The trial court appointed a receiver and issued an assignment and restraining order to aid the judgment creditor, KPC, in executing a $2 million judgment against Stephen Gaggero and additional judgment debtors including appellant entities controlled by Gaggero. The court had previously found the appellant entities were Gaggero's alter egos based on his use of an estate planning scheme to hide assets and avoid paying judgments. The orders were a reasonable method to obtain fair and orderly satisfaction of the judgment given Gaggero's history of using his controlled entities to shield assets and interfere with enforcement efforts.

1. CA2DB245114-02
{D0E70F8E-65AB-44A4-8D4C-1 DC8E8D9D1 36}
{14551 1} {30-1 40310:114004} {030714}
RESPONDENT'S
BRIEF
CA2DB245114-02

2. Case No. B245114
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
STEPHEN M. GAGGERO,
Plaintiff,
vs..
KNAPP, PETERSEN & CLARKE; STEVEN RAY GARCIA;
STEPHEN M. HARRIS; and ANDRE JARDINI,
Defendants and Respondents.
PACIFIC COAST MANAGEMENT, INC.; GINGERBREAD COURT LP;
511 OFW LP; MALIBU BROADBEACH LP; MARINA GLENCOE LP;
BLU HOUSE LLC; BOARDWALK SUNSET LLC; and JOSEPH
PRASKE as Trustee ofTHE GIGANIN TRUST, THE ARENZANO
TRUST, and THE AQUASANTE FOUNDATION
Additional Judgment Debtors andAppellants.
Appeal from the Los Angeles County Superior Court
Case No BC286925
Honorable Robert L. Hess, Judge
RESPONDENTS’BRIEF
Randall A. Miller (SBN 116036)
Steven S. Wang (SBN 184979)
MILLER LLP
515 South Flower Street, Suite 2150
Los Angeles, CA 90071-2201
Telephone: 800.720.2126
Facsimile: 888.749.5812
Attorneysfor Defendants andRespondents

3. TABLE OF CONTENTS
in t r o d u c t io n ;............................................................... i
FACTUALAND PROCEDURAL BACKGROUND............................. 4
1. Appellants' Misleading and Incomplete Statement ofthe Case........4
2. KPC's Underlying Judgment...................................................... 5
3. The Judgment Debtors' Collective Refusal to Pay the Judgment 5
4. KPC's Initial Motions for Appointment of a Receiver and
Assignment of Rights/Restraining Order DirectedAgainst
Gaggero and Appellants.............................................................. 6
5. The Stay of Trial Court Proceedings as to Appellants from
August 6 to August 30, 2012..............................................................6
6. The August 23, 2012 Hearing on KPC's Receivership and
Assignment Motions as to Gaggero.................... 7
7. KPC's Motions forAppointment of a Receiver andAssignment
of Rights/Restraining Order Directed SolelyAgainstAppellants.... 7
8. The Trial Court’s Orders on First Set of Receivership and
Assignment Motions DirectedAgainst Gaggero...............................9
9. The October 3, 2012 Hearing on KPC's Receivership and
Assignment Motions Against Appellants.......................... 10
10. The Receiver's Request for Authorization to Approve Loan
Transaction to Pay the Judgment in Full............. ...........................11
11. Appellants' Payment,of Judgment in Full............................... 12
STANDARDS OF REVIEW....................................................... ;....... 13
ARGUMENT................................................................ 14
1. The Trial Court Correctly Ruled that the Appointment of a
Receiver and Assignment ofRights Was Appropriate ...............14

4. A. The Appointment of a Receiver Was a Reasonable Method
to Obtain the Fair and Orderly Satisfaction of KPC's
Judgment.. ................................. 14
B. The Trial Court's Assignment/Restraining Order was
Appropriate to Satisfy KPC's Judgment.................. 19
2. The Issuance of the Receivership and Assignment/Restraining
Orders Was a Proper Exercise of the Court's Discretion..............., 20
A. Trial Courts Are Vested With Broad Discretion in Issuing
Post-Judgment Orders to Give Effect to Its Judgment......... 20
B. As a Matter of Law, Availability of Other Remedies Does
Not Preclude the Appointment of a Receiver.................... 21
3. The Terms of the Receivership and Assignment/Restraining
Orders Were Properly Tailored to Carry Out the Judgment and
Comply with California Rules of Court ^......................... 23
4. Appellants Cannot Show that They Were Harmed or Prejudiced
by Other Provisions ofthe Receivership and Assignment Orders..27
5. Appellants Cannot Demonstrate that the Earlier September
13, 2012 Orders Prejudiced Them Because the Court Corrected
the Orders via Its October 3, 2012 Amended/Reissued Orders.......28
6. Appellants Were Given Full Notice and Opportunity to be Heard
on the October 3, 2012 Orders................... 29
A. There is No Merit to Appellants' Argument that the Court
was Biased in Ruling on the Motions Heard on October 3,
2012...................................................................................... 29
B. Appellants Waived Their Bias Argument by Failing to
Timely Seek Disqualification ofthe Trial Court Judge........30
C. There Was No Violation ofAppellants' Constitutional
Due Process-Rights. ........................... .............................31
7. The Appointment of a Receiver and Assignment ofRights Were
Appropriate Regardless of the Trial Court's Reasons......................33
ii

5. CONCLUSION............... ................
CERTIFICATE OF WORD COUNT
iii

6. Table ofAuthorities
State Cases
Aguayo v. Crompton &Knowles Corp.
(1986) 183 Cal.App.3d 1032....... 2.8
Barnes v. Chamberlain
(1983) 147 Cal.App.3d 762................................................................. 15
Bennett v. McCall
(1993) 19 Cal.App.4th 122........................................... 22
Caminetti v. Pac. Mutual L. Ins. Co.
(1943) 22 Cal.2d 386.........,.............. ..30
Church ofChrist in Hollywood v. Sup. Ct.
(2002) 99 CaLApp.4th 1244................................................... 13
Citizensfor Open Government v. City ofLodi
(2012) 205 Cal.App.4th 296......... 28
City and County ofSan Francisco v. Daley
(1993) 16 Cal.App.4th 734..................................................... 16,20,22
Crocker Nat’lBank v. O'Donnell
(1981) 115 Cal.App.3d264......................................................................15
Davey v. Southern Pacific Co.
(1-897) 11-6 Cal. 325..................................’.................... ;..............33
Denham v. Sup. Ct.
(1970) 2 Cal.3d 5.57............. 22
Ecco-Phoenix Elec. Corp. v. Howard J. White, Inc.
(1969) .1 Cal.3d266.................................................................... 28
Gaggero v. Knapp, Petersen & Clarke
2010 WL 1796575 (Cal.App. 2 Dist.) ................ 4
Goes v. Perry
(1941) 18 Cal.2d373 ...............................................................................13

7. Gold v. Gold Realty Co.
(2003) 114 Cal.App.4th 791.......................................................13,15,22
Hillman v. Stults
(1968) 263 Cal.App.2d 848................................................ 24
Horsford v. Board o f Trustees ofCalif State Univ.
(2005) 132 Cal.App.4th 359............................................ 13
HousingAuthority o fOakland v. Sup. Ct.
(1941) 18 Cal.2d 336................................................;..............................14
In re Cortez
(1971) 6 Cal.3d78........................................................... 14
In re Marriage ofEconomou
(1990) 224 Cal.App.3d 1466...................................................................20
In re Marriage of Goddard
(2004) 33 Cal.4th 49............................................................... 27,28
In re Steven O.
(1991) 229 Cal.App.3d 46.................................................. 30
FTCorp. v. County ofImperial
(1983) 35 Cal.3d 63...................................................... 13
J.B. Aguerre, Inc. v. American Guar &Liab. Ins. Co.
(1997) 59 Cal.App.4-th 6.................:........................................................33
Maggiora v. Palo Alto Inn, Inc.
(1967) 249 Cal.App.2d 706............. 21
Marsh v. Williams
(1994) 23 Cal.App.4th 238............................................................ 24
Martin v. Alcoholic Bev. etc. Appeals Bd.
(1961) 55 Cal.2d 867.............................................................................. 14
Mike Davidov Co. v. Issod
(2000) 78 Cal.App.4th 597.............................................................. 33
v

8. Moore v. Oberg
(1943)61 Cal.App.2d216.............................. :.......................... 21
Morand v. Sup. Ct.
(1974) 38 Cal.App.3d 347.... ..................................... :............................16
People v. Beaumaster
(1971) 17 Cal.App.3d 996..................................................................... 30
People v. Giminez
(1975) 14 Cal.3d 68....... 14
People v. Mosley
(1997) 53 CaLApp.4th 489......................................................................22
R.D. v. PM.
(2011) 202 Cal.App.4th 181....................................... 13
Sacramento etc. Drainage Dist. v. Jarvis
(1959)51 Cal.2d 799......... ...:................................................................. 30
Sibert v. Shaver
(1952) 113 Cal.App.2d 19.............. ;....................20
Snidow v. Hill
(1948) 84 Cal.App.2d 702................ 21
Tucker v. Fontes
(1945) 70 Cal.App.2d768......................................................................25
UnlimitedAdjusting Group, Inc. v. Wells Fargo Bank
(2009) 174 CalApp.4th 883................................. :................................. 28
Federal Cases
Aetna Life Ins. Co. v. Lavoie
(1986) 475 U.S. 813 [106 S.Ct. 1580, 89 L.Ed.2d 823]..............31, 32,33
Caperton v. A.T. Massey Coal Co., Inc.
(2009) 556 U.S. 868 [129 S.Ct 2252, 173L.Ed.2d 1208]....................... 33
In reMurchison
(1955) 349 U.S. 133 [75 S.Ct 623,99 L.Ed. 942].................................32
vi

9. Mayberry v. Pennsylvania
(1971) 400 U.S. 455 [91 S.Ct. 499,27 L.Ed.2d 532] 32
Patterson v. New York
(1977)-432 U.S. 197................................ 32
Statutes
Cal. Const., art. VI, § 13................................................... ...........................27
Code Civ. Proc., § 170.3....................... 30
Code Civ. Proc., § 564.......................................... 15, 23
Code Civ. Proc., § 568 ....................... 23
Code Civ. Proc., § 568.5 .............................. 24
Code Civ. Proc., §708.510 ............................ 6, 19
Code Civ. Proc., § 708.520 ...................................:.....................6, 14,19, 20
Xode Civ. Proc., § 708.620........ ,............ ......................................14,15, 21
Code Civ. Proc., § 475....................................... .........................................27
Evid. Code, §664........................................................................... 22
Rules
Cal. Rules of Court, rule 3.1179...................................................................23
Cal. Rules of Court, rule 3.1181...................................................... 24, 26
Cal. Rules of Court, rule3.1182............................................................ 24,26
Cal. Rules of Court, rule 3.1184...................................... .....................24,26
Cal. Rides of Court, rule 8.204................. 35
vii

10. INTRODUCTION
The instant appeal is one of nine appeals brought by Stephen
Gaggero and/or the appellants herein, Pacific Coast Management, Inc.,
Gingerbread Court LP, 511 OFW LP, Malibu Broadbeach LP, Marina
Glencoe LP, Blu House LLC, Boardwalk Sunset LLC, and Joseph Praske as
the trustee of the Giganin Trust, the Arenzano Trust, and the Aquasante
Foundation (collectively "Appellants"), stemming from the trial court's
judgment entered in 2008 against Gaggero.1 Needless to say, this case has
had an extraordinarily long history marked by Gaggero and Appellants’
desperate attempts to keep the Respondents -judgment creditor KPG2-
from executing on itsfinal judgment or interfere with KPC's enforcement
efforts by filing one meritless appeal after another.3
True to 20 years of Gaggero modus operandi, in this appeal,
Appellants - all-entities formed and controlled by Gaggero - raiseanumber
of specious arguments designed to obfuscate the only real issue before the
Court: whether the trial court’s post-judgment orders appointing a receiver
and assigning/restraining Appellants' rights to aid KPC's execution ofthe
judgment was a reasonable method to obtain thefair and orderly
satisfaction of thejudgment. The answer is "yes." All other arguments
1Gaggero is not an appellant on this appeal.
2"KPC" collectively refers to Respondents Knapp, Petersen &
Clark, Steven Ray Garcia, Stephen M. Hams, and Andre Jardini.
3Gaggero appealed from the underlying legal malpractice case,
wherein - after the trial court ordered a directed verdict after his
case - this Court ofAppeal fully affirmed the Statement of
Decision andjudgment. See Gaggero v. Knapp, Petersen &
Clarke, 2010 WL 1796575 (Cal.Xpp. 2 Dist.). Thatjudgment is
final.
1

11. raised by Appellants are merely a side-show solely intended to distract this
Court from focusing on this primary - and only - issue.
When the trial court entered its receivership and
assignment/restraining orders, it was not operating in a vacuum. It had not
only presided over an eight week bench trial in which it found that Gaggero
used an "estate planning" scheme to hide his assets to avoid paying
judgments, but had recently concluded that the very entities and trusts
holding all of Gaggero's assets as part of his "estate plan," i.e., Appellants,
were Gaggero's alter egos. Thus, by the time the instant motions were
heard, the trial court was well aware that Gaggero exercised full control
over Appellants, that the sole purpose ofAppellants' existence was to
protect Gaggero's assets, and that Gaggero and Appellants were essentially
"one and the same." Based on these findings, the trial court had amended
the judgment to include Appellants as additional judgment debtors. This
was eminentlyjustified - even compelled- given-Gaggero's stated intent to
structure his life through a series of "estate planning tools" that attempted to
insulate him from personal liability while he prosecuted a series
malpractice lawsuits spawned solely by his aspiration ofrecovering
prevailing party- attorneys' fees (an engagement letter provision that he
insisted upon). In this way, Gaggero was hoisted.byhis own petard.4 Since
the hoisting, Gaggero - through his controlled entities - had led a sustained
attempt to retreat to the shelter of his estate plan, claiming pauper and that
his trusts5and other corporate entities were beyond his reach. The trial
4Hamlet, William Shakespeare.
5Two of Gaggero's trusts holding his assets (Aguasante Foundation
and Arezano Trust) were formed under the laws of the Caribbean
island ofAnguilla; each trust document was just four pages long,
. contained the barest ofterms, and was expressly formed to
shield assets.
2

12. courtjudge saw through this, correctly ordering Gaggero's entities to be
responsible for the adverse judgment, which had swelled to more than $2
million. It was in this backdrop that KPC came to court seeking a receiver
and an assignment/restraining order to assist in executing on thefinal
judgment.
Appellants' chief argument on appeal is that the receiver and
assignment/restraining orders were premature because KPC had other
remedies available to execute on the judgment. ButAppellants
misunderstand the law. There was no need for KPC to have gone through
fruitless attempts to apply other means to satisfy the judgment, when the
evidence clearly demonstrated that without the drastic intervention of a
receiver, Gaggero and Appellants would have continued to stonewall KPC's
enforcement efforts and render the judgment useless and uncollectible,
which was the whole idea. Contrary to Appellants' argument, the
availability of other "lesser-remedies does not preclude the use of a
receivership as a matter of law. Rather, the law authorizes trial courts to
appoint a receiver and assign the judgment debtors financial rights when
the court, considering the availability and efficacy of otherremedies,
determines that there are reasonable grounds to believe that the debtor or
third parties have control of property that rightfully should be subject to
execution. That is exactly what happened here.
Moreover, there is no merit to Appellants' contention that the terms
of the receivership and assignment/restraining orders were excessive or
improper, because the law vests trial courts with broad discretion and
authority to fashion its post-judgment orders to effectuate the judgment.
Appellants’contention that the court's earlier orders (issued on September
13,2012) should be reversed on procedural grounds is simply a non-issue
because they are not binding on Appellants and Appellants cannot show
prejudice from these orders. Lastly, Appellants'.belatedjudicial

13. disqualification challenge on the basis that the trial judge was biased has no
support in law or the record.
In short, the trial court was correct to appoint the receiver, assign
Appellants' rights, and vest the receiver with the necessary authority to
carry out the appointment. The orders should be affirmed in their entirety.
FACTUALAND PROCEDURAL BACKGROUND
1. Appellants' Misleading and Incomplete Statement of the Case.
Appellants' "Factual and Procedural History" does not fairly
characterize either the evidence which gave rise to the original judgment or
the record upon which this appeal is taken. With respect to the recordr ‘
which led to the judgment, this Court instead should look to the trial court's
Statement of Decision (B241675 CT1 60-91)6and this Court's own Opinion
that affirmed the judgment (Gaggero v. Knapp, Petersen & Clarke, 2010
WL 1796-575 (Cal.App. 2 Dist); see also B241675 CT1 93-115).
What follows below is an accurate summary of pertinent portions of
the record,on this appeal, which demonstrate that the trial court acted
within both its power and discretion in appointing a receiver and
assigning/restraining Appellants' rights to aid KPC's execution of its final
judgment.
6Citations to the clerk's transcript from Appellants' currently
pending appeal from the trial court order amending thejudgment
adding Appellants to thejudgment as Gaggero's alter egos, i.e.,
appeal number B241675, are differentiated from citations to the
clerk's transcript in this appeal by referencing "B241675.n KPC
respectfully requests that the Court take judicial notice of the
clerk's transcript in appeal number B241675 pursuant to
Evidence Code sections 452(d) and 453.
4

14. 2. KPC's Underlying Judgment.
Almost six years ago, the trial court entered a judgment against
Gaggero totaling $1,327,697.40 in fees and costs incurred by KPC in
defending Gaggero's frivolous legal malpractice lawsuit. (CT3 519:12-14.)
This Court subsequently affirmed the judgment in favor of KPC, and
awarded KPC additional fees and costs on appeal. (CT3 519:16-20.) An
amendedjudgment reflecting the augmented fees award and accrued post­
judgment interest was entered on December 28, 2010. (CT3 519:19-20.)
OnApril 10,2012, KPC filed a motion to amend the judgment to
add Appellants as additional judgment debtors on the basis that Appellants
were Gaggero's alter egos. (CT3 631-649.) The court granted the motion
on May 29, 2012. (CT3 570-571.) While Appellants immediately appealed
from the order, they did not post an undertaking to stay enforcement of the
judgment. (CT3 519:25-26, 520:3-6.)
On July 13, 2012, the court awarded KPC additional post-judgment
enforcement costs and accrued interest bringing the total amount of
judgment against Gaggero andAppellants, jointly, to $2,178,235.51. (CT3
520:10-16,573-574.)
3. The Judgment Debtors' Collective Refusal to Pay the
Judgment.
During the long history of KPC's attempt to collect its judgment,
Gaggero and appellant Joseph Praske engaged in delay, obstruction and
abuse of the discovery process to thwart KPC's judgment enforcement
efforts. (CT3 520:20-27, 521:1-2, 598-599.) Notably, because Gaggero
had transferred all his personal assets worth over $35,000,000 to his trustee
and appellant herein Joseph Praske, KPC sought to obtain Gaggero's trust
documents as part of its judgment enforcement efforts. (CT3 581-592.) In
5

15. response, Gaggero and Praske refused to produce the documents (ibid) or
pay thejudgment.
4. KPC's Initial Motions for Appointment of a Receiver and
Gaggero and Appellants.
On July 30,2012, KPC filed the following motions to enforce the
underlying judgment against Gaggero and Appellants: (1) a motion for
assignment ofrights and order restraining judgment debtors pursuant to
Code of Civil Procedure section 708.510, et seq. ("assignment motion"),
and (2) a motion for appointment ofreceiver pursuant to section 708.610 et
seq. ("receivership motion”). (CT1 28-162, 163-222; CT2 223-318.) 1
The assignment motion averred that KPC had a money judgment
against the judgment debtors, that thejudgment debtors had not posted a
bond to stay enforcement of the judgment, that the judgment debtors had
not paid any part of thejudgment, and that KPC had an assignable rightto
payments owed to thejudgment debtors from third parties pursuant to Code
of Civil Procedure sections 708.510 and 708.520. (CT1 29-30, 35-36.)
The receivership motion further asserted that an appointment of a
receiver was necessary to enforce the judgment, and that KPC had no
reasonable altemati.ve-Eeme.dy to enfbrce-the-judgment. (CT1 164.) The
hearing on both motions was set for August 23, 2012. (CT1 28-30, 163-
165.)
5. The Stay of Trial Court Proceedings as to Appellants from
August 6 to August 30,2012.
On August 6,2012, this Court issued a stay of all trial court
proceedings as to Appellants in response to a supersedeas petition filed by
Appellants. (CT2 321.)
6

16. Therefore on August 7, -2012, the trial court ordered,the hearing on
the pending receivership and assignment motions off calendar as to
Appellants. (CT2 321, 402.) The court also indicated that KPC may refile
the motions with respect to Appellants upon expiration of the stay. (CT2
402.) The court also assured Appellants that in the event the motions were
refiled, Appellants would be allowed an opportunity to oppose the motions
under statutory briefing schedules. (CT2 402.) The motions remained
pending as to Gaggero. (CT2 321, 402-403.)
On August 30, 2012, this Court deniedAppellants' supersedeas
petition, thereby lifting the stay that had been in place since August 6, 2012.
6. The August 23,2012 Hearing on KPC's Receivership and
Assignment Motions as to Gaggero.
On August 23, 2012, during the court-imposed stay of proceedings
as to Appellants, the trial court heard KPC's receivership and assignment
motions as to Gaggero. (August 23,2012 RT 1.) At the hearing, the court
indicated its tentative ruling to grant the motions and to allow Gaggero one
week to submit his objections to KPC's receiver nomination. (August 23,
2012 RT 11:6-8.) The court acknowledged that although KPC's motions
were brought against Appellants, as well as Gaggero, the proceedings were
stayed as to Appellants. (August 23,2012 RT 13:27-28, 14:2-4.)
The hearing concluded with the court indicating that it would further
review the proposed orders submitted by KPC. (August 23, 2012 RT 13:4,
14:16-19.)
7. KPC’s Motions for Appointment of a Receiver and
Assignment of Rights/Restraining Order Directed Solely
Against Appellants.
On September 6, 2012, following this Court's denial ofAppellants*
supersedeas petition, KPC filed a motion to appoint a receiver and a motion
7

17. for assignment ofrights and restraining order, this time directed solely
againstAppellants. (CT3 507, 509; CT4 763-764,766.) KPC asserted in
the new motions that Appellants had not paid the judgment or posted an
undertaking to stay enforcement of the judgment, that KPC had an
assignable right to payments owed to Appellants from third parties, that a
receiver was necessary to enforce the judgment, and that there was no
reasonable alternative remedy to enforce KPC's judgment. (CT3 507-521;
CT4 763-780.)
The motions were supported by over 350 pages of documents,
including transcript of hearings and court rulings on post-judgment
enforcement motions previously brought by KPC, Gaggero's responses to
discovery in the judgment debtor proceedings, and transcript ofjudgment
debtor examination, all evidencing KPC's earlier efforts to collect on the
judgment. The motions also included various declarations filed by counsel
and parties affiliated with Appellants concerning Gaggero's concealment of
his ownership of various assets. All of this was authenticated by the
declaration ofKPC's counsel or requests forjudicial notice. (CT3 519-521;
CT4 776-780;-CT5-894-898, .1082-1084; CT6 1160.)
In particular, KPC's receivership motion reminded the trial court that
Gaggero, as part of an asset protection plan implemented in 1997,
transferred all his assets, worth over $35,000,000, to various companies and
partnerships in which he had full ownership interests. (CT3 512-517.) The
motions also reminded the court that Gaggero placed the ownership of
these companies and partnerships in Appellants, including various trusts
and a foundation of which he was the trustor and manager, and his estate
planning attorney Praske, as the trustee. (CT3 512-517.) The motions
explained that despite the elaborate structure of the estate plan, Gaggero
retained full control of all the assets held by Appellants. (CT3 512-517.)
8

18. Additionally, KPC's assignment motion advised the court that
despite his purported poverty, Gaggero had considerable wealth which he
readily accessed through his control ofAppellants. (CT4 766-775.)
Of course, none of this was news to the trial courtjudge, whojust
months before ruled that substantial evidence supported the conclusion that
Gaggero controlled Appellants (B241675 May 29, 2012 RT 27:21-23), that
the only interest ofAppellants was to protect Gaggero's assets (B241675
May 29, 2012 RT 18:12-14), that Gaggero and Appellants were one and the
same (B241675 May 29, 2012 RT 19:5), and that Appellants were
Gaggero's alter egos (B241675 May 29, 2012 RT 25:27-28).
The hearing on the receivership and assignment motions directed
against Appellants was set for October 3, 2012. (CT3 507-508; CT4 763-
765.)
8. The TrialBourt's Orders on First Set of Receivership and-
Assignment Motions DirectedAgainst Gaggero.
On September 12, 2012, the court signed orders granting KPC's
receivership and assignment motions that were heard-on August 23, 2012.7
(CT5 902-909, 913-918.)
The assignment order stated that the judgment debtors' rights to
payment now due or to become due from third parties were assigned to
KPC's counsel "until the payment of thejudgment in the amount of
$2,178,235.51 plus post-judgment interest and allowable costs is paid in
fuH." (CT5 903, 909.)
On the order granting KPC's receivership motion, the court
appointed Jay D. Adkisson as the post-judgment receiver ofthe judgment
7The trial court noted in these orders that it was aware that this
Court had vacated the temporary stay order as to Appellants on
August 30, 2012. (CT5 903, 914.)
9

19. debtors, and ordered the receiver to file a receiver's bond and oath within
ten days. (CT5 914.)
Even though these orders were subsequently amended and modified
by the court, Appellants appealed from the September 12, 2012 orders on
November 13,2012.8 (CT6 1309-1311.)
9. The October 3,2012 Hearing on KPC's Receivership and
Assignment Motions Against Appellants.
KPC's receivership and assignment motions againstAppellants were
heard on October 3, 2012. (CT6 1183; October 3,2012 RT 1.) At the
hearing on the motions, the court gave Appellants a full opportunity to
make their arguments, and even considered Appellants' untimely
declarations filed on the morning of the hearing, and even though it
prevented KPC from having the opportunity to respond to them. (October
3,2012 RT 3:15-28.)
What followed was over an hour of oral argument from counsel,
mostly from Appellants' counsel Edward Hoffman. (October 3, 2012 RT
1:1,45:4.) After oral argument, the court took the matter under submission.
(October 3, 2012 RT 45:3.) Later that day, the court issued an "amended"
receivership order and "reissued" the assignment order. (CT6 1199-1214.)
In the amended-receivership order, the court clarified that-KPC's
receivership motion was heard on August 23,2012 as to Gaggero only, and
on October 3, 2012 as to Appellants. (CT6 1200:2-7.) In granting the
receivership motion as to both Gaggero and Appellants, the amended,
receivership order stated that the judgment debtors must post an
undertaking to stay enforcement of the order, and appointed Jay D.
Adkisson as the receiver..(CT6 1200:18-26.)
8Neither Gaggero nor Appellants posted an undertaking to stay the
enforcement of the September 12, 2012 orders.
10

20. In the reissued assignment order, the court again clarified that KPC's
assignment motion was heard on August 23, 2012 as to Gaggero only, and
on October 3,2012 as to Appellants. (CT6 1208:2-10.) The court then
ordered that thejudgment debtors' rights to present and future payments
were assigned to KPC's counsel and enjoined Appellants from disposing of
those rights "until the payment ofthejudgment in the amount of
$2,178,235.51 plus post-judgment interest and allowable costs is paid in
full.11 (CT6 1208:21-25,1213:23-27.) The court also stated that the
judgment debtors must post an undertaking to stay enforcement of the
order. (CT6 1208:16-19.)
On October 4, 2012, KPC filed the original receiver's bond with the
court. (CT6 1237-1242.)
Appellants appealed from the court's October 3,2012 receivership
and assignment orders on December 3,2012.9 (CT6 1312-1315.)
10. The Receiver’s Request for Authorization to Approve Loan
Transaction to Pay the Judgment in Full.
On November 5,2012, the court appointed receiver applied exparte
for instructions and authorization to approve a financial transaction
arranged by Appellants that would allow them to pay the judgment in full.
(CT6 1260-1263; November 5,2012 RT 3:5-8.) At the hearing on the
application, Appellants urged the court to approve the transaction.
(November 5,2012 RT 3:11-13.) After an extensive conference between
counsel and the court, the court signed an order authorizing the transaction.
(CT6 1308.)
The order authorizing the transaction granted the receiver authority
to approve and facilitate the financing transaction arranged by four of
9Neither Gaggero nor Appellants posted an undertaking to stay the
enforcement of the October 3, 2012 orders.
11

21. Appellants, whereby,the four parties were to boiTOw against the equity in
their real properties to pay off existing loans, and convert the equity into
cash to satisfy KPC's judgment in full. (CT6 1296:6-9.) The court further
ordered KPC to provide the escrow company handling the transaction a
fully executed acknowledgment of satisfaction ofjudgment to be held by
the escrow company until the judgment was paid in full. (CT6 1296:13-
18.) The court specified that after the loan was funded and the senior
lienholders paid off, the receiver was to receive approximately $2,230,000
to be paid to KPC, plus approximately $30,000 to cover the receiver's fees.
(CT6 1297.) Lastly, the court ordered that once the judgment was paid in
full, the receiver was to file a final accounting with the court. (GT6 1297.)
Neither Gaggero nor Appellants appealed from this order.
11. Appellants’Payment of Judgment in Full.
On November 15, 2012, Appellants and the receiver completed the
transaction which the court had authorized on November 5, 2012. (AOB
21.) Thereafter, Appellants paid $2,238,509.51 to KPC to satisfy the
judgment in full-. (AOB 21.)
Upon payment ofthejudgment in full, the assignment orders expired
pursuant to their own terms. (CT5 903:23-24, 909:9-10; CT6 1208:24-25,
1214:11-12.)
KPC's Acknowledgment of Satisfaction ofJudgment was promptly
recorded in the Los Angeles County Recorder's Office. (MJN, Exh. 1,)10
10KPC respectfully requests that the court take judicial notice,
pursuant to KPC's Motion for Judicial Notice ("MJN”) filed on
December 31,2013, the Acknowledgement of Satisfaction of
Judgment recorded on November 14,2012 and filed on
December 3, 2012 by KPC.
12

22. On December 3, 2012, KPC filed a copy of the recorded Acknowledgment
of Satisfaction of Judgment with the court. (MJN; Exh. 2.)
On April 12,2013, the court entered an order discharging the
receiver and terminating the receivership. (MJN, Exh. 3.)11 No appeal was
taken from this order.
STANDARDS OF REVIEW
Appellants concede that an order appointing a receiver is reviewed
on appeal under an abuse of discretion standard. (AOB21.) Indeed, along
line of California appellate decisions establishes that the appointment of a
receiver rests within the sound discretion of the trial court. (Gold v. Gold
Realty Co. (2003) 114 Cal.App.4th 791, 807-808; Goes v. Perry (1941) 18
Cal.2d 373, 381.)
An order assigning rights and restraining the judgment debtor from
disposing of the right to payment that is subject to the assignment order is
also reviewed for an abuse of discretion. (Horsford v. Board of Trustees of
Calif State Univ. (2005) 132 Cal.App.4th 359, 390; Church o f Christ in
Hollywood v. Sup. Ct (2002) 99 Cal.App.4th 1244, 1251.) While
Appellants also suggest that restraining orders maybe reviewed de novo,
citing R.D. v. P.M. (2011) 202 Cal.App.4th 181, 188, the law is-well settled
that the decision to grant an injunction, such as a restraining order, rests in
the sound discretion ofthe trial court. (IT Corp. v. County ofImperial
(1983) 35 Cal.3d 63,69.)
11KPC respectfully requests that the court take judicial notice,
pursuant to KPC's Motion for Judicial Notice filed on December
31, 2013, the trial court’s order ofApril 12, 2013 discharging the
receiver and terminating the receivership.
13

23. Moreover, the fact that the statute authorizing restraining orders as
part of post-judgment assignment orders (Code of Civil Procedure section
708.520, subsection (b) and (c)) states that the court "may” issue an order
restraining disposition of right to payment and "may" modify or vacate the
order at any time means the court is to exercise its discretion in determining
whether to restrain the judgment debtor. (Code Civ. Proc., § 708.520, subs,
(b) and (c); HousingAuthority of Oakland v. Sup. Ct. (1941) 18 Cal.2d 336,
339 [the legislature's use of "may" expresses intent to vest discretion in the
trial court].) Accordingly, the trial court's assignment/restraining order
should be reviewed for an abuse of discretion.
The proper exercise of discretion requires the trial court to consider
all material facts and evidence and to apply legal principles essential to an
informed, intelligent, andjust decision. (Martin v. Alcoholic Bev. etc.
Appeals Bd. (1961) 55 Cal.2d 867, 875.) Judicial discretion "implies .
absence of arbitrary determination, capricious disposition or whimsical
thinking." (In re Cortez (1971) 6 Cal.3d 78, 85.) In short, a trial court
abuses its discretion only if its action exceeds the bounds ofreason, in light
of the facts and circumstances ofthe case before it. (Peoples: Giminez
(1975) 14Cal.3d68,72.)
ARGUMENT
1. The Trial Court Correctly Ruled that the Appointment of a
Receiver and Assignment of Rights Was Appropriate.
A. The Appointment of a Receiver Was a Reasonable Method
to Obtain the Fair and Orderly Satisfaction of KPC’s
Judgment
Code of Civil Procedure section 708.620 states the circumstances
under which the post-judgment appointment of a receiver to aid in the
execution ofjudgment is appropriate. "The court may appoint a receiver to
14

24. enforce the judgment where the judgment creditor shows that, considering
the interests of both the judgment creditor and the judgment debtor, the
appointment of the receiver is a reasonable method to obtain thefair and
orderly satisfaction o fthejudgment" (Code Civ. Proc., § 708.620,
emphasis added.) The Legislative Committee comments to Code of Civil
Procedure section 708.620 states that the 1982 amendment to the statute
eliminated a former prerequisite of showing that a writ of execution had
been returned unsatisfied or that the judgment creditor refused to apply
property in satisfaction of the judgment. Thus, the only requirement for
appointing a receiver is the trial court's conclusion that the receivership is a
"reasonable method to obtain the fair and orderly satisfaction ofthe
judgment;" (Code Civ. Proc., § 708.620.)
In addition, the plain language of Code of Civil Procedure section
564 gives the court power to appoint a receiver "to carry thejudgment into
effect." (Code Civ. Proc., § 564, subd. (b)(3).) It also provides the court
with authority to "dispose ofthe property according to thejudgment" (Code
Civ. Proc., § 564, subd. (b)(4)), or in "all other cases where necessary to
preserve ... ikenrights o fanyparty" (Code Civ. Proc., §■564, subdv(b)(9),
emphasis added). Code of Civil Procedure sections 708.620 and 564
together permit the trial court to appoint and vest broad authority in a
receiver to aid a successful litigant in the collection of an unpaidjudgment.
Accordingly, receivers are routinely appointed by courts after a
judgment has been entered where the circumstances make it appropriate in
the court's discretion to appoint a receiver to carry thejudgment into effect.
This longstanding reality is illustrated in numerous California cases. (See,
e.g., Gold v. Gold Realty Co., supra; City and County ofSan Francisco v.
Daley (1993) 16 Cal.App.4th 734; Barnes v. Chamberlain (1983) 147
CalApp.3d 762; CrockerNat’lBank v. ODonnell (1981) 115 Cal.App.3d
264.)
15

25. In this appeal, Appellants ask this Court to ignore settled law and to
focus instead on selective quotes from cases such as Morand v. Sup. Ct.
(1974) 38 Cal.App.3d 347, 351, that state that receivership is a drastic
remedy. As the Morand court added, however, "a party to an action should
not be subjected to the onerous expense of a receiver, unless his
appointment is obviously necessary to the protection of the opposite party."
(Ibid., emphasis added, citations omitted.) Tellingly, Appellants' brief fails
to cite any legal authority to support their argument that the availability of
lesser remedies rendered the trial court's receivership and assignment orders
improper. As discussed infra, the law is clear that the availability of other
remedies does not, of itself, preclude the use of a receivership; (City arid
County ofSan Francisco v. Daley, supra, 16 Cal.App.4th at 745.)
Appellants' brief also glosses over the lengthy discussion by the trial
court explaining why it believed a receiver was necessary for KPC to
execute on the judgment. Contrary to Appellants' innuendo, the trial court
did not give short shrift to their various arguments in opposition to the
motions. The record reveals that the court made its views clear that
Gaggero, aided by Appellants, had taken a "stonewall position" to avoid
paying the judgment, and that based on the alter ego relationship between
Gaggero and Appellants, the appointment of a receiver was the next logical
and necessary step for KPC to enforce the judgment.
[T]o say that [Gaggero] has resisted any effort
to either, number one, pay sums that were owed
prior tojudgment, or to pay it once the
judgment was entered is an understatement of
the case. ... [I]ts [sic] been worse trying to pull
teeth without anesthetic for the creditors. The
validity of their claim, their fundamental is
undisputed, and it keeps adding interest and
everything. ... I can understand why they
might be disinclined to engage in prolonged
discussions which have no reasonable
16

26. likelihood ofresolving at anything approaching
collection.
(October 3, 2012 RT 5:7-24.)
[M]y general understanding is that this web of
entities [i.e., Appellants] was set up by Mr.
Gaggero ... to make himjudgment proof. ... I
think there is evidence that has been presented
to that effect, and indeed I have some
recollection ofMr. Gaggero's own testimony at
trial.
(October 3,2012 RT 19:28,20:1-6.)
I know the history of Mr. Gaggero on that. He
doesn't want to payjudgments against him...
So ... the way he set up these relationships ...
with these different entitiesf,] it’s very hard to
twist his arm. And what we have here now is
counsel for thejudgment creditors who is
willing to come in and take the steps actually to
effectively twist the arm.
* * *
It's hard for me to say that given this history,
given my understanding of the facts, given my
understanding of the relationship between Mr.
Gaggero and these different persons and entities
[i.e., Appellants], that [the appointment of a
receiver and assignment] shouldn't [be]
allow[ed] to go forward.
(October 3, 2012 RT 25:18-28, 26:1-3.)
The court also gave a detailed explanationwhy it viewed Appellants'
request for a continuance of the hearing - purportedly to liquidate some
properties to pay the judgment - to be just another delay tactic.
[M]y impression reading this was that it's kind
of vague, kind of conceptual, and what it does is
promise significant additional delay.
17

27. (October 3,2012 RT 11:3-6.)
[0]n the basis of what I have before me today, I
do not have a high degree of confidence that
will happen within a reasonable period of time.
(October 3,2012 RT 20:14-17.)
[Y]ou say you're getting updated appraisals. I
don't know what it will show. I don't know the
value of any ofthese properties. I don't know
what the —you tell me there's a million dollars
in [ejncumbrances. i don't know what the
values are and —
(October 3,2012 RT 20:23-27.)
But I don't have enough before me today to
know that I'm not buying a pig in a po[k]e. And
that's no[t] casting doubts on your v[e]racity.
It’s intended to express that you are asking me
to require them to submit to something that they
are not willing to do voluntarily on the basis of
a theoretical offer which has notyet been—
reduced to anything that would be enforceable.
(October 3, 2012 RT21:l-8.)
It's too indefinite ... It's"that I don't know what
you have offered. There are no specifics about
this and there's no timeframe, and there's no
basis for assurance that it's going to happen in a
reasonable-period of time or shake out the way
that you intend.
(October 3, 2012 RT22:13-i9.)
In the end?the record fully supports the trial court's conclusion that a
receiver and assignment order were necessary for KPC to execute its
judgment. The court legitimately viewed Gaggero's conduct in avoiding
payment of the judgment and his stonewalling tactics applied equally to
Appellants. Moreover, the court had already found that the assets in
Appellants' name are in realityGaggero's personal assets. Under these
18

28. circumstances, it is difficult to imagine why the trial court would not have
appointed a receiver to aid KPC's execution of the judgment.
B. The Trial CourtisAssignment/Restraining Order was
Appropriate to Satisfy KPC's-Judgment.
Code of Civil Procedure section 708.510( a) provides that "upon
application of thejudgment creditor on noticed motion, the court may order
the judgment debtor to assign to the judgment creditor ... all or part of a
right to payment due or to become due, whether or not the right is
conditioned on future developments.. (Code Civ. Proc., § 708.510, subs.
(a).) The court may order an assignment of any type ofpayment due to the
judgment debtor, including, "but not limited to" the following:
(1) Wages due from the federal government
that are not subject to withholding under an
earnings withholding order.
(2) Rents.
(3) Commissions.
(4) Royalties.
(5) Payments due from a patent or copyright.
(6) Insuranceipolicyloan^vaitte.
{Ibid.) The Legislative Committee comment to the section states that
assignment ofpayments "may be used alone or in conjunction with other
remedies provided in this title for reaching rights to payment, such as
execution, orders in examination proceedings, creditors1suits, and
receivership."
In addition, Code of Civil Procedure section 708.520(a) provides
that "[wjhen an application is made pursuant to Section 708.510 ...,the
judgment creditor may apply to the court for an order restraining the
19

29. judgment debtor from assigning or otherwise disposing of the right to
payment that is sought to be assigned." (Code Civ. Proc., § 708.520, subs,
(a).) The court may issue such a restraining order "upon a showing of need
for the order." (Code Civ. Proc., § 708.520, subs, (b).)
Here, there is no dispute that at the time of the assignment order,
neither Gaggero nor Appellants had satisfied any portion of KPC's
judgment Based on these facts, the court had ample authority to order
assignment ofAppellants' right to payment due from third persons to the
extent necessary to satisfy KPC'sjudgment.
Moreover, there can be no dispute that the court's order restraining
Appellants from disposing of their property to avoid paying thejudgment
was appropriate as an ancillary measure to give effect to the assignment
order. Once KPC was assigned Appellants' right to payment, Appellants
would have no right to interfere with payments so assigned. In other
words, Appellants-would be restrained from doing only that which-they
would have no right to do in the first instance. The assignment/restraining
order should be affirmed.
2. The Issuance of the Receivership and Assignment/Restraining
Orders Was a Proper Exercise of the Court’s Discretion.
A. Trial Courts Are Vested With Broad Discretion in Issuing
Post-Judgment Orders to Give Effect to Its Judgment
The order appointing a receiver will be reversed on appeal only if
there is a clear showing of an abuse of discretion. {City and County o fSan
Francisco v. Daley, supra, 16 Cal.App.4th at 744; In re Marriage of
Economou (1990) 224 Cal.App.3d 1466, 1484; Sibert v. Shaver (1952) 113
Cal.App.2d 19,21.) "We cannot substitute,our conclusion for that of the
trial court made upon sufficient evidence even if we should be of the
opinion that there was no danger ofthe loss or removal of, or other
20

30. irreparable injury to the assets ofthe joint venture. Tojustify our
interference with the order confirming the appointment herein, it must be
made clearly to appear that the order was an arbitrary exercise ofpower."
■ {Moore v. Oberg (1943) 61 Cal.App.2d 216, 221-222.)
In Maggiorav, Palo Alto Inn, Inc. (1967) 249 Cal.App.2d 706, the
court held that:
If it appears that the party seeking the
appointment has at least aprobable right or
interest in theproperty sought to be placed in
receivership and that the property is in danger
of destruction, removal or misappropriation, the
appointment of a receiver will not be disturbed
on appeal [citation].
{Id,, at 710, emphasis added)
Indeed, the court's discretion in appointing a receiver is "so broad
that an order based upon facts concerning which reasonable minds might
differ with respect to the necessity for the receiver will not be reversed."
{Maggiora v. Palo Alto Inn., Inc., supra, 249 Cal.App.2d at 710.) Even if,
arguably, there had been an abuse of discretion in the appointment of a
receiver, an appellant challenging that order must show some that prejudice
or injury resulted from the appointment. {Snidow v. Hill (1948) 84
Cal.App.2d702,708.)
Here, the record demonstrates that the trial court was more than
justified in concluding that the post-judgment appointment of a receiver
was a "reasonable method to obtain the fair and orderly satisfaction" of
KPC’s judgment. (Code Civ. Proc., § 708.620.)
B. As a Matter of Law, Availability of Other Remedies Does
Not Preclude the Appointment of a Receiver.
Appellants contend that the trial court abused its discretion by failing
to consider less drastic alternatives to the appointment of a receiver,
21

31. arguing that KPC failed to seek lesser remedies before asking for a receiver.
Appellants misunderstand the law. The fact that other potential remedies
may have been available does not by itselfpreclude, the appointment of a
receiver as a matter of law. (City and County ofSan Francisco v. Daley,
supra, 16 Cal.App.4th at 745.)
In Gold v. Gold Realty Company, supra, the trial court.appointed a
receiver to market and sell the parties' real property, even though the
parties' judgment specifically provided for the appointment of an
independent third director to carry out the dissolution of the corporation.
The appellant in Gold argued, as Appellants do in this appeal, that the trial
judge abused her discretion in appointing a receiver when the remedy of
selecting a third director remained available. (Id., at 807.)
Rejecting this argument, the Gold court explained:
”[T]he availability of other remedies does not,
in and of itself, preclude the use of a
receivership. ... Rather, a trial court must
consider the availability and efficacy of other
remedies in determining whether to employ the
extraordinary remedy of a receivership. ..."
(Gold v. Gold Realty Co., supra, 114 Cal.App.4th at 807, emphasis added.)
Moreover, the "trial court is presumed to have been aware of and
followed the applicable law." (People v. Mosley (1997) 53 Cal.App.4th
489,496; accord, Evid. Code, § 664;) Therefore, as to matters on which the
record is silent, a trial court's ruling is presumed to be correct. (Denham v.
Sup. Ct. (1970) 2 Cal.3d 557, 564.) To overcome that presumption, an
appellant must present a record that affirmatively establishes the existence
of error, notjust the possibility that it might have occurred. (See, ibid.;
Bennett v. McCall (1993) 19 Cal.App.4th 122, 127.) Here, nothing in the
record establishes that the trial court failed or refused to consider less
intrusive remedies.
22

32. Even without the presumption of correctness, however, the record
here shows that it would have been futile to require KPC to go through the
motions of serving judgment debtor discovery or apply other enforcement
measures onAppellants. Not only had Gaggero openly flaunted his
"judgment proof' status to the court, he had demonstrated his ability to
conceal and disguise assets underAppellants' name, while maintaining full
control of and access to the assets held by Appellants. KPC only requested
the appointment of a receiver because other remedies would have been
utterly inadequate and ineffective.
^ 3. The Terms of the Receivership and Assignment/Restraining
Orders Were Properly Tailored to Carry Out the Judgment and
Comply with California Rules of Court
As discussed above, the plain language of Code of Civil Procedure
section 564 gives the court power to appoint a receiver to carry the
judgment into effect (Code Civ. Proc., § 564, subd. (b)(4).) A receiver's
powers and functions are not only granted and controlled by statute, but
also by the order of appointment and orders subsequently made by the
court. (Code Civ. Proc., § 568; Cal. Rules of Court, rule 3.1179(a).) The
general statutory powers of a receiver, which are all subject to the control of
the court, are:
• to bring and defend actions in his own name, as receiver;
• to take and keep possession ofthe property, to receive rents,
collect debts, to compound for and compromise the same;
• to make transfers, and
• "generally to do such acts respecting theproperty as the
Court may authorize"
(Code Civ. Proc., § 568, emphasis added.) The last enumerated power
allows the court to either expand or limit a receiver's statutory authority.
23

33. Code of Civil Procedure section 568.5 further provides that the court
may order the receiver to "sell real or personal property in the receiver's
possession..." (Code Civ. Proc., § 568.5.) As the "hand of the court," the
receiver aids the court "in preserving and managing the property involved
in the suit for the benefit of those to whom it may ultimately be determined
to belong." (Marsh v. Williams (1994) 23 Cal.App.4th 238,248.)
California Rules of Court sets forth additional duties on a receiver.
It requires the receiver to "file an inventory containing a complete and
detailed list of all property of which the receiver has taken possession by
virtue of his appointment." (Cal. Rules of Court, rule 3.1181) It also
requires the receiver to "provide monthly reports to the parties and, if
requested to nonparty client hen holders." (Cal. Rules of Court, rule
3.1182.) The monthly reports must include:
(1) A narrative report of events;
(2) A financial report; and
(3) A statement of all fees paid to the
receiver, employees, and professionals ...
(Ibid.) The receiver is then required to provide the court, via noticed
motion or stipulation of all parties, a "final account and report..(C al.
Rules of Court, rule 3.1184.)
Importantly, neither the authorizing statute nor California Rules of
Court contains any language limiting the power of the receiver appointed to
aid in the enforcement of ajudgment. In Hillman v. Stults (1968) 263
Cal.App.2d 848, the court explained: "It is well settled that a trial court has
broad discretion in its directions and approvals given to a receiver in
respect to management of the property." (Id., at 876.)
In this appeal, Appellants objects to a whole host of directions given
by the court to the receiver, characterizing them as vesting the receiver with
24

34. authority to "actively manage" Appellants' business affairs. There is no
legal or factual basis for this argument.
The only legal authority cited by Appellants for this proposition is
Tucker v. Fontes (1945) 70 Cal.App.2d 768.12 In Tucker,the court affirmed
the trial court's order appointing a receiver, rejecting the defendant's
argument that the order failed to define the receiver's duties, and that the
terms of the order were too broad. (Id. at 775.) However, contrary to
Appellants' assertion, the Tucker court did not hold that a receiver may not
be placed in the "active management" of the defendant. Rather, the Tucker
court was merely reciting what the defendant in that case had cited, namely
"33 C.J.S., Executions, § 391, at pages 717, 718, to the effect that that
rights, powers, and duties of a receiver appointed in a supplemental
proceeding are limited to the purposes of such proceeding and those for
which he was appointed;... and that they do not include active
management ofproperty-or operation of a business of thejudgment
debtor..." (Ibid.) The court's reference to a citation made by the defendant
in the case hardly makes it the court's holding.
In-fact, the Tucker court went on to hold that the appointment order
in that case, when reasonably construed, was proper because "in substance,"
the order simply authorized the receiver to take possession of the
defendant's property, including the defendant's "books of account and
papers relating to his business affairs, and to collect the debts and moneys
due the defendants..." (Tucker v. Fontes, supra, 70 Cal.App.2d at 775.)
12Appellants also cite Morand v. Sup. Ct., supra, 38 Cal.App.3d
347, 350 (AOB 43), but Morand does not say what Appellants
suggest it does. Rather, the Morand court simply held that the
court's appointment order did not give the receiver leave to
commence an action against third parties. (Id. at 353.) It
contains no discussion whether the order in question authorized
the receiver to actively manage the debtor's business.
25

35. Here, all the provisions objected to by Appellants were necessary for
the receiver to discharge his primary duty of identifying and liquidating
assets to satisfy KPC's judgment. Appellants consist of various trusts,
limited liability companies, and a corporation,that hold real property
interests. The receiver necessarily had to understand the complex structure,
control and ownership of Gaggero's estate plan, which involved entities and
trusts other than Appellants, in order to identify ownership interests of
Appellants to satisfy thejudgment. If the receiver did not have the
authority to administer or manage Appellants' business affairs, funds, and
assets, and have access to all the records, how could he identify and
liquidate assets to pay the judgment?
Moreover, because the receiver is obligated under California Rules
of Court, rules 3.1181, 3.1182, and 3.1184 to perform an inventory of
Appellants' assets, provide a detailed monthly report including a financial
report, and file a final accounting to the court; the receiver-had to have full
access to Appellants' business affairs, funds, properties, assets, and records.
The court took all of the receiver's expected responsibilities and duties into
consideration; as well as the particularcircumstances concemingGaggero's
"estate plan," in issuing the receivership order. The order was reasonably
tailored to accomplish the purpose of the receivership in this case.
Without citing any legal authority, Appellants also complain that the
order was improper because it allowed the receiver to "investigate"
Appellants. Yet, as discussed above, the receiver’s duty to marshal
Appellants' assets necessarily required the receiver to investigate
Appellants' assets and liabilities. There was nothing oppressive or
excessive about the terms of the court's orders.
26

36. 4. Appellants Cannot Show that They Were Harmed or Prejudiced
by Other Provisions of the Receivership and Assignment Orders.
Claims ofprocedural nature are reviewed for prejudice: "[T]he
presumption in the California Constitution is that the 'improper admission
or rejection of evidence ... o r... any error as to any matter ofprocedure,' is
subject to harmless error analysis and must have resulted in a 'miscarriage
ofjustice in order for the judgment to be set aside. (Cal. Const., art. VI, §
13.) Code of Civil Procedure section475 contains similar language: The
court must, in every stage of an action, disregard any error, improper ruling,
instruction, or defect, in the pleadings or proceedings which, in the opinion
of the court, does not affect the substantial rights of the parties.''' (In re
Marriage of Goddard (2004) 33 Cal.4th 49, 56-57.)
Appellants argue that the receivership order impermissibly gave the
receiver access to Appellants' tax returns or privileged attomey-client
communication. However, Appellants -fail to show any harm or prejudice
actually resulted from the provision in the assignment order concerning the
receiver's access to tax returns, or their contention that the order could be
read to include access to privileged communication.
Similarly, Appellants contend that the assignment order was
improper because it was "designed to prevent" them from paying their
lawyers or their employees. (AOB 53, 55.) Again, Appellants fail to cite
any-legal authority for this position. The arguments are simply specious
and based entirely on hypothesis and speculation. Just as importantly, this
argument fails because Appellants cannot show that any prejudice or harm
resulted from the provisions in the trial court orders they complain of.
27

37. 5. Appellants Cannot Demonstrate that the Earlier September
13,2012 Orders Prejudiced Them Because the Court
Corrected the Orders via Its October 3,2012
Amended/Reissued Orders.
Appellants claim that the receivership and assignment orders entered
by the court on September 13,2012 should be reversed because (1) they
were purportedly issued during the stay ofproceedings ordered by this
court, and (2) they did not have an opportunity to be heard. These
arguments overlook the critical fact that the any error or irregularity in the
September 13, 2012 orders was made inconsequential by the court's
subsequent issuance of amended orders on October 3, 2012 that superseded
the September 13, 2012 orders.
As-discussed supra,claims ofprocedural defects are reviewed for
prejudice. (In re Marriage of Goddard, supra, 33 Cal.4th at 56-57 [the
court must disregard any error, improper ruling instruction, or defect, in the
pleadings or proceedings which, krthe opinion of the court, does not affect
the substantial rights ofthe parties].) Thus, only an error resulting in
prejudice to the losing party will support a reversal. (Unlimited Adjusting
Group, Inc. v. Wells Fargo Bank (2009) 174 Cal.App.4th 883, 895.) Nor is
error prejudicial if it was cured in the trial proceedings. (Ecco-Phoenix
Elec. Corp. v. HowardJ. White,.Ina,(1969) 1CaL3d266, 270-271; Aguayo
v. Crompton <ScKnowles Corp. (1986) 183 Cal.App.3d 1032, 1043.) The
burden is on the appellant to affirmatively demonstrate prejudicial error.
(Citizensfor Open Government v. City ofLodi (2012) 205 Cal.App.4th 296,
308-310.) Here, the Appellants cannot show that the court's September 13,
2012 orders resulted in any prejudice to them.
Admittedly, the trial court's September 13,2012 orders failed to
cross out the names ofAppellants even though they did not participate in
the hearing on August 23, 2012, and the court had previously taken the
28

38. motions with respect to Appellants off calendar. However, the court re-set
the hearing on the motions against Appellants for October 3, 2012, and
Appellants were given notice of the hearing, allowed to file written
opposition to the motions, and argue against the motions at the hearing.
Recognizing that the September 13, 2012 orders erroneously included
Appellants, the court issued a new set of orders after receiving Appellants'
written and oral opposition to the motions. The new set of orders, entitled
"Amended Order for the Appointment of Receiver" and "Reissued Order
for Assignment ofRights and Order Restraining Judgment Debtors,"
effectively superseded the earlier September 13,2012 orders.
Consequently, there is no reason to reverse the September 13,2012
orders, and they should not be disturbed on this appeal.
6. Appellants Were Given Full Notice and Opportunity to be
Heard on the October 3,2012 Orders.
A. There is No Merit to Appellants' Argument that the Court
was Biased in Ruling on the Motions Heard on October 3,
2012.
The trial court gave Appellants a full opportunity to be heard on the
motions decided on October 3, 2012. The court bent over backwards in
reviewing and considering Appellants' opposing declarations filed on the
morning of the hearing* Despite the tardiness of the filing, and even though
they had no grounds to file such declarations after the time for filing written
oppositions had passed, the court reviewed and considered the late filed
declarations before the hearing. Thus, rather than being biased against
Appellants, the court gave Appellants an "extra" opportunity to oppose the
motions for the October 3, 2012 hearing. In fact, the court entertained oral
argument from counsel - almost entirely fromAppellants' counsel - for over
an hour on October 3, 2012.
The fact that the court did not rule in Appellants' favor did not mean
29

39. that'court was biased against them, or that the court deprived them of notice
and opportunity to be heard. Just the opposite happened. The record
clearly shows that the court gave a detailed reasoning for his conclusion,
which was supported by substantial evidence, that there would be more
delay in paying the judgment without a receiver and an assignment order.
Recall that, just months before the October, 2012 hearing, the court heard
the motion by KPC to add.Appellants as additionaljudgment debtors on the
basis that they were Gaggero's alter egos. In this earlier proceeding, the
court found that Appellants and Gaggero were one and the same, that
Gaggero controlled Appellants, and thatAppellants' sole purpose was to
protect Gaggero's assets. Based on this evidence, the court was more than
justified in viewing Appellants and Gaggero as sitting at the same "side of
the table" in dealing with KPC.
Appellants’argument that the trial court orders were the result of the
judge's bias against them is nothing more than historical revisionism.
B. Appellants Waived Their Bias Argument by Failing to
Timely Seek Disqualification of the Trial Court Judge.
Even if, for argument sake, Appellants' bias claim has any merit,
they waived the argument by failing to raise grounds -for disqualification by
filing a verified statement objecting to the hearing before the judge under
Code of Civil Procedure section 170.3. (In re Steven O. (1991) 229
Cal.App.3d 46, 55 ["this promptness requirement is not to be taken lightly,
especially when the party delays in challenging the judge until after
judgment. Otherwise, a defendant can sit through a first trial hoping for an
acquittal, secure in the knowledge that he can invalidate the trial later if it
does not net a favorable result"].)
Thus, Code of Civil Procedure section 170.3 provides that "[t]he
statement [of disqualification] shall be presented at the earliest practicable
opportunity after discovery of the facts constituting the ground for
30

40. disqualification.” (Code Civ. Proc., § 170.3, subd. (c)(1).) Courts have
held,that a party's failure to comply with this requirement constitutes a
waiver of the disqualification challenge. (Sacramento etc. Drainage Dist.
v. Jarvis (1959) 51 Cal.2d 799, 801; Caminetti v. Pac. Mutual L. Ins. Co.
(1943) 22 Cal,2d 386, 390-392.) The matter cannot then be raised for the
first time oh appeal. (People v. Beaumaster (1971) 17 Cal.App.3d 996,
1009.)
C. There Was No Violation ofAppellants' Constitutional Due
Process Rights.
Having failed to raise the issue of disqualification in the trial court,
Appellants argue that their bias challenge is still timely because thejudge's
bias violated their "constitutional due process." (AOB 27,34.) As
discussed above, the trial court judge was not biased. But even assuming
that he was for argument sake, whatever bias the trialjudge might have had
certainly didnot rise to the level ofconstitutional defect. Indeed^the
United States Supreme Court in Aetna Life Ins. Co. v. Lavoie (1986) 475
U.S. 813 [106 S.Ct 1580, 89 L.Ed.2d 823] warned that:
not "[a]ll questions ofjudicial qualification ...
involve constitutional validity. Thus matters of
kinship, personal bias, state policy, remoteness
of interest, would seem generally to be matters
merely of legrslative-discretion." Tumey v.
Ohio, 273 U.S. 510, 523, 47 S.Ct. 437,441, 71
L.Ed. 749 (1927); see also FTCv. Cement
Institute, 333 U.S. .683, 702, 68 S.Ct. 793, 804,
92 L.Ed. 1010 (1948) ("[M]ost matters relating
tojudicial disqualification [do] not rise to a
constitutional level"). Moreover, the traditional
common-law rule was that disqualification for
bias or prejudice was not permitted. See, e.g.,
Clyma v. Kennedy, 64 Conn. 310, 29 A. 539
(1894). See generally Frank, Disqualification
of Judges, 56 Yale L.J. 605 (1947). As
Blackstone put it, "the law will not suppose a
31

41. possibility of bias'or favour in a judge, who is
already sworn to administer impartial justice,
and whose authority greatly depends upon that
presumption and idea." 3 W. Blackstone,
Commentaries.
(Id. at 820.)
The High Court went on to caution that even a judge's "personal bias
or prejudice concerning a party ... alone would not be sufficient basis for
imposing a constitutional requirement under the Due Process Clause."
(Aetna Life Ins. Co. v. Lavoie, supra, 475 U.S. at 820.) The court noted
that,
it is normally within the power of the State to
regulate procedures under which its laws are
carried out... and its decision in this regard is
not subject to proscription under the Due
Process Clause unless it offends some principle
ofjustice so rooted in the traditions and
conscience of our people as to-be-ranked as
fundamental.
(Id. at 821, citing Patterson v. New York(911) 432 U.S. 197, 201-202 [97
S.Ct. 2319, 2322, 53 L;Ed.2d 281].)
Here, there is nothing in the record to indicate that Appellants' due
process rights were violated by the trialjudge. A sampling of United States
Supreme Court cases finding due process violation is instructive tosee that
the trial courtjudge's conduct in this case did not amount to due process
violation.
In Mayberry v. Pennsylvania (1971) 400 U.S. 455 [91 S.Ct. 499/27
L.Ed.2d 532], the court held that a party's right to due process was violated
when ajudge became "embroiled in a running bitter controversy" with a
litigant (M at 465.) In In reMurchison (1955) 349 U.S. 133 [75 S.Ct
623, 99 L.Ed. 942], the court held that ajudge’s recusal was required on due
process ground when the judge became "a part of the accusatory process"
32

42. because he had determined in an earlier proceeding whether criminal
charges should be brought and then proceeded to try and convict the
petitioners. (Id. at 137.) la Aetna Life Ins. Co.>supra, the court'held that
recusal was required under due process grounds where a state supreme
courtjustice cast the deciding vote upholding a punitive damages award
while he was the lead plaintiffin a nearly identical suit pending in the
state's lower courts. (Aetna Life Ins. Co. v. Lavoie, supra, 475 U.S. at 824-
825.) Lastly, in Caperton v. A.T. Massey Coal Co., Inc. (2009) 556 U.S.
868 [129 S.Ct 2252, 173 L.Ed.2d 1208], the court held that a judge's
recusal was required as a matter of due process where a state appellate court
judge who had received $3 million in judicial campaign contribution from a
litigant decided a case involving the same litigant. (Id. at 884-890.)
These examples clearly demonstrate that whatever bias Appellants
contend influenced the trial court's ruling on the subject motions, they did
not rise to the level of due-process violation.
7. The Appointment of a Receiver and Assignment of Rights
Were Appropriate Regardless of the Trial Court's Reasons.
Appellants argue that the court improperly imposed its views of
Gaggero on them. While the record shows that the court was fullyjustified
in viewmg Gaggero's conduct as applying to Appellants, an appealed order
on any theory will be affirmed* everufthe trial court's reasoning may have
been erroneous. (J.B. Aguerre, Inc. v. American Guar. &Liab. Ins. Co.
(1997) 59 Cal.App.4th 6,15-16 ["We do not review the trial court's
reasoning, but rather its ruling."].) "No rule of decision is better or more
firm ly established by authority, nor one resting upon a sounder basis of
reason and propriety, than that a ruling ordecision, itself correct in law, will
not be disturbed on appeal merely because given for a wrong reason. If
right upon any theory of the law applicable to the case, it must be sustained
33

43. regardless of the considerations which may have moved the trial court to its
conclusion." (Davey v. Southern Pacific Co. (1897) 116 Cal. 325, 329-
330.) Simply put, there can be no prejudicial error from erroneous logic or
reasoning if the decision itself is correct. (MikeDavidov Co. v. Issod
(2000) 78 Cal.App.4th 597,610.)
Here, the record supports the appropriateness of the trial court's
appointment of a receiver and assignment ofrights to aid in the execution
of KPC's judgment. Appellants' attempt to spin the facts or skew the record
to suggest otherwise does not change this fact. The orders should be
affirmed in their entirety.
For all the reasons outlined above, the trial court's order appointing a
receiver and order assigningAppellants' rights and restraining them from
divesting those rights must be affirmed.
CONCLUSION
DATED: March 2014 Respectfully submitted,
MILLER LLP
ANDALL A. MII£E
STEVEN S. WANG
Attorneys for Defendants and
Respondents
KNAPP, PETERSEN & CLARKE,
STEVEN RAY GARCIA, STEPHEN M.
HARRIS, and ANDRE JARDINI
34

44. CERTIFICATE OF WORD COUNT
Pursuant to the requirements of California Rules of Court, rule
8.204(c)(1), the undersigned counsel of record hereby certifies that the
word count within this brief, exclusive of tables, proofofservice, and this
certification, consists of a total of 9,595 words in accordance with the
computer program’s word count upon which the undersigned relies in
making this certification.
DATED: March ^ 2014 Respectfully submitted,
MILLER LLP
By:
m b ALL A. MILLE
STEVEN S. WANG
Attorneys for Defendants and
Respondents
KNAPP, PETERSEN & CLARKE,
STEVEN RAY GARCIA, STEPHEN M.
HARRIS, andANDRE JARDDSH
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PROOF OF SERVICE
I am a resident of the State of California, over the age of eighteen years, and not a party to
the within action. My business address is Miller LLP, 515 South Flower Street, Suite 2150, Los
Angeles, CA 90071-2201. On March 7,2014,1served the within documents:
RESPONDENTS1BRIEF
□ by transmitting via facsimile the document(s) listed above to the fax number(s) set
forth below on this date before 5:00 p.m.
by placing the document(s) listed above in a sealed envelope with postage thereon
folly prepaid, in the United States mail at Los Angeles, California addressed as set
forth below.
■■r(|by causing to be;personallyserved to the person(s) at the address(es) set forth below
on this date before.5:00 p.m.
by causing such document to be transmitted by electronic mail to the office of the
addressees as,set forth below on this date before 5:00 p.m.
by causing such document(s) to be sent overnight via Federal Express; I enclosed
such document(s) in an envelope/package provided by Federal Express addressed to
the person(s) at the address (es) set forth below and I placed the envelope/package
for collection at a drop box provided by Federal Express.
SEE ATTACHED SERVICE LIST
I am readily familiar with the firm's practice of collection and processing correspondence
for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same
day with postage thereon fully prepaid in the ordinary course of business. I am aware that on
motion of the party served, service is presumed invalid if postal cancellation date or postage meter
date is more than one day after date of deposit for mailing in affidavit.
I declare under penalty of peijury under the laws of the State of California that the above is
true and correct.
Executed on March 7, 2014, at Los Angeles, California.
Jasmine Takhtalian

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SERVICE LIST
Edward A. Hoffman, Esq.
LAW OFFICES OF EDWARD A. HOFFMAN
11755 Wilshire Blvd Ste 1250
Los Angeles, CA 90025
Attorneys for Judgment Debtors,
PACIFIC COAST MANAGEMENT,
INC, 5110FW LP, GINGERBREAD
COURT LP, MALIBU BROAD
BEACH LP, MARINA GLENCOE LP,
BLU HOUSE LLC, BOARDWALK
SUNSET LLC, AND JOSEPH
PRASKE AS THE TRUSTEE OF THE
GIGANIN TRUST, ARENZANO
TRUST, AND AQUASANTE
FOUNDATION
Phone: (310)442-3600
Fax: (310)442-4600
Email: eah@hof6nanlaw.com
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