220.) They likewise
served Gaggero’s counsel with the costs memorandum, but did not serve the
appellants or anyone acting on their behalf. (CT2 215-217.) These failures doom the
third amended judgment as to appellants.
The requirements of notice and an opportunity to be heard before being
subjected to a court order are fundamental to the very notion o f due process.
(Anderson Nat. Bankv. Luckett ( 1944) 321 U.S. 233, 246 [64 S.Ct. 599, 88 L.Ed.
692].) This is as true o f an award of fees and costs as any other court order. The
United States Supreme Court has held that “attorney’s fees certainly should not be
assessed lightly or without fair notice and an opportunity for a hearing on the record.1'
(Roadway Exp., Inc. v. Piper (1980) 447 U.S. 752, 767 [100 S.Ct. 2455, 65 L.Ed.2d
488].) Such notice “is mandated not only by statute, but also by the due process
clauses of both the state and federal Constitutions.” (O ’Brien v. Cseh (1983) 148
Cal.App.3d 957, 961, citing Cal. Const., art. I, § 7 and U.S. Const., 14th Amend.)
The failure to serve appellants would be fatal even if respondents had not
actually known how to serve them. But they demonstrably did know how to serve
appellants, since their alter-ego motion - which was served and filed five weeks
before the fee motion and costs memo - had pointed out that several of them had
designated Praske as their agent for service, arguing that this fact somehow showed
they were Gaggero’s alter egos. (B241675 CT1 33:6, 39:7-8.) They even supported
their alter-ego motion with copies of records containing the addresses where
appellants could be served with legal papers. (B241675 CT2 308-319.) Respondents
knew how to serve appellants. They just didn’t do it.
17](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-29-2048.jpg)
![B. The Fee Motion and Costs Memorandum Were Both Filed and
Served before Appellants Became Additional Judgment Debtors.
Even if respondents had served their papers on appellants, appellants would
have had no reason to believe their rights were in jeopardy. After all, they had not yet
been added as judgment debtors. They were not parties to the case and could not be
ordered to pay the costs of enforcing a judgment that had been entered against
somebody else. (Blumenthal v. Superior Court (1980) 103 Cal.App.3d 317, 320
[motion seeking sanctions against parties could not support sanction award against
non-party attorney against whom motion has sought no relief].)
Respondents could have avoided this problem by waiting just two more weeks
before seeking fees and costs. That way, a request for relief against appellants would
at least have been procedurally proper. O f course, had respondents waited they would
also have had to serve their fee motion and costs memo on appellants. By acting
before the alter-ego motion was decided, respondents were able to avoid doing so.
C. Neither the Notice of Motion nor the Accompanying Points and
Authorities Sought Any Relief Against Appellants.
There is yet another reason why appellants would not have had proper notice
even if respondents had served them with the costs memo and the fee motion: neither
document asked for any relief against them.
A notice of motion must state what relief the moving party seeks and against
whom. (In re Sutter Health Uninsured Pricing Cases (2009) 171 Cal.App.4th 495,
514 [request for relief that was stated in motion but not in notice was ineffective].)
The notice o f respondents’ fee motion said nothing about seeking relief from any of
the (non-party) appellants. (CT1 28-30.) Neither did the points and authorities (CT1
18](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-30-2048.jpg)
![29-37), or even the supporting declaration of counsel (CT1 38-42.)— So even if
respondents had served the papers on appellants, the papers would have failed to put
them on notice that their rights were at stake or that they had reason to attend the July
13 hearing.
III. THE THIRD AMENDED JUDGMENT VIOLATED THIS COURT’S
AUGUST 6 STAY ORDER IN APPEAL B241675.
This court’s stay order in B241675 was entered on August 6 - the same day the
trial court entered the third amended judgment. The record does not say which
document was entered first, and it contains no evidence that whichever court acted
second was aware of what the other court had done. Even so, this court’s stay order
takes precedence over the amended judgment. That judgment was entered in violation
of the stay, and is therefore void.
“The law takes no notice of fractions of a day. Any fraction of a day is deemed
a day unless in a particular case it is necessary to ascertain the relative order of
occurrences on the same day.” [Municipal Imp. Co. v. Thompson (1927) 201 Cal. 629.
632; accord 74 Am.Jur.2d Time § 13 [“Fractions of a day generally are not considered
in the legal computation of time; the day on which an act is done or an event occurs
are wholly included or excluded.”]) Because the third amended judgment and the stay
order were issued on the same day, the judgment cannot take precedence over the stay
regardless of which came first.
Code of Civil Procedure, section 12 and Government Code section 6800 both
state that “[t]he time in which any act provided by law is to be done is computed by
excluding the first day, and including the last, unless the last day is a holiday, and then
it is also excluded.” Courts have applied this principle in many contexts since the
— Because this information must be contained in the notice of motion,
respondents could not salvage their position even if it was hidden elsewhere
in their papers.
19](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-31-2048.jpg)
![IV. THE TRIAL COURT ERRED BY AWARDING RESPONDENTS FEES
AND COSTS THAT ARE NOT RECOVERABLE.
A. Only a Small Fraction of the Awarded Fees Are Even Arguably
Recoverable.
1. The Fees for Respondents’ Alter-Ego Motion Were not
Incurred in Enforcing the Judgment.
When they opposed the motion to tax, respondents claimed amending the
judgment to add appellants was a means of enforcing the judgment, but did not even
try to explain their position. (CT Supp 96:14-97:4.) The best they could do was to
claim that the motion was “directly related to their enforcement efforts.” (CT Supp
97:2-3.) But section 685.040 says creditors may recover only “costs ^/enforcing a
judgment” (emphasis added), not costs “related to” such enforcement.
Respondents’ position was simple to the point of being simplistic. To them,
anything they did after obtaining the original judgment had to qualify as enforcing that
judgment. (CT2 239:14-15 [arguing that, because the judgment had already been
entered, “the only remaining task was to enforce the ju dgm en t emphasis in
original].) That is a logical fallacy. That a task is performed after a judgment has
been entered does not make it a means of enforcing the judgment. (Berti v. Santa
Barbara Beach Props. (2006) 145 Cal.App.4th 70, 77.)—
— Opposing an appeal is but the most obvious example ofpost-judgment
legal work that does not involve enforcement. After all, enforcement of a
judgment is often stayed while an appeal is pending. (Sections 916-923.) If
opposing an appeal was a type of enforcement, then it would be forbidden
when a stay was in place. That stays of enforcement do not prevent judgment
creditors from opposing an appeal demonstrates that such work is not a type
of enforcement. So does the fact that many appeals —including this one -
(continued...)
21](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-33-2048.jpg)
![Section 685.040 also says that enforcement costs must be both “reasonable and
necessary” for that purpose in order to be recoverable. Since the judgment was
against Gaggcro, only enforcement efforts directed at Gaggero could possibly qualify
as reasonable or necessary. Trying to amend the judgment to add new debtors was an
effort to change the judgment, not to enforce it. Only after the judgment had been
changed could respondents take steps to enforce it against appellants - such as
obtaining the receiver and assignment orders which appellants have challenged in case
B245114.
That respondents may have found it useful to amend the complaint does not
make the costs of doing so recoverable. In Ronald P. Slates, APC v. Gorabi (2010)
189 Cal.App.4th 1210, this court held that the costs of litigating against a different
creditor over who had priority were not recoverable because they were about the risk
that the judgment debtor would be unable to pay - an “uncertainty in the judgm ent’s
value” which “rests on the happenstance o f [the debtor’s] wealth.” (Id. at p. 1215.) As
the court explained, “Were [the debtors] wealthier, with assets sufficient to satisfy
both judgments, [the] battle over priority would have been unnecessary. It seems
unlikely that the Legislature intended a section 685.040 postjudgment fee award to
turn on whether the judgment debtor had sufficient assets to satisfy all judgments
against him. More plausibly, the Legislature envisioned the propriety of an attorney
fee award as turning on the judgment debtor’s postjudgment conduct, with the
Legislature intending that the judgment debtor’s possible liability for postjudgment
fees serve as encouragement for the debtors cooperation in satisfying the judgment.”
(Id.)
Moving to amend the judgment to add creditors other than Gaggero was not an
effort to enforce it against Gaggero. It also was not an effort to enforce the judgment
-(...continued)
proceed after a judgment has been paid. And so does the fact that some
respondents are actually judgment creditors rather than judgment debtors.
2 2](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-34-2048.jpg)
![A trial court has no authority to award fees incurred in a pending appeal. After
all, until the appeal has been decided, there is no prevailing party. While those fees
and costs might later have become recoverable, they could not be awarded unless and
until respondents prevailed in this court.
With few exceptions, only the party that prevails in an appeal is eligible to
recover associated costs - including fees where allowed. (Cal. Rules of Court, Rule
8.278(a)(1).) The Court of Appeal has discretion to make the prevailing party bear its
own costs. (Cal. Rules of Court, rule 8.278(a)(5).) “Alternatively, the court can
apportion costs between opposing parties[.]” (Ahart, California Practice Guide:
Enforcing Judgments and Debts (Rutter 2012) 14:65.) It may even order a
successful respondent to pay the costs of an unsuccessful appellant. (Unnamed
Physician v. Board o f Trustees o f Saint Agnes Med. Ctr. (2001) 93 Cal.App.4th 607,
632.) The decision was this court’s to make, and even this court couldn't make it until
the appeal was over. The trial court had no authority to make it while the appeal was
in progress.
In addition to seeking fees they were not yet entitled to ask for, respondents
followed the wrong procedure by asking for them as costs of enforcing the judgment
under section 685.040. A prevailing party that wishes to recover fees incurred on
appeal must file a memorandum of costs in the superior court “within 40 days after the
clerk sends notice o f issuance of the remittitur”. (Cal. Rules o f Court, rule 8.278(a)(1);
accord Ahart, supra, ^ 14:98.) The claim must wait until the remitittur has been
issued, and even then it has nothing to do with section 685.040.
“Attorney fees recoverable on appeal ... generally may be requested from the
appellate court while the appeal is pending or from the trial court after the remittitur
has issued.” (Ahart, supra, U 14:115.) The Court of Appeal may forbid the trial court
to award appellate attorney fees even to the prevailing party (Encinitas Plaza Real v.
Knight (1989) 209 Cal.App.3d 996, 1003-1004) or may order it to delay ruling on any
such claim until after other related appeals have been decided. (See Marriage o f
24](https://image.slidesharecdn.com/ca2db243062-02-160920062528/75/Ca2-db243062-02-36-2048.jpg)
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- 2. Case N o. B243062 INTHE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION EIGHT STEPHEN M. GAGGERO, Plaintiffand Appellant, vs. KNAPP, PETERSEN & CLARKE; STEVEN RAY GARCIA; STEPHEN M. HARRIS and ANDRE JARDINI, Defendants and Respondents’, PACIFIC COAST MANAGEMENT, INC.; 511 OFW LP; GINGERBREAD COURT LP; MALIBU BROAD BEACH LP; MARINA GLENCOE LP; BLU HOUSE LLC; BOARDWALK SUNSET LLC; and JOSEPH PRASKE as Trustee of THE GIGANIN TRUST, THE ARENZANO TRUST, and THE AQUASANTE FOUNDATION Additional Judgment Debtors and Appellants Hon. Robert L. Hess, Hon. Matthew St. George, Hon. Murray Gross; Hon. Victor Greenberg Superior Court of Los Angeles County L.A.S.C. Case No. BC286925 A PP E L L A N T S’ O PE N IN G B R IE F EDWARD A. HOFFMAN, Bar No. 167240 LAW OFFICES OF EDWARD A. HOFFMAN 11755 WILSHIRE BOULEVARD, SUITE 1250 LOS ANGELES, CALIFORNIA 90025 (310) 442-3600 Attorney fo r Additional Judgment Debtors and Appellants
- 3. TO BE FILEDIN THE COURT OF APPEAL A P P -0 0 8 COURT OF APPEAL, S e C O l l d APPELLATE DISTRICT, DIVISION Eight C ourt of A pped C a se Num ber B243062 ATTORNEY OR PARTY VMThOUT ATTORNEY (N am e S ta te Bar number, and s d d iv s ) Edward A. Hoffman (Bar » 167240) “ Law Offices o f Edward A. Hoffman 11755 Wilshirc Blvd., Suite 1250 Los Angeles, CA 90025 TELEPHONE H O - (3 10) 442-3600 FAX NO. (Optional)- (310) 442-4600 e-m a ilA D D R E ssfo p u 3 /ia0 - eah@ hoffmanlaw.eom a t t o r n e y f o r (N am ey P a c i f ic C o a s t M a n a g e m e n t , e t aL , A d d i t i o n a l J u d g m e n t D e b t o r s Superior C ourt C am N um ber BC’286925 FO R C O U RT USE O N LY a p p e l l a n t /p e t i t i o n e r : Stephen M. Gaggero, etal. r e s p o n d e n t /r e a l p a r t y in i n t e r e s t : Knapp, Petersen & Clarke, etal. CERTIFICATE OF INTERESTED ENTITIES OR PERSONS (Check one): CD INITIAL C E R T IF IC A T E □ S U P P L E M E N T A L C E R T IF IC A T E Notice: Please read rules 8.208 and 8.488 before com pleting this form. You may use this form for the initial certificate in an appeal w hen you file your brief or a prebriefing motion, application, o r opposition to such a motion or application in th e Court of Appeal, and w hen you file a petition for an extraordinary writ. You may also use this form as a supplem ental certificate w hen you learn of c h a n g ed or additional information that m ust be disclosed. 1 This form is being submitted on behalf of the following party (name): Pacific Const Management, el a L A dditional Judgment D c h i o t s 2. a □ There are no interested entities or persons that must be listed in this certificate under rule 8.208. b. CEH Interested entities or persons required to be listed under rule 8.208 are as follows: Full name of interested entity or person Nature of interest (Explain): (1) TerraMar Trust ( 2) (3) (4) (5) □ Continued on attachment 2. The undersigned certifies that the above-listed persons or entities (corporations, partnerships, firms, or any other association, but not including governm ent entities o r their agencies) have either (1) an ownership Interest of 10 percent or more in the party if it is an entity; or (2) a financial or other interest in the outcom e of the proceeding that the justices should consider in determining w hether to disqualify themselves, as defined in rule 8.208(e)(2). Date: N ovem ber 4. 2 0 13 Edward A. Hoffman (TYPE CR PRINT NAME) _____________________________________________________________________________________________ P age 1 oM (SIGNATURE O F P A R T /O R ATTORNEY) Form Approved for Opbonal Use Judicial C oirw l of Calfornia A PP-008 [Rov January 1. 2009) CERTIFICATE OF INTERESTED ENTITIES OR PERSONS Cal "i*** court onesarcstvw.v counMto ca 5 0 '.' L e .v is N e x i.0 A u io m a ie d C a lifo r n ia J u d ic ia l C o u n c il F o r m r
- 4. TABLE OF CONTENTS Tableo f A uthorities.......................................................................................................................v Introduction .................................................................................................................................. 1 Statement of Appealability .........................................................................................................2 Factual and Procedural H isto ry ..................................................................................................3 1. 1997-1998: Creating the Estate Plan...................................................................3 2. 2000-2002: Respondents Serve as Gaggero’s Attorneys.............................. 4 3. December 12, 2002-January 8, 2008: The Underlying Malpractice Case....................................................................................................5 4. February 5, 2008 and May 19, 2008: The Original and First Amended Judgments............................................................................................. 5 5. April 28, 2008-August 19, 2010: Gaggero’s Original Appeal.....................5 6. December 28, 2010: The Second Amended Judgment.................................. 6 7. December 12, 2002-Present: The Yura Malpractice Case.............................6 8. 2009-2012: Respondents Conduct Post-Trial Discovery Solely as to Mr. Gaggero.................................................................................................. 7 9. October 21, 2011 - October 3, 2012: Gaggero Appeals a Post- Judgment Discovery Order.................................................................................. 8 10. April 10, 2012: Respondents File their Motion to Amend the Judgment to Add Appellants as Judgment Debtors....................................... 8 11. May 15, 2012: The Costs Memorandum and Fee M otion.............................8 12. May 15, 2012: Appellants and Gaggero Oppose the Alter-Ego M otion.................................................................................................................. 10 13. May 29, 2012: The Trial Court Grants the Alter-Ego M otion................... 10 14. May 31, 2012: Gaggero Files a Motion to Tax..............................................11
- 5. 15. June 29,2012: Gaggero and Respondents Oppose Each Others’ Motions................................................................................................................ 11 16. July 13, 2012: The Trial Court Grants Respondents’ Fee Motion and Denies Gaggero’sMotion to Tax............................................................ 11 17. July 16, 2012: Respondents Submit a Proposed Amended Judgment Directed at Bothat Gaggero and Appellants...............................12 18. August 3, 2012: Appellants and Gaggero File their Notice of Appeal Challenging the July 13 Order......................................................... 12 19. August 6, 2012: This Court Stays Further Proceedings as to Appellants........................................................................................................... 13 20. August 6, 2012: The Trial Court Signs the Proposed Amended Judgment............................................................................................................. 13 Standards of Review ............................................................................................................... 14 A rgum ent.................................................................................................................................... 14 I. A Reversal in Appeal B241675 Will Require a Reversal Here........................... 14 II. The Third Amended Judgment Violates Appellants’ Due Process Rights Because Respondents Failed to Serve Them with Either the Fee Motion or the Costs M emo......................................................................................................... 16 A. Respondents’ Failure to Serve Appellants with Either Their Fee Motion or Their Costs Memorandum Is Fatal to the Resulting Judgment............................................................................................................. 17 B. The Fee Motion and Costs Memorandum Were Both Filed and Served before Appellants Became Additional Judgment Debtors. . . . 18 C. Neither the Notice of Motion nor the Accompanying Points and Authorities Sought Any Relief Against Appellants.................................. 18 III. The Third Amended Judgment Violated this Court’s August 6 Stay Order in Appeal B 241675........................................................................................................ 19
- 6. IV. The TrialCourt Erred by Awarding Respondents Fees and Costs that Are Not Recoverable....................................................................................................... 21 A. Only a Small Fraction of the Awarded Fees Are Even Arguably Recoverable...........................................................................................................21 1. The Fees for Respondents’ Alter-Ego Motion Were not Incurred in Enforcing the Judgment...................................................21 2. The Trial Court Improperly Included Other Non- Recoverable Fees in the Award...........................................................23 3. The Trial Court Had no Authority to Award Fees for a Pending Appeal....................................................................................... 23 4. Respondents also Were not Entitled to Fees Incurred in Seeking Fees and Costs Related to Gaggero’s Prior Appeal. . . 25 5. Respondents Were not Entitled to Fees they Incurred in Other Cases...............................................................................................25 B. Most of the Costs the Trial Court Awarded Are Likewise Not Recoverable...........................................................................................................27 1. Because Respondents Claimed Costs Only Connected to Judgment-Debtor Examinations, the Trial Court Had no Authority to Award Any Other Costs................................................27 2. Respondents Forfeited their Claims for Non-Statutory Costs...........................................................................................................28 3. The Trial Court Improperly Awarded the Fees and Costs Charged by Messengers and Attorney Services.............................29 V. There Is Insufficient Evidence to Support Large Portions of the Fee and Costs Awards.............................................................................................................29 A. There Is No Evidence That Some of the Timekeepers Whose Fees Were Included in the Award Are Attorneys........................................29 -iii-
- 7. B. Many of Respondents’ Billing Entries Are so Heavily Redacted that It Is Impossible to Tell W hether the Work Was Reasonable and Necessary for Enforcement of the Judgment........................................ 31 VI. By Waiting More than Four Years Before Pursuing Appellants, Respondents Were Estopped to Claim Interest and Enforcement Costs from Them.............................................................................................................. 33 C onclusion.................................................................................................................................... 35 Certificate of Word C o u n t.........................................................................................................37 Proof of S erv ice........................................................................................................................... 38
- 8. TABLE OF AUTHORITIES STATECASES Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th 894 ................................................................................................................. 13 Alexander v. Abbey o f the Chimes (1980) 104 Cal.App.3d 3 9 ..........................................................................................................35 Bankes v. Lucas (1992) 9 Cal.App.4th 365 ...................................................................................................... 20 Berti v. Santa Barbara Beach Props. (2006) 145 Cal.App.4th 70 ........................................................................................................21 Blue Ridge Ins. Co. v. Superior Court (1988) 202 Cal.App.3d 339 ...................................................................................................... 32 Blumenthal v. Superior Court (1980) 103 Cal.App.3d 3 1 7 ........................................................................................................ 18 Chinese Yellow Pages Co. v. Chinese Overseas Marketing Service (2008) 170 Cal.App.4th 868 .................................................................................................... 14 Chronicle Pub. Co. v. Superior Court (1960) 54 Cal.2d 548 .................................................................................................................. 31 Elkins v. Superior Court (2007)41 Cal.4th 1337 ............................................................................................................. 14 Encinitas Plaza Real v. Knight (1989) 209 Cal.App.3d 996 ...................................................................................................... 24 Estate o fJenanyan (1982) 31 Cal.3d 703 ................................................................................................................ 16 Gaggero v. Yura (2003) 108 Cal.App.4th 884 ................................................................................................. 5, 6 ■V'
- 9. Gillan v. Cityo f San Marino (2007) 147 Cal.App.4th 1033 ................................................................................................. 15 Gilman v. Dalby (2009) 176 Cal.App.4th 606 ......................................................................................................15 Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44 ........................................................................................................29 Hernandez v. Superior Court (2003) 112 Cal.App.4th 285 .................................................................................................... 31 Hollister Convalescent Hosp., Inc. v. Rico (1975) 15 Cal.3d 660 ....................................................................................................................13 In re Jackson (1986) 182 Cal.App.3d 439 ...................................................................................................... 20 In re Marriage o f Carlsson (2008) 163 Cal.App.4th 281 ......................................................................................................14 In re Sutter Health Uninsured Pricing Cases (2009) 171 Cal.App.4th 495 ......................................................................................................18 Jaffa v- PaceHi (2008) 165 Cal.App.4th 927 .................................................................................................... 14 Krikorian Premiere Theatres, LLC v. Westminster Central, LLC (2011) 193 Cal.App.4th 1075 ................................................................................................... 13 Ladas v. California State Auto. A ss’n (1993) 19 Cal.App.4th761 ......................................................................................................30 Lucky United Properties Investment, Inc. v. Lee (2010) 185 Cal.App.4th 125 ..................................................................................................... 28 Mclntire v. Superior Court (1975) 52 Cal.App.3d 7 1 7 ..........................................................................................................35 -vi-
- 10. Merced County Taxpayers’Assn. v. Cordelia (1990) 218 Cal.App.3d 396 .......................................................................................................15 Moore v. California Minerals Products Corp. (1953) 115 Cal.App.2d 834 .......................................................................................................16 Municipal Imp. Co. v. Thompson (1927) 201 Cal. 629 ............................................................................................................. 19,20 O'Brien v. Cseh (1983) 148 Cal.App.3d 957 ...................................................................................................... 17 People v. Bravo (1990) 219 Cal.App.3d 729 .................................................................................................... 20 Prevoyance Mutuelle v. District Court (1879) 53 Cal. 495 ........................................................................................................................ 15 Price v. Whitman (1857) 8 Cal. 4 1 2 ..........................................................................................................................20 Purdy v. Johnson (1929) 100 Cal.App. 4 1 6 .............................................................................................................15 Robertson v. Rodriguez (1995) 36 Cal.App.4th 347 ...................................................................................................... 20 Ronald P. Slates, A PC v. Gorabi (20120) 189 Cal.App.4th 1210 .......................................................................................... 14,22 Scoville v. Anderson (1901) 131 Cal. 590 .................................................................................................................... 20 Marriage o f Colvin (1992) 2 Cal.App.4th 1570 ...................................................................................................... 24 Slawinski v. Mocettini (1965) 63 Cal.2d 7 0 ......................................................................................................................13 -vii-
- 11. Tanzola v. DeRita (1955) 45 Cal.2d 1 ........................................................................................................................31 Unnamed Physician v. Board o f Trustees o f Saint Agnes Med. Ctr. (2001) 93 Cal.App.4th 607 ...................................................................................................... 24 Wells Fargo & Co. v. City and County o fSan Francisco (1944) 25 Cal.2d 3 7 ......................................................................................................................15 FEDERAL CASES Anderson Nat. Bank v. Luckett (1944) 321 U.S. 233 [64 S.Ct. 599, 88 L.Ed. 692] .............................................................. 17 Galpin v. Page (1873) 85 U.S. 350 [21 L.Ed. 959, 18 Wall. 3 5 0 ] .................................................................16 Roadway Exp., Inc. v. Piper (1980) 447 U.S. 752 [100 S.Ct. 2455, 65 L.Ed.2d 488] ..................................................... 17 STATE STATUTES Code of Civil Procedure § 1 2 ................................................................................................................................................... 20 § 187....................................................................................................................................................8 § 6 3 1 .8 ...............................................................................................................................................5 § 685.010 ...................................................................................................................................... 34 § 685.040 ............................................................................................................................... passim § 685.070 ........................................................................................................................ 27,28,30 § 685.080 ................................................................................................................................. 10,28 § 708.110 ...................................................................................................................................... 27 § 904.1 ...............................................................................................................................................2 § 9 1 6 .................................................................................................................................................22 § 923 ............................................................................................................................................... 22 §917.1 ............................................................................................................................................ 25 § 1033.5 ........................................................................................................................................ 29 -viii
- 12. Evidence Code § 452........................................................................................................................................... 3,26 § 453 .........................................................................................................; ............................... 3. 26 Government Code § 6800 20 § 70626 ........................................................................................................................................... 27 Cal. Const., art. I, § 7 ....................................................................................................................... 17 FEDERAL STATUTES U.S. Const., 14th Arndt.......................................................................................................................17 STATE RULES Cal. Rules of Court, Rule8 .1 0 4 ......................................................................................................13 Cal. Rules of Court, Rule8.204 .................................................................................................... 37 Cal. Rules of Court, Rule8.278 .................................................................................................... 24 SECONDARY SOURCES Ahart, California Practice Guide: Enforcing Judgments and Debts (Rutter 2012) ........................................................................................................... 24,28,35 A m .Jur.2d.............................................................................................................................................19 Witkin, Cal. Procedure (5th ed., 2008) ..................................................................................10,16 -IX-
- 13. INTRODUCTION In case B241675,appellants- explained that they had been improperly deemed the alter egos of the original judgment debtor, Stephen Gaggero, and named additional debtors on the underlying judgment against him. That decision was based on multiple errors by the trial court, and encouraged by respondents’ deceptive and misleading arguments - a pattern which was far from over. Two months after appellants were added to the case, the trial court ordered them to pay almost $570,000 in interest and over $87,000 in fees and costs, and then incorporated those awards into the third amended judgment challenged in this appeal. But the award was based on a fee motion and costs memorandum which were filed before appellants became judgment debtors and which had not asked for any relief from them. Respondents had not even served the motion or costs memo on appellants, denying them notice and an opportunity to be heard. W hat’s more, the amended judgment which included these sums was entered in violation of the stay order this court had issued the same day in B241675. Although the award was ostensibly for costs of enforcing the judgment against Mr. Gaggero, most of the fees it included were for the alter-ego motion —an effort to modify the judgment rather than to enforce it. The court also awarded fees for client communication and other non-enforcement services. It awarded fees for work by people whom respondents never even claimed were attorneys, and for work on entirely different cases. It even awarded fees and costs incurred in an appeal that was still pending in this court at the time, even though there was no prevailing party in that appeal and even though only this court could decide whether either side would be -The term “appellants” in this brief refers to the additional judgment debtors, on whose behalf it has been filed. They are Pacific Coast Management, Inc. 511 OFW L.P., Gingerbread Court L.P., Malibu Broadbeach, L.P., Marina Glencoe L.P., Blu House L.L.C., Boardwalk Sunset L.L.C., and Joseph Praske as Trustee of the Giganin Trust, the Arenzano Trust, and the Aquasante Foundation. Co-appellant Stephen Gaggero, the original judgment debtor, has separately appealed and is filing his own opening brief.
- 14. entitled to costsfrom the other. And many o f the billing entries on which the award was based had been so heavily redacted that there is no way to know if they were reasonable and necessary to enforce the underlying judgment. The award also included a variety of non-recoverable costs such as photocopying and messenger services, along with other costs that are potentially recoverable but which respondents had forfeited procedurally. Making matters worse, the award made appellants responsible for more than four years’ worth of interest and enforcement costs even though they had been added to the case just two months earlier - inflating the judgment against them by almost a million dollars by the time appellants paid it in November 2012. O f course, all of this is in addition to the fact that the fee and costs awards will necessarily have to fall if appellants win a reversal in appeal B241675. STATEMENT OF APPEALABILITY This appeal is taken from an order denying a motion to tax costs and granting a motion for fees and costs, and from an amended judgment incorporating that order. Amended judgments are appealable under Code of Civil Procedure section 904.1. subdivision (a)(1).- The prior order is appealable under section 904.1, subdivision (a)(2) as an order made after a final judgment. // // -A ll statutory citations herein are to the Code of Civil Procedure unless otherwise noted.
- 15. FACTUAL AND PROCEDURALHISTORY 1. 1997-1998: Creating the Estate Plan. Stephen Gaggero, a successful real estate investor and developer, hired attorney Joseph Praske in 1997 to develop and implement an estate plan on his behalf (Trial RT1 602-604; Trial RT5 2720; B241675 CT1 124-125; B241675 CT3 411.)- Setting up the estate plan took several months in 1997 and 1998. (B241675 CT1 127, 152- 163; B241675 CT2 192; B241675 CT3 411.) As part of this process, Praske created several limited liability companies (“LLCs”) and limited partnerships (“LPs”) in which Gaggero initially owned a membership or limited partnership interest. (B241675 CT1 129-130; B241675 CT2 190-191, 212-213.) Appellants 511 OFW L.P., Gingerbread Court L.P., Malibu Broadbeach, L.P., Marina Glencoe L.P., Blu House L.L.C., and Boardwalk Sunset L.L.C. were each created by Praske to own a distinct piece of Gaggero’s real property. (B241675 CT2 314-319, 360-B241675 CT3 370.) Gaggero then transferred his properties to these LLCs and LPs. (B 241675 CT1 126, 162-163, 191.) He subsequently transferred his ownership in those entities into various trusts which Praske had established, including appellants Arenzano Trust and the Aquasante Foundation. (B241675 CT2 191-193, 360-B241675 CT3 370.) He separately transferred his personal residence to the Giganin Trust. (B241675 CT2 ]93- - Citations to “JA”, “Trial RT” and “Opn.” refer to the joint appendix, reporter’s transcript and opinion from Gaggero’s appeal of the original judgment, B207567. Citations to “CT” refer to the clerk’s transcript in the present appeal. The three hearing transcripts in this appeal are all cited by date (to illustrate: 10-3-12 RT 1-2). Citations to the clerk’s and reporter’s transcripts from one of appellants’ other pending appeals start with the number of that appeal (to illustrate: B241675 CT1 1-2). Appellants respectfully ask the court to judicially notice the briefing and records in these related appeals per Evidence Code sections 452, subdivision (d), and 453. 3
- 16. 196.) Praske has beenthe trustee of each of these trusts since they were formed. ^ 4 i /• 'r r i 1 /• / i r ^ 4 1 /* r /^irr ^ 1 a /• ^ ^ 1 p 4 1 r 1 ^ ( tiz ^ io o t i 1 1 0 0 - 1 0 /; a z m o / D l .i z ivd; tf z ^ io o l u h iz.) t>y respondents own admission, Gaggero no longer owned the properties after he transferred them to the LLCs and LPs, and no longer owned any interests in the LLCs or LPs after he transferred them to the trusts. (B241675 CT1 28:2-7, 29:1-4, 29:21-22, 31:7-8, 31:8- 11,31:11-12, 31:12-18, 31:18-20, 32:4-5, 33:13-15, 36:2-6, 40:4-6, 42:15-16; B241675 CT3 428:15-17, 430:20-21, 432:3-5, 432:5-7, 432:7-9, 432:9-10, 432:11- 12.) The LLCs and LPs hired Praske’s business management company, appellant Pacific Coast Management, Inc. (“PCM”), to manage their assets and finances. (B241675 CT2 187-188, 195-196, 269.) Because Praske’s expertise is in estate planning rather than real estate management, PCM engaged Gaggero as a consultant to manage its clients’ real estate assets and to guide future purchases or sales. (B241675 CT1 140; B241675 CT2 213-215, 360.) Gaggero also used PCM to manage his own financial affairs. (B241675 CT2 252-257; Trial RT4 1836-1839.) 2. 2000-2002: Respondents Serve as Gaggero’s Attorneys. In or around August o f 2000, Gaggero hired respondents - the law firm of Knapp, Petersen & Clarke, and attorneys Stephen Ray Garcia, Stephen M. Harris, and Andre Jard in i-- to advise and represent him in several cases. (JA2 521-534; Trial RT2 610-615.) One of them was Gaggero v. Yura, L.A.S.C. No. BC239810 (“the Yura case”), which sought to enforce an agreement to purchase real estate in Santa Monica. (Trial RT2 619-620, 635-636; Trial RT3 1247; Trial RT4 2173; B241675 CT2 281-288.) -The record often refers to respondents collectively as “KPC”. 4
- 17. Amid disputes aboutthe quality of their work, respondents resigned as Gaggero’s attorneys and withdrew their representation in early 2002. (Trial RT3 908- a a a 1 i ^ n A 1 ^n n i a t 1 t r» T 'n a s i t< i r> rr 1 r r r r r» .1 ^ _. yuy, iz / a-iz /y, 1zad-izay; i nai m o h d jo ; iriai h i iu j / d v j. ) ny men uaggero had lost a summary judgment motion in the Yura case - a result which different attorneys successfully challenged on appeal. (Gaggero v. Yura (2003) 108 Cal.App.4th 884, 896.) 3. December 12, 2002-January 8, 2008: The Underlying Malpractice Case. Gaggero filed the underlying malpractice case on December 12, 2002. (CT1 18.) His second amended complaint, filed on August 13, 2003, alleged several causes o f action, including professional negligence and breach of contract. (JA1 1-41.) The case was tried without a jury from July 23 to September 10, 2007, when the trial court granted respondents’ motion for judgment under section 631.8. (Trial RT10 5737- 5738; JA1 147; JA2 366.) On January 8, 2008, the court issued a 32-page statement of decision, which it had drafted itself, condemning Gaggero’s ethics and his business practices. (JA2 386-417.) 4. February 5, 2008 and May 19, 2008: The Original and First Amended Judgments. The judgment against Gaggero was entered on February 5, 2008. (JA2 421 - 423.) The court amended the judgment on May 19, 2008, awarding respondents $1,202,944.50 in attorney fees and $124,702.90 in other costs, for a total of $1,327,674.40. (JA7 1884-1889.) 5. April 28, 2008-August 19, 2010: Gaggero’s Original Appeal. Gaggero appealed the original judgment on April 28, 2010 in case no. B207567. He then appealed the first amended judgment on July 16, 2008 in case no.
- 18. B209522. Per theparties’ stipulation, this court later consolidated the appeals. It then affirmed both judgments in an unpublished opinion on May 6, 2010. The m j^v» y « | ■f | | a f ro n « n m i ^ ^ ^ A l l o ^ 1 ^ f 1 O ^ ^ f r">♦ ^ r ss o «• i v u m u i u i wGl> i^^uvu u u r-^uguoi 1 ? u i u m i ^ t a i . 6. December 28, 2010: The Second Amended Judgment. On December 28, 2010, the trial court amended the judgment a second time, awarding respondents another $513,837.68 - consisting of $192,723.90 in attorney fees and $522 in costs for the appeal, along with $320,591.78 in accrued interest. (B241675 CT1 114-116.) That interest was calculated at a daily rate of $354.34 through November 18, 2010, when the earlier motion to amend was filed. (CT1 35:5-6 41:14-19.) This brought the total amount of the judgment against Gaggero to $1,841,535.08.- 7. December 12, 2002-Present: The Yura M alpractice Case. Gaggero filed another malpractice case against respondents the same day he filed the underlying case. That lawsuit, Gaggero v. Knapp, Petersen & Clarke, et aL. L.A.S.C. No. BC286924 (the “Yura malpractice case”), arises from respondents’ work in the Yura case. Almost eleven years after it was filed, it has not yet gone to trial.- The trial is currently scheduled to begin in early 2014. -The numbers do not quite add up because the fee award in the proposed amended judgment included a $23 error in respondents1 favor. -The details of the Yura malpractice case are not important to this appeal, and appellants do not wish to burden the court by adding materials from that case to the already-substantial record here. In order to confirm the dates and subject-matter set forth above, appellants respectfully ask the court to judicially notice the petition and record in a successful writ petition Gaggero filed in Division Five earlier this year, Gaggero v. Superior Court, 2nd Dist. No. B247494. 6
- 19. 8. 2009-2012: RespondentsConduct Post-Trial Discovery Solely as to Mr. Gaggero. Respondents conducted judgment-debtor discovery shout Gaggero’s finances, taking his debtor exam and serving him with written discovery. They took Praske’s third-party debtor exam on June 5, 2009. (B241675 CT2 357-B241675 CT3 377.) The April 10, 2009 order to appear named Praske in his individual capacity and not as a representative of any entities. It directed him to testify about his knowledge of Gaggero’s finances and about any funds or assets he possessed which were owed to Gaggero. It did not call for any information about any of the appellants. (B241675 CT2 357-358.) Respondents’ written discovery to Gaggero sought, inter alia, the trust instruments for Giganin, Arenzano, and Aquasante. (B241675 CT2 329-354) Gaggero - who had testified in 2007 that Praske was the one who had this information (Trial RT4 1871-1872, 2133; Trial RT5 2770-2774) —stated in response that he did not have them. (B241675 CT2 3 3 3 - 3 3 4 Respondents did not move to compel further responses, and instead brought their alter ego motion just three weeks after the responses were served. (B241675 CT1 24; B241675 CT3 354.) Respondents did not examine Praske again, either as an individual or as a representative of any of the appellants. They also failed to examine anyone else on appellants’ behalf. They did not subpoena any records from appellants, nor did they subpoena records concerning appellants from any third parties. They also did not -In their alter-ego motion, respondents claimed Gaggero had previously refused to produce the documents despite a successful motion to compel. (B241675 CT1 33:18-34:6.) But that was motion to compel further responses to interrogatories, not to requests for production. (B241675 CT1 33:21-25.) By definition, interrogatories do not call for production of documents. Even so, respondents complained that Gaggero “did not produce any documents in response”. (B241675 CT1 33:20, emphasis in original; see also B241675 CT1 53:21-23.) 7
- 20. serve appellants withany written discovery. 9. October 21, 2011 - October 3, 2032: Gaggero Appeais a Post- Judgment Discovery Order. On October 5, 2011, the trial court granted a motion by respondents to compel Gaggero to provide responses to post-judgment interrogatories and imposed $2,000 in related sanctions. (B236834 CT 71-74.) Gaggero filed a notice of appeal from that order on October 21, 2011, commencing case B236834. (B236834 CT 75-76.) This court later dismissed the appeal on its own motion on October 3,2012, after defaulting Gaggero for failing to file an opening brief The remittitur in that appeal was issued on December 5, 2012. 10. April 10, 2012: Respondents File their Motion to Amend the Judgment to Add Appellants as Judgment Debtors. On April 10, 2012-, respondents filed a motion under section 187 to deem appellants Gaggero’s alter egos and to further amend the judgment by naming them additional judgment debtors. (B241675 CT1 24 - B241675 CT3 378.) Among respondents’ many arguments was the claim that, because many of the appellants had designated Praske as their agent for service, this commonality somehow meant they were Gaggero’s alter egos. (B241675 CT1 33:6, 39:7-8.) Respondents supported this claim with extensive documentation of where legal papers could be served on the various appellants. (B241675 CT2 308-319.) 11. May 15, 2012: The Costs Memorandum and Fee Motion On May 15, respondents filed a memorandum of costs after judgment seeking $248,978.18 in additional post-judgment interest, $86,247.70 in attorney fees, and -'All further dates were in 2012 unless otherwise noted.
- 21. $1,474.55 in costsrelated to judgment debtor examinations, and. (CT1 23-24.)- The memorandum did not seek costs under any o f the other categories listed on the form. Respondents served the costs memo only on counsei for Mr. Gaggero. They did not serve any of the appellants or anyone acting on appellants’ behalf (CT1 25-27), despite their exhaustive demonstration five weeks earlier that they knew precisely how to do so. (B241675 CT1 33:6, 39:7-8; B241675 CT2 308-319.) At the same time, respondents filed a “motion for award o f post-judgment enforcement costs and accrued interest”. (CT1 28-CT2 214.) The motion expressly said it was being brought against Gaggero. (CT1 29:2-9, 31:2-4.) Neither the notice of motion (CT1 29-30) nor the memorandum of points and authorities (CT1 31-37) said the motion was being brought against appellants - who, of course, had not yet been added to the judgment. Like the costs memo, the fee motion was served only on counsel for Gaggero and not on appellants or anyone acting on their behalf. (CT2 218- 220.) The motion explained that respondents were seeking $354.34 in daily interest for the 40-day gap before entry of the second amended judgment and $416.70 in daily interest thereafter. (CT1 33:1-28, 34:20-35:8,41:14-42:5.) The difference - which amounted to $32,354.28 by the time the motions were heard and to $62,959.68 by the time appellants paid the judgment on November 15, 2012 - was interest on the prior $192,723.90 award o f fees and costs. (CT1 33:1-28, 34:20-35:8, 41:14-42:5.) The notice of motion claimed respondents were entitled to $1,474.55 of post judgment enforcement costs pursuant to sections 685.040 and 685.080 (CT1 29:13- 14), but neither the memorandum of points and authorities (CT1 31-37) nor the accompanying declaration of counsel (CT1 38-42) explained what these costs were or why they were recoverable. -The memo stated that the interest was $569,569.96, but that amount must have included the $320,591.78 awarded on December 28, 2010. (CT1 23.) 9
- 22. Respondents submitted aproposed order along with their fee motion. (CT Suppl 2-3.) Like the motion and the costs memo, it said nothing about any relief O f r ' i i n c ' t r»f t l i a n n n a l l n n t r ' u g u u u i u n j u i u iv ap p ^ iiu iito . 12. May 15, 2012: Appellants and Gaggero Oppose the Alter-Ego Motion. Appellants filed their opposition to the alter-ego motion on May 15. (B241675 CT3 397-540.) Gaggero filed his opposition the same day. (B241675 CT3 379-396.) Respondents filed combined reply papers on May 21. (B241675 CT3 423-439.) 13. May 29, 2012: The Trial Court Grants the Alter-Ego Motion. The trial court heard respondents’ alter-ego motion on May 29, and granted it in full. (B241675 CT3 540, 541-542.)— The formal written order twice states that appellants were “hereby” added as judgment debtors. (B241675 CT3 541-542.) The order did not state a new amount due. Appellants filed a notice of appeal three days later, commencing appeal B241675. (B241675 CT3 543-545.) They will not burden this court by repeating what they said about the order in their opening brief in that appeal. // // — The May 29 order was actually a third amended judgment even though it was not labeled as such. “There is no prescribed form for ajudgment. Its sufficiency depends on whether it shows distinctly that the issues have been adjudicated.” (7 Witkin, Cal. Procedure (5th ed., 2008) Judgment, § 29, p. 569.) The order said twice that the appellants were “hereby added” as judgment debtors, instead of calling for respondents to submit a new proposed judgment. (B 241675 CT3 541 -542.) Because it expressly modified the terms of the second amended judgment, it was in itself a further amended judgment regardless of its label. 10
- 23. 14. May 31,2012: Gaggero Files a Motion to Tax. Gaggero filed a motion to tax respondents’ costs memo on May 31. (CT Suppl 4-92.) The motion was supported with spreadsheets breaking down what he had identified as recoverable and non-recoverable fees and costs on each page of respondents’ invoices. (CT Supp 11-19)— and with highlighted copies of the bills respondents had submitted with their fee motion, indicating which ones Gaggero objected to and why. (CT Supp 20-91.) 15. June 29, 2012: Gaggero and Respondents Oppose Each Others’ Motions. Gaggero filed his opposition to the motion for fees and costs on June 29. (CT2 221-237.) The opposition was substantially similar to his motion to tax. Respondents opposed Gaggero’s motion to tax the same day. (CT Supp 93-99,) Unlike the original motion, the reply was served on appellants’ counsel as well as Gaggero’s. (CT Suppl 98-99.) But like the motion, the reply said nothing about seeking relief from anyone besides Gaggero. (CT Suppl 94-97.) 16. July 13, 2012: The Trial Court Grants Respondents’ Fee Motion and Denies Gaggero’s Motion to Tax. The fee motion and the motion to tax were both heard on July 13. (CT2 245.)— —Respondents disagree with some of Gaggero’s figures, since they contest a number of costs which he did not. They will explain which costs were not recoverable in Part IV.B., post, but will not burden the court by identifying here the items as to which they and Gaggero do not agree. —It appears that there was no reporter present at this hearing. Although appellants had hoped to file either an agreed statement or a settled statement, that process would have taken a considerable amount o f time. That, in turn, would make it difficult for this court to decide the present appeal before (continued...) 11
- 24. Counsel appeared onbehalf o f both respondents and Mr. Gaggero, but there was no appearance for appellants. (CT2 245.) The court granted the fee motion in its entirety, denied Gaggero’s motion to tax, and dircctcd respondents “to submit an order and revised judgment.” (CT2 245.) 17. July 16, 2012: Respondents Submit a Proposed Amended Judgment Directed at Both at Gaggero and Appellants. Respondents filed their proposed third amended judgment on July 16, calling for the addition o f all the amounts they had sought in their fee motion and their costs memo. (CT2 249-250, 253-254.) Unlike the motion and the memo, the proposed judgment named all of the appellants as well as Gaggero. (CT2 250.) It justified this change by noting that appellants had by then been named additional judgment debtors (CT2 249-250), but said nothing about the fact that this had happened after the fee motion and costs memo were filed. It also failed to mention that respondents had served neither o f those documents on appellants, that appellants had filed no related papers, or that appellants were not represented at the July 13 hearing. (CT2 249-250.) 18. August 3, 2012: Appellants and Gaggero File their Notice of Appeal Challenging the July 13 Order. Appellants and Gaggero filed a notice of appeal from the fee and costs award — (...continued) B245114, which concerns subsequent orders but in which the opening brief has already been filed. There is little reason to believe anything remarkable happened at the hearing, and the minute order confirms that neither side offered any testimony at the hearing or introduced any new evidence. (CT2 245.) Because appellants were not present at the hearing and had received no notice of it, they could not have waived or forfeited any rights during the hearing by either act or omission. None of appellants’ arguments are affected by the lack o f a transcript. 12
- 25. on August 3.(CT2 246-250.)- 19. August 6, 2012: This Court Stays Further Proceedings as to Appellants. Appellants had filed a supersedeas petition as part o f case B241675 on July 19. In response, the court issued a stay of all proceedings in the trial court on August 6. It later denied the supersedeas petition and lifted the stay on August 30. 20. August 6, 2012: The Trial Court Signs the Proposed Amended Judgment. The trial court signed respondents’ proposed third amended judgment, without change, the same day this court issued its stay order. (CT2 3 19-320.)— The additional —”A notice of appeal filed after judgment is rendered but before it is entered is valid and is treated as filed immediately after entry of judgment.” (Cal. Rules of Court, Rule 8.104(d)(1).) The court has discretion to do likewise where the judgment has merely been announced. (Cal. Rules of Court, Rule 8.104(d)(2).) But it must exercise that discretion in a manner consistent with “the well-established policy of ‘according [the] right [to appeal] in doubtful cases ‘when such can be accomplished without doing violence to applicable rules.’” (Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th 894, 901, quoting Hollister Convalescent H o sp In c. v. R ico(915) 15 Cal.3d 660, 674, in turn quoting Slawinski v. Mocettini (1965) 63 Cal.2d 70, 72.) That is true even where the appeal concerns the original judgment rather than a subsequent amendment. Even where no final judgment has been entered, an award of fees and costs is appealable because it is a collateral order which directs the payment of money and which is enforceable independent of the entry of the judgment. (Krikorian Premiere Theatres, LLC v. Westminster Central, LLC (2011) 193 Cal.App.4th 1075, 1083-1085.) —The August 6 document was labeled"Third Amended Judgment” but, as we have seen, that label was incorrect. The judgment was actually amended (continued...) 13
- 26. fees, costs, andinterest brought the overall amount of the judgment to $2,178,235.51. (CT2 249-250.) STANDARDS OF REVIEW Denying a party notice and an opportunity to be heard is reversible per se, and not subject to harmless-error review. (Elkins v. Superior Court (2007) 41 Cal.4th 1337, 1357; In re Marriage o f Carlsson (2008) 163 Cal.App.4th 281, 291-293.) “The trial court’s authority to award postjudgment fees is a legal question that we independently review.” (Ronald P. Slates, APC v. Gorabi (20120) 189 Cal.App.4th 1210, 1213; accord Jaffe v. Pacelli (2008) 165 Cal.App.4th 927. 934 [“whether the trial court had the authority pursuant to Section 685.040 to issue such an award ... is a legal issue, which we review de novo.”].) If particular fee or cost items are recoverable, the Court of Appeal reviews the amount of the award for an abuse of discretion. (Chinese Yellow Pages Co. v. Chinese Overseas Marketing Service (2008) 170 Cal.App.4th 868, 885.) ARGUMENT I. A REVERSAL IN APPEAL B241675 WILL REQUIRE A REVERSAL HERE. When a judgment is reversed on appeal, all subsequent orders enforcing that judgment fall along with it. That is what should happen here. The orders and amended judgment which appellants challenge were entered pursuant to the May 29, 2012 judgment which named appellants additional judgment — (...continued) for the third time on May 29, when the court granted the alter-ego motions. The court was actually amending the judgment for the fourth time on August 6. For the sake of clarity, appellants will refer to the document by its title even though that title is not accurate. 14
- 27. debtors. The trialcourt determined that the fees and costs it awarded were incurred to enforce that judgment. (CT2 249-250.) Respondents were only able to obtain these orders because they had won their prior motion to add appellants to the judgment against Mr. Gaggero. But appellants have appealed the May 29 judgment in case B241675. If they win, respondents will no longer be the prevailing parties. Any relief which the trial court awarded to them on that basis will have to be reversed. (Gilman v. Dalby (2009) 176 Cal.App.4th 606, 620.) “Costs upon appeal are merely incidental to the judgm ent appealed from [citation], and an order awarding costs falls with a reversal of that part of the judgment upon which it is based [citation].” (Purdy v. Johnson (1929) 100 Cal.App. 416, 420- 421; accord Gillan v. City o fSan Marino (2007) 147 Cal.App.4th 1033, 1053 [reversal ofjudgment “necessarily compels the reversal of the award of fees as costs to the prevailing party based on the judgment.”]) They are incidental because they depend upon how the court resolves the substance of the parties’ claims. (Wells Fargo & Co. v. City and County o fSan Francisco (1944) 25 Cal.2d 37, 44.) Orders enforcing a judgment are thus also incidental to that judgment. (La Societe Francaise d'Epargnes et de Prevoyance Mutuelle v. District Court (1879) 53 Cal. 495, 552.) So if the original May 29, 2012 judgment against appellants is reversed, the subsequent award of fees, costs, and interest cannot stand. Neither can the amended judgment that incorporated them. “An order awarding costs falls with a reversal of the judgment on which it is based.” (Merced County Taxpayers’Assn. v. Cardella (1990) 218 Cal.App.3d 396, 402.) A defendant who was ordered to pay the plaintiffs costs is therefore entitled to relief from those costs when the judgment is reversed. “[T]he successful party is never required to pay the costs incurred by the unsuccessful party.” (Purdy, supra, 100 Cal.App. at p. 421.) If appellants succeed in appeal B241675, they cannot be made to pay respondents’ fees or costs.
- 28. II. THE THIRDAMENDED JUDGMENT VIOLATES APPELLANTS’ DUE PROCESS RIGHTS BECAUSE RESPONDENTS FAILED TO SERVE THEM WITH EITHER THE FEE MOTION OR THE COSTS MEMO. The most fundamental components of due process are the right to notice and an opportunity to be heard. As the United States Supreme Court explained 140 years ago, “It is a rule as old as the law, and never more to be respected than now. that no one shall be personally bound until he has had his day in court, by which is meant, until he has been duly cited to appear, and has been afforded an opportunity to be heard. Judgment without such citation and opportunity wants all the attributes of a judicial determination; it is judicial usurpation and oppression, and never can be upheld where justice is justly administered.” (Galpin v. Page (1873) 85 U.S. 350, 368-369 [21 L.Ed. 959, 18 Wall. 350].) Even where a court has generally obtained personal jurisdiction over a party for purposes of a case, it only gains jurisdiction to make particular orders when the affected parties have received adequate notice and an opportunity to be heard. (Estate o f Jenanyan (1982) 31 Cal.3d 703, 708.) Where a court issues such an order against a party who received no such notice or opportunity, the court lacks jurisdiction to make the order and it is therefor void. (Moore v. California Minerals Products Corp. (1953) 115 Cal.App.2d 834, 837 [due process violation where judgment was based on point of law raised “with no warning of counsel and no opportunity given to ward off the blow”].) “A fair hearing is denied where, though personal jurisdiction has been obtained, some later step is taken without adequate notice.” (2 Witkin, Cal.Proc.5th (2008) Jurisd, § 304, p. 916.) Appellants were denied notice o f both respondents’ fee motion and their claim for costs. Even by itself, respondents’ failure to give them notice entitles appellants to a reversal. // // 16
- 29. A. Respondents’ Failureto Serve Appellants with Either Their Fee Motion or Their Costs Memorandum Is Fatal to the Resuiting Judgment. Respondents served their fee motion on counsel for Mr. Gaggero, but did not serve anyone acting on behalf of any of the appellants. (CT2 218-220.) They likewise served Gaggero’s counsel with the costs memorandum, but did not serve the appellants or anyone acting on their behalf. (CT2 215-217.) These failures doom the third amended judgment as to appellants. The requirements of notice and an opportunity to be heard before being subjected to a court order are fundamental to the very notion o f due process. (Anderson Nat. Bankv. Luckett ( 1944) 321 U.S. 233, 246 [64 S.Ct. 599, 88 L.Ed. 692].) This is as true o f an award of fees and costs as any other court order. The United States Supreme Court has held that “attorney’s fees certainly should not be assessed lightly or without fair notice and an opportunity for a hearing on the record.1' (Roadway Exp., Inc. v. Piper (1980) 447 U.S. 752, 767 [100 S.Ct. 2455, 65 L.Ed.2d 488].) Such notice “is mandated not only by statute, but also by the due process clauses of both the state and federal Constitutions.” (O ’Brien v. Cseh (1983) 148 Cal.App.3d 957, 961, citing Cal. Const., art. I, § 7 and U.S. Const., 14th Amend.) The failure to serve appellants would be fatal even if respondents had not actually known how to serve them. But they demonstrably did know how to serve appellants, since their alter-ego motion - which was served and filed five weeks before the fee motion and costs memo - had pointed out that several of them had designated Praske as their agent for service, arguing that this fact somehow showed they were Gaggero’s alter egos. (B241675 CT1 33:6, 39:7-8.) They even supported their alter-ego motion with copies of records containing the addresses where appellants could be served with legal papers. (B241675 CT2 308-319.) Respondents knew how to serve appellants. They just didn’t do it. 17
- 30. B. The FeeMotion and Costs Memorandum Were Both Filed and Served before Appellants Became Additional Judgment Debtors. Even if respondents had served their papers on appellants, appellants would have had no reason to believe their rights were in jeopardy. After all, they had not yet been added as judgment debtors. They were not parties to the case and could not be ordered to pay the costs of enforcing a judgment that had been entered against somebody else. (Blumenthal v. Superior Court (1980) 103 Cal.App.3d 317, 320 [motion seeking sanctions against parties could not support sanction award against non-party attorney against whom motion has sought no relief].) Respondents could have avoided this problem by waiting just two more weeks before seeking fees and costs. That way, a request for relief against appellants would at least have been procedurally proper. O f course, had respondents waited they would also have had to serve their fee motion and costs memo on appellants. By acting before the alter-ego motion was decided, respondents were able to avoid doing so. C. Neither the Notice of Motion nor the Accompanying Points and Authorities Sought Any Relief Against Appellants. There is yet another reason why appellants would not have had proper notice even if respondents had served them with the costs memo and the fee motion: neither document asked for any relief against them. A notice of motion must state what relief the moving party seeks and against whom. (In re Sutter Health Uninsured Pricing Cases (2009) 171 Cal.App.4th 495, 514 [request for relief that was stated in motion but not in notice was ineffective].) The notice o f respondents’ fee motion said nothing about seeking relief from any of the (non-party) appellants. (CT1 28-30.) Neither did the points and authorities (CT1 18
- 31. 29-37), or eventhe supporting declaration of counsel (CT1 38-42.)— So even if respondents had served the papers on appellants, the papers would have failed to put them on notice that their rights were at stake or that they had reason to attend the July 13 hearing. III. THE THIRD AMENDED JUDGMENT VIOLATED THIS COURT’S AUGUST 6 STAY ORDER IN APPEAL B241675. This court’s stay order in B241675 was entered on August 6 - the same day the trial court entered the third amended judgment. The record does not say which document was entered first, and it contains no evidence that whichever court acted second was aware of what the other court had done. Even so, this court’s stay order takes precedence over the amended judgment. That judgment was entered in violation of the stay, and is therefore void. “The law takes no notice of fractions of a day. Any fraction of a day is deemed a day unless in a particular case it is necessary to ascertain the relative order of occurrences on the same day.” [Municipal Imp. Co. v. Thompson (1927) 201 Cal. 629. 632; accord 74 Am.Jur.2d Time § 13 [“Fractions of a day generally are not considered in the legal computation of time; the day on which an act is done or an event occurs are wholly included or excluded.”]) Because the third amended judgment and the stay order were issued on the same day, the judgment cannot take precedence over the stay regardless of which came first. Code of Civil Procedure, section 12 and Government Code section 6800 both state that “[t]he time in which any act provided by law is to be done is computed by excluding the first day, and including the last, unless the last day is a holiday, and then it is also excluded.” Courts have applied this principle in many contexts since the — Because this information must be contained in the notice of motion, respondents could not salvage their position even if it was hidden elsewhere in their papers. 19
- 32. earliest days ofthis state. They have held that a partial day counts as a full day when giving notice o f a hearing (Thompson, supra, 201 Cal. at p. 632), determining when a bill becomes law if not signed by the governor {Price v. Whitman (1857) 8 Cal. 412. 416), determining when an attachment dissolves (Scoville v. Anderson (1901) 131 Cal 590, 592-596), and when measuring both pre-sentence custody credits (People v. Bravo (1990) 219 Cal.App.3d 729, 735) and contempt sentences. (In re Jackson (1986) 182 Cal.App.3d 439, 442-443.) Applying these principles to the present case, both the third amended judgment and the stay order took effect at the same time. Since orders from the Courts of Appeal trump conflicting orders from the Superior Court, the trial court’s action must yield to this court’s stay rather than the other way around. Ordinarily, a trial court may amend a judgment to add fees and costs even while an appellate stay is in place. (Bankes v. Lucas (1992) 9 Cal.App.4th 365, 368.) That’s because there is a specific exception to the stay rule, which allows trial courts to consider motions for fees and costs while a stay is in place and then to incorporate any fees and costs it awards into an amended judgment. (Robertson v. Rodriguez (1995) 36 Cal.App.4th 347, 360.) But this exception presumes that the motion is properly before the trial court. Appellants have already shown that these motions were not, because they had not been served with copies. The third amended judgment did not come within the fee-award exception, so it violated this court's August 6 stay order. // // 20
- 33. IV. THE TRIALCOURT ERRED BY AWARDING RESPONDENTS FEES AND COSTS THAT ARE NOT RECOVERABLE. A. Only a Small Fraction of the Awarded Fees Are Even Arguably Recoverable. 1. The Fees for Respondents’ Alter-Ego Motion Were not Incurred in Enforcing the Judgment. When they opposed the motion to tax, respondents claimed amending the judgment to add appellants was a means of enforcing the judgment, but did not even try to explain their position. (CT Supp 96:14-97:4.) The best they could do was to claim that the motion was “directly related to their enforcement efforts.” (CT Supp 97:2-3.) But section 685.040 says creditors may recover only “costs ^/enforcing a judgment” (emphasis added), not costs “related to” such enforcement. Respondents’ position was simple to the point of being simplistic. To them, anything they did after obtaining the original judgment had to qualify as enforcing that judgment. (CT2 239:14-15 [arguing that, because the judgment had already been entered, “the only remaining task was to enforce the ju dgm en t emphasis in original].) That is a logical fallacy. That a task is performed after a judgment has been entered does not make it a means of enforcing the judgment. (Berti v. Santa Barbara Beach Props. (2006) 145 Cal.App.4th 70, 77.)— — Opposing an appeal is but the most obvious example ofpost-judgment legal work that does not involve enforcement. After all, enforcement of a judgment is often stayed while an appeal is pending. (Sections 916-923.) If opposing an appeal was a type of enforcement, then it would be forbidden when a stay was in place. That stays of enforcement do not prevent judgment creditors from opposing an appeal demonstrates that such work is not a type of enforcement. So does the fact that many appeals —including this one - (continued...) 21
- 34. Section 685.040 alsosays that enforcement costs must be both “reasonable and necessary” for that purpose in order to be recoverable. Since the judgment was against Gaggcro, only enforcement efforts directed at Gaggero could possibly qualify as reasonable or necessary. Trying to amend the judgment to add new debtors was an effort to change the judgment, not to enforce it. Only after the judgment had been changed could respondents take steps to enforce it against appellants - such as obtaining the receiver and assignment orders which appellants have challenged in case B245114. That respondents may have found it useful to amend the complaint does not make the costs of doing so recoverable. In Ronald P. Slates, APC v. Gorabi (2010) 189 Cal.App.4th 1210, this court held that the costs of litigating against a different creditor over who had priority were not recoverable because they were about the risk that the judgment debtor would be unable to pay - an “uncertainty in the judgm ent’s value” which “rests on the happenstance o f [the debtor’s] wealth.” (Id. at p. 1215.) As the court explained, “Were [the debtors] wealthier, with assets sufficient to satisfy both judgments, [the] battle over priority would have been unnecessary. It seems unlikely that the Legislature intended a section 685.040 postjudgment fee award to turn on whether the judgment debtor had sufficient assets to satisfy all judgments against him. More plausibly, the Legislature envisioned the propriety of an attorney fee award as turning on the judgment debtor’s postjudgment conduct, with the Legislature intending that the judgment debtor’s possible liability for postjudgment fees serve as encouragement for the debtors cooperation in satisfying the judgment.” (Id.) Moving to amend the judgment to add creditors other than Gaggero was not an effort to enforce it against Gaggero. It also was not an effort to enforce the judgment -(...continued) proceed after a judgment has been paid. And so does the fact that some respondents are actually judgment creditors rather than judgment debtors. 2 2
- 35. against appellants, sincethere was no judgment against them at the time. Since the alter-ego motion was not a way to enforce the judgment against either Gaggero or appellants, the associated fees and costs are not recoverable. 2. The Trial Court Improperly Included Other Non- Recoverable Fees in the Award. Many of the fee items on counsel’s invoices were for communicating with respondents and their insurance carrier, St. Paul Travelers, or for other routine tasks. (CT1 133, 135; CT2 138, 139, 142, 143, 159, 170, 185, 196, 202.) The time spent on those tasks was not spent enforcing the judgment. Even if respondents or their insurer are willing to pay for these items, the work involved was not part of the enforcement effort and is not recoverable. 3. The Trial Court Had no Authority to Award Fees for a Pending Appeal. Respondents’ bills contain several entries for work on an unspecified appeal, including preliminary work on a motion to dismiss that was never filed. (See, e.g., CT1 132-133, CT2 134, 138, 143, 196, 199-200, 205-209.) The only appeal that was pending at the time was case number B236834, which Mr. Gaggero had filed on October 21, 2011 to contest the trial court’s October 5 order granting a motion to compel interrogatory responses and imposing $2,000 in sanctions. (B236834 CT 71- 76.) This court dismissed the appeal on its own motion a year later, on October 3, 2012. That appeal was still pending when respondents filed their fee motion and costs memorandum on May 15, 2012. It was also still pending when the court granted their motion and denied Gaggero’s motion to tax on July 13, and when the court entered the third amended judgment on August 6. 23
- 36. A trial courthas no authority to award fees incurred in a pending appeal. After all, until the appeal has been decided, there is no prevailing party. While those fees and costs might later have become recoverable, they could not be awarded unless and until respondents prevailed in this court. With few exceptions, only the party that prevails in an appeal is eligible to recover associated costs - including fees where allowed. (Cal. Rules of Court, Rule 8.278(a)(1).) The Court of Appeal has discretion to make the prevailing party bear its own costs. (Cal. Rules of Court, rule 8.278(a)(5).) “Alternatively, the court can apportion costs between opposing parties[.]” (Ahart, California Practice Guide: Enforcing Judgments and Debts (Rutter 2012) 14:65.) It may even order a successful respondent to pay the costs of an unsuccessful appellant. (Unnamed Physician v. Board o f Trustees o f Saint Agnes Med. Ctr. (2001) 93 Cal.App.4th 607, 632.) The decision was this court’s to make, and even this court couldn't make it until the appeal was over. The trial court had no authority to make it while the appeal was in progress. In addition to seeking fees they were not yet entitled to ask for, respondents followed the wrong procedure by asking for them as costs of enforcing the judgment under section 685.040. A prevailing party that wishes to recover fees incurred on appeal must file a memorandum of costs in the superior court “within 40 days after the clerk sends notice o f issuance of the remittitur”. (Cal. Rules o f Court, rule 8.278(a)(1); accord Ahart, supra, ^ 14:98.) The claim must wait until the remitittur has been issued, and even then it has nothing to do with section 685.040. “Attorney fees recoverable on appeal ... generally may be requested from the appellate court while the appeal is pending or from the trial court after the remittitur has issued.” (Ahart, supra, U 14:115.) The Court of Appeal may forbid the trial court to award appellate attorney fees even to the prevailing party (Encinitas Plaza Real v. Knight (1989) 209 Cal.App.3d 996, 1003-1004) or may order it to delay ruling on any such claim until after other related appeals have been decided. (See Marriage o f 24
- 37. Colvin (1992) 2Cal.App.4th 1570, 1582.) When the trial court acted in July and August of 2012, neither it nor the parties knew whether appeal B236834 would succccd or fail. Even if they could have somehow presumed it wouid fail, they could not know whether this court would accept, reject or limit respondents’ claim for fees. The decision was this court’s to make, not the trial court’s. 4. Respondents also Were not Entitled to Fees Incurred in Seeking Fees and Costs Related to Gaggero’s Prior Appeal. Respondents’ claim also included fees they incurred while seeking their fees and costs for Gaggero’s original appeal, B207567. (CT2 160, 202.) But respondents’ work in that appeal was to preserve the judgment, not to enforce it. Indeed, because it was a costs-only appeal and thus subject to an automatic stay (Code Civ. Proc., § 917.1, subd. (d)), respondents were forbidden to enforce it until the appeal had been decided in their favor. They would have done the same work even if Gaggero had posted a bond or paid the judgment in full, leaving nothing to enforce. Since their efforts in that appeal were not a means of enforcing the judgment, neither were their subsequent efforts in the trial court to recover the fees and costs they had incurred in this court. The trial court was thus required to tax the costs bill in the full amount of appellate fees and costs respondents were seeking, and to deny the fee motion to the same extent. Appellants cannot be made to pay those fees. 5. Respondents Were not Entitled to Fees they Incurred in Other Cases. Portions of the fee award were for services respondents’ counsel performed in other cases but billed in this case. (CT 24, 71, 73-74.) Those services necessarily were not related to enforcing the judgment in this case and are not recoverable. One o f those cases was Bunge v. 511 OFW LP, L.A.S.C. No. SC 100361, which 25
- 38. was still pendingat the time o f the award. (CT2 135, 136, 142, 143.) Respondents were not even parties to that case. Another was Sulphur Mountain v. Knapp, Petersen & Clarke, ei al., Ventura S.C. No. CIV 214486 - a malpractice case against respondents in which co-appellant Malibu Broadbeach LP was one of the plaintiffs. (CT2 139.) Gaggero was not a party to that case. The plaintiffs prevailed in that case and were awarded over $111,000 in fees and almost $13,500 in costs. Respondents filed their notice of appeal in that case on October 29, 2004, commencing appeal no. B 178942. Division Six of this court issued a decision on July 25, 2005, affirming the judgment in part and reversing it in part. The reversal was only as to a portion of the costs award.— The third amended judgment in this case thus quite literally awards fees to respondents for work on a case in which they were ordered to pay fees - and it makes those fees payable by Malibu Broadbeach, which had won the earlier case and received a fee award against respondents. That Malibu Broadbeach did not have to pay any of respondents’ fees in that case was res judicata and not open to re examination. But the award would have been improper even without this disregard for history, since work respondents performed on the Sulphur Mountain case was not a reasonable and necessary part of enforcing their judgment in this case. // // — Appellants respectfully ask the court to take judicial notice of the decision in that case pursuant to Evidence Code sections 452, subdivision (d), and 453.
- 39. B. Most ofthe Costs the Trial Court Awarded Are Likewise Not Recoverable. 1. Because Respondents Claimed Costs Only Connected to Judgment-Debtor Examinations, the Trial Court Had no Authority to Award Any Other Costs. Aside from attorney fees, respondents’ costs memo sought only one type of cost - $1,474.55 in “approved fees on application for order for appearance of judgment debtor, or other approved costs under Code Civ. Proc. § 708.110 et seq.” on line l.f. (CT1 23.) The memo did not seek any recovery for “preparing and issuing abstract o f judgment” (line l.a), “recording and indexing abstract of judgment” (line 1.b), “filing notice of judgment lien on personal property” (line 1.c), issuing writs of execution (line l.d), or levying officers’ fees (line l.e) (CT1 23.) The fee motion stated only a $1,474.55 total costs amount without explaining the nature of those costs. (CT1 29:13-14, 36:22-25.) Because the only costs which respondents asked for were those associated with judgment debtor exams, those are the only costs the trial court had authority to give them. But respondents’ evidence does not show any such costs. The closest it comes is three items, for $91, $100, and $106, for messengers to deliver orders for appearance to Mr. Gaggero. (CT2 144, 160.) The attached invoices show that they were payments to an attorney service and not to a court. (CT 2 145, 162, 168.) These were not court fees and thus were not recoverable. A judgment creditor may also claim statutory fees for recording and indexing abstracts ofjudgment. (Section 605.070, subdivision (a).) But respondents made no such claim. (CT 23.) The attorney bills did include charges for recording abstracts of judgment in Los Angeles, Ventura, Riverside, San Diego, San Luis Obispo, and San Bernardino counties. (CT2 171, 185.) The amounts stated for these charges were often more than the $30 statutory fee allowed by Government Code section 70626, 27
- 40. subdivision (b)(2). Soeven if the trial court was allowed to give respondents some compensation for these payments, it was not allowed to give them the entire amount. Respondents’ invoices also included such cost items as basic photocopying (CT2 136, 139, 196, 203), copying by various courts and government offices (CT2 171,185), filing fees for motions and ex parte applications (CT2 160. 185), and “transcripts on appeal”. (CT2 160, 209.) None o f these items are recoverable as a matter of right. (Section 685.070.) And respondents did nothing to show they should be awarded as discretionary costs. 2. Respondents Forfeited their Claims for Non-Statutory Costs. Even if respondents might otherwise have been able to recover costs that are not expressly allowed by statute, they forfeited those claims by not supporting them in the fee motion. Enforcement costs which are not recoverable as a matter of right may only be awarded if the judgment creditor seeks them via a noticed motion. (Sections 685.040, 685.080; accord Lucky United Properties Investment, Inc. v. Lee (2010) 185 Cal.App.4th 125, 138.) A costs memorandum is not sufficient, since the judgment creditor must both “describe the costs claimed” and “state their amount” in the notice of motion. (Section 685.080(b); accord Ahart, supra, 6:39.) Granted, respondents called their fee motion a “motion for award of post judgment enforcement costs and accrued interest”. (CT1 28.) But what matters is the motion’s substance, not its title. The notice o f motion stated the amount of costs respondents were seeking, but did not “describe the costs claimed” as required by section 685.080, subdivision (b). (CT1 29:13-14.) The only costs described in the body of the motion were attorney fees. (CT1 31-37.) And while the respondents’ counsel declared - without factual or legal explanation - that the costs her firm had billed were “reasonable and necessary” (CT1 41:11), she did not even say how much the firm was seeking, let alone what those costs were for, why they were necessary, or 28
- 41. why the amountscharged was reasonable. Even if counsel’s declaration could somehow establish that the costs were reasonable and necessary for something, it did not explain why they were either reasonable or necessary for the enforcement o f the judgment. That is what section 685.040 requires. “Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.” (Section 1033.5, subd. (c)(2).) So even if the claim had not been procedurally defaulted, there was no substantial evidence to support the award. 3. The Trial Court Improperly Awarded the Fees and Costs Charged by Messengers and Attorney Services. Much of respondents’ claim for costs was for messengers and attorney services. (CT2 144, 145, 150-152, 160, 162, 167-168, 174, 179, 187, 190, 192.) Courts have some discretion to award messenger fees, but only upon a factual showing that the fees were “reasonable and necessary”. (Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 75.) Respondents made no such showing. V. THERE IS INSUFFICIENT EVIDENCE TO SUPPORT LARGE PORTIONS OF THE FEE AND COSTS AWARDS. A. There Is No Evidence That Some of the Timekeepers Whose Fees Were Included in the Award Are Attorneys. Over $20,000 of the fee award was for work performed by Lori S. Blitstien, Howard M. Fields, Susy Koshkakaryan, Scott Newman, Kamran K. Nouri, and Vikram Sohal. Respondents did not say who these individuals were, what positions they held or why their rates are reasonable. There is no declaration stating that any of them are attorneys. For all we know, they may all be accountants, paralegals, 29
- 42. investigators or othernon-lawyer staff.— Sections 685.040 and 685.070(a)(6) authorize only claims for “attorney’s fees”. They say nothing about fees for any other personnel. Without proof that these individuals are attorneys, there is insufficient evidence to support any award for their fees. Their fees cannot be justified as discretionary costs, either. As we have already seen, respondents waived their claim to discretionary costs by failing to explain or justify them in their motion. As a result, respondents may recover only costs awardable as a matter of right under section 685.070(a) - a section which does not authorize fees for non-lawyers. Respondents bore the burden of proof on their motion. (Ladas v. California State Auto. A ss’n (1993) 19 Cal.App.4th 761, 774-776.) To recover these attorney fees, respondents had to at least offer substantial evidence that the personnel who did the work are attorneys. Without such evidence, they failed to carry their burden. None of the fees billed by these individuals should have been awarded. Blitstien billed 0.6 hours at $285 per hour, for a total o f $171. (CT2 141, 153.) Fields billed 44.1 hours at $260 per hour and 10.8 hours at $285 per hour, for a total of $14,544. (CT2 141, 153, 158, 198, 201.) Koshkakaryan billed 0.6 hours at $120 per hour, for a total of $72. (CT2 198.) Newman billed 5.7 hours at $260 per hour and 5.0 hours at $240 per hour, for a total o f $2,682. (CT2 137, 146, 156, 201, 214.) Nouri billed 8.2 hours at $195 per hour, for a total of $1,599. (CT2 198.) Sohal billed 5.7 hours at $260 per hour, for a total of $1,482. (CT2 204.) This amounts to $20,550 billed by individuals whom respondents did not even claim were attorneys. — Most of respondents’ fee claim was for work performed by lead counsel Randall Miller and his associate, Austa Wakily. Miller was respondents’ trial counsel, and Wakily - who at least declared that she was an attorney (CT1 38:4-5) - handled the July 13 motions. Appellants do not dispute the sufficiency of the evidence that they are attorneys. 30
- 43. Absent a declarationattesting that these individuals were attorneys, there was insufficient evidence to award attorney fees for their work. At a minimum, appellants were entitled to a chance to oppose this claim and object to this evidence —an opportunity respondents denied them by failing to properly serve their fee motion. They should not have to pay so much money with no evidence to prove it was recoverable. B. Many of Respondents’ Billing Entries Are so Heavily Redacted that It Is Impossible to Tell W hether the Work Was Reasonable and Necessary for Enforcement of the Judgment. By redacting portions o f the billing statements., respondents implicitly claimed that the redacted information is privileged or otherwise protected from disclosure - a claim they made expressly in their reply to the fee motion after Gaggero complained about the redactions, by claiming the redacted information described their collection strategy. (CT2 242:5-12.) But the burden o f establishing that a privilege applies rests with the party asserting it. (Chronicle Pub. Co. v. Superior Court (1960) 54 Cal. 2d 548, 565; Tanzola v. De Rita (1955) 45 Cal.2d 1, 6.) Respondents did nothing more than claim that the privilege applies. (CT2 242:5-12.) That is not enough. There is simply no way to say whether the work reflected in these entries was related to the enforcing the judgment at all, let alone whether it was reasonably necessary for that purpose, whether it took a reasonable amount o f time, or whether it duplicated other work. Appellants have found no case law defining what may be redacted from billing statements in order to preserve a privilege. They submit, however, that it makes no sense to allow redaction o f information that would have to be disclosed in a privilege log were the same information sought during discovery. “The purpose of a 'privilege log’ is to provide a specific factual description o f documents in aid of substantiating a claim of privilege in connection with a request for document production.” (Hernandez 31
- 44. v. Superior Court(2003) 112 Cal.App.4th 285, 291-292.) Such a description is necessary so that the court can evaluate the claim of privilege. {Blue Ridge Ins. Co. v. o, ~ s '1____ * / i n o o 'i a ') i a ->j o o n -> a r t t _______________________________________________- j . L j u y c r i v f y ^ u u r i jlj ± v _ a i . r i . p p . J U J J 7 , O C I C , l C I s p U l l U C I l l b c m i l l i c u d privilege by redacting the very information the court would need in order to decide whether a privilege exists. Even if appellants had been able to oppose these claims, neither they nor the court could have meaningfully reviewed the billing records with so much information improperly withheld. They cannot do so now, either. Neither can this court. The necessary information simply isn’t in the record. The redactions have hobbled appellants’ ability to defend their interests. Respondents have used redactions to insulate their claim for fees by creating the mere appearance o f privilege without providing any means to test whether the appearance is accurate. Such gamesmanship should not be tolerated, and every redacted entry should have been excluded from any fee award. Redacting billing statements that are used as exhibits to a fee motion deprives both the opposing parties and the court of any means to review the reasonableness and necessity of the service being billed. While redactions may be proper where the subject information is covered by a recognized privilege, redacting non-privileged information serves no legitimate interest of the moving parties. There is thus no justification for the interference it causes to the non-moving parties and the courts. Respondents argued that the redacted text related to their strategy in pursuing appellants, and that revealing it might have enabled Mr. Gaggero to thwart that strategy. (CT2 242:8-11.)^ As we have already seen, adding appellants to the judgment was not a means of enforcing it, let alone one that was reasonable and necessary. Respondents’ statement that this is what the redacted entries were about thus concedes that none of them were properly recoverable. — They made no such claim as to appellants, further demonstrating that the motion was directed only at Gaggero. 32
- 45. More to thepoint, even if respondents had a legitimate reason to redact some of the billing entries, the fact remains that the redacted entries do not reveal enough information to dccidc whether they were reasonably related to enforcing the judgmenr. If respondents needed the redactions, then respondents had to either explain what was missing and why it was privileged or else forfeit the associated fees. A fee motion is not a guessing game. Respondents bore the burden of proving that each item on their bills was recoverable. They did not meet that burden as to the redacted entries. Whether they had a good reason for not meeting that burden is beside the point. Even if respondents had to choose between proving their claims or keeping their secrets, they chose to keep their secrets. That might have been a reasonable decision. But it carried a price, and the price had to fall on either the parties who had failed to carry their burden o f proof or on the parties who were prevented from seeing the evidence against them. A court has no authority to rule in favor of a party that fails to meet its burden of proof - especially where the proof is available but the party intentionally withholds it. Appellants respectfully submit that the trial court was required to deny respondents’ fee motion - and grant the motion to tax - as to each of these entries. VI. BY W A ITIN G M O R E THAN FO U R YEARS BEFO RE PURSUING A PPELLANTS, RESPONDENTS W ER E ESTO PPED TO CLAIM IN TER EST AND EN FO R C EM EN T COSTS FR O M THEM . The third amended judgment included an award of almost $570,000 in interest which had accrued since Mr. Gaggero was first ordered to pay respondents’ attorney fees and costs 50 months earlier, on May 19, 2008. But as appellants showed in their opening brief in appeal B241675, respondents were fully aware by 2007 - at the latest - o f all the information on which they based their alter-ego arguments in 2012. (B241675 AOB 70-75.) Indeed, appellants have demonstrated that this delay would 33
- 46. doom the alter-egofinding even if the law and the facts were otherwise on respondents5side. (B241675 AOB 70-75.) But even if this court somehow believes respondents’ delay did not bar the alter-ego motion, it should at least hold that the delay barred their claim for interest and for the costs of enforcing the judgment in the interim. Appellants were not held liable for the second amended judgment until May 29, 2012. There was no reason for them to pay the judgment before then, so they had no opportunity to prevent interest from accumulating in the meantime or to act before respondents incurred significant costs to enforce the judgment. Respondents’ judgment against Mr. Gaggero began accruing interest at the statutory rate of 10% per year as soon as it was entered on May 19, 2008. (Section 685.010, subd. (a).) Had appellants been named in that judgment from the start they could have paid it before any significant amount of interest had accrued. Respondents alone prevented that from happening, and they did it by letting years go by before seeking any relief against appellants. If what respondents did here is proper, then judgment creditors will have an incentive let interest accumulate for years and to run up their legal bills in futile enforcement efforts against the original debtor before taking action against purported alter egos with deeper pockets.— At the same time, no person or business entity will — Respondents were awarded $192,723.90 in enforcement costs just through November 18,2010 (B241675 CT1 114-116) and another$87,722.25 for further costs through July 13, 2012. (CT2 249-250.) Appellants were thus ordered to pay a total of $280,446.15 in enforcement costs, literally all of which had been incurred before they were added to the judgment. They were also ordered to pay $32,354.28 in interest that had accrued on the earlier costs award. (CT1 33:1-28, 34:20-35:8, 41:14-42:5.) Interest on these awards continued to accrue at $76.83 per had until appellants paid the judgment on November 15, 2012, adding yet another $9,604.32 to the amount they ultimately paid. And as they will demonstrate in appeal B247780, they were hit with yet another amended judgment on January 13, 2013 which awarded (continued...) 34
- 47. be able totell whether he may be required to pay not only somebody else’s judgment but years of interest on that judgment which he had no chance to preempt by paying sooner. Parties who wish to add new defendants or judgment debtors must act with due diligence. (Mclntire v. Superior Court (1975) 52 Cal.App.3d 717, 721; Ahart, supra, ^ 6:1574.) Even where a genuine alter ego could have been added to a judgment earlier, a creditor who sits on his rights may not belatedly have it named an additional judgment debtor. (Alexander v. Abbey o f the Chimes (1980) 104 Cal.App.3d 39, 48.) Public policy thus requires judgment creditors to be vigilant and not to delay once they have identified a potential new debtor. Allowing respondents to benefit from their inexcusable delay would give them and other judgment creditors perverse incentives, and would undermine the policy behind Mclntire and Alexander. CONCLUSION The fee and costs awards will necessarily fail if appellants win their prior appeal, B241675. But that is just one of many reasons why this court should reverse the third amended judgment. Respondents failed to give appellants notice of their claims for fees and costs, which consisted primarily of non-recoverable items and which respondents had largely forfeited. The award violated this court’s August 6, 2012 stay order in B241675. And it was inflated by hundreds of thousands of dollars due to interest and enforcement costs that respondents were able to add to their claim only because they waited more than four years before they even began to pursue appellants. — (...continued) an additional $155,090.70 in fees and costs of enforcement. The grand total of enforcement costs and interest awarded on those costs is thus $477,495.45 - on top of hundreds of thousands of dollars in interest on the original award against Gaggero - a tidy profit which respondents and their counsel obtained precisely because they waited so long to take action against appellants. 35
- 48. For all thesereasons, Appellants Pacific Coast Management, Inc. 511 OFW L.P., Gingerbread Court L.P., Malibu Broadbeach. L.P.. Marina Glencoe L.P.: Blu House L.L.C., Boardwalk Sunset L.L.C., and Joseph Praske as Trustee of the Giganin Trust, the Arenzano Trust, and the Aquasante Foundation respectfully ask this court to reverse the third amended judgment and the related awards of fees and costs. D ated: N o v e m b e r 4, 2013 R espectfully subm itted, LAW OFFICES OF EDWARD A. HOFFMAN Edward A. Hoffman Attorneys for Appellants Pacific Coast Management, Inc. 511 OFW L.P.. Gingerbread Court L.P., Malibu Broadbcach, L.P.. Marina Glencoc L.P., Blu House L.L.C., Boardwalk Sunset L.L.C., Joseph Praske as Trustee for Giganin Trust, Arenzano Trust, and Aquasante Foundation 36
- 49. CERTIFICATE OF WORDCOUNT (Cal. Rules of Court, rule 8.204(c)(1)) The text of this Brief consists of 10,707 words as counted by the Corel WordPerfect version 36.0.0.429 (also known as WordPerfect X6) word-processing software with which it was written. DATED: November 4. 2013 Respectfully submitted, Edward A. Hoffman Law Offices of Edward A. Hoffman Attorney for Appellants Pacific Coast Management, Inc.. 511 OFW L.P., Gingerbread Court L.P., Malibu Broadbeach, L.P.. Marina Glencoe L.P.. Blu House L.L.C., Boardwalk Sunset L.L.C., Joseph Praske as Trustee for Giganin T i i i s l Arenzano Trust, and Aquasante Foundation 37
- 50. PROOF OF SERVICEBY MAIL I. Edward A. Hoffman, declare as follows: I am over eighteen (18) years of age and not a party to the within action. My business address is 11755 Wilshire Boulevard. Suite 1250. Los Angeles, California 90025. On November 4, 2013,1 served the within APPELLANTS’ OPENING BRIEF on cach of the following, by placing a true copy thereof in a sealed envelope with postage fully prepaid, in the United States mail at Los Angeles, California, addressed as follows: Randall A. Miller Attorney Miller LLP 515 South Flower Street, Suite 2150 Los Angeles, CA 90071-2201 Clerk of Court - Civil Los Angeles Superior Court 111 North Hill Street Los Angeles, CA 90012 Clerk, Department 24 Los Angeles Superior Court 111 North Hill Street Los Angeles, CA 90012 (Courtesty copy for Delivery to the Hon. Robert L. Hess) I declare under penalty of perjury that the foregoing is true and correct and that I signed this declaration on November 4, 2013 at Los Angeles, California. Edward A. Hoffman Office of the Clerk Supreme Court of California 350 McAllister Street San Francisco, CA 94102-3600 (Submitted electronically to Court of Appeal) David Blake Chatfield Attorney Westlake Law Group 2625 Townsgate Rd., Suite 330 Westlake Village, CA 91361 38