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COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
STEPHEN M. GAGGERO,
PLAINTIFF-APPELLANT,
-vs-
KNAPP PETERSON & CLARK, ET AL.
DEFENDANTS-RESPONDENTS,
)
)
)
)
) CASE NO.
)BC286925
)
l ORGNAL
~~~~~~~~~~~~~~~~~~~-)
APPEAL FROM THE SUPERIOR COURT OF LOS ANGELES COUNTY
HONORABLE ROBERT L. HESS, JUDGE PRESIDING
REPORTERS' TRANSCRIPT ON APPEAL
TITLE, INDICES, CERTIFICATE
MAY 29, 2012, JUNE 19, 2012
APPEARANCES:
FOR THE PLAINTIFF/APPELLANT: WESTLAKE LAW GROUP
BY: DAVID CHATFIELD
2625 TOWNSGATE ROAD
SUITE 330
WESTLAKE VILLAGE, CA
91361
FOR THE DEFENDANTS/RESPONDENTS: MILLER LLP
VOLUME 1 OF 1 VOLUME
PAGES 1-39 ONLY
BY: RANDALL MILLER
515 S. FLOWER STREET
SUITE 2150
LOS ANGELES, CA 90071
COURT OF APPEAL - SECOND DIST.
IF Il 1L ~)])
DE: 142012
JOSEPH A. LAMF Clerk
Deputy Clerk
CAROL CRAWLEY, CSR NO. 7518
OFFICIAL REPORTER

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SUPERIOR COURT OF THE STATE OF CALIFORNIA.
FOR THE COUNTY OF LOS ANGELES
DEPARTMENT LA 24 HON. ROBERT L. HESS, JUDGE
STEPHEN GAGGERO, AN INDIVIDUAL; ET AL.,
PLAINTIFF,
)
)
-vs-
KNAPP, PETERSEN & CLARKE,
)CASE NO.
) BC286925
)
)
STEPHEN RAY GARCIA, STEPHEN M. HARRIS
AND ANDRE JARDINI,
] ORlGNALDEFENDANTS.
)
REPORTER'S EXPEDITED TRANSCRIPT OF PROCEEDINGS
TUESDAY, MAY 29, 2012
APPEARANCES:
FOR THE PLAINTIFF:
FOR THE DEFENDANTS:
FOR NEW JUDGMENT DEBTORS:
VOLUME 1 OF 1
PAGES 1-28
DAVID CHATFIELD
ATTORNEY AT LAW
2625 TOWNSGATE RD
SUITE 330
WESTLAKE VILLAGE, CA 91361
MILLER LLP
BY: RANDALL A. MILLER
BY: AUSTA WAKILY
515 SOUTH FLOWER STREET
SUITE 2150
LOS ANGELES, CA 90071
DAVID ESQUIBIAS
2625 TOWNSGATE ROAD
SUITE 330
WESTLAKE VILLAGE, CA 91301
CAROL L. CRAWLEY, CSR #7518

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SUPERIOR COURT OF THE STATE OF CALIFORNIA
DEPARTMENT lA HON. MATTHEW ST. GEORGE, COMMISSIONER
STEPHEN M. GAGGERO,
PLAINTIFF,
vs.
ET AL.,
DEFENDANT.
)
)
)
)
) NO. BC 286925
)
)
)
)
)
~~~~~~~~~~~~~~~~~)
REPORTER'S TRANSCRIPT OF PROCEEDINGS
APPEARANCES:
FOR PLAINTIFF/
JUDGMENT DEBTOR:
FOR JUDGMENT
CREDITORS ABC :
REPORTED BY:
TUESDAY, JUNE 19, 2012
WESTLAKE LAW GROUP
BY: DAVID BLAKE CHATFIELD, ESQ.
2625 TOWNSGATE ROAD
SUITE 330
WESTLAKE VILLAGE, CALIFORNIA 91361
MILLER LLP
BY: AUSTA WAKILY
ATTORNEY AT LAW
515 SOUTH FLOWER STREET
SUITE 2150
LOS ANGELES, CALIFORNIA 91361
LAURA LOPEZ, CSR NO. 6876
OFFICIAL REPORTER

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ALPHABETICAL/CHRONOLOGICAL INDEX OF WITNESSES
MAY 29, 2012
VOLUME 1 OF 1 VOLUME
PLAINTIFF'S WITNESSES DIRECT CROSS REDIRECT RECROSS
NONE
DEFENSE WITNESSES
(NONE)
NONE MARKED
INDEX OF
EXHIBITS
MAY 29, 2012

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0 28
VOLUME
I N D E X
(JUNE 19, 3012)
CHRONOLOGICAL/ALPHABETICAL INDEX OF WITNESSES
(NONE.)
EXHIBITS
(NONE.)

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LOS ANGELES, CALIFORNIA; TUESDAY, MAY 29, 2012
DEPARTMENT 24 HONORABLE ROBERT L. HESS JUDGE
11:50 A.M.
APPEARANCES: (AS NOTED ON TITLE PAGE)
(CAROL L. CRAWLEY, OFFICIAL REPORTER.
MR. CHATFIELD: DAVID CHATFIELD ON BEHALF OF THE
11. PLAINTIFF.
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MR. ESQUIBIAS: GOOD MORNING~ YOUR HONOR.
DAVID ESQUIBIAS ESPECIALLY APPEARING FOR
JOSEPH PRASKE TRUSTEE OF THE GIG.AN IN TRUST, TRUSTEE
OF THE ARANZANO TRUST, AND THE AQUASANTE FOUNDATION
16 AND VARIOUS LLC'S AND LP'S THAT ARE NOTED IN OUR
17 PLEADING AS A GENERAL PARTNER AND/OR MANAGING MEMBER.
18 I WOULD LIKE TO NOTE FOR THE RECORD THAT
19 JOSEPH PRASKE IS NOT A PARTY TO THIS ACTION.
20 MS. WAKILI:. GOOD MORNING, AUSTA WAKILI FOR
21 DEFENDANT, KNAPP, PETERSEN & CLARKE.
22 THE COURT: THIS IS A MOTION TO AMEND THE JUDGMENT
23 TO ADD JUDGMENT DEBTORS ON THE THEORY THAT VARIOUS
24 TRUSTS FOUNDATIONS, AND OTHER BUSINESS ENTITIES
25 INCLUDING LLC'S ARE ALL MR. GAGGERO'S ALTEREGOS, AND
26 THEY SHOULD BE LIABLE FOR OR THEIR ASSETS -- SHOULD
27 BE REACHABLE FOR COLLECTION TO THE JUDGMENTS AGAINST
28 HIM.
1

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I HAVE A VERY SUBSTANTIAL AMOUNT OF EVIDENCE
ON THE NATURE OF THESE RELATIONSHIPS THAT HAS BEEN
3 SUBMITTED TO ME .IN CONNECTION WITH THIS MOTION, AND
4 FRANKLY IT LOOKS TO ME LIKE THESE ARE APPROPRIATE
5 MOTIONS.
6 I SEEM TO HAVE QUITE A SHOWING HERE THAT IN
7 FACT, MR. GAGGERO CONTROLS THESE -- DIRECTS THE
8 MONIES AND WILL.
9 AND SINCE WE HAVE, YOU KNOW, IT SEEMS TO ME
10 THAT THE MOTION HAS SOME MERIT, SO LET ME START WITH
11 MR. GAGGERO'S COUNSEL, AND SEE WHAT YOU WOULD LIKE TO
12 SAY ON THIS POIN_T, SIR.
13 MR. CHATFIELD: YOUR HONOR, IF I MAY START AS
14 REALLY THE PARTY IN INTEREST -- I REPRESENT THE
15
16
17
TRUSTEE WHO CONTROLS THESE ASSETS WITHIN THESE
TRUSTS.
IF I MAY RESPOND TO THE COURT FIRST, I WOULD
18 APPRECIATE THAT.
19 THE COURT: WELL, THE TRUSTEE HAS TO BE -- THE
20 TRUSTEE GETS NAMED, BUT IT IS REALLY THE TRUST THAT
21 HIS ASSETS ARE BEING SOUGHT.
22 MR. ESQUIBIAS: THE CORPUS OF THE TRUST --
23 THE COURT: I DON'T UNDERSTAND THAT THEY ARE
24 SEEKING TO ADD YOU IN ANY OTHER CAPACITY PERHAPS THAN
25 AS TRUSTEE.
26
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28
THERE IS CERTAINLY NO INDIVIDUAL CAPACITY.
MR. ESQUIBIAS: CORRECT. WE DON'T BELIEVE THAT
ANYONE IS SEEKING MR. PRASKE.
2

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1 WE DON'T BELIEVE THAT KPS IS TRYING TO SAY
2 THAT MR. PRASKE AS PERSONAL LIABILITY, THAT WE DON'T
3 BELIEVE.
4 THE COURT: AND I DIDN'T GET THAT OUT OF THEIR
5 PAPERS.
6 MR. ESQUIBIA~: WHAT WE DO BELIEVE, IS THAT THE
7 ASSETS, WHICH MR. PRASKE CONTROLS ARE ASSETS THAT ARE
8 BEING SOUGHT, AND BECAUSE THESE ASSETS ARE CONTAINED
9 WITHIN IRREVOCABLE TRUSTS -- OR EVEN IF THEY WERE
10 REVOCABLE, THE FACT IS THAT THESE ARE IRREVOCABLE
11 TRUSTS THAT THERE ARE CERTAIN PROCEDURES THAT NEED TO
12 BE FOLLOWED WHEN YOU ARE TRYING TO OBTAIN OR CONTROL
13 LEVY OR GARNISH THE ASSETS OF TRUS.TS.
14
15
AND I WOULD NOTE FOR THE RECORD, THAT THE
PROBATE COURT HAS THE EXCLUSIVE JURISDICTION OF TRUST
16 MATTERS UNDER PROBATE CODE 17000, WHICH SPECIFICALLY
17 STATES THAT ACTIONS AND PROCEEDINGS BY OR AGAINST A
18 CREDITOR ARE VESTED IN THAT COURT AND MORE
19 IMPORTANTLY, BECAUSE THE ASSETS IN THIS PARTICULAR
20 MOTION ARE BEING SOUGHT BY A JUDGMENT CREDITOR,
21 NOTICE UNDER THE PROBATE CODE NEEDS TO BE PROVIDED OF
22 THIS MOTION TO THE VESTED CURRENT INCOME AND
23 PRINCIPAL AND REMAINDER BENEFICIARIES OF THESE
24 TRUSTS.
25 NO SUCH NOTICE WAS PROVIDED TO ANY
26 BENEFICIARY NOR WAS NOTICE PROVIDED TO THE TRUSTEE OF
27
28
THESE TRUSTS, AND, NOTICE WOULD BE REQUIRED UNDER
PROBAT.E CODE 17203.
3

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AND LAST, PROBATE CODE 18200 SPECIFICALLY
STATES THAT THE ASSETS OF AN IRREVOCABLE TRUST ARE
3 NOT AVAILABLE TO THE SETTLERS CREDITORS, WHICH IS THE
4 CASE HERE.
5 TO THE EXTENT THAT THERE WAS FRAUDULENT
6 CONVEYANCE, THEN IT WOULD BE MADE POTENTIALLY
7 AVAILABLE.
8 BUT, AS THE MOVING PARTY HAS CONCEDED IN
9 THEIR OWN DOCUMENTS THAT THE FRAUDULENT CONVEYANCE
10 CAUSE OF ACTION IS UNAVAILABLE TO THEM DUE TO THE
11 STATUTE OF LIMITATIONS, FRAUDULENT CONVEYANCE IS THE
12 ONLY EXCEPTION TO PROBATE CODE SECTION 18200 AND
13 PROBATE CODE SECTION 15403.
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16
I SEE THE COURT IS LOOKING AT THE PROBATE
CODE --
THE COURT: JUST A MINUTE.
17 MR. ESQUIBIAS: -- I WOULD LIKE TO POINT OUT JUST
18 ONE CASE.
19 THE COURT: MAY I ASK WHERE THIS ARGUMENT APPEARS
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IN YOUR OPPOSITION, SIR?
MR. ESQUIBIAS: IT DOES NOT APPEAR. THE SUBSTANCE
OF THE ARGUMENT WAS FILED.
THE COURT: IS THERE A REASON, IS THERE A REASON
YOU ARE MAKING AN ARGUMENT NOW THAT APPARENTLY GOES
TO JURISDI.CTION?
IS THERE A REASON WHY, IF THIS IS A
MERITORIOUS ARGUMENT, IT WAS NOT INCLUDED IN THE
OPPOSITION?
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MR. CHATFIELD: I CAN TELL THE COURT THAT I AM
SPECIALLY APPEARING FOR THE PURPOSE OF ARGUING
JURISDICTION AND NOTICE.
I HAVE NO EXPLANATION AS TO WHY IT WASN'T IN
THE OPPOSITION. I AM LATE TO THIS PARTY.
THE COURT: THE NOTICE OF SPECIAL APPEARANCE TO
OPPOSE AN OPPOSITION WAS FILED MAY 15TH.
MOVING PAPERS WERE FILED APRIL lOTH, AND AS I
LOOK AT YOUR PAPERS HERE, I DON'T EVEN GET A SNIFF OF
THESE ARGUMENTS, QUITE FRANKLY.
MR. ESQUIBIAS: I WOULD AGREE. BUT I DON'T
12 BELIEVE THE FACT THAT THEY WERE NOT RAISED IN THAT
13 DOCUMENT DOES NOT PRECLUDE THE ARGUMENT TODAY.
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THE COURT: WELL, WHY? SO MY QUESTION IS, IF
THESE ARE ESSENTIAL ARGUMENTS, WHY DID YOU HOLD THEM
BACK SO THAT THEY COULD NOT RESPOND TO THEM?
MR. ESQUIBIAS: IT WAS NOT DESIGNED TO AMBUSH THE
MOVING PARTY.
THE COURT: IS IT ANYTHING OTHER THAN AMBUSH
THOUGH, AT THIS POINT?
MR. ESQUIBIAS: I CAN SEE HOW IT IS PERCEIVED AS
THAT BY THIS COURT, AND PERHAPS MOVING PARTIES XXXJD
THIS MATTER CAN ~E CON~INUED TO BRIEF IT AND TO ALLOW
THEM TO RESPOND TO THESE ARGUMENTS.
THE COURT: WELL, YOU HAVEN'T EVEN BRIEFED IT.
MR. ESQUIBIAS: I AM PREPARED TO DO SO.
THE COURT: SO THAT, AGAIN, RAISES THE QUESTION
THIS IS THE TIME AND PLACE FOR THE HEARING ON THIS
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MS. WAKILI: CAN I MAKE ONE BRIEF POINT ON THIS?
HAD HE BRIEFED IT OR RAISED IT IN HIS OPPOSITION,
MR. PRASKE HAS TESTIFIED UNDER
THESE ARE OFFSHORE TRUSTS.
IN A DEBTOR EXAM,
ARANZANO IS AN OFFSHORE TRUST. THEY HAVE
NEVER BEEN FILED WITH ANY COURT IN CALIFORNIA OR THE
UNITED STATES, SO THESE ARE ESSENTIALLY VERY SECRET
DOCUMENTS THAT ARE PRIVATE.
THEY HAVE INDEPENDENT CONFIDENTIALITY
PROVISIONS THAT BOUND PRETTY MUCH THE TRUSTOR THE
TRUSTEE, SO THEY WON'T BE SOMETHING YOU WILL FIND IN
A PROBATE COURT AND ACCORDING TO MR. PRASKE -- THAT
IS SOMETHING THAT HE SAID HE NEVER FILED, AND AGAIN
HAD WE HAD ANY IDEA THIS WOULD BE AN ARGUMENT THEY
WOULD RAISE WE WOULD HAVE PULLED EXCERPTS FROM THE
DEBTOR EXAMINATION TO ADDRESS THAT.
THE COURT: I DON'T DISAGREE, BUT DO I HAVE ANY
EVIDENCE? JUST A SECOND. DO I HAVE ANY EVIDENCE IN
SUPPORT OF THESE FACTUAL ASSERTIONS?
MR. ESQUIBIAS: RAISED BY OPPOSING COUNSEL?
THE COURT: NO, YOUR FACTUAL ASSERTIONS. YOU HAVE
CHARACTERIZED THESE AS IRREVOCABLE AND SUBJECT TO
THIS THAT AND THE OTHER. I DON'T KNOW. HOW DO I
KNOW THAT?
WHERE IS THE EVIDENCE TO SUPPORT IT?
MR. ESQUIBIAS: YOU WILL NOT FIND IT IN OUR
PLEADING THAT WAS FILED.

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THE COURT: IS THERE ANYTHING IN THEIRS, THAT WILL
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DO IT?
MR. ESQUIBIAS: I HAVE THE PLEADINGS THAT I HAVE
REVIEWED IN PREPARATION FOR TODAY'S HEARING, DID NOT
SHOW OTHER THAN THEIR OWN STATEMENTS IN THEIR
PLEADINGS WHICH ARE CONSIDERED ADMISSIONS THAT THE
TRUSTS ARE IRREVOCABLE.
THE COURT: HAS THERE -- HAS MR. PRASKE TAKEN THE
POSITION, THAT THE TRUSTS THEMSELVES ARE
CONFIDENTIAL?
MR. CHATFIELD: I HAD NOT PARTICIPATED IN THAT
12 PRIOR DISCOVERY THAT COUNSEL TALKS ABOUT, BUT I WILL
13 SAY THIS, ON BEHALF OF MR. PRASKE --
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THE COURT: AND THAT THE TERMS OF THE TRUST
THE TRUST DOCUMENTS OUGHT NOT TO BE PRODUCED?
MR. ESQUIBIAS: I WILL SAY THIS ON BEHALF OF
17 MR. PRASKE, THAT IF NOTICE IS PROVIDED TO THE ALL THE
18 VESTED CURRENT INCOME AND PRINCIPAL BENEFICIARIES
19 THE COURT: HAS MR. -- AND HOW WOULD THEY DO THAT?
20 MR. ESQUIBIAS: WE WILL PROVIDE A COPY OF THE
21 TRUST DOCUMENTS TO COUNSEL UPON NOTICE TO THE
22 BENEFICIARIES.
23 THE COURT: HOW WOULD THEY KNOW WHO THE
24 BENEFICIARIES ARE?
25 I AM TAKING YOUR RESPONSE AS THE TRUST
26 DOCUMENTS THEMSELVES HAVE NOT BEEN PRODUCED UNDER A
27 CLAIM OF CONFIDENTIALITY.
28 SO AT THIS POINT, YOU ARE ASSERTING A SERIES

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1 OF THINGS WHICH FIND NO EVIDENTIARY SUPPORT AND THE
2 REASON THEY HAVE NO EVIDENTIARY SUPPORT, AND YOUR
3 OBJECTIONS ARE VERY INTERESTING, IS THAT YOU HAVE, AS
4 I UNDERSTAND IT, YOU OR MR. GAGGERO HAVE PRECLUDED
5 THE OTHER SIDE FROM ACCESS TO THE VERY INFORMATION
6 THAT YOU CLAIM IS NECESSARY FOR THEM TO GIVE NOTICE.
7 THAT IS NOT A SITUATION THAT IS REASONABLY
8 CALCULATED TO GIVE RISE TO A SYMPATHETIC HEARING.
9 FOR YOU TO SAY, WELL YOU CAN'T GO FORWARD WITHOUT
10 GIVING NOTICE TO ALL THESE PEOPLE, AND BY THE WAY WE
11 WON'T TELL YOU WHO IS ENTITLED TO GET NOTICE. HOW DO
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I RESOLVE THAT?
MR. ESQUIBIAS: YOU HONOR, I HAVE A RESPONSE.
HAVE A RESOLUTION.
I AM NEW TO THIS CASE. I WILL MAKE SURE THAT
16 OPPOSING COUNSEL HAS A COPY OF THE TRUST DOCUMENTS,
I
17 SO THAT SHE CAN APPRISE THE SITUATION HERSELF. SHE
18 CAN GIVE NOTICE.
19 THE COURT: WELL, APPARENTLY, WAS MR. PRASKE
20 REPRESENTED BY COUNSEL AT THE DEPOSITIONS?
21 MS. WAKILI: I BELIEVE HE WAS REPRESENTED BY
22 MR. CHATFIELD.
23 THE COURT: OKAY. WHAT DO I DO WITH THAT? IF HE
24 WAS REPRESENTED BY MR. CHATFIELD AT THE DEPOSITIONS,
25 AND THIS IS THE POSITION THAT WAS TAKEN. WHAT DO I
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DO WITH THAT?
MR. ESQUIBIAS: I DON'T KNOW ANYTHING ABOUT ANY
DEPOSITIONS. I WAS NOT PRESENT, BUT I WILL TELL THE
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1 COURT NOW, AND OPPOSING COUNSEL, I NOW REPRESENT
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MR. PRASKE IN HIS CAPACITY AS TRUSTEE OF THESE
TRUSTS, AND WE INTEND TO COMPLETELY AND FULLY
COOPERATE WITH THE REQUESTS FOR THE DOCUMENTATION.
THERE IS NO REASON WHY IT SHOULD NOT BE
DISCLOSED.
THE COURT: IS THERE A REASON WHY YOU DON'T HAVE
THEM TODAY?
MR. ESQUIBIAS: I DO HAVE THEM TODAY BUT THEY ARE
MY VERSIONS WITH MY MARKINGS ON THEM. I AM NOT AWARE
11 OF THE REASON WHY THEY WERE NOT PROVIDED IMMEDIATELY
12 TO COUNSEL, BECAUSE I THINK ONCE COUNSEL DOES SEE
13 THEM -- NOTES THAT THEY ARE IRREVOCABLE NOTES, THE
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ASSETS WERE TRANSFERRED TO THESE TRUSTS MANY, MANY
YEARS AGO. READ PROBATE CODE SECTION 18200. I JUST
THINK THAT WE CAN RESOLVE THIS ISSUE FAIRLY QUICKLY.
MS. WAKILI: YOUR HONOR, COULD I GET SOME
18 CLARIFICATION ON COUNSELS RESPONSE RIGHT NOW?
19 THE COURT: JUST A SECOND.
20 MR. ESQUIBIAS: IT IS NOT MY PRACTICE -- RATHER,
21 LET ME RESTATE THAT IT IS MY PRACTICE TO BE OPEN WITH
22 THIS COURT AND WITH OPPOSING COUNSEL, TO BE FAIR AND
23 CLEAR AND TRANSPARENT ~- TO THE BEST THAT I CAN BE.
24 I INTEND TO DO THAT. GOING FORWARD, I WOULD
25 ASK THAT THE COURT ISSUE AN INTERIM ORDER IN RELATION
26 TO DISCLOSURE OF THESE TRUST DOCUMENTS, THAT THEY BE
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USED BY OPPOSING COUNSEL FOR PURPOSES ONLY FOR THIS
MOTION AND FOR GIVING NOTICE, AND THAT IT IS NOT TO
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BE MADE.
THE DOCUMENTS ARE NOT TO BE MADE PUBLIC OR
3 USED FOR ANY OTHER REASON.
4 THE COURT: YOU COULD HAVE APPLIED FOR A
5 PROTECTIVE ORDER TO THAT EFFECT IN A TIMELY FASHION.
6 YOU SEE, MR. PRASKE HAS PREVIOUSLY BEEN
7 REPRESENTED BY COUNSEL FOR MR. GAGGERO. SORT OF
8 LOOKS LIKE THEY ARE JOINED AT THE HIP.
9 MR. ESQUIBIAS: I VIEW THAT AS PROBLEMATIC, YOUR
10 HONOR, AND THAT IS WHY --
11 THE COURT: IN CONNECTION WITH THIS MOTION, THIS
12 IS NOT A SITUATION WHERE MR. PRASKE, DURING THESE
13 PRECEDING TIMES, HAS HAD INDEPENDENT COUNSEL.
14 HE HAS USED MR. GAGGERO AS COUNSEL, WHICH
15 SUGGESTS TO ME -- CERTAINLY LEADS TO AN INFERENCE,
16 THAT THE POSITIONS TAKEN WERE COORDINATED POSITIONS.
17 AND, WHAT I HAVE HERE SUGGESTS, COMING IN AT
18 THIS POINT IN TIME, RAISING ARGUMENTS ORALLY, THAT
19 WERE NOT IN THE PAPERS, ASSERTING EVIDENCE THAT HAS
20 PREVIOUSLY BEEN REFUSED TO BE PRODUCED, AND THEN
21 SAYING, WELL YOU HAVE GOT TO DELAY IT JUDGE, THIS
22 THAT AND THE OTHER THING.
23 I WANT TO DO ALL THE THINGS THAT MR. PRASKE
24 HAS NOT DONE, WHEN HE WAS REPRESENTED BY MR.
25 GAGGERO'S COUNSEL. SMELLS LIKE MORE DELAY.
10
26 MR. ESQUIBIAS: I AM NOT SEEKING AN EXTRAORDINARY
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AMOUNT OF TIME TO CONTINUES THIS. I THINK IT COULD
BE JUST DAYS IN ORDER FOR THE DOCUMENTS TO BE

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1 TRANSFERRED OVER TO OPPOSING COUNSEL.
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THE COURT: WHY WAS .THIS NOT BROUGHT OUT IN
ANYTHING UNTIL I ASKED YOU WHAT THE FACTUAL BASIS FOR
4 THE ORAL ASSERTIONS YOU WERE MAKING?
5 MR. ESQUIBIAS: ALL I CAN TELL YOU, YOUR HONOR, IS
6 THAT I HAVE BEEN PRACTICING PROBATE LAW FOR 20 YEARS.
7 ORAL ARGUMENTS ARE COMMON PLACE. IT IS A DIFFERENT
8 COURTROOM WITH DIFFERENT SETS OF RULES, AND I
9 APOLOGIZE THAT I AM NOT FAMILIAR WITH THE CIVIL
10 COURTS OR THE RULES OF THIS COURT.
11 BUT, THE FACT REMAINS THAT WE HAVE TO GIVE
12 NOTICE TO THESE VESTED PRINCIPAL AND INCOME
13 BENEFICIARIES, 30 DAYS.
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THE COURT: I DON'T KNOW THAT THERE ARE VESTED
INCOME AND PRINCIPAL BENEFICIARIES. I HAVE BEEN
16 DENIED THAT INFORMATION AS DEFENSE COUNSEL HAS BEEN
17 DENIED THAT INFORMATION.
18 MR. ESQUIBIAS: I SEEK TODAY TO RIGHT THAT WRONG.
19 THE COURT: WHAT, IF ANYTHING ELSE ARE YOU
20 OFFERING IN WAY OF INFORMATION THAT HAS BEEN
21 PREVIOUSLY WITHHELD?
22 MR. ESQUIBIAS: IT IS HARD FOR ME TO ANSWER THAT
23 QUESTION BECAUSE I DON'T KNOW WHAT HAS BEEN
24 PREVIOUSLY WITHHELD. I HAVE ONLY BEEN IN THIS CASE
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14 DAYS.
THE COURT: I SUSPECT IT HAS BEEN A LITTLE LONGER
THAN THAT, BECAUSE IT TOOK SOME TIME TO PREPARE THE
DOCUMENT, UNLESS YOU DIDN'T PREPARE IT.

()
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MR. ESQUIBIAS: I BELIEVE ALL THE INFORMATION
CONTAINED IN THE TRUST INSTRUMENTS AND PERHAPS
FUNDING DATES OF THE ASSETS IN THOSE TRUSTS WOULD BE
SUFFICIENT. I DON'T KNOW OF ANY OTHER INFORMATION
THAT WOULD BE REQUIRED FOR THIS COURT OR OPPOSING
COUNSEL TO MAKE THE CONCLUSION THAT THE ASSETS ARE
UNREACHABLE.
THE COURT: SO, YOU WISH TO PROVIDE NOT THE
ENTIRETY OF THE INFORMATION BUT ONLY A PART OF THAT?
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MR. ESQUIBIAS: WE WOULD ONLY WANT TO PROVIDE
INFORMATION THAT IS EITHER AGREED UPON BETWEEN MYSELF
AND OPPOSING COUNSEL OR IF WE COULD NOT COME TO SOME
TYPE OF AGREEMENT, WHATEVER THIS COURT WOULD
DETERMINE TO BE RELEVANT.
THE COURT: HOW WOULD I KNOW WITHOUT YOU PROVIDING
EVERYTHING? I HEAR AT BEST A CONTINGENT OFFER.
MR. ESQUIBIAS: I PLAN TO HAVE A MEET AND CONFER
18 WITH OPPOSING COUNSEL TO FIND OUT WHAT IN PARTICULAR
19 THEY ARE INTERESTED IN KNOWING ABOUT THESE TRUSTS,
20 BUT IN MY MIND, ACCORDING TO THE LAW AND ACCORDING TO
21 THE DOCUMENTS THEMSELVES, I KNOW IN MY MIND WHAT
22 INFORMATION THEY NEED.
23 I REMAIN OPEN TO PERSUASION FROM OPPOSING
24 COUNSEL AS TO ADDITIONAL INFORMATION.
25 MR. CHATFIELD
26 MR. CHATFIELD: WELL, YOUR HONOR, AN ISSUE THAT
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LOOMS OVER THIS IS THAT, WHAT THE DEFENDANTS SEEK TO
DO HERE IS IMPERMISSIBLE OUTSIDE REVERSE PIERCING.

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THE COURT: I READ THE ARGUMENT IN DETAIL, AND I
READ THE AUTHORITIES, AND FRANKLY I AM NOT PERSUADED
BY THAT. IT IS WELL ESTABLISHED THAT YOU CAN PIERCE
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IF THE TRUST IS -- IF ONE OR MORE OF THE TRUSTS, FOR
EXAMPLE, IS AN ALTER EGO OF MR. GAGGERO, THE CASE LAW
IS WELL ESTABLISHED THAT YOU CAN GO IN TO THE TRUST.
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YOU DON'T NAME THE TRUST. YOU HAVE TO GO AT IT
THROUGH THE TRUSTEE, BUT I DON'T THINK THERE IS A LOT
OF DOUBT ABOUT THAT, AND THE CASE ONE OR MORE RECENT
CASES ON THIS IS GREENSPAN, G-R-E-E-N-S-P-A-N
V-L-A-D-T LLC, 191 CAL APP. 4TH, 486, AND THAT HAS A
GOOD DEAL TO SAY ABOUT THIS.
AND, IF YOU, YOU KNOW, THE BASIC PARAMETERS
14 OF AMENDING THE JUDGMENT ARE ARTICULATED IN HALL,
15 H-A-L-L G-0-0-D-H-U-E, H-A-I-S-L-E-Y, AND BARKER
16 VERSES M-A-R-C-0-N-I CONFERENCE CENTER BOARD, 41 CAL
17 APP. 4TH, 1551.
18 AND THERE IS A BUNCH OF OTHER CASES THAT
19 APPLY ON THIS.
20 MR. CHATFIELD: WELL, YOUR HONOR, AS YOU KNOW FROM
21 HAVING ENTERED THE AWARD APPROVING THE ARBITRATION IN
22 THAT GREENSPAN CASE', THAT THE COURT ON PAGES 513
23 THROUGH 514 OF GREENSPAN STATED THAT IN POSTAL
24 INSTANT PRESS VERSUS KAZO CORP THE COURT OF APPEAL
25 HELD THAT OUTSIDE REVERSE PIERCING OF THE CORPORATE
26 VEIL IS NOT PERMITTED IN CALIFORNIA.
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THAT IS, THE CORPORATE VEIL WILL NOT BE
PIERCED TO SATISFY THE DEBT OF AN INDIVIDUAL

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SHAREHOLDER --1
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THE COURT: RATHER THIS COURT EXPLAINED THE ALTER
EGO DOCTRINE WILL ONLY BE APPLIED TO AN INDIVIDUAL
4 SHAREHOLDER LIABLE FOR A CORPORATE DEBT WHERE THE
5 INDIVIDUAL IS HAS DISREGARDED THE CORPORATE FORM BUT
6 THAT IS NOT --
7 MR. CHATFIELD: AT THE VERY NEXT SENTENCE, YOUR
8 HONOR, IT SAYS THIS CASE DOES NOT INVOLVE OUTSIDE
9 REVERSE PIERCING. AND WHY IS THAT? BECAUSE. THE
10 JUDGMENT WAS AGAINST TWO ENTITIES, AND THEY WERE
11 SEEKING TO BRING INDIVIDUALS IN AS ADDITIONAL
12 JUDGMENT DEBTORS. NOT -- THIS WAS NOT A CASE WHERE
13 THERE WAS A JUDGMENT AGAINST AN INDIVIDUAL, AND THEY
14 WERE TRYING TO GO AFTER THE TRUST.
15 THE COURT: THIS IS A SITUATION WHERE, KPC IS
16 SEEKING TO HOLD THE SPECIALLY APPEARING PARTIES
17 LIABLE FOR GAGGERO'S DEBT WHERE THEY ARE ALLEGED TO
18 BE THE ALTER EGOS OF GAGGERO.
19 MR. CHATFIELD: THAT IS TYPICAL OUTSIDE REVERSE
20 PIERCING. THERE IS NO OTHER TERM FOR THAT. AND IT
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IS NOT RECOGNIZED IN THE STATE OF CALIFORNIA. I HAVE
PROVIDED YOU WITH AUTHORITY ON THAT, PLUS THERE ARE
AT MY LAST VIEW, 24 OTHER UNPUBLISHED DECISIONS WHICH
STATE EXACTLY THE SAME THING. YOU CANNOT IMPOSE
LIABILITY AND BRING IN ENTITIES TO SATISFY AN
INDIVIDUAL'S DEBT. AND EVEN IF THE STATE RECOGNIZED
OUTSIDE REVERSE PIERCING, WHICH IT DOESN'T, YOU WOULD
HAVE TO GO THROUGH AN ADDITIONAL ANALYSIS WHICH THIS

15
1 COURT DISPOSED OF IN ITS OWN STATEMENT OF DECISION.
0 2 THE COURT: I KNOW WHERE YOU ARE GOING ON THAT.
3 GO AHEAD AND SAY IT. YOU ARE WRONG, BUT I KNOW WHERE
4 YOU ARE GOINc;. BECAUSE I READ IT IN YOUR PAPERS.
5 YOU ARE SUGGESTING THAT THE FACT THAT AT TRIAL
6 MR. GAGGERO PUT ON NO EVIDENCE THAT HE WAS SUING ON
7 BEHALF OF PCM TO RECOVER THE ATTORNEY'S FEES, IS
8 SOMEHOW DISPOSITIVE. IT IS NOT. THAT WAS A COMMENT
9 ON THE FAILURE OF MR. GAGGERO TO PRODUCE CERTAIN
10 EVIDENCE IN THE TRIAL WHEN IT WAS DIRECTED TO THE
11 ISSUE OF DAMAGES, HIS DAMAGES THAT HE WAS CLAIMING
12 AGAINST KNAPP PETERSEN & CLARKE SO, YOU KNOW. I SAW
13 WHAT YOU SAID IN YOUR PAPERS, AND I AM SORRY IT IS
14 NOT
0 15 MR. CHATFIELD: WHAT I AM SAYING IS SOMETHING A
16 LITTLE DIFFERENT.
17 I AM .GOING BY YOUR FINDINGS OF FACT, AND YOU
18 STATED ON PAGE 16 OF YOUR STATEMENT OF DECISION THAT
19 UNLESS OTHERWISE SPECIFICALLY STATED, THE FACTS SET
20 FORTH BELOW ARE EITHER UNDISPUTED OR REPRESENT THOSE
21 WHICH THE COURT FINDS TO BE TRUE BY THE PREPONDERANCE
22 OF THE CREDIBLE EVIDENCE, AND THEN IN THE FINDINGS OF
23 FACT ON PAGE 18, THE COURT STATED THAT IN 1995 AND
24 1996 GAGGERO DID EXTENSIVE ESTATE PLANNING WHICH
25 RESULTED IN ALL OF HIS PERSONAL ASSETS BEING
26 TRANSFERRED TO VARIOUS CORPORATIONS, TRUSTS
27 FOUNDATIONS.
HE RETAINED ABSOLUTELY NO OWNERSHIP INTEREST
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28

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AND NO CONTROL.1
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THE COURT: IS THERE A DOT DOT DOT IN THERE? DID
YOU OMIT SOME OF THE WORDS THAT I PUT IN THERE?
4 MR. CHATFIELD, DID YOU OMIT SOME OF THE WORDS THAT
5 WERE IN THE ORIGINAL, IN THE STATEMENT OF DECISION?
6 MR. CHATFIELD: I AM SUMMARIZING THAT.
7 THE COURT: YES, BECAUSE YOU ARE OMITTING FOR THE
8 PURPOSE THERE IS SOMEWHERE IN THERE FOR THE
9 PURPOSE OF TRYING TO SHIELD THEM FROM CREDITORS.
10 MR. CHATFIELD: ACTUALLY, WHAT THE COURT SAID
11 RELATING TO CREDITORS WAS, THAT ALTHOUGH GAGGERO USED
12 THREATS, BLUSTERS AND ULTIMATUMS TO ATTEMPT TO
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DISCHARGE THE KNBC CREDITORS
THE COURT: I SAID OTHER THINGS. I SAID OTHER
THINGS.
MR. CHATFIELD: YOU ALSO SAID THAT KNBC'S CLAIM
17 WAS PAID EARLY IN 2002 BY FULL PAYMENT PLUS INTEREST
18 AND AWARDED ATTORNEYS FEES, AND YOU ALSO STATED THAT
19 THE SLOCOM CLAIM WAS WITHDRAWN AND DISMISSED.
20 THE COURT: NOW, SIR, THAT HAS NOTHING TO DO WITH
21 THIS CASE. THAT HAS NOTHING TO DO WITH THE ISSUES
22 BEFORE THE COURT. THE STATEMENT OF DECISION THE
23 COURT ENTERED, WHICH HAS BEEN AFFIRMED BY THE COURT
24 OF APPEALS, IS NOT DISPOSITIVE OF ANY ISSUE BEFORE
25 THE COURT TODAY.
26 IF -- IS THERE ANYTHING ELSE YOU WOULD LIKE
27
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TO SAY.
MR. CHATFIELD: YES. KPC HAS NOT MET ~TS BURDEN

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OF SHOWING THAT THE BUSINESS ENTITIES OR PRASKE WERE
GAGGERO ALTER EGOS. KPC PRESENTED NO EVIDENCE THAT
3 THE BUSINESS ENTITIES OR PRASKE'S CONTROLLED THE
4 LITIGATION OR WERE VIRTUALLY REPRESENTED IN THE
5 ACTION. IN FACT -~
6 THE COURT: DOES THE FACT THAT THEY -- IT LET ME
17
7 START OUT WITH THIS PREDICATE, MR. CHATFIELD, I THINK
8 THAT THEY HAVE MADE A PRIMA FACIA CASE THAT THESE
9 ENTITIES ARE ALTER EGOS OF MR. GAGGERO. AND IF I DO
10 THAT, THERE IS NO DOUBT THAT MR. GAGGERO CONTROLLED
11 THE UNDERLYING LITIGATION. THESE ARE NOT ~NDEPENDENT
12 ENTITIES AS I SEE THEM. AND IF THEY ARE ALTER EGOS
13 OF MR. GAGGERO, AND MR. GAGGERO CONTROLLED THE
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LITIGATION WHICH HE UNDOUBTEDLY DID, THEN WHAT?
MR. ESQUIBIAS: YOUR HONOR, IF I MAY RESPOND.
THE COURT: NO, MR. CHATFIELD CAN RESPOND TO THIS.
17 HE WAS ONE OF THE ATTORNEYS WHO REPRESENTED
18 MR. GAGGERO DURING THE TRIAL PROCEEDINGS OR IN POST
19 TRIAL.
20 MR. CHATFIELD: I, FIRST OF ALL, FAIL TO
21 UNDERSTAND HOW THE COURT HAS REACHED THE CONCLUSION
22 THAT ALL OF THE ELEMENTS OF ALTER EGO HAVE BEEN
23 FULFILLED WITHOUT ANY EVIDENCE SUPPORTING IT WHEN WE
24 HAVE PROVIDED THE COURT WITH DECLARATIONS. AND ALSO,
25 THE DEFENDANTS HAVE PROVIDED THE COURT WITH EVIDENCE
26 AS TO THE CORRECTNESS OF THE SETUP OF THE PARTICULAR
27 ENTITIES -- THE STATUS OF THE ENTITIES AS BEING IN
28 GOOD STANDING IN THE STATE OF CALIFORNIA, THAT THE

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ENTITIES HAVE -- IT IS IN THE DECLARATION OF1
2 MR. PRASKE THAT IS IN MR. ESQUIBIAS'S BRIEF, THAT THE
3 COMPANIES ARE SEPARATE AND DISTINCT FROM MR. GAGGERO,
4 AND THAT THERE IS NO EVIDENCE TO SUPPORT THE
5 CONCLUSION OTHERWISE.
6 AND AGAIN, EVEN IF THEY WERE TO BE FOUND TO
7 BE THE ALTER EGO, YOU CANNOT TAKE A JUDGMENT AGAINST
8 AN INDIVIDUAL AND DO OUTSIDE REVERSE PIERCING TO ADD
9 ENTITIES AS NEW JUDGMENT DEBTORS.
10 THE COURT: WELL, YOU KNOW, THE EXHIBITS ATTACHED
11 TO THE MOTION CONTAIN TESTIMONY OF BOTH MR. GAGGERO
12 AND MR. PRASKE SHOWING THAT THE ONLY INTEREST OF THE
13 SPECIALLY APPEARING PARTIES IS TO PROTECT 100 PERCENT
14
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OF MR. GAGGERO'S ASSETS, BOTH PERSONAL AND BUSINESS.
PRASKE IS THE ONLY TRUST.EE OF THE TRUST AND
16 FOUNDATION INVOLVED IN THE MOTION. HE IS ONE OF ONLY
17 TWO OFFICERS IN PCM. PCM PAYS EVERYTHING AT
18 GAGGERO'S WISHES WITHOUT RESISTANCE OR HESITANCE.
19 PRASKE IS ALSO THE REGISTERED AGENT FOR SERVICE OF
20 PROCESS AT EACH OF THE BUSINESS ENTITIES. KPC'S
21 EVIDENCE SHOWS THAT MR. GAGGERO'S OWN ACCOUNTANT
22 TESTIFIED UNDER PENALTY OF PERJURY THAT THE GAINS AND
23 LOSSES FOR THE ASSETS AND THE ESTATE PLAN, ULTIMATELY
24 FLOW THROUGH MR. GAGGERO'S TAX RETURNS, WHICH IS MORE
25 EVIDENCE OF ALTER EGO STATUS.
26
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GAGGERO CONTROLLED THE LITIGATION. HE DID SO
BY THE WAY OF THE FINANCIAL ASSETS OF THE SPECIALLY
APPEARING PARTIES. THEIR INTERESTS ARE ALIGNED WITH

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

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THE COURT: THIS IS MR. CHATFIELD'S ARGUMENT.
MR. ESQUIBIAS: HE IS ARGUING ABOUT SOMETHING
3 ABOUT MY CLIENT WHO I REPRESENT.
4 THE COURT: HE IS ARGUING ABOUT SOMETHING FROM
5 WHEN HE REPRESENTED YOUR CLIENT. ARE YOU TALKING
6 ABOUT THE TESTIMONY IN THE JUDGMENT DEBTOR EXAM?
7 MR. CHATFIELD: NO, YOUR HONOR.
20
8 THE COURT: WHICH TESTIMONY ARE YOU TALKING ABOUT
9 IN THE URA CASE?
10 MR. CHATFIELD: YES, YOUR HONOR, AND TELL ME
11 I DID NOT REPRESENT HIM IN THE URA CASE, YOUR
12 HONOR.
13 THE COURT: WHOM DID YOU REPRESENT, MR; GAGGERO?
14 MR. CHATFIELD: NO, I WAS NOT. I WITHDREW AS
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ATTORNEY OF RECORD IN THAT CASE PRIOR TO TRIAL.
MR. BOSWICK REPRESENTED MR. GAGGERO.
THE COURT: WHAT IS THE PORTION OF THE TESTIMONY
18 THAT YOU THINK WAS TAKEN OUT OF CONTEXT, SIR?
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MR. CHATFIELD: WELL
THE COURT: I HAVE THE EXHIBITS RIGHT HERE.
MR. CHATFIELD: IN EXHIBIT G.
THE COURT: THE PRASKE CROSS-EXAMINATION
23 JUNE 13TH, 2005.
24
25
26
MR. CHATFIELD:
1001.
THE QUESTION WAS ASKED ON PAGE
THE COURT: JUST A MINUTE. I AM TRYING TO FIND
27 THIS.
28 MR. CHATFIELD: ALL RIGHT.

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THE COURT: I HAVE PAGE 1001.
MR. CHATFIELD: WELL, STARTING ON PAGE 1000 GOING
THROUGH 1001. MR. PRASKE TESTIFIED THAT MR. GAGGERO
4 MAKES RECOMMENDATIONS TO HIM, BUT THAT MR. PRASKE IS
5 THE ONLY ONE THAT CAN MAKE THE DECISIONS. AND IF YOU
6 GO
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THE COURT: BUT MR. -- PAGE 1000 HE SAYS THAT
MR. GAGGERO, HE HAS GOT THE TRUST AND THE LLC'S THESE
ENTITIES WANT TO BUY A PIECE OF PROPERTY.. MR. PRASKE
IS THE TRUSTEE, BUT MR. GAGGERO IS THE MANAGER, AND
HE TELLS MR. PRASKE WHAT HE WANTS TO DO.
MR. CHATFIELD: THAT IS NOT THE WAY I READ THE
TESTTMONY. I READ THE TESTIMONY TO SAY THAT
14 MR. GAGGERO IS ONE OF THE PEOPLE WHO WORKS AT THE
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MANAGEMENT COMPANY AND MAKES RECOMMENDATION TO
MR. PRASKE, AND MR. PRASKE MAKES THE DECISION AS TO
WHAT TO DO.
THE COURT:
QUESTION: PAGE 1,000, LINE 22.
NOW MR. GAGGERO COMES TO YOU AND SAYS, HEY I
WANT TO BUY THI$ GREAT PIECE OF PROPERTY.
WHAT SHOWING MUST MR. GAGGERO MAKE TO YOU IN
ORDER TO SATISFY YOU AS THE TRUSTEE WITH
FIDUCIARY DUTIES, THAT I AM GOING TO RELEASE
FUNDS FOR THAT PIECE OF PROPERTY?
ANSWER: SUCCESSFUL HISTORY OF
MAKING POSITIVE, SUCCESSFUL
TRANSACTIONS.

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QUESTION: THAT IS IT?
ANSWER: THAT IS THE MOST iMPORTANT
THING.
QUESTION: SO, MR. GAGGERO SAYS I
WANT MONEY AND YOU SAY, HOW MUCH?
ANSWER: WELL, NO.
QUESTION: SO WHAT IS THE PROCESS?
ANSWER: IF IT IS WITH REGARD TO
MAKING INVESTMENTS FOR THE BENEFIT
OF THE TRUST, HE MAKES A
RECOMMENDATiON ON A PROPERTY
INVESTMENT. I WILL FOLLOW THAT
RECOMMENDATION.
WHAT IS OUT OF CONTEXT?
MR. CHATFIELD: WHAT .IS OUT OF CONTEXT IS THAT
MR. GAGGERO IS NOT THE DECISION MAKER. THE TRUSTEE
IS THE DECISION MAKER.
THE COURT: MR. PRASKE IS FOR ALL INTENTS AND
PURPOSES A RUBBER STAMP. AND THE TESTIMONY THAT YOU
DIRECTED ME TO CONFIRMS THAT IF HE MAKES THE
RECOMMENDATION, MR. PRASKE DOES IT. IT IS A LITTLE
HARD TO INTERPRET THAT LANGUAGE ANY OTHER WAY.
MR. CHATFIELD: WELL, HE GOES ON TO SAY ON THAT
PAGE THAT ON LINE 14 LINE 15 IT SAYS
QUESTION: I AM TRYING IN MY nwN
MIND TO DISTINGUISH THAT DIFFERENT
FROM MR. GAGGERO SAYING I WANT MONEY
AND YOU SAYING HOW MUCH, BECAUSE --
22

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AND THEN ANSWER IS BECAUSE AND
THEN --
QUESTION: WHY ARE YOU DRAWING A
DISTINCTION BETWEEN THOSE TWO?
ANSWER: BECAUSE IF HE CAME TO ME
AND SAID I WANT $2,000,000 TO SPEND
IN LAS VEGAS. I MIGHT SAY NO.
OTHER WORDS IT HAS TO BE FOR THE
BENEFIT OF THE TRUST?
ANSWER: YES.
QUESTION: YES?
ANSWER: YES.
IN
THE COURT: OKAY. SO, I WANT THE -- GAGGERO SAYS
14 I WANT THE TRUST TO BUY THIS PROPERTY AND MR. PRASKE
15 SAYS YES, SIR, YES, SIR, THREE BAGS FULL AND SIGNS
16 THE CHECK.
17 MR. CHATFIELD: THAT IS NOT NECESSARILY SO, YOUR
18 HONOR, ALTHOUGH --
19 THE COURT: WHAT ABOUT MR. PRASKE'S TESTIMONY
20 MEANS IT AIN'T NEC.ESSARILY SO?
21 MR. CHATFIELD: HIS TESTIMONY IS THAT MR. GAGGERO
22 MAKES THE RECOMMENDATION, AND HE MAKES THE DECISION
23 IT IS NOTHING IN THERE THAT SAYS THAT.
24 THE COURT: WHAT DO YOU DO THEN, SIR, WITH THE
25 DIRECT ANSWER?
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QUESTION: SO WHAT IS THE PROCESS?
ANSWER: IF IT IS REGARD TO MAKING
INVESTMENTS FOR THE BENEFIT OF THE
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TRUST, AND HE MAKES A RECOMMENDATION
ON A PROPERTY INVESTMENT, I WILL
FOLLOW THAT RECOMMENDATION. SOUNDS
LIKE NO EXERCISE OF DISCRETION BY
MR. PRASKE. HE SAYS DO IT, YOU
KNOW, IT rs LIKE, YOU KNOW --
24
MR. ESQUIBIAS: I COMPLETELY DISAGREE, YOUR HONOR.
THE COURT: WHEN MR. GAGGERO SAYS JUMP, MR. PRASKE
SAYS HOW HIGH ON HIS WAY UP.
MR. ESQUIBIAS: AS A PERSON SITTING HERE LISTENING
TO THE STATEMENTS NOT INVOLVED IN THE DEPOSITION --
THE COURT: THAT rs TRIAL TESTIMONY, SIR. THIS IS
TRIAL TESTIMONY.
MR. ESQUIBIAS: AS A PERSON LISTENING TO TRIAL
TESTIMONY, I CAN TELL YOU IT SOUNDS LIKE HE DOES
EXERCISE DISCRETION THAT HE DETERMINES WHETHER IT rs
FOR THE BENEFIT OF THE TRUST.
THE COURT: DO YOU HAVE ANY DIFFERENT POINTS YOU
WISH TO MAKE, MR. CHATFIELD? THE ONLY REASON WE
DEALT WITH THAT PARTICULAR ONE rs THAT WAS THE ONE
YOU POINTED ME TO. THERE ARE OTHER -- THERE ARE
PLENTY OF OTHER STUFF.
MR. CHATFIELD: WELL, YOUR HONOR, I DISAGREE THAT
THE EVIDENCE SHOWS ALTER EGO, AND AGAIN, I STATE THAT
EVEN IF IT DID SHOW ALTER EGO, THE ONLY WAY YOU CAN
PIERCE IN TO THE ENTITIES IS THROUGH OUTSIDE REVERSE
ALTER EGO WHICH rs NOT PERMITTED IN THE STATE OF
CALIFORNIA.

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THIS IS A JUDGMENT AGAINST AN INDIVIDUAL, AND
YOU ARE TRYING TO MAKE AN ENTITIES AND THEIR ASSETS
SUBJECT TO JUDGMENT AGAINST AN INDIVIDUAL.
THE COURT: IF I AM JOHN JONES, AND I SET UP A
JOHN JONES TRUST, AND I DUMP ALL MY .ASSETS IN TO IT,
AND I RUN IT AS MY PIGGYBANK, ARE YOU SUGGESTING THAT
JOHN JONES TRUST CAN'T BE REACHED?
MR. ESQUIBIAS: ACTUALLY, YOUR HONOR --
THE COURT: I DON'T THINK SO.
MR. ESQUIBIAS: I WOULD ACTUALLY SAY, YES, THAT'S
CORRECT.
THE COURT: I DON'T THINK SO.
MR. ESQUIBIAS: THAT IS THE LAW UNDER 141 CAL APP.
4TH, 25 A 2006-CASE, DIVISION ONE OF THE FOURTH
DISTRICT.
THE COURT: AND THEN THAT SEEMS TO RUN COUNTER TO
GREENSPAN, BECAUSE GREENSPAN SAYS THAT YOU CAN GO IN
TO THE TRUST THE ALTER EGO DOCTRINE, MAY APPLY TO THE
TRUSTEE -- THE TRUST THROUGH THE TRUSTEE, AND
M-I-S-I-K VERSUS D-'-A-R-C-0 197 CAL APP. 4TH 1065,
CITES GREENSPAN.
MR. ESQUIBIAS:. I WILL TELL YOU WHAT -- SAYS IN
THAT REGARD, YOUR HONOR, IT SAYS THAT --
THE COURT: I WILL TAKE THE 2010-CASE OUT OF OUR
DISTRICT, BECAUSE I THINK THAT IS THE CONTROLLING
AUTHORITY.
I AM PERSUADED BY THE SHOWING THAT THESE
PERSONS AND ENTITIES ARE ALTER EGOS OF MR. GAGGERO

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

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

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ASSETS FROM CREDITORS. I BELIEVE THAT WAS HIS
TESTIMONY ON CROSS EXAMINATION AT THE TRIAL IN THIS
CASE.
28
MR. CHATFIELD: I BELIEVE THAT IS INCORRECT, YOUR;
HONOR. THAT WAS YOUR CONCLUSION, BUT WHAT I DON'T
UNDERSTAND IS HOW WI~HOUT ANY EXAMINATION OF THESE
ENTITIES PACIFIC COAST MANAGEMENT, 511 OCEAN FRONT
WALK LP, GINGERBREAD COURT LP, MALIBU BROAD BEACH LP,
MARINO GLENCO LP, BLU HOUSE LLC AND BOARDWALK SUNSET
LLC, HOW YOU CAN DETERMINE THAT THEY ARE ALL HIS
ALTER EGO.
THE COURT: THE MOTION IS GRANTED.
THE ORDER HAS BEEN SIGNED. DEFENSE TO GIVE
NOTICE. THANK YOU.

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LOS ANGELES, CALIFORNIA; TUESDAY, JUNE 19, 2012
A.M.
29
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APPEARANCES: (AS NOTED ON TITLE PAGE.)
(LAURA LOPEZ, OFFICIAL REPORTER, CSR #6876.)
(THE FOLLOWING PROCEEDINGS
WERE HELD IN OPEN COURT:)
10 THE COURT: BEFORE WE START CALLING THE CASES, I JUST
11 WANT TO LET YOU KNOW TODAY IS THE LAST LAW AND MOTION DAY
12 FOR DEPARTMENT lA. DUE TO BUDGET CUTS, THIS DEPARTMENT IS
13 CLOSING, AND IT WILL ONLY BE OPENED BEGINNING IN JULY,
14 MONDAY THROUGH WEDNESDAY. WE WILL REOPEN JULY 5TH AS
15 DEPARTMENT 90, 9-0, A, AND WE WILL BE HANDLING MATTERS
16 THURSDAY AND FRIDAY MORNING AND AFTERNOONS. LAW AND MOTION
17 CALENDAR WILL NOW BE ON FRIDAY AFTERNOON, SO IF YOU HAVE
18 POST-JUDGMENT MATTERS THAT YOU NEED TO DEAL WITH IN THE
19 FUTURE.
20 BEGINNING WITH NO. 1 ON CALENDAR, STEPHEN R.
21 GAGGERO, G-A-G-G-E-R-0, VS. KNAPP, PETERSEN & CLARKE,
22 BC286925.
23 YOUR APPEARANCES.
24 MR. CHATFIELD: GOOD MORNING, YOUR HONOR. DAVID
25 CHATFIELD APPEARING ON BEHALF OF THE PLAINTIFF.
26 MS. WAKILY: GOOD MORNING, YOUR HONOR. AUSTA WAKILY
27
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APPEARING ON BEHALF OF THE JUDGMENT CREDITORS, ABC.
THE COURT: WHO'S THE JUDGMENT CREDITOR?

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MR. CHATFIELD: THE DEFENDANTS ARE, KNAPP, PETERSEN.
THE COURT: WE NO LONGER HAVE PLAINTIFFS AND
3 DEFENDANTS, COUNSEL. IN THIS COURT, JUDGMENT DEBTORS,
4 JUDGMENT CREDITORS. SO WILL YOU SWITCH PLACES, PLEASE.
5 SO WHO ARE YOU APPEARING ON BEHALF OF, COUNSEL?
6 MR. CHATFIELD: THE JUDGMENT DEBTOR, STEPHEN GAGGERO.
7 THE COURT: THANK YOU.
8 FIRST OF ALL, THIS IS A MOTION FOR A PROTECTIVE
9 ORDER BY THE JUDGMENT DEBTOR, MR. GAGGERO, I PRESUME
10 BECAUSE HE HAS BEEN SCHEDULED FOR A JUDGMENT DEBTOR
11 EXAMINATION?
12 MR. CHATFIELD: YES, YOUR HONOR.
13 THE COURT: WHEN IS THAT TO OCCUR?
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14 MR. CHATFIELD: TOMORROW UNLESS THE PROOF OF SERVICE IS
15 NOT CORRECT.
16 THE COURT: WELL, WE'LL DEAL WITH THAT TOMORROW.
18 THE COURT: OKAY.
19 I NOTED THAT IN YOUR REPLY YOU FILED A STAY OF
20 PROCEEDINGS.
22 THE COURT: AND UNDER LOCAL RULE -- OR EXCUSE ME --
23 CALIFORNIA RULES OF COURT 3.650(B), WHAT GROUND IS IT
24 STAYED UNDER?
25 MR. CHATFIELD: IT'S STAYED UNDER AN APPEAL AFTER
26 JUDGMENT UNDER THE CODE OF CIVIL PROCEDURE SECTION
27 904.l(A) (2).
28 THE COURT: COUNSEL, THE RULES OF COURT 3.650(B) DO NOT

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LIST THAT AS A GROUND FOR A STAY OF PROCEEDINGS TO BE FILED
BY COUNSEL. SO YOUR STAY OF PROCEEDINGS HAS NO EFFECT.
3 MR. CHATFIELD: WELL, YOUR HONOR --
4 THE COURT: COUNSEL, WHAT SECTION DO YOU BELIEVE GIVES
5 YOU A STAY OF PROCEEDINGS?
6 MR. CHATFIELD: IT'S A JUDGMENT AFTER TRIAL.
7 THE COURT: THAT'S -- OKAY. HAVE YOU POSTED AN
8 UNDERTAKING?
9 MR. CHATFIELD: THERE'S NO UNDERTAKING NECESSARY
10 BECAUSE IT'S A COST ONLY JUDGMENT.
11 THE COURT: UNDER WHAT SECTION OF THE CODE OF CIVIL
12 PROCEDURE DOES THAT APPLY?
13 MR. CHATFIELD: UNDER 917.l(A).
14 THE COURT: ALL RIGHT. BUT THERE IS A MONEY JUDGMENT,
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IS THERE NOT?
MR. CHATFIELD: NO, YOUR HONOR. IT'S A JUDGMENT FOR
17 COSTS ONLY.
18 THE COURT: LET ME HEAR FROM THE JUDGMENT CREDITOR ON
19 THAT. I DON'T BELIEVE YOU'RE CORRECT.
20 MS. WAKILY: YOUR HONOR, INITIALLY MR. GAGGERO, ABOUT
21 SEVERAL YEARS AGO, APPEALED THE UNDERLYING JUDGMENT WHICH
22 WAS AN AWARD OF ATTORNEY FEES AND COSTS. THAT JUDGMENT IS
23 NOW FINAL AND FULLY ENFORCEABLE. IT'S NOT SUBJECT TO ANY
24 FURTHER APPEALS. SO THIS TIME AROUND THEY DO HAVE TO POST
25 A BOND IN ORDER TO STAY ANY FURTHER ENFORCEMENT EFFORTS.
26 MR. GAGGERO HAD THE BENEFIT OF THE AUTOMATIC
27 APPEAL WHEN HE APPEALED THE UNDERLYING JUDGMENT YEARS AGO.
28 THE COURT: THE AUTOMATIC STAY.

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MS. WAKILY: YES, EXACTLY.
THE COURT: ALL RIGHT.
3 WHAT IS THE NATURE OF YOUR APPEAL, COUNSEL?
4 MR. CHATFIELD: THE NATURE OF THE APPEAL IS THAT FOR
5 VALID DUE PROCESS REASONS, THE STATE OF CALIFORNIA HAS
6 REJECTED THE CONCEPT OF OUTSIDE REVERSE PIERCING AND A
7 JUDGMENT RENDERED SOLELY AGAINST AN INDIVIDUAL IS NOT
8 PERMITTED TO HAVE THE ENTITIES ADDED TO IT.
9 BUT DESPITE THIS PROHIBITION, THE COURT, ON
10 MAY 29, ENTERED AN AMENDED JUDGMENT NAMING 14 JUDGMENT
11 DEBTORS, INCLUDING MR. GAGGERO AND 13 OTHER NON-PARTY
12 ENTITIES, TO THE AMENDED JUDGMENT. UNDER THE THEORY OF
13 OUTSIDE
14 THE COURT: WAIT, WAIT. I'M NOT AN APPELLATE COURT.
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15 YOU MAY HAVE NOTICED. IN FACT, WE'RE CLOSING SO I'M NOT AN
16 APPELLATE COURT. JUDGE HESS, I BELIEVE, WAS FULLY BRIEFED
17 ON THIS AND THEN CHOSE TO AMEND THE JUDGMENT TO INCLUDE
18 THOSE 14 ENTITIES THAT YOU SAY SHOULD NOT BE INCLUDED?
.19 MR. CHATFIELD: YES, YOUR HONOR.
20 THE COURT: SO YOU'LL DEAL WITH THAT AT THE APPELLATE
21 COURT. LET'S DEAL WITH WHAT'S BEFORE THIS COURT. I ASSUME
22 YOU'RE APPEARING HERE SOLELY ON BEHALF MR. GAGGERO AS A
23 JUDGMENT DEBTOR?
25 THE COURT: SO YOU'RE ASKING FOR A PROTECTIVE ORDER
26 WITH REGARD TO MR. GAGGERO?
27 MR. CHATFIELD: YES.
28 THE COURT: AND WITH REGARD TO HIM, THERE IS NO STAY.

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MR. CHATFIELD: WELL --1
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THE COURT: YOUR APPEAL IS TO THE AMENDED JUDGMENT AND
THE OTHER 14 ENTITIES; RIGHT? SO YOU'RE REQUESTING A
PROTECTIVE ORDER FOR MR. GAGGERO AS AN INDIVIDUAL; IS THAT
CORRECT?
MR. CHATFIELD: YES, YOUR HONOR.
7 THE COURT: SO LET'S PROCEED. THE COURT'S TENTATIVE
8 WAS TO DENY.
9 DO YOU WISH TO BE HEARD?
10 MR. CHATFIELD: YES, YOUR HONOR. THE CALIFORNIA
11 CONSTITUTION PROVIDES THAT --
12 THE COURT: OKAY. YOU'RE ARGUING A RIGHT TO PRIVACY.
13 HE IS A POST-JUDGMENT DEBTOR. THE RIGHTS TO PRIVACY FOR
14 ANYBODY IN A JUDGMENT DEBTOR PROCEEDING ARE SEVERELY
15 LIMITED.
17 THE COURT: SO LET'S NOT TALK LIKE IN BROAD THINGS
18 ABOUT RIGHTS TO PRIVACY. HAVE YOU .READ THE TROY CASE?
19 MR. CHATFIELD: YES, I HAVE, YOUR HONOR.
20 THE COURT: ALL RIGHT. PLEASE ADDRESS YOUR REQUEST FOR
21 A RESTRICTION ON THE JUDGMENT DEBTOR IN LIGHT OF THAT CASE.
22 MR. CHATFIELD: WELL; YOUR HONOR, THE ONLY THING THAT
23 WE ARE REQUESTING IS THAT THE INFORMATION BE UTILIZED ONLY
24 BY THE ATTORNEYS AND THE DEFENDANTS -- OR THE JUDGMENT
25 CREDITORS.
26 THE COURT: ACTUALLY, THE FIRST THING YOU'RE ASKING FOR
27 IS THAT A PUBLIC JUDGMENT DEBTOR EXAMINATION BE SEALED.
28 WHAT BASIS DO YOU HAVE FOR THAT?

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MR. CHATFIELD: WE CITED SEVERAL CASES IN SUPPORT OF
THAT.
THE COURT: DID ANY OF THEM DEAL WITH POST-JUDGMENT
4 PROCEEDINGS?
5 MR. CHATFIELD: NO, YOUR HONOR.
6 THE COURT: ALL RIGHT. SO I'LL DENY THAT.
7 THE NEXT SECTION.
8 MR. CHATFIELD: HOWEVER
9 THE COURT: COUNSEL, THE COURT PROCEEDINGS,
10 SPECIFICALLY TESTIMONY BY A WITNESS, ARE RARELY SEALED.
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11 AND FOR YOU TO ASK FOR THIS COURT TO SEAL A JUDGMENT DEBTOR
12 EXAMINATION HAS NEVER BEEN APPROVED BY ANY COURT AND I'M
13 NOT GOING TO BE THE FIRST.
14 SO NEXT?
15 MR. CHATFIELD: WELL, THE NEXT REQUEST IS THAT THE ONLY
16 PERSONS WHO SHALL BE PERMITTED TO ATTEND THE JUDGMENT
17 DEBTOR EXAMINATION ARE THE PARTIES AND COUNSEL AND THE
18 COURT REPORTER.
19 THE COURT: AGAIN, THEY'RE PUBLIC PROCEEDINGS. ANYBODY
20 WHO WISHES TO ATTEND CAN ATTEND. SHOULD THERE BE SOMEBODY
21 WHO SHOWS UP THAT YOU HAVE AN OBJECTION TO, WE CAN DEAL
22 WITH IT TOMORROW. BUT THEY ARE, BY NATURE, PUBLIC
23 PROCEEDINGS. I '.LL TELL YOU IT'S VERY RARE FOR ANYONE ELSE
24 TO TAKE AN INTEREST IN SOMEONE'S JUDGMENT DEBTOR EXAM. BUT
25 IF SOME PARTY SHOWS UP WHO'S INVOLVED AGAINST YOUR CLIENT
26 IN ANOTHER PROCEEDING AND YOU WISH TO BRING THAT TO THE
27 ATTENTION OF THE COURT, I'LL CERTAINLY ADHERE TO THAT. BUT
28 ABSENT THAT, I'M NOT GOING TO MAKE A BLANKET ORDER THAT

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1 ONLY CERTAIN PEOPLE CAN ATTEND.
0
.
.
2 MR. CHATFIELD: WELL, THE THIRD REQUEST IS THAT NO
3 DISCLOSURES OF THE FINANCIAL INFORMATION SHALL BE MADE TO
4 ANY PERSON OTHER THAN COUNSEL TO THE DEFENDANTS AND
5 JUDGMENT CREDITORS.
6 THE COURT.: AND DOESN'T THAT FLY DIRECTLY IN THE FACE
7 OF THE HOLDING IN TROY?
8 MR. CHATFIELD: NO, I DON'T BELIEVE SO, YOUR HONOR.
9 THE COURT: WELL, TROY SAYS THE JUDGMENT CREDITOR IS
lO PERMITTED TO CAST A VERY BROAD MAP IN SEEKING OUT ASSETS
11 THAT THE JUDGMENT DEBTOR MAY HAVE TO COLLECT THE JUDGMENT
12 AND IT ENVISIONS THAT THIRD PARTIES WILL BE, BY THE VERY
13 NATURE OF THE PROCEEDINGS, INVOLVED.
14 SO IT WOULD BE VERY UNUSUAL FOR THIS COURT TO SAY
0 15 THAT ONLY COUNSEL FOR THE DEFENDANTS AND JUDGMENT CREDITORS
16 AND OTHER PEOPLE WHO ARE DIRECTLY INVOLVED IN THE
17 COLLECTION SHOULD SEE THIS INFORMATION. IT'S NOT THE
18 NATURE OF THESE KIND OF PROCEEDINGS.
19 MR. CHATFIELD: WELL, YOUR HONOR, THE JUDGMENT DEBTOR'S
20 PRIVATE FINANCIAL INFORMATION IS --
21 THE COURT: HAS BEEN PUT AT ISSUE SINCE THIS JUDGMENT
22 WAS THERE TO BE COLLECTED.
23 MR. CHATFIELD: IT'S BEEN PUT AT ISSUE AS TO THE
24 JUDGMENT CREDITOR ONLY, YOUR HONOR.
25 THE COURT: NOT REALLY. THE JUDGMENT CREDITOR IS TO BE
26 GIVEN THE OPPORTUNITY TO PURSUE WHATEVER AVENUES EXISTS TO
27 DISCOVER ASSETS HELD BY THE JUDGMENT DEBTOR. I HAVE SEEN,
0 28 OVER THE LAST FEW YEARS SITTING HERE, THE INVENTIVENESS THE

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JUDGMENT DEBTORS OFTEN HAVE IN MOVING THEIR ASSETS AROUND.
SO VERY OFTEN YOU HAVE TO INVOLVE THIRD PARTIES EVEN IF
THEY DON'T WISH TO BE.
MR. CHATFIELD: WELL, THE COURT HAS THE RIGHT OR
5 ACTUALLY THE JUDGMENT CREDITOR HAS A RIGHT TO BRING IN
36
6 THIRD PARTIES, BUT TO SHARE THE FINANCIAL INFORMATION WITH
7 ANYONE OTHER THAN SOMEONE WHO'S DIRECTLY INVOLVED IN THE
8 COLLECTION OF A JUDGMENT IS UNWARRANTED AND VIOLATES THE
9 CONSTITUTIONAL RIGHT TO PRIVACY.
10 THE COURT: ALL RIGHT. THANK YOU.
11 DO YOU WISH TO BE HEARD, COUNSEL?
12 MS. WAKILY: YOUR HONOR, YOU CORRECTLY POINTED OUT THAT
13 IN THIS CASE WE'RE DEALING WITH THAT TYPE OF SITUATION
14 WHERE MR. GAGGERO HAS CREATED MULTIPLE ENTITIES, TRUSTS, A
15 SHOWER OF TRUSTS, FOUNDATIONS. NUMEROUS PEOPLE ARE
16 INVOLVED. HE HAS ESTATE PLANNING ATTORNEYS INVOLVED IN
17 HIDING HIS ASSETS. HE'S BEEN INVOLVED IN A LOT OF
18 LITIGATION AND HE'S DISCLOSED INFORMATION RELATING TO THOSE
19 ASSETS WHEN BENEFICIAL TO HIM.
20 SO FIRST OF ALL, THIS INFORMATION IS NO LONGER
21 PRIVATE. HE'S PUT AT ISSUE MANY DIFFERENT CASES. AND WE
22 WILL NEED TO DISCUSS HIS TESTIMONY AS AGAINST OTHER PARTIES
23 THAT MAY BECOME SUBJECT TO ANOTHER AMENDED MOTION TO ADD
24 THEM AS A JUDGMENT DEBTOR. THIS IS AS A RESULT OF MR.
25. GAGGERO TO CREATE A COMPLICATED ESTATE PLAN TO HIDE HIS
26 ASSETS FROM JUDGMENT CREDITORS.
27
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THE COURT: THE PROBLEM THAT I HAVE WITH YOUR NOTION OF
NO DISCLOSURES OF THE FINANCIAL -- DEBTOR'S FINANCIAL

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INFORMATION SHALL BE MADE TO ANY OTHER PERSON OTHER THAN
COUNSEL FOR THE JUDGMENT CREDITORS AND SUCH PERSONS WHO ARE
3 DIRECTLY INVOLVED IN THE COLLECTION OF THE JUDGMENT IS THAT
4 IT'S WAY OVER BROAD. CLEARLY, THEY'RE GOING TO DISCUSS
5 CERTAIN THINGS WITH PEOPLE IN ORDER TO BE ABLE TO .ASK
6 QUESTIONS AND DISCOVER INFORMATION.
7 SO I'M MORE THAN HAPPY TO ADDRESS IT ON AN
8 INDIVIDUAL BASIS WITH REGARDS TO SPECIFIC LINES OF INQUIRY.
9 BUT I'M NOT ABOUT TO ISSUE A VERY BROAD ORDER SUCH AS YOUR
10 REQUEST. SO I WILL DENY THIS REQUEST FOR A PROTECTIVE
11 ORDER, AND I GUESS I'LL SEE YOU HERE TOMORROW FOR THE
12 JUDGMENT DEBTOR EXAMINATION OF MR. GAGGERO.
13 MR. CHATFIELD: WELL, YOUR HONOR --
14
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THE COURT: YES, COUNSEL?
MR. CHATFIELD: THE JUDGMENT DEBTOR WISHES TO APPEAL
16 THE DETERMINATION OF THE COURT.
17 THE COURT: FINE.
18 MR. CHATFIELD: AND WE WOULD REQUEST LEAVE TO --
19 THE COURT: YOU NEED TO FILE YOUR VARIOUS PAPERS,
20 COUNSEL. I'M NOT STAYING ANYTHING UNTIL SOMETHING IS
21 FILED.
22 MR. CHATFIELD: ONCE I FILE THE APPEAL DOWNSTAIRS IN
23 111 IN THE NEXT 15 MINUTES AND I BRING UP A .COPY OF THE
24 NOTICE OF APPEAL AND THE NOTICE OF STAY, WILL WHAT WILL
25 HAPPEN TO THE JUDGMENT DEBTOR EXAM TOMORROW?
26 THE COURT: IT'S STILL ON CALENDAR.
27
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MR. CHATFIELD: WELL, WHY WOULD IT STILL BE ON
CALENDAR?

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THE COURT: WELL, BECAUSE YOU HAVEN'T REQUESTED
YOU'RE JUST REQUESTING A STAY OF MY RULING ON THE
PROTECTIVE ORDER.
4 MR. CHATFIELD: YES. AND YOUR RULING AFFECTS WHAT
5 HAPPENS IN TOMORROW'S JUDGMENT DEBTOR EXAM.
6 THE COURT: RIGHT. WE'LL DEAL WITH THAT TOMORROW.
7 IT'S NOT BEFORE THE COURT TODAY.
8 MS. WAKILY: TO THE EXTENT -- JUST TO PUT ON THE
9 RECORD, WE DON'T AGREE THAT THE APPEAL STAYS ALL THE
10 PROCEEDINGS. BUT TO THE EXTENT THAT HE FILES AN APPEAL
38
11 THE COURT: I MAY NOT NECESSARILY AGREE EITHER. IF YOU
12 BELIEVE, COUNSEL, THAT SIMPLY APPEALING THIS PROTECTIVE
13 ORDER AND APPEALING THE AMENDED JUDGMENT SOMEHOW STAYS THE
14
15
JUDGMENT DEBTOR EXAM OF YOUR CLIENT AS AN INDIVIDUAL, I
SUGGEST YOU BRING ME SOME CASE LAW TOMORROW.
18 MR. CHATFIELD: THANK YOU.
19 MS. WAKILY: THANK YOU. I'LL GIVE NOTICE.
20 THE COURT: AGAIN, I'M TAKING AS A GIVEN THAT THE
21 ORIGINAL JUDGMENT WHICH HAS BEEN THROUGH THE APPELLATE
22 PROCESS IS FINAL, IS ENFORCEABLE AND ABSENT -- WELL,
23 THERE'S NO FURTHER APPELLATE REVIEW.
24 MS. WAKILY: RIGHT.
25 THE COURT: SO AS FAR AS I CAN TELL, THE EXAMINATION
26 WILL GO FORWARD UNLESS YOU BELIEVE YOU'RE ENTITLED TO A
27
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STAY WHILE THE APPEAL OF THE PROTECTIVE ORDER AFFECTING
THAT JUDGMENT DEBTOR EXAM HAS BEEN RESOLVED. AND IN WHICH

. . .. . . . . . .
39
1 CASE, THEN MAYBE THEN YOU'LL HAVE TO FILE AN UNDERTAKING OF
2 SOME SORT. I JUST DON'T KNOW. SO THAT'S WHY I'M ASKING
3 FOR SOME CASE LAW.
6 MR. CHATFIELD: THANK YOU, YOUR HONOR.
7 (THE PROCEEDINGS WERE CONCLUDED.)
8 -000-
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@ 28

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STEPHEN M. GAGGERO,
PLAINTIFF,
vs.
ET AL.,
DEFENDANTS.
)
)
)
)
) NO. BC 286925
)
)
) REPORTER' S
) CERTIFICATE
)
~~~~~~~~~~~~~~)
12 I, LAURA LOPEZ, OFFICIAL REPORTER OF THE
13 SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF LOS
14 ANGELES, DO HEREBY CERTIFY THAT THE FOREGOING PAGES 29
15 THROUGH 39, INCLUSIVE, COMPRISE A FULL, TRUE, AND CORRECT
16 TRANSCRIPT OF THE PROCEEDINGS TAKEN IN THE MATTER OF THE
17 ABOVE-ENTITLED CAUSE ON JUNE 19, 2012.
18
19
20
21
22
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24
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DATED THIS 13TH DAY OF SEPTEMBER, 2012.
, CSR NO. 6876
ER
0 28

DEPT. LA 24 HONORABLE ROBERT L HESS, JUDGE
STEPHEN GAGGERO, AN INDIVIDUAL; )
PLAINT I FF, )
) CASE NO.
-VS- )BC286925
) REPORTER'S
KNAPP, PETERSEN & CLARKE, )CERTIFICATE
DEFENDANTS. )
)
STATE OF CALIFORNIA
SS
COUNTY OF LOS ANGELES
I, CAROL L. CRAWLEY, OFFICIAL REPORTER OF THE
SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF
LOS ANGELES, DO HEREBY CERTIFY THAT. THE FOREGOING PAGES,
1-28 COMPRISE A FULL, TRUE, AND CORRECT TRANSCRIPT OF THE
PROCEEDINGS HELD ON MAY 29, 2012, IN DEPARTMENT 24 OF THE
LOS ANGELES COURT IN THE MATTER OF THE ABOVE-ENTITLED CAUSE.
DATED

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