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IIIJJ
IIII
IIIJII
IIIII
IIII
IIIJJ
IIIIJ
11111
IJJJJ
IIIIJ
Ill
JJIIJJ
MIIit
Jill
CA2DB241675-03
{286F22A3-A069-46F5-980F-6A62467A0147}
{139024}

{30-130626:092836}

{062413}

APPELLANT'S
BRIEF

Case No.

B241675
IN TIlE

COURT

OF APPEAL
SECOND

OF THE

STATE

APPELLATE
DIVISION

STEPHEN

OF CALIFORNIA

DISTRICT

EIGHT

M, GAGGERQ,

Pla, intiff {md Appcllanl,

KNAPP,

PETERSEN & CLARKE; STEVEN RAY GARCIA;

STEPHEN M. HARRIS and ANDRE JARDINI,
Defendants

PACIFIC

COAST

and Respondents;

MANAGEMENT,

1NC,;

GINGERBREAD
COURT LP; MALIBU
MARINA
GLENCOE
LP; BLU HOUSE
SUNSET

LLC;

and JOSEPH

THE GIGANIN
and TIlE
Additional
Hon.

Roba

Hon,

TRUST,

L, H_ss,

Murray

Grass;

LP;

BROAD
BEACH LP;
LLC; BOARDWALK

PRASKE

as Trustee

THE ARENZANO

AQUASANTE
Judgmant

511 OFW

of

TRUST,

FOUNDATION

D_bto_,a, and Appellants

Hon,
Hon,

Matthew
Victor

St. GeaFge,
Greanberg

Superior Court of Los Angeles

County
L,A,$,C,
Cas_ No, BC286925

APPELLANTS

_ OPENING

BRIEF

EDWARD A, HOFFMAN,
BRr,No, ! 67240
LAW OFFICES OF EDWARD A, HOFFMAN
12301 WILSHIRE BOULEVARD,
SUITE 500
LOS ANGELES,

CALIFORNIA

90025

(310) 442.3600
Attorney

for Additional

Judgment

Debtors'

and Appellants

B241675
IN THE

COURT

OF APPEAL
SECOND

OF THE

APPELLATE
DIVISION

STEPHEN
Plaintiff

STATE

OF CALIFORNIA

DISTRICT

EIGHT

M. GAGGERO,
and Appellant,
VS,

KNAPP,

PETERSEN & CLARKE; STEVEN RAY GARC1A;

STEPHEN M. HARRIS and ANDRE JARDINI,
Defendants'

PACIFIC

COAST

GINGERBREAD
MARINA

and Respondents;

MANAGEMENT,

COURT

GLENCOE

SUNSET
LLC;
THE GIGANIN

LP; BLU

Hen.

Robert

Hen.

511 OFW

BROAD

HOUSE

LLC;

LP;

BEACH

BOARDWALK

and JOSEPH
PRASKE
as Trustee of
TRUST,
THE ARENZANO
TRUST,

and THE AQUASANTE

Additional

INC.;

LP; MALIBU

Judgment

Debtors

L. Hess, Hen.

Murray

FOUNDATION

Gross; Hen.

and Appellants

Matthew
Vletor

St, George,
Oreenberg

Superior
Court of Los Angeles
County
L.A.S.C.
Case No. BC286925

APPELLANTS'

OPENING

BRIEF

EDWARD A. HOFFMAN,
Bar No. 167240
LAW OFFICES OF EDWARD A. HOFFMAN
12301 WILSHIRE BOULEVARD,
LOS ANGELES,
CALIFORNIA

SUITE 500
90025

(310) 442-3600
Attorney

for Additional

Judgment

Debtors

and Appellants

LP;

TO BE FILED

IN THE COURT

OF APPEAL

APP.001
Court

COURT

OF

Second

APPEAL,

APPBLLATE

DISTRICT,

_ ADpod

Eight

DIVISION

HO[Illl,_JI

(.[Jnr

lb

C_JM

CIIa

a'rrORNEV_ORrNameJ:Pacific Coast Mtmagument,

Nun_oE

BC286925

I,Z_U)

-' Law Offices of Edwttrd A, l,loffi_an

12301 Wilshire Blvd., Suite 500
l,os AItgeles, CA 90025
rt_ts_oNe_'0.: (3 10) 442-3600
,Ax_o.ro_,,0:(310)
_.M^'LAOO"ESStO_O,O_:
ash@he ffinanlaw.com

Numb=It:

B241675
8t41edor

l_Gw_lr(/I/_.

Calo

IS_q count

US8

ONL V

442-4600

et el., Additional

Judgment

Debtors

APPELLANTmE'rmONER:
Stephen M. Gaggero, et el.
RES_'ONt_ENTmEAL
PASTYININTEREST:Knapp, Petersen & Clarke, et el.
CERTIFICATE
(Check one):

OF INTERESTED

INITIAL CERTIFICATE

Notice:
Please read rules 8.208 and
certificate
in an appeal when you file
motion
or application
In the Court of
also use this form as a supplemental
be disclosed.

ENTITLES
[]

OR PERSONS

SUPPLEMENTAL

CERTIFICATE

8.488 before completing

this form. You may use this form for the Initial
your brief or e prebrloflng
motion, appllcat|on,
or opposition
to such a
Appeal, and when you file a petition for an extraordinary
writ. You may
certificate
when you learn of changed or additional
information
that must

1. This form is being submitted on behalf of the following party (name): Pacific Coast Management,
2. a. []

et al._ Additional

Judy.meat Debtors

There are no interested entities or persona that must be listed In this certificate under rule 8.208.

b. [_

Interested entities or parsons required to be listed under rule g.20fl are aa follows:
Full name of Interested
entlty or perse.

Nature of Interest
(Explain):

(1) TerraMar Trust

(2)

[_

Continued on attaohmant _,

The undersigned co.flea

that the above.listed persons or ontltloa (corporations, pa_norshlpa, firms, or any other
association, but not Including government entitles or their agencies) have either (_) an ownership Interest of 10 percent or
more In the party If It Is an entity; or (2) a financial or other Interest In the outcome of the proceeding that the Justices
should consider In determining whether to dlaquall_ themselves, as defined In rule 8.208(e)(2).

Orate:

June 24, 2013

Edwurd A. Hoffman
(TYPE

PRINT

NAME)

Paget

_o_,_uI_o=_=u=
Jt_ldat
App-o0fi

CO_J
[Ra_

CERTIFICATE

OF INTERESTED

ENTITLES

OR PERSONS

Ot C d/omll=
J_rpJarf

1,200g]

www.o_uttin_o,
Lgxi._lVa_lJr_

A utomoled

1 el 1

c= R==*_Co_.,r_*==
_,=_O,S,_S
Cet/ortJt';'lio

Judicial

C'omtcil

Fuemn

ca,gov

TABLE

OF CONTENTS

Table of Authorities

vii

Introduction .........................................................

Statement of Appealability .............................................

Factual and Procedural History ..........................................

I.

The EstatePlan ............................................

2.

Respondents

3.

The Malpractice

4.

Post-Trial

5.

The Alter-Ego

6.

Appellants
Additional

Standards
Argument
I.

of Review

Appellants

B.

......................

........................................

......................................

Motion

Pay the Entire

Costs - Under

Judgment
- Including
Duress .............................

Interest

and
11

.................................................

That

Gaggero

Cannot

Entities

11

Controlled

Be Liable

Which

13
His Own

Did Not Control

the Litigation

Debtors .........................................

The Trial

Court

The Evidence

Litigation

Means

for His Debt ...........................

Judgment

Controlled
D.

Attorneys

Case .......................................

Discovery

the Litigation
C.

as Gaggero's

..........................................................

The Finding

A,

Serve

Expressly

Found

13

Cannot

Be Added

as
14

That Appellants

DidNot

Control

.............................................
Could

Not Support

the Litigation

15

a Finding

That Appellants

....................................

This Finding That Gaggero

Controlled
a Full Reversal ...........................................

His Own

16
Litigation

Requires
16

II.

The Alter-Ego
Decision
Findings
That Appellants
Praskc

Rests Entirely on the Court's

Had Committed
Misconduct

Did Not "Refuse"

Respondents

to Produce

Documents,

Because

Appellants

Accused

of Refusing

The Ruling

Had

No Notice

to Produce

Amounted

Praske

a.

Testified

That

d,

e,

Requirements

Gaggero's

Failure

Represented

Financially

of this Supposed
Court's

IV.

Appellants

Before

Hinged

Sanction...

Capacity

and Not
........

23

23

24

Documents

Is Not
25
Finding

and Gaggero

That

at the

to Let Appellants
Them

26

Produce

Is Another

Ego Claim

That

Gaggero

and Appellants

.............................................

-ii-

Why

the

Per Se ......................

an Alter

Alter

the Trust

Reason

to Make

Be Gaggero's

Violated

...............................

Is Reversible

in Prior Proceedings

24

.......................

Praske

22

Not Be

Willfully

on its Unsupported
Both

Penalizing

Are Estopped

Cannot

Discovery

........................

to Produce

Refusal

Refusal

Judgment

Separate

21

Sanctions
May
..........................

to Appellants

Lawyer

Admitted

and Is Reversible

of the Appellants

Praske

Discovery

the Same

Respondents

29

Any

Is No Evidence

Ruling

Amended

Be

There

Court's

Documents

III.

of Any

Would
the May

to

The Trial

The Trial

They

There Is No Evidence
That Respondents
Moved
Compel Responses
from Praske ...................

Attributable

C,

19

Rights

in His Individual

Evidentiary
and Issue
Imposed
on Nonparties

b.

Time

Since

Documents,

to an Improper

as a Representative

B.

18

Did Not Ask Hhn To ............................

Ruling Violated
Their Due Process
PerSe .............................................
2,

Unsupported
.................

Egos .........................

27

Because

They

Are
29
32

A.

The Varieties

B.

Appellants
Are Not Gaggero's
Alter
Theories ................................................
1,

of Alter-ego

Liability

Even

If California

Respondents
3.

The

4.

Failed

to Make

Section

5.

B.

C.

187 Does

Greenspan

Reverse

Rule Does

This Court

There

Does

must Reverse

Not Allow

Showing

Not Support

Courts

Where

........

Because

the Amended
Because

Liable

Forbidden

.......

38

Judgment

.......

39

They

Are

for the Debts

of
42

of the Trusts
43

Court

on the Wrong
That

Alter-

41

the Trial

Evidence

Placed

Parties

the Trusts

the

............

F.

Appellants

Is from
Amply

Insufficiency

Another

Preserved

46

District
this Issue

of the Evidence

-iii-

45

Were

...............................................

That Laycock

37

the Amended

to Impose

it Is Otherwise

Not Support

re Revoeability

Is No Substantial

E,

1.

Piercing,

Evidence
Shows That All Three
...........................................

of Proof

Revocable

35

3"/

Irrevocable
Trusts May Never Be Held
Their Settlors ............................................
The Undisputed
Are Irrevocable

of These

in

the Necessary

Could Not Be Added to the Judgment

....................................................

Burden
D.

Any

..........................................

Ego Liability

A.

under

34

Law Allowed

Single-Enterprise

Judgment

The Trusts
Irrevocable

Egos

32

Outside Reverse Veil-Piercing

ls Forbidden
California
..........................................

2.

V,

...........................

Is Irrelevant

..............

47

in the Trial

Court ..........

47

Cannot

Be Waived

...........

48

Appellants

Court
V1.

There

Raised

Rejected

ls Insufficient

the Issue

Evidence

to Support

A.

The Evidence

B.

The Gaps ................................................

C*

Respondents
Shared

D_

a Unity

to Prove

Both

of Interest

the Amended

Separateness

Would

There

ls No "Unity

of Interest

and Gaggero

Respondents'

Without

That Appellants

Promote

53

Between

That

54

Gaggero

Does

Not Own

Disproves

the Required
54

of Control

Is Not Enough

There

Is Insufficient

Evidence

to Establish

the Required

Unity

of Interest

Entbreing

Recognizing

.................

Evidence

and Ownership

Respondents'

Evidence
Even

Ownership

Respondents

b.

Would

If They

Have

Failed

Respondents'

Alter

in Disguise

Unity

Appellants'

Separateness

from

Injustice

Separateness

to
57

to Prove

.....................................

Appellants'

Been

Did Not Have

Gaggero

or Promote

Have

from

Ego Motion

Strong

Separateness

from
60

Gaggero

Would

Not

.........................
Gaggero

60

Is Not a Fiction

Is a Fraudulent

and Is Time-Barred

55

56

..............................

to Overcome

Appellants'

.....

........................

Enough

a Fraud

Claim

_0

and Gaggero

and That

an Injustice

and Ownership"

Concession

Prove

1,

........

....................................

Insufficient

Sanction

Judgment

Ownership,

E.

48

52

Any of the Appellants

Conclusively
Unity .............................................

and the

51

and Ownership

Their

2.

Court,

............................................

Had

Appellants

in the Trial

it on the Merits .........................

...................

.....

61

Transfer
61

Enforcing

Fraud
F.

There

Is Nothing

Consequences
Q,

VII.

Court

the Trusts'
VIII.

IX.

of Limitations

Neither

an Injustice

.......................

about
Own

Making
Business

Decisions

the Probate

Affairs

Court's

A.

Judgment
Judgment

Having

Cannot

Stand

Exclusive

63

May Not
64

Jurisdiction

Over
64

Separate

Is Law

of the
66

Because

Separate

the Benefits

May

55-Month

A Court
Knew

it Directly

Contradicts
67

of the Original

Not Contradict
Delay

May Not Add New

Their

Judgment

Before

Respondents'

Motion

Was

the Judgment

Against

Gaggero

Judgment,

Alter-Ego
Debtors

Judgment

Based

Prejudiced

-V-

When

70

If the Creditor

They

in Early

That Delaying
Was Convenient
for Respondents
Excuse It ................................................
Severely

Diligence

Entered

D.

Were

Claim ...........

on Information

Was

69

Was Entered

Claimants

Appellants

Use Due

67

It ...........................

Waived

of the Relationship

Must

............................

C.

E.

.................

...........................................

Accepted

Respondents'

B,

the

.......................................

Are Financially

Respondents

Bear

The 2012 Finding That Appellants

Are All Gaggero's
Alter Egos
Cannot Be Reconciled
with the 2008 Finding
That PCM and
Gaggero

g.

a
62

Respondents

That Gaggero
and Appellants
Are Financially
Case .........................................................
The Amended

Sanctions

Failure to Prove Their Case Means They

Chance in the Trial Court .......................

Invaded

Internal

the Original

X.

Unjust
of Their

Respondents'
Have Another

The Trial

a Statute

Nor Promotes

Adding

..........
Had Before

2008 ........

Parties
Does

by Respondents'

71

.........

71
73

Not
74
Delay ......

74

XI.

The Court

Should

Order

Respondents

to Make

Costs They Have Incurred

and the Consequential
Suffered Due to the Enforcement
of the Amended
Conclusion
Certificate
Proof

.........................................................
of Word

of Service

Count

by Mail

Appellants
Damages
Judgment

Whole

for the

They Have
.............

75
77

.............................................
..............................................

-Vi-

79
80

TABLE

OF AUTHORITIES
STATE

CASES

Aguilar
v. Atlantic
Richfield
Co.
(2001) 25 Cal.4th 826
..............................................
Al J. Vela & Associates,
(1982)

129 Cal.App.3d

Alexander

v. Abbey

(1980)
Ann

(1993)

Auto

(1962)
Baxter

70

Shopping

666

Center

..................................................
Meat

825

12

Co.

..........................................

Inc. v. Superior
450

54, 73

62, 63

Court

..................................................

47

v. Peterson

(2007)
Beck

57 Cal.2d

Dist.

...........................................

Inc. v. Oakland

Sales,

School

............................................

39

210 Cal.App.2d

Equity

Unified

of the Chimes

Plaza

6 Cal.4th

Vendors,

(1962)

766

104 Cal.App.3d

M. v. Pacific

Assoc.

Inc. v. Glendora

45, 46

150 Cal.App.4th

Development

(1996)
Biscaro

............................................

Co. v. Southern

44 Cal.App.4th

Pacific

64

Transportation

Co.

1160

............................................

44

702

............................................

22

v. Stern

(2010)
Blank

673

181 Cal.App.4th

v. Coffin

(1942)
Bowman
(1984)
California
(1986)

20 Cal.2d
v. Board

457

of Pension

155 Cal.App.3d
State

..................................................

Employees'

178 Cal.App.3d

44

Commissioners

937

.............................................

Assn.
372

v. State

Personnel

.............................................

-vii-

12
Bd.
17

Carpenter

v. Jack

(2007)

in the Box

151 Cal.App.4th

CC-California
(1996)

Plaza

29 Cal.4th

City of Los Angeles

(1951)

& Goldstein

............................................

.................................................

68

27

v. Morgan
726

56 Cal.App.4th
National

(1989)

Bank

49 Cal.3d

.............................................

21

1453

............................................

v. City & County

881

17

of San Francisco

..................................................

12

v. Contreras

(2002)
Cuccia

95 Cal.App.4th
v. Superior

(2007)
DiMaria

v. Bank

(1984)
Dowdall

151 Cal.App.3d

183 Cal.

v. Superior

(2007)

46

347

............................................

47

254

.............................................

42

144

.............................................

16

Co. v. Avenel

v. Superior

(1920)

............................................

of California

237 Cal.App.2d

Dow Jones

1194

Court

153 Cal.App.4th

(1965)

41 Cal.4th

Court
348

...................................................

66

Court
1337

................................................

29

of Hearst

(1977)
Estate

v. Paller

I2

v. Matthes

Crocker

Estate

142

105 Cal.App.2d

(1997)

Elkins

1042

............................................

v. Kay

(2002)

Crook

Associates

51 Cal.App.4th

Chambers

Conley

454

67 Cal.App.3d

777

..............................................

59

of Mullins

(1988)

206 Cal.App.3d

924

.............................................

-viii-

65

Estate

of Teed

(1952)
Ex Parte

112 Cal.App.2d

Fassberg

52 Cal.2d
Const.

(2007)
Gaggero

250

..................................................

Co. v. Housing

152 Cal.App.4th

11

Authority

41

of City of Los Angeles

720

............................................

43

884

............................................

25

v. Yura

(2003)

108 Cal.App.4th

Galdjie

v. Darwish

(2003)

113 Cal.App.4th

v. Lockheed

(2006)

Martin

8 Cal.4th

Gordon

v. Nissan

(2009)

(2011)

55

12

Co., Ltd.
1103

...........................................

28

LLC
486

196 Cal.App.4th
Motor

19 Cal.3d

........................................

passim

1060

...........................................

76

Co.

530

..................................................

69

of America

147 Cal.App.2d

12 Cal.2d

In re Angela
(2002)

..................................................

Motor

v. Southern

(1939)

.............................................

v. Wall

v. Bank

(1957)

34

191 Cal.App.4th

v. Ford

Heifetz

791

v. LADT,

Gunderson

(1977)

Corp.

170 Cal.App.4th

Greenspan

Hasson

............................................

v. Antonioli

(1994)

(2011)

1331

140 Cal.App.4th

Ghirardo

Hinkle

.............................................

Tartar

(1959)

Gelfo

638

Pacific
691

776

.............................................

46

Co.
..................................................

44

C.

99 Cal.App.4th

389

.............................................

-ix-

28

b_ re Enrique
(2006)

G,

140 Cal.App.4th

In re Goldberg's
(1938)

(2005)

(1981)
Jackson

..................................................

22, 28

68

G.
1109

...........................................

21

B.

125 CaI.App.3d
v. County

(1997)
dines

709

127 Cal.App.4th

In re Vincent

.........................................

Estate

10 Cal.2d

In re Jasmine

676

752

.............................................

44

.............................................

31

of Los Angeles

60 Cal.App.4th

171

v. Abarbanel

(1978)
Kahrs

77 Cal.App.3d

v. County

(1938)

v. Ford

(2006)

...........................................

60, 71

...............................................

45

of Los Angeles

28 Cal.App.2d

Karlsson

702

Motor

46
Co.

140 Cal.App.4th

Keeler v. Superior
Court
(1956) 46 Cal.2d 596

1202

...........................................

..................................................

Kelly v. New West Federal

Savings
(1996) 49 Cal.App.4th
659
.............................................
Kuhn

v. Department

(1994)
Lambert

v. General

(1998)

Laycock
(2006)

Assoc.

39

28

Services

1627

.........................................

1179

............................................

12, 51

Motors

67 Cal.App.4th

Las Palmas
(1991)

of General

22 Cal.App.4th

25

v. Las Palmas

235 Cal.App.3d

69

Ctr. Assoc.

1220

...................................

25

.........................................

32, 34, 38, 54

v. Hammer
141 Cal,App.4th

-X-

passim

Levin

v. Ligon

(2006)
Lovato

140 Cal.App.4th
v. Santa

(1984)

Fe Internat.

151 Cal.App.3d

Marriage

...........................................

31

Corp.
549

.............................................

21

of Carlsson

(2008)
Martin

1456

163 Cal.App.4th

v. County

(1996)
McClellan
(2001)
Mclntire

............................................

28

of Los Angeles

51 Cal.App.4th

688

v. Northridge

Park

89 Cal.App.4th

746

v. Superior

(1975)

281

.............................................
Townhome

Owners

21

Assn.

.............................................

11

Court

52 Cal.App.3d

717

..............................................

73

Mesler v. Bragg Management

Co.
(1985) 39 Cal.3d 290 ..................................................
Mid-Century
(1992)
Minifie

lns.

Co. v. Gardner

9 Cal.App.4th

1205

.............................................

53

v. Rowley

(1922)

187 Cal. 481

Minton
v. Cavaney
(1961) 56 Cal.2d
Misik

54

...................................................

576

32

..................................................

16

v. D'Arco

(2011)
Morohoshi
(2004)
Morrison
(1999)
Motores
(1958)

197 Cal.App.4th
v. Pacific
34 Cal.4th
Knudsen

51 Cal.2d

.......................................

passim

Home
482
Corp.

69 Cal.App.4th
De Mexicali,

1065

.................................................
v. Hancock,
223

& Bunshofi,

.............................................

S. A. v. Superior
172

Rothert

66
LLP
57

Court

..................................................

-xi-

14

NEC

Electronics

(1989)

Inc.

v. Hurt

208 Cal,App.3d

Napa Valley Packing

(1911) 16 Cal.App.
New Albertsons,
(2008)
Norgart

Parsons

Inc. v. Superior

People

People

Red Cross

Funds
69

Court

1403

...........................................

24

.................................................

Development

62 Cal.2d

861

24 Cal.4th

Co.

..................................................

v. Shamrock
415

17

Foods

13

Co.

.................................................

12

v. Avanessian

(1999)
People

76 Cal.App.4th

635

.............................................

45

v. Johnson

(1980)
People

26 Cal.3d

557

..................................................

12

409

20

v. Kluga

(1973)
People

32 Cal.App.3d

..............................................

v. Lujan

(2012)
People

211 Cal.App.4th

1499

...........................................

39

1268

...........................................

12

v. Powell

(2011)

194 Cal.App.4th

People v. Shuey
(1975) 13 Cal.3d
People

835

..................................................

66

v. Stanley

(1995)
Postal

383

ex rel. Lockyer

(2000)

11, 14, 16,39

Co.

21 Cal,4th
v. Bristol

(1965)

...................................

Co. v. San Francisco

Relief&
461 ................................................

168 Cal.App.4th
v. Upjohn

(1999)

772

10 Cal.4th

lnstant

(2008)

Press,

764
lnc.

162 Cal.App.4th

.................................................
v. Kaswa
1510

67

Corp.
.......................................

-xii-

passim

Riddle

v. Leuschner

(1959)

51 Cal.2d

574

...............................................

Rogers
v. Bill & Vince 's, lnc.
(1963) 219 Cal.App.2d
322
San Bernardino
(1902)
Santisas

17 Cal.4th

v. Superior

(1987)
Saxena

County
70

599

.................................................

43

213

13

Court
.............................................

v. Goffney

Schoenberg
(1967)
Sessions

Smith

159 Cal.App.4th

251 Cal.App.2d

Steven

Pac.

159 Cal. 599

v. Walter

(1978)

Stockton

82 Cal.App.3d

.............................................

24, 25

lnc.

Bank

4 Cal.3d

16

Co.
i. 69

& Co.
..............................................

55

S.
1108

............................................

50

v. Palermo

121 Cal.App.2d

National

(1971)

154

259

33 Cal.App.4th
Theatres

(1953)

.........................................

.................................................

E. Heller

W. v. Matthew

(1995)

316

v. Benner

v. Southern

(1911)

Tally

v. Riverside

76

...................................................

195 Cal.App.3d

(2008)

Tahoe

.............................................

v. Goodin

(1998)
Sauer

County

135 Cal. 618

55, 56

616

.............................................

75

v. Phillips

11 ....................................................

48

418

67

v. Ganahl

(1907)
Tavaglione
(1993)

151 Cal.

...................................................

v. Billings
4 Cal.4th

1150

.......

..........

-xiii-

................

.....

69

Temple Comm. Hosp. v. Superior

Court
(1999) 20 Cal.4th 464
.................................................

24

Triplett v. Farmers
Ins. Exchange
(1994) 24 Cal.App.4th
1415
.........................................
Vallbona

14, 16

v. Springer

(1996)

43 Ca1.App.4th

1525

.........................................

13, 23

VirtualMagic
Asia, Inc. v. Fil-Cartoons,
Inc.
(2002) 99 Cal.App.4th
228
.............................................
Wollersheim

v. Church

(1999)

of Scientology

69 Cal.App.4th

1012

Int 'l

.........................................

FEDERAL
Arizona

16, 53

CASES

v. Fulminante

(1991)

499 U.S. 279 [111 S.Ct.

Cascade

Energy

(10th
Floyd

57

Cir.

& Metals

1990)

Corp.

896 F.2d

1246,

113 L.Ed.2d

302]

......................

21

v. Bank

1557

.......................................

36, 63

.......................................

36, 37

v. I.R.S.

(10th

Cir.1998)

Holywell

Corp.

(1992)

151 F.3d

1295

v. Smith

503 U.S. 47 [112 S.Ct.

1021,

117 L.Ed.2d

196]

.......................

59

In re Barnes
(Bankr.

E.D.

Cal. 2002)

275 B.R.

889

..................................

40, 42

In re Sims
(5th Cir.
Katzir's

1993)

Floor

& Home

(9th Cir. 2004)

O. F. Nelson
(9th Cir.

994 F.2d 210

Design,

394 F3d 1143

............................................

63

Inc. v. M-MLS.com
........................................

16, 62

& Co. v. U.S.

1945)

149 F.2d 692

............................................

-xiv-

43

S.E.C. v. Hickey
(9th Cir. 2003)

322 F,3d

1123

.....................................

40, 55, 56

STATESTATUTES
Civil

Code

3439.04

...........................................................

3439.07
3439.09
Code

61

.........................................................
............................................................

33,62
62

of CivilProeedure

187 .......................................................

8,14,38,39

625 ...............................................................
631.8

...........................................................

904.1

..............................................................

69
5,74
2

908 ...............................................................

75

917.1

74

.............................................................

2023.010

..........................................................

22

2023.030

..........................................................

22

Evidence

Code

452 ................................................................

453 ................................................................

500 ...............................................................

45

1220

43

Probate

..............................................................

Code

15400

.............................................................

45

15403

..........................................................

42,43

17000

..........................................................

64,65

17200

.............................................................

64

18200 .............................................................

42

Cal.

Const.,

art. I, 7 ....................................................

27

Cal.

Const.,

art. VI, 13 ..................................................

22

-XV-

STATE
Cal. Rules

of Court,

Cal. Rules

of Prof.

rule 8.204
Conduct,

RULES

.............................................

rule

1-100

......................................

FEDEILAL
26 U.S.C.

671-677

26 U.S.C.

2702

U.S. Const.,

STATUTES

43, 59

............................................

34 Am.Jur.2d

Evidence
Federal

California

and Debts

Eisenberg,

Horvitz,

Friedman,
Restatement

Enforcing

and Trustees

Trusts

and Writs

California

59

Judgments

Practice

passim

(Thomson

West

2013)

................

...............................................
California

(Rutter

2013)

Practice

Guide:

Guide."

...............................................

.xvi-

passim

. ..........................

Corporations

43, 60
42

................................

of the Law of Corporations

2d, Judgments

54

...........................................

and Wiener,

Cyclopedia

32

............................................

Guide:

2012)

of Trusts

(2012)

Civil Appeals
Fletcher

SOURCES

.................................................

Taxation

Practice

(Rutter

The Law

60 Cal.Jur.3d

14, 21, 27

...........................................................

29A Am.Jur.2d

Bogert,

60

....................................................

SECONDARY

Ahart,

27

....................................................

14th Amdt

2 A.L.R.6th

79

(Rutter

2010)

33, 55
................

38
15

Weil & Brown, California

Before

Trial (Rutter

1 Witkin,

Cal. Evidence

9 Witkin,

Practice
Guide." Civil Procedure
2013)
.............................................

24

(5th ed. 2012)

Hearsay,

98

..........................

55

Cal. Procedure

(4th ed 1997)

Appeal,

895

..........................

66

8 Witkin,

Cal. Procedure

(5th ed. 2008)

7 Witkin,

Cal. Procedure

(5th ed., 2008)

Enf. Judgm.,
Judgment,

-xvii-

479 ......................
29

........................

61
11

INTRODUCTION
The original
Gaggero,

were

this court

on May

asked

judgment

entered

on February

to name

ground

that they

were

created

them in 1997 and

motion

Appellants

were

Gaggero

on May

which

an issue,
error

evidence

Praske

though

employed

violating

conceded
outside

request

It is barred

piercing

I/

No. B207567.
of the briefing,

accordingly.

then paid the judgment

The court

continuance

so they

that
debtors.

documents

had no notice

by substantial

neither

trusts

contradicts

estoppel

evidence

part of an alter-ego

owns

was Gaggero

record

to produce

rights.

the appellants

of the corporate

Appellants
subdivision

failure

due process

for a short

irrevocable

by judicial

452,

granted

For one, the finding

Appellants

veil,

liable

which

this might

be

compounded
could

this

produce

the

capacity

v. Knapp,

and decision

nor their

assets.

California

Petersen
ask

settlor.

finding

It also invaded

& Clarke,

the Court

to take

pursuant

It

law forbids.

and not on behalf

in that appeal

(d), and 453.

relationship

judgment's

and law of the case.

respectfully

- in part because,

for a debt of their

the original

his case in his individual

- The prior appeal

sections

The court

had

withheld.

also directly

entities.

on the

Praske,

can be no other judgment

supposed

is a necessary

held three

had litigated

plan.

They

reasons.

there

him for.

their

that Gaggero

reverse

Gaggero

Code

means

also was not supported

The decision

notice

asked

had supposedly

And it improperly

Dist.

for many

on Praske's

such ownership

respondents

debtors

Joseph

the judgment

into receivership.

litigation

appellants'

decision

estate

by

respondents

judgment

attorney,

and amended

placed

had never

fundamentally

The
even

was also based

by refusing

whose

Stephen

and affirmed

after the judgment,

as part of Gaggero's

29, 2012

plaintiff

respectively,

as additional

of Gaggero,

was wrong

his own

respondents

years

against

$2.2 million.

decision

controlled

The decision

1998

subsequently

The court's

than four

19, 2008,

the ten appellants

alter egos

in full at a cost of over

award in this case,

5 and May

6, 2010. !/ More

the trial court

respondents'

and costs

that
of any
the

et al., 2 "d
judicial

to Evidence

exclusivejurisdiction of theprobatecourt over mattersof internaltrust affairs. And it

ignoredthe waiver causedby respondents'unjustifiable55-monthdelayin bringing
their motion.
Theseerrorshavedrawn appellantsinto a decade-oldlegaldispute,led to them
beingplacedinto receivership,andcostthem millions of dollars. They respectfully
askthis court to reversetrial court's baselessdecision.

STATEMENT
This
additional
Civil

appeal
judgment

Procedure

addressed

That

904.1,

appealable

a final,

from an amended

debtors.

section

independently
after

is taken

appealable

OF APPEALABILITY

section

judgment

and which

(a)(1)

904.1,

which

which

judgment

subdivisions

under

in the judgment

amended

judgment

is appealable

subdivision

appellants
under

and (a)(2). z/ The

Code

alter-ego

(a)(2)

as an order

different

issues

from

that judgment

and/or

involves

affects

named

of

ruling

is

made

those

relates

to its

enforcement.

FACTUAL
- 1.

The

Gaggero,
Praske

in 1997

Estate

several

months

to develop

real estate investor

and implement

CT1 124-125;

3-/Citations

citations

to "JA",

transcript

HISTORY

and

Citations

to "CT"

transcript

in the present

"Trial

and "RT"

refer

appeal.

an estate

hired

on his behalf.

CT3 411.) 3-/ Setting

up the estate

herein

opinion

and developer,
plan

in 1997 and 1998. (CT1

Z/All statutory
otherwise
noted.

reporter's

PROCEDURAL

Plan.

a successful

604; Trial RT5 2720;

AND

127,

152-163;

are to the Code

RT" and "Opn."

from

(Trial

of Civil Procedure

prior

transcript

appeal,

Joseph
RT1 602-

plan took

192; CT3 411.)

refer to the joint

Gaggero's

to the clerk's

CT2

attorney

As part of

unless

appendix,
B207567.

and the reporter's

this process,Praskecreatedseverallimited liability companies("LLCs") andlimited

partnerships("LPs") in which Gaggeroinitially owned a membership
partnership

interest.

Appellants
Marina

Glencoe

created

by Praske

360-CT3

129-130;

511 OFW

L.P.,

then transferred

Praske

Aquasante

Court

L.P., Malibu

and Boardwalk

piece

Sunset

of Gaggero's

residence
Praske

Broadbeach,

L.L.C.

real property.

CT2

longer

owned

the properties

longer

owned

any interests

432:7-9,

432:9-10,
The LLCs
Coast

187-188,

were
(CT2

L.P.,
each

314-319,

40:4-6,

31:7-8,

42:15-16;

entities

Arenzano

370.)

He separately

162-

into various

Trust

and the

transferred

his

193-196.)

of these

trusts

By respondents'

in the LLCs

and LPs hired

31:8-11,

since they

were

own admission,

them

or LPs after

to the LLCs

formed.

Gaggero

and LPs,

he transferred

31:11-12,

CT3 428:15-17,

real estate

assets

Because
PCM

and guide

Gaggero's

and insurance
to manage

Praske's

business

Inc. ("PCM"),

269.)

management,

used PCM

of each

in those

126,

them

31:12-18,

no

and no

to the trusts.

31:18-20,

32:4-5,

430:20-21,432:3-5,432:5-7,

432:11-12.)

real estate

As of 2001,

(CT2

and LPs. (CT1

appellants

after he transferred

29:21-22,

Management,

195-196,

Trust.

195; CT3 412.)

29:1-4,

36:2-6,

his ownership
including

the trustee

166-167;

to the LLCs

191-193,360-CT3

to the Giganin

has been

33:13-15,

transferred

(CT2

(CT1

28:2-7,

his properties

had established,

Foundation.

personal

vehicle

L.L.C.,

to ov_a a distinct

He subsequently

which

Pacific

190-191,212-213.)

370.)

163, 191.)

(CT1

CT2

Gingerbread

L.P., Blu House

Gaggero

trusts

(CT1

or limited

future

monthly

to manage

Praske's

engaged

expertise

Gaggero

purchases

(Trial

his own

financial

along

RT6 3003-3005
affairs.

their

assets

is in estate

as a consultant

or sales.

pay was $3,000,

benefits.

management

(CT2

(CT1

company,

appellant

and finances.
planning
to manage

(CT2

rather

than

its clients'

140; CT2 213-215,360.)

with the use of a company

CT3 375-376.)
252-257;

Gaggero

Trial RT4

also

1836-1839.)

2.

Respondents

In or around
Knapp,

Petersen

Andre
RT2

Serve

August

of 2000,

& Clarke,

They

knew

bring

case against

(CT1

2479.)

30:17-18;

Yet they

2175;

did not require

and might

3118-3119.)

PCM

drawn

funds

One of the cases

BC239810

("the

in Santa

2173;

CT2 281-288.)

seven-figure
Gaggero
could

Monica.

purchase
and Praske

have

borrowed

transactions.

he had borrowed

(Trial

was

RT2 619-620,
the defendant

price,

respondents

explaining

that,

despite

from

his estate

3014-

with checks

issued

prepared

and submitted

L.A.S.C.

or other

1247; Trial

real

RT4

not afford

declarations
wealth,

in arm's-length

respondents

resigned

(CT2:283-288.)

Amid

disputes

n/The record
5-/Gaggero
respondents

about

often
tried

successfully

the quality

refers
to

to respondents

explain

objected

of their

how

work,

collectively
these

to that testimony.
4

the

by both

Gaggero

sources

_/

No.

to purchase

could

personal

by

RT6 3139-3140.)

v. Yura,

that Gaggero

the judgment

Trial RT6

(Trial

claimed

RT4

to pay them in full

2757;

Trial RT3

his limited

TrialRT5
Trial

to persuade

an agreement

635-636;

After

the funds

Gaggero

was to

him in one of those

not afford

to enforce

tasks

RT2 657-658;

his estate.

Trial

him from

one of their

for their services

from

sought

against

303, 611-616;

2738-2740,

handled

which

TrialRT2

he could

paid respondents

Yura case"),

estate

because

respondents

indeed,

M. Harris, and

(JA2 521-534;

judgments

on his behalf

RT5 2501-2511,

Gaggero

against

matters.

from him (Trial

and they worked

(Trial

Stephen

who had represented

27-30;

a retainer

their claims

go bankrupt.

3016,

4:1-16,

- the law firm of

Ray Garcia,

of dollars;

the attorney

JA1 3:3-8,

to compromise

respondents

him in various

of thousands

Trial RT8 4567-4570),

creditors

hired

that he had two outstanding

hundreds

cases.

Attorneys.

Stephen

and represent

other cases totaling

a malpractice

Gaggero

and attorneys

Jardini -4/- to advise

610-615.)

as Gaggero's

as

as "KPC".

transactions

worked,

(Trial

RT6 3141-3144.)

but

Gaggero'sattorneysandwithdrew their representationin early2002,(Trial RT3 908909, 1278-1279,1288-1289;Trial RT8 4616;TrialRT10 5750.)

3.

The Malpraetlee

Gaggero
CT1

19.)

causes

brought

the underlying

His second

of action,

The damages

amended

including

he sought

respondents

and their

had been

required

RT10

Praske

(Trial

counsel,

testified

without

Praske

to do so. (Trial

did not testify

details

RT5 2773),

with one noteworthy

exception.

86, 89.)

The payments

had been

deposition.
evidence
(Trial

(Trial
about

claiming

RT6 3142.)

Gaggero's

RT6 3142-3143.)

(Trial

to opposing
eases.

(JA1

under

several
(JA 1 1-41 .)

to

counsel
4-5,

that he

11-24.)

10, 2007,

section

when

631.8.

(Trial

how he paid respondents'

funds

RT1.)

from the estate

Even

plan and that Praske

most of which

worth

after

fees,

and that

Gaggero

testified

that

was the only one who did

made

were

Gaggero

via checks
(Trial

relationship

sought

RT4

with PCM,

to this appeal

he had paid.

to answer

the trusts,

Gaggero

RT6 3141-3144.)

related

this objection,

(JA 1

by appellant

1837-1839.)
(Trial

respondents

were written

1869,

his responsibility.

sustained

from

fees and costs

which

that he had refused

The court

are not germane

of attorney

own funds.

why the payments

objected,

asked

The damages

$498,000

Respondents

of contract.

July 23 to September

to advance

issues,

approximately

tried to explain

alleged

did not call him to the stand.

many

on Gaggero's

fbrnaer

1934;

RT6 3139-3140.)

of the estate

included

but drawn

13, 2003,

(JA7

of the fees he had paid

for judgment

When

at the trial.

respondents

The trial involved

PCM

motion

147; JA2 366.)

that he asked

had agreed

from

that year.

and breach

and a fee award

a jury

respondents'

JA1

he did not know

negligence

inter ella, some

successor

granted

Praske

professional

case later

filed on August

to pay in one of respondents'

5737-5738;

Gaggero

malpractice

complaint,

lneluded,

The ease was tried

the trial court

Case.

questions

excluding

and the other

at his

all
entities.

Gaggeromadean offer of proof, describingthe relationshipbetweenhimself,

PCM, the trusts,andthe otherentitiesthathadbeencreatedaspart of his estateplan.
In particular,he tried to showthatPCM is a managementcompanywhich paysbills
on behalf of its clients- including him - using the clients' own money,andthat he
had borrowedthe feesfrom trustswhich he wasrequiredto reimburse.The trial court
stoodby its ruling. (Trial RT7 3626-3629,3632-3633.)
On January8,2008,the court issueda 32-pagestatementof decision.(CT1 6091.)

Among

that PCM

its findings

had paid

In the Court's

was that Gaggero

because

there

not recover

was no evidence

any of the fees or costs

they had been paid

with his money.

words:

"... Mr. Gaggero

anyone
There

did not personally

who represented

one or more

business

him.

director

including

has any obligation

filed a notice

was

of entry

of appeal

entered

(JA7

in attorneys

fees to

fees were paid by or through

... directly

to the attorneys.

represented

in a capacity

and there

any of these

As far as the evidence

entirely
gratuitously."

28, 2008.

28, 2008.

dime

entities,

to repay

on February

on February

on April

was

of any of these

which they paid to attorneys.

whatever
sums were expended
The judgment

PCM

that Mr. Gaggero

or employee

that Mr. Gaggero

pay a single

All the attorneys

entities,

was no evidence

officer,

notice

could

5, 2008.

(JA2 424-429.)

1876-1878.)

That

entities

any sums

goes, the entities

(CT1 86.)

(JA2

as

was no evidence
paid

421-423.)

Respondents

Gaggero

filed a timely

appeal

was

Case No.

B207567.
Respondents
attorney

fees.

(JA6

and filed a motion

motion

filed a memorandum
1552-1582.)

a fee award

Gaggero

to tax costs.

in its entirety

(JA6

and taxed

of $1,202,944.50,

of costs
opposed

1659-1680.)

only a small
a costs

award

judgment

totaling

$1,327,674.40.

(JA7

amended

judgment

was Case

No. B209522.

This court

consolidated

Gaggero's

portion

(JA2 430-432)
the fee motion
The trial court

appeals

Gaggero's

under

Case

for

(JA6

1586-1616)

granted

the fee

of the requested

of $124,702.90,

1884-1889.)

and a motion

costs,

resulting

and an amended
appeal

from that

No. B207567.

It issued

in

an unpublishedopinion on May 6, 2010,affirming both the

judgments
above.

in full. The opinion

(Opn.

21-23.)

The remittitur

On December
awarding

The

another

for the appeal,

4.

They

28, 2010,

respondents

Gaggero

Post-Trial

took Praske's

third-party

representative
Gaggero's
Gaggero.

was issued

the trial court

about

on August

amended

PCM

quoted

19, 2010.

the judgment

in attorney

with $320,591.78

a second

time,

in costs

against

fees and $522

in accrued

named

judgment-debtor
debtor

Praske

of any entities.
finances

the findings

and amended

interest.

(CT1

114-116.)

Discovery.

conducted

to appear

upheld

$192,723.90

along

Respondents

order

expressly

original

and about

discovery

exam

about

on June 5, 2009.

in his individual

him to testify

any funds

or assets

It did not call for any information

(CT2

capacity

It directed

finances.

357-CT3

377.)

and not as a

about his knowledge

he possessed

about

Gaggero's

which

of

were

any of the appellants.

owed

(CT2

to

357-

358.)
During
about

Praske's

appellants

instructed
outside

511 OFW,

the scope

third parties.

had transferred
them.

(CT2

courthouse
moved

362,366;
(CT2

to compel

further

followed
to those

objecting

and infringed
his lawyer's

entities

neither

asked

Sunset.

Praske's

to respondents'
upon

advice,

in the 1990s

the rights
testifying

lawyer

the court

was

was

investigation
of appellants

and

only that Gaggero

and had retained

the examination
asked

him for information

that the information

was irrelevant

Although

respondents

no interest

in

held in the

to resolve

this dispute

nor

responses.

also served

the trust

Gaggero

to appear,

CT3 368.)

359),

Respondents

329-354)

Praske

counsel

and Boardwalk

questions,

was privileged

properties

alia, to produce

those

of the order

finances,

respondents'

Blu House,

him not to answer

of Gaggero's
other

examination,

Gaggero

instruments

- who had testified

with written

for Giganin,
in 2007
7

discovery,

Arenzano,
that Praske

asking

him, inter

and Aquasante.

(CT2

was the one who had this

information(Trial RT4 1871-1872,2133;Trial RT5 2770-2774)- statedin response

that hedid not havethem.(CT2 333-334.)6-/Respondentsdid not moveto compel
further responses,andinsteadbroughttheir alter egomotionjust threeweeksafterthe
responseswereserved.(CT1 24; CT3 354.)
Respondentsdid not examinePraskeagain,eitherasan individual or asa
representativeof any of the appellants.They alsofailed to examineanyoneelseon
appellants'behalf. They did not subpoenaany recordsfrom appellants,nor did they
subpoenarecordsconcerningappellantsfrom any third parties.

5.

The Alter-Ego Motion.

On April 10,2012,respondentsfiled a motion undersection187to deem

appellantsGaggero'salteregosandto further amendthejudgmentby namingthem
additionaljudgmentdebtors.(CT1 24 - CT3 378.)z_
times

that Gaggero

29:21-22,
40:4-6

31:7-8,

31:8-11,

42:15-16.)

accurate

(CT1

does not own the appellants

It also admitted
38:2-8),

The exhibits
partnership

motion
25.)

31:12-18,

and provided

evidence

motion

assets.

31:18-20,

offer of proof

to back

Gaggero

a successful

motion

involved

only interrogatories,

By definition,

interrogatories

documents.

Even

documents

in response".

so, respondents
(CT1

not requests

about

(CTI

PCM

to produce

33:18-34:6.)

for production.

"did not produce

in original;

the

(CT1 33:21-

claimed

that Gaggero

trusts,

But that

not for production

emphasis

was

of either

call only for answers,

33:20,

29:1-4,

261:22-28.)

agreements

refused

thirteen

36:2-6,

of any of the three

had previously
to compel.

28:2-7,

33:13-15,

it up. (CT2

the trust instruments

claimed

conceded

(CT1

32:4-5,

of any of the four LPs, the operating

6/Respondents
despite

or their

that Gaggero's

did not include

agreements

documents

31:11-12,

Their

see

also

of
any
CT1

53:21-23.)
Z/This brief
The

trial court

per Galdjie
542.)

refers

to the trusts as alter egos solely

actually

named

Praske

the alter

v. Darwish

(2003)

113 Cal.App.4th

for the sake of clarity.

ego in his capacity

1331,

1343-1344.

as trustee,
(CT3

541-

the

LLC, or PCM's articlesof incorporation. They did not includeany otherinternal

recordsof any of the appellants,either. They did not identify the beneficiariesof the
trusts,the shareholdersof PCM,the membersor managersof the LLCs, or the general
or limited partnersof the LPs. They includedno corporateminutes,no contracts,no
bankstatements,andno financial recordsof any kind involving anyof the appellants.
Therewereno declarationsfrom witnesseswho hadworked for, donebusinesswith,
or interactedin anyway with anyof the appellants.Aside from the aforementioned
questionsin the Praskeexaminationthreeyearsearlier,the evidencedid not reveal
any attemptto get this information from anyonebut Gaggero.
The evidencerespondentsdid provide includedtwo transcriptexcerptsfrom the
2007 trial, containingjust 25 pagesfrom a total of over 2,100.(CT2 249-261,266277.) The January8, 2008 statementof decisionwasalsoan exhibit (CT1 30-80),as
werethe secondamendedjudgment(CT1 114-116)andexcerptsfrom this court's
May 6, 2010 opinion in Gaggero'sappeal.(CT1 93-111.) Appellants
other

notice

of what

Also among
exam

(CT2

the exhibits

357-CT3

production.
judgment

had happened

(CT2

377)

motion

Respondents

also provided

and the LCs.

Appellants

They

to compel

a portion

(CT2
opposed

of Praske's

responses

also included

further

2009

of the October
(CT2

of basic

third-party

to post-judgment

Gaggero's

responses.

two printouts

no

the trial.

and the transcript

respondents'

LLPs,

were

and Gaggero's

322-354.)

interrogatories

during

received

public

demands

responses
5,2011

debtor

to post-

hearing

291-306,

of

322-236.)

intbrmation

for

-8_

about

PCM,

309-311,314-319.)
the motion

(CT3

397-414),

as did Gaggero.

(CT3

379-396,

415-422.)
Respondents'

reply

-8/Their evidence
opposition,
motion

based

the reply,
on those

the

papers

conceded

did not include

the order,
responses.

seven

the

more

times

that Oaggero

interrogatories,

the supplemental

responses,

owned

the motion,
or any

the

further

neitherappellantsnor their assets.(CT3 428:15-17,430:20-21,432:3-5,432:5-7,

432:7-9,432:9-10,432:11-12.) The
the gaps

in their

documents

from other

supplemental

These

was after

responses

"quite

a showing"

litigation".
insisted

documents

during

held the documents'

absence

arguments.
and asked

too late and called

The

capacity
541-542.)

formal

May

as trustee

(CT3

29 order

filed

not labeled

sufficiency
adjudicated."
569.)

as such.

depends

The court's

order

(CT3

29, 2012.

of these

relationships",

all of the appellants.

them.

(CT3

493-495),

(RT 28; CT3

"a very

amounting

(RT 2:1-8.)

- had "controlled

540.)

(RT 7:8-8:26,
appellants
When

tactic.

states

to

It also
the

sought

the court

a protective

On that basis,
some

counsel

offered

deemed

the proposal

the
of

to produce
too

(RT 8:27-10:25.)

of appeal

- including

added

three

days

a third amended

is no prescribed
it shows

Procedure

was labeled

have

to turn over

and said it foreclosed

that appellants

was actually

had failed

10:4-5.)

appellants'

- "are hereby

"There

who

that he should

continuance,

a notice

Cal.

not Gaggero,

against

trusts

on whether

(7 Witkin,

above.

had provided

- not respondents

it a delaying

-9/The May 29 order

it was

on May

that respondents

claiming

for a short

of the three

-9I Appellants

were

24,)

and granted

discovery,

court

little,

30, 2012

that it was Praske,

to produce

the documents

on April

decreed

of

17:10.)

if he did not want

key factual

and served
(CT1

none

was Gaggero's
described

filed.

filled

new exhibits

requests

controlled

order

their

Six of the seven

document

that Gaggero

(RT

they provided

The seventh

on the nature

that Gaggero

The court
the trust

dated

the trial court

was "no doubt"

underlying

423-539.)

was heard

of evidence

evidence

435-436.)

had been

motion

amount

said there

(CT3

were

the motion

At the hearing,

substantial

(CT3

to post-judgment

Respondents'
540.)

showing.
cases.

response

468-495.)
which

original

additional

distinctly
(5th ed.,

"Order

Granting

Praske

in his

as judgment

debtors."

later. (CT3

543-545.)

judgment

form

even though

for a judgment.

that the issues

2008)
KPC's

Judgment,
Motion

(CT3

have

Its
been

29, p.
to Amend
(continued...)

10

6.

Appellants
Additional

On November

15, 2012,

all of the appellants

the amount

Pay the Entire

Costs - Under

after respondents

into receivership,

had grown

Judgment
Duress.

to $2,238,509.51.

findings

(MJN

are ordinarily

Electronics

Inc. v. Hurt (1989)

Northrtdge

Park

be deemed

substantial,

Teed (1952)

"Ibwnhome

112 Cal.App.2d

of solid

value;

requires

in a particular

evidence

evidence

it must

need

638,

actually

Assn.

for substantial

(2001)

"It must

not be affirmed

By then,

on review."

legal

(Bowman

v.

746,

751-752.)

significance."

v. Board

credible,

which

by a mere

the law

scintilla

of

of Pension

_-/(...eontinued)
Judgment

to Add Judgment

limited

partnership

and

debtors"

(CT3

capacity

as the trustee",

542.)

Because

judgment,

(MJN

Exh.

pending

1.)

court's

November

re payment
satisfaction
judgment

for

trusts,

debtor."

the terms

of the second
regardless

formally

amended

and deemed
appeal

the judgment
that

amended

on August

amended

541-

of its label.

that to be the third amended

from

"in his

(CT3

6, 2012,
judgment.

judgment

is now

as Case No. B243062,

5, 2012
the

appellant

as a judgment
judgment

respectfully

being

as judgment

amended

ask

order

of the judgment,
after

of the three

added

that the corporate,

added

modified

Appellants'

_/Appellants

It stated
hereby

a further

and costs,

in this court

541.)
"are

expressly

in itself

court next

interest

the trustee

"is hereby

the order

(CT3

appellants

541) and that

it was

The
adding

Debtors".
LLC

limited
subjected

the

approving

court

the receiver's

and respondents'
purpose

of

that

efforts

notice

ex parte

December

showing

to enforcement
II

to judicially

the

trial

application

3, 2012
appellants

by respondents.

To

(Estate

in nature,

of the essentials

supported

(NEC

McClellan

be reasonable

proof

"A decision

evidence.

89 Cal.App.4th

be of ponderable

644.)

(Ibid.)

in full.

2, 3.) I-Q/

772, 776-777;

be 'substantial'

case."

to place

OF REVIEW
reviewed

"must

and

the trial court

paid the judgment

Exhs.

208 Cal.App.3d

Owners

Interest

had persuaded

four of them

STANDARDS
Alter-ego

- Including

notice
paid

of
the

of
and

Commissioners

(1984)

the evidence,

an appellate

only the evidence

155 Cal.App.3d
court

favorable

937, 944.)

must review

to one party.

When

the entire

(People

assessing

record

the sufficiency

and cannot

v. Johnson

(1980)

of

consider

26 Cal.3d

557,

577.)
Where
court

"must

presume

Department

"The

ultimate

citing

Appeal

People

will uphold

on pure

(1994)

8 Cal.4th

interpretation
432.)

Findings

legal issues
(1989)

Plaza

within

a court's

reviewed

of law are reviewed

ex tel. Lockyer
questions
(Crocker

therefor.

Foods

Bank

of
and...

Reasonable
evidence

of

with no deference
v. Antonioli

of statutory

Co. (2000)

of law and fact are reviewed

National

and reason

(Ghirardo

to questions

v. Shamrock

in

it." (Ibid.)
de novo,

reasons

in
have

The Court

to uncontradicted

not doubt

applies

emphasis

of fact could

of logic

at p. 1633.)

are contrary

or the stated

trier

at pp. 577-578.)

are the "product

would

1622-1633,

v:

24 Cal.4th
de novo

v. City & County

415,

where

of San Francisco

881,888.)

The existence
Pacific

which

1627,

(Kuhn

(ld. at 1633, emphases

26 Cal.3d

This standard

predominate.

record."

the appellate

inferences."

a reasonable

22 Cal.App.4th

people

ruling

as to mixed

49 Cal.3d

(2007)

supra,

those

791,799.)

(People

supra,

questions

to the trial court's

is whether

only if they

(Kuhn,

all reasonable

on the whole

inferences

that reasonable

Rulings
either

based

from the evidence,

22 Cal.App.4th

determination

"do not include

such a nature

(1994)

v. Johnson,

rest on the evidence."

inferences

may be drawn

of the judgment

Services

for the respondent

original,

Box

inferences

in favor

of General

original,)
found

conflicting

and scope

Shopping
inherent

Center

de novo.

(Ann M. v.

(1993)

Whether

a given

authority

151 Cal.App.4th
for abuse

of a legal duty are reviewed

454,

of discretion.

6 Cal.4th

666,

is also reviewed
460.)
(People

674.)

de novo.

But the exercise

v. Powell

1283.)
//
12

(2011)

(Carpenter

of inherent

act is

v. Jack
authority

194 Cal.App.4th

in the
is

1268,

Whenthe interpretationof a written documentis at issueandneitherside

presentedextrinsicevidenceat trial to aid in its interpretation,"the appellatecourt is
not bound
Practice

by the trial court's

Guide:

emphasis

CivilAppeals

in original.)

thus subject
Cal.2d

ruling[.]"

(Eisenberg,

and Writs" (Rutter

The meaning

to interpretation

Horvitz,
2013)

("Eisenberg,

of such a document

de novo.

(Parsons

and Wiener,

et al.")

is a question

v. Bristol

California
8:66,

of law and is

Development

Co. (1965)

62

861,865-866.)
Orders

(Vallbona
based

imposing

v. Springer

on factual

Superior

Court

discovery
(1996)

findings,
(1987)

sanctions

are reviewed

43 Cal.App.4th

the findings

1525,

are reviewed

195 Cal.App.3d

for abuse

1545.)

Where

of discretion.
those

for substantial

sanctions

evidence.

are

(Sauer

213,227-228.)

ARGUMENT
I.

THE

FINDING

LITIGATION
DEBT.
Much
egos.

distinct

the underlying
Even
ego's

of this brief

But this court

another,

name

litigation.
Gaggero

THAT
MEANS

litigation
actual

not even

to a judgment.

The court

The trial court

had controlled

made

due not only to the absence

of a finding
requires

that they were

finding.

FOR

are Gaggero's

the trial court

judgment:

Instead,

alter

made

against

in control,

is fatal to the amended

a full reversal.

13

that

(CT3

540.)

to add the alter

it expressly

The judgment

HIS

it found

but by Gaggero.

is not enough

that they were

That ruling

OWN

also find that the alter ego controlled

himself.

of a finding
not.

the amended

ego relationship

no such

the litigation

because

not by appellants

must

HIS

BE LIABLE

that appellants

that issue

undermines

was controlled
of an alter

CANNOT

the finding

address

that fatally

proof

CONTROLLED

APPELLANTS

will address

need

finding

GAGGERO

found

the

that

appellants

fails

but to the presence

judgment

and

v.

A.

Entities

Which

Judgment
The California
not control

person

whom

Court

liable

constitutional

party

ability

liability

litigation,

have

concerns."

under

having

threshold

alter

ego issues."

Practice

Guide:

Enforcing

litigation.

Absent

section

in a judicial

proceeding

Due process

alter

ego corporation

that any
the

De Mexicali,

who

which

to litigate
would

S. A. v.

that anyone

the allegations

them

who did

guarantee

shall have

requires

to dispute
allowing

debtor

guarantees

(Motores

"without

187 to amend

defendant

These

a judgment

without

is

led to

any questions

patently

violate

requirements

this

and Debts
alter

the alter ego

had controlled

in order

in addition

(Rutter

thereby

both (1) that the new

to satisfy

24 Cal.App.4th

in original;

lies only if the nonparty

such control,

(1994)
"are

emphasis

Judgments

requires

to litigate,

Ins. Exchange

(Ibid.,

trial,

to add a defendant,

and (2) that the new party

had the opportunity

v. Farmers

in original.)

amendment

as

(Ibid.)

emphases

["The

provision

his defenses."

to the allegedly

(Triplett

Be Added

Amendment's

constitutional

an opportunity

ego of the old party

thereby

Cannot

a judgment

the Fourteenth

172, 176.)

debtors

on the new

be the alter

"[t]hat

51 Cal.2d

safeguard."

"The

violates

is asserted

To add new
relation

the Litigation

has held that adding

and to present

for a judgment

their

imposing

a claim

(1958)

that judgment.
beyond

litigation

to be heard

Superior

Control

Court

As it explained,

against

opportunity

held

Supreme

the underlying

of due process.

Did Not

Debtors.

the

due process

1415,

1421,

to, not in lieu of the

see also Ahart,

2012)

ego controlled

California

("Ahart")

6:1568

the underlying

is a true nonparty",

emphasis

in

original].)
Even
individual
litigation
personal
Cal.App.3d

a genuine

alter

to be charged,
and occasion
liability

ego may become

personally
to conduct

that was involved.'

at pp. 778-779,

quoting

or through

a new judgment
a representative,

it with a diligence
" (NEC
Rest.2d,

14

debtor"

'only

had control

corresponding

if the
of the

to the risk of

Electronics

Inc.

v. Hurt,

Judgments,

59, p. 102.)

supra,

208

The alter

ego

canthus be liable if it controlledthe litigant, but not if the litigant controlledthe alter
ego. Liability canonly betransferredup the chainof command,not down.

B.

The Trial

Court

Expressly

Found

that Appellants

DidNot

Control

the Litigation.
The trial court did not find that any of the appellants
amount

of control

Gaggero

over the litigation.

controlled

the litigation

alter ego of Mr. Gaggero,

times

["I seem

these - directs
controlled

the underlying

22:18-19

["Mr.

Praske

Gaggero

controls

necessary

these

entities."])

finding

fatally

undermines

["there

"are the

And it said at leastfive

the lawsuit

and/or the appellants.

controls

is no doubt that Mr. Gaggero

["Gaggero

and purposes

of what

his own litigation

to qualify

that appellants

controlled
a rubber

the litigation"],

stamp"],

27:21

["Mr.

_/

the opposite

controlled

control

18:26

is for all intents

a slight

here that, in fact, Mr. Gaggero

17:10-11

litigation"],

This is precisely
that Gaggero

at will"],

540 [holding

controlled

even

found that

this litigation."])

quite a showing

monies

expressly

(CT3

that Gaggero

to have

these

himself.

who controlled

at the May 29 hearing

(RT 2:6-8

It instead

exerted

respondents

means

as an additional
its contradictory

had to prove.

The finding

that no one else was exerting

judgment
alter-ego

debtor, w/ The court's

the
own

ruling.

//
//

_/Similarly,
had
entity

litigated

that could
_/Ofcourse,

this

finding

Gaggero

in its statement

the case

"entirely

recover

for the services

appellants

underscores

of decision,

in a personal

the

the court
capacity"

of in-house

counsel.

do not agree that Gaggero

court's

belief

or his litigation.
15

that

found

that Gaggero

and not as part

(JA2 413-414.)

controlled

appellants

of an

them.

did not

But

control

C.

The Evidence
Controlled

Even

had not found

could

supported

not have

claim

any of the appellants

They

instead

37:21-22,

that Appellants

had controlled

38:1-4;

controlled

finding.

his own litigation,

Respondents

bit of control

the appellants.

the opposite

lnt 'l (1999)

the case.

28:10-11,

Respondents

of what

69 Cal.App.4th

over

(CT1

CT3 424:10-11,428:25-26.)

did not

was required.

1012,

bore

(Wollersheim

1017; Ahart,

supra,

_/
requisite

control

enough,

for instance,

exerting

actual

fired

that Gaggero

the opposite

and they proved

ofScientology

The

581.)

a Finding

ever had even the slightest

that Gaggero

&proof,

v. Church
6:1572.)

argued

36:23,

the burden

not Support

if the trial court

the evidence

29:18-19,

Could

the Litigation.

entails

of the litigation.

It is also not enough

Design,

and who appeared

(Minton

(9th Cir. 2004)

litigation.

of course,

appealed

from

_/A handful

of older

decisions

simply

168; Dow Jones

pre-date

(See, e.g., Schoenberg

Co. v.Avenel(1984)

substantial

e.g.,

Triplett

Inc.

v.

Hurt,

supra,

preponderance
6:1572a,

supra,
208

citing

"would

stand

applies

generally

Wollersheim,

in stark contrast

at

supra,

Floor

16

Litigation

that Gaggero

inferred

such

(1967)

Requires

it is

control

from

251 Cal.App.2d

778-779.)

Ahart

of proof"

the
154,

But they

requirement.

at p. 1421; NEC
p.

& Home

controlled

144, 148-149.)

is a distinct

standard

and

1149-1150.)

His own

69 Cal.App.4th

in the trial court."].)

576,

(Katzir's

24 Cal.App.4th

to well-settled

56 Cal.2d

conferences.

v. Benner

the correct

without

who hired

151 Cal.App.3d

Cal.App.3d

test "undoubtedly

(1961)

it nor filed a cross-appeal,

case law that says control

v. Farmers,

and cooperate,

debtor

the finding

neither

It is not

of a judgment

Controlled

do not challenge

in the case.

as a witness,

394 F3d 1143,

Respondents

alter ego finding.

involvement

v. Cavaney

at settlement

This Finding
that Gaggero
a Full Reversal.

Appellants,

appear

to be the sole owner

Inc. v. M-MLS.com

D.

than mere

to fund the litigation,

control

its lawyers

more

(See,

Electronics
calls

(Ahart,

at p. 1017 [contrary

law that the preponderance

the

supra,
rule
test

the

thereforefinal andbinding on respondentsin anyfurther proceedingsin the trial court.

It is too late for respondentsto challengethe finding. "[A] respondentwho has
not appealedfrom thejudgment maynot urgeerror on appeal."(California State
Employees
Even

'Assn.

if respoI_dents

repeatedly
way

argued

around.

error,

v. State

had challenged
below

So even

it would

Personnel

Bd. (1986)
the finding

it was Gaggero

if respondents

be an error they

178 Cal.App.3d
their challenge

who controlled

do an about-face

invited.

(Norgart

372, 382, fla. 7.)

would

appellants
and claim

v. Upjohn

fail, since

they

and not the other

the finding

Co. (1999)

was an

21 Cal.4th

383,

403.)
This
litigation.
really
there

finding
They

conclusively

thus cannot

are Gaggero's
is no reason

alter

as a matter

facts _/, we may

direct

(1997)

be additional

egos.

to remand

from the record

56 Cal.App.4th

establishes

that appellants
judgment

Because

respondents

the case for further

of law there

the trial court

1453,

debtors

1459, fn. 7.)

even

cannot

proceedings.

is only one proper

to enter

did not control

Appellants

if they somehow

overcome

this finding,

"[W]here
judgment

that judgment."

the

it appears

on undisputed

(Conley

respectfully

v. Matthes

ask this court

just that.
//
//

_/Here,
own

litigation.

evidence

might

of course,
It defeats

the undisputed

fact is that Gaggero

respondents'

claim

show.
17

no matter

controlled
what

their

his
other

to do

II.

THE

ALTER-EGO

DECISION

UNSUPPORTED

FINDINGS

RESTS
THAT

ENTIRELY

ON THE

APPELLANTS

HAD

COURT'S

COMMITTED

MISCONDUCT.
The trial court
had refused

to produce

discovery.
hearing.

(CT3

were

using

But there

much

540.)

The court

their

never
received

called

Praske

of discovery
"[T]his
hoops

and then coming

over."

I do know

based

where

these

the

(RT 26:26-

for any these

documents,

asked

Respondents

been

asked

the documents,

did not even

The trial court

was simply

claim

involved

had

in the case when

accused

that

wrong.

for the trust documents,

the court

issues

unfairness

the judgment

have

been

to making

and saying

in at the last minute

on evidence

also faulted

them

percolating

KPC jump

no, no you can't

making

not before

the identities

26:15-18.)

But Praske
witness

Praske

that Mr. Praske

trial about

again,

during

they

of a long

arguments

the court

for a long time,

through

have

all these

X, Y and Z,

not set forth

and saying

Judge

in the

give us a do

(RT 27:7-14.)

The court

any other

times

and a shield".

(RT 11:22-12:7),

is a fundamental

to collect

pleadings

several

during

abuse:

is a situation

and there

beneficiaries

"as both a sword

and had only become

motion

Praske

to produce

from him.

as witnesses,

the trusts'

because

that, by refusing

them.

had never

arguments

accusation

had ever been

to provide

appellants

the alter-ego

the same

It insisted

such documents

though

been

history

made

appellants'

or identify

confidentiality

less that he had refused

Even

Here

the trust instruments

was no evidence

they had sought

fact,

that it rejected

(RT 8, 10, 11, 12, 26.)

appellants
27.)

explained

was

the record

of these

was extraordinarily
beneficiaries

did not testify

ever asked

for supposedly

evasive

vague

when

supposed

at the trial

to identify

does not say what

being

(Trial

//
//

18

he was

beneficiaries

insisted

questioned

[sic]."

RT 1), and neither

the beneficiaries

the court

at trial: "And

at

(RT

Gaggero

of any of the trusts.

it says.

in

nor

A.

refusal

Praske Did Not "Refuse"

Did Not Ask Him To.

to Produce

The trial court devoted

almost

to produce

and to the role

documents

The Court

notes

Mr. Gaggero,

documents

on the grounds

in there

half of its minute

that Mr. Praske,

represented

now being

Documents,

represented

played

supposed

in its decision:

by the same

refused

counsel

to produce

that they are confidential.

no evidentiary

Respondents

order to Praske's

this refusal

has apparently

Since

who

the trust

That refusal

[sic] for any of the factual

has resulted

assertions

concerning
the trust which counsel has made today.
In particular,
to the extent
counsel suggests there are beneficiaries
and contingent beneficiaries
who are
entitled

to notice,

Gaggero's

counsel,

This statement

been

them.
likewise
54:2,

in written

(CT1

claimed

28:14-19,

third-party

321-354;
either

the other

for them

counsel

has been

withheld"];

the hearing.
side from access

to give notice"];
11:15-17

denied

12:15-16

_/Respondents

10:19-20
["I have

that information";

["How

would

the documents

I know

who had failed

Their

supporting

from
to produce
evidence

discovery

responses.

(CT1

46:1-4,

CT3 435:21-24,

467-495.)

They

did not serve

of Praske's
debtor

or on appellants'
role

et al., L.A.S.C.

some

by different

was some

(CT2

of Praske's

No. BC239810
lawyers

53:1-4,

53:16document

behalf.

in discovery

examination.

also offered

cross-examined

Gaggero

CT3 429:13-18.)

individually

judgment

v. Yura,

prccluded

to be produced..."];

and that it was

only Gaggero's

on Praske,

he was

refused

540.)

the court during

only that they had sought

33:13-34:6;

concerned

Gaggero

been

by Mr.

everything?"])

The only evidence

8, 2009

have

represented

(CT3

from

is necessary

as defense

discovery,

CT2 290-306,

requests

comments

that has been previously

But respondents
Gaggero

similar

that you claim

you providing

while

this impossible.

or Mr. Gaggero

that information

"... information

of Mr. Praske,

made

that has previously

denied

without

["you

information

["...evidence

have

echoed

(See, e.g., RT 8:4-6

to the very

the actions

excerpts

359-CT3

2005

representing

377.) _/ He had been

trial

- a different

of his June

testimony
case

different

in

in which
clients
(continued...)

19

orderedto appearin his individual capacity.(CT2 357.) The orderdid not call for him
to producedocuments,andit soughthis testimonyonly aboutGaggeroandnot about
appellants.(CT2 357-358.) Respondentsstartedto askhim questionsaboutthe
internaloperationsof appellants511OFW, Blu House,andBoardwalkSunset,but he
declinedto answeron attorney-clientprivilege andothergroundson adviceof
counsel.(CT2 360-362,366; CT3 368.) Respondentsotherwiselimited their
questionsto Gaggero'srelationshipwith the appellanttrusts,LLCs andLPs,revealing
that Gaggerohadno financial or participatoryinteresteither with them or in the
propertiesthey owned.(CT2 362-CT3375.) Praskealsotestified thatPCM furnished
Gaggerowith a truck in his role asconsultantandpaid the insurancepremiums.(CT3
375-376.)
During the 34 monthsafterthey took Praske'sexaminationandbeforethey
broughttheir alter-egomotion, respondentsdid nothingto seekany additional
documentsor informationfrom Praskeor the appellants.
Praske'spurportedmisdeedswerebut a figment of the court's imagination.
"Judicial imaginationis, however,no substitutefor evidence."(Peoplev.
(1973)

32 Cal.App,3d

Praske

ever

entirely

refused

from

reversed

409,

418,

to turn over

this error

Diss. Opn.

of Kaus,

the disputed

by the trial court.

J..)

There

documents.

The amended

is no evidence

The alter-ego
judgment

Kluga

must

finding

flows

therefore

be

in its entirety.

//
l/

2/(...continued)
about

different

predated
It pre-dated

matters.

the original

(CT1

judgment

the alter-ego

motion

182-CT2

218.)

Praske's

in this case by more than three

by almost
2O

seven

years.

Yura

that

testimony

and a half years.

1.

Because

Appellants

Accused

of Refusing

Ruling Violated
Per Se.
Appellants
withheld
court

had no notice

documents.

asked

why it should

supposedly

refused

participated
motion

(RT

uncontradicted

Failure

Corp.

730.)

parties
The

rest on the finding

Imposing

Unlike

reversal."

553.)

A ruling

of Los Angeles

even

an attempt

(In re Jasmine

in the presentation
notice

States

Supreme

had

the

had

- who had not

the alter-ego

contained
But the court

focused

that may be decided

(Lovato

v. Morgan

to produce

to offer

when

Praske

to oppose

Fe lnternat.

without

notice

it

to the

105 Cal.App.2d

726,

are thus void to the extent

they

evidence.
to give notice

G. (2005)

is "a mistake

127 Cal.App.4th

of evidence,

is a structural

(1951)

against

v. Santa

that is entered

had refused

which

error which

1109,

1115.)

may be deemed
"demand[s]

of

harmless,

automatic

(Ibid.)
Court

of the trial mechanism..,

v. Fulminante

Although

that holding

at p. 1115;

of issues

that Praske

(Arizona

Fulminante

notice

right to due process.

without

that Praske

counsel

papers

29

(RT 6-7.)

party

549,

after

irrevocable.

judgment

error

The United
constitution

were

and amended

a penalty

failure

specifically

findings

dimension."

a routine

a complete

misconduct.

(City

hired

trusts

a claim

Appellants'

Be

and is Reversible

at the hearing,

that respondents'

that all three

is void.

to rebut

Would
the May

Rights

are irrevocable

(RT 6-8.)

- explained

Amendment

alter-ego

constitutional

evidence.

151 Cal.App.3d

Process

need

that the trusts

to give an affected

(1984)

Due

that They

Documents,

of the accusation

trial and had been

supposed

its Fourteenth

affected

believe

evidence

only on Praske's

Their

only learned

11-12)

no Notice

to Produce

that they would

to produce

in the 2007

in 2012

violates

They

Had

outside

(1991)
was made

the criminal

see also Martin

has explained

defy

analysis

that "structural
by 'harmless-error'

499 U.S. 279, 309 [111 S.Ct.

in a criminal
context[.]"

v. County

case,

21

1246,

"California

(In re Jasmine

of Los Angeles

defects

(1996)

G., supra,

standards."

113 L.Ed.2d

courts

in the

have

302].)

applied

127 Cal.App.4th

51 Cal.App.4th

688,698.)

As this court recentlyexplained,eventhoughArticle VI, section13 of the California

Constitutiongenerallyallows reversalonly on a showingof prejudice,"someerrorsin
civil casesremainreversibleper se,primarily when the error callsinto questionthe
very fairnessof the trial or hearingitself." (Biscaro v.

Stern

(2010)

181 Cal.App.4th

702, 709.)
When

a trial court

specifically

demonstrate

regardless

of the strength

(2006)
error

181 Cal.App.4th

twice

order

not have
though

supplied

to a reversal

evidence

et al., supra,

absent

is not required

as a matter

or arguments.

the error prevents

happened

that appellants
(CT3

2.
Although

to

of law,

(ln re Enrique

8:308.)

G.

"[S]tructural

a reviewing

the error."

court

(Biscaro

either

2023.030,

which

refused

discovery

process".

authority

involve

While

that llst is not exhaustive,

witness

by offering

That

discovery

contains

propounding

discovery

it shows

- for failing

given

from

v. Stern,

supra,

22

(RT

- stated

10:7-14)

no notice,

to produce

counsel

had happened.
the trust

(RT 8-11 .)

holding

Discovery

amounted

sanction
sanctions

was

to an evidentiary

from

section

that is a misuse

a list of conduct
or refusing

that qualifies,

to properly

may not sanction

evidence

Sanction.

improper.

comes

in conduct

that courts

to provide

evidence

of what

to an Improper

the trial court's

2023.010

which

alone a nonparty

Amounted

to impose

been

or an explanation

the problem

abuses.

withheld

at the hearing

Having

them only for "engaging

Section

improperly

times

to give him a chance.

for discovery

allows

and three

the evidence

The Ruling

sanction

had wrongfully

role in its decision.

not so labeled,

The court's

540)

tried to solve

the court

and/or issue

have

an outsized

counsel

instruments,

of his opponent's

the "appellant

at p. 709.)

in the minute

could
And

might

belief

played

and is entitled

per se because

The court's

clearly

error,

676, 685; Eisenberg,

calls for reversal

what

a structural

prejudice"

140 Cal.App.4th

ascertaining

commits

of the
all of

answer

a party

that had not been

it.

- let
sought

from him.
"The powerto imposediscoverysanctionsis a broaddiscretionsubjectto
reversalonly for arbitrary,capricious,or whimsicalaction." (Vallbona v.
(1996)

43 Cal.App.4th

are absolutely
comply

prerequisite

instruments.

motion

seek
have

have

clear

when

be wilful[.]"

"Only

there

Neither

sought

proved

fashion"

protection

had actually
it easily.

(RT

something
from?

two facts

must

be a failure

of these

prerequisites

They

to produce

offered

Praske

The notice
him individually,

of Praske's

to

a proper document

to any of the appellants.

they have

the

fbr a protective
Why

would

9 What
brought

the trust documents,

in His Individual

would

their

it.'?
respondents

Capacity

and Not

as

of Any of the Appellants.

judgment

not on behalf of any trusts

had refused

happened.

to produce

no such proof.

Testified

third-party

applied

no sense.

that never
should

was supposed

have

10) makes

When

refused

Praske

"could

a Representative

attributable

(1)

(Ibid.)

that appellants

from

a.

if he really

has limits.

of the sanction:

the court believed

in a timely

protection

If Praske
could

must

Its comment

to that effect

appellants

But this discretion

here.

It is not even

order

1545.)

to imposition

... and (2) the failure

was satisfied

trust

1525,

Springer

debtor examination

or business
request,

The trial court,

entities.

that refusal

was issued

(CT2
would

357.)

to

So even

not have

been

however,

held

it against

all of

Sanctions

May

Not Be Imposed

them.

b.

Evidentlary

and Issue

on Nonparties.
At least until the amended

judgment

parties

to the case were

and respondents.

appear

expressly

Gaggero

acknowledges

was

entered

that he was to testify

23

on May 29, 2012,

The 2009
as a third

order

the only

for Praske

person

rather

to
than as a

judgment

debtor.

and even

(CT2

357.)

if he had done

appellants

were

available

against

20 Cal.4th

So even

so as appellants'

nonparties.

476-477;

sanctions

witness.

There

A court
party

has willfully

documents

attaches

1403,

inadequately!"
Trial (Rutter

order

to answer

359) precisely
Instead,

they

ever withheld
long since

California

their

had asked

questions,

Moved

(1999)

to

only if the sanctioned

Court

the requested
(2008)

159 Cal.App.4th

316,

Otherwise,

to respond

Practice

him to respond.
to make
waited

After

such prompt

almost

three

the documents.

lost the right

willfully

about

168
334.)

"[T]he

no penalty

or responding

Guide:

Civil Procedure

years

the trusts

could

all, the exam

relief

have

available.

- and even

There

Praske's

Before

if he had

immediately

sought

an

in the courthouse

(Ahart,

supra,

(CT2

6:1335.1.)

then they did not claim

filed their motion,

that he had
they had

responses.

Is No Evidence

Praske

Willfully

Violated

Any

Requirements.

to prerequisite

give false

and even

was held

By the time respondents

to challenge

The major exception

Praske

respondents

Discovery

who

Court

8:1136.)

d.

parties

are the only relief

him to provide

discovery.

failure

the

Praske.

sanctions

(2008)

to enforce
party's

& Brown,

if respondents

directing

party

documents
when

v. Superior

Inc. v. Superior

v. Goffney

for the responding

2013)

Even
refused

Saxena

from

compelling

(New Albertsons,

1428;

(Weil

order

happened

that Respondents

evidentiary

a prior

is on the propounding
either

Responses

Hosp.

withheld

8:617.5.)

Is No Evidence

impose

disobeyed

or information.

Cal.App.4th
burden

may generally

Comm.

et al., supra,

Compel

have

and contempt

(Temple

Eisenberg,

c.

had improperly

agent, it would

Monetary

a nonparty

464,

if he really

of a successful

information

in their

24

motion

discovery

to compel

responses.

is for

(Saxena,

supra,

159 Cal.App.4th

compelling

at p. 334 ["in the absence

an answer

or further

answer,

where

the answer

given

Motor

Co. (2006)

140 Cal.App.4th

Respondents

is willfully

offered

did not claim

certainly

offer

contrary

is that he declined

362,366;

CT3 368.)

party

to answer.

Such

to answer,

to pursue

an order

(Saxena,

or further

supra,

refusal

was false,

three

or the giving

e.

Gaggero
326,

declined

329-354.)

propounded
(CT1

34.)

further

But even

attempts

statement
sought

to Gaggero

about

they offered

The court's

so, and they

be said of Praske's

on the advice

answer,

They

of counsel.

(CT2

that be believed

he did

884,

"The

892-893.)

requires

answer

the propounding

- otherwise

sanction

the right

is not available."

their alter-ego

motion

was wrong
from

him and not appellants.

about appellants.

futile

without

him really

is not

- or anyone

says that Praske

been

futile

CT2 322-

post-judgment

discovery

&judgment."

the information,
have

been

did not even

else besides

and even
futile,

claim

if

that is a

they had

Gaggero

- and

to try.

was the one who refused

25

that

33-34,

amendment

would

Respondents

have

(CT1

"Further

to withhold

from appellants
that it would

Documents

in part by complaining

motion,

if Gaggero

to get the materials

to Produce

to Appellants.

be similarly

order

that could

or further

Failure

would

no evidence

requests.

at p. 334.)

to respondents'

the trust instruments

v. Ford

at all, much

document

and an evidence

to give them information

According

answers

108 Cal.App.4th

an answer

Gaggero's

justified

false

only the inference

Attributable
Respondents

Karlsson

less willfully

questions

of an evasive

is waived

159 Cal.App.4th

much

The worst

v. Yura (2003)

answer

gave

with nonexistent

supports

compelling

in original)];

that Praske

to answer

may only be imposed

1214-1215.)

evidence.

(Gaggero

failure

to an answer

1202,

of an order

sanction

(Emphasis

in connection

testimony

simple

false."

that any of his testimony

didn't

not have

the evidence

no evidence

less that he did so willfully

of a violation

to produce

the

documents.(CT3 540.) Evenif Gaggero'sactionssomehowcould

sanctioning

the trusts,

Had

that was not the basis

respondents

subpoenaed

moved

to quash

the subpoena

should

not have

to comply.

of these

respondents'

actions

that Gaggero

discovery.

capacity,

before

322-326,

329-354.)
Neither

That

respondents

a protective

order

had reason

those

if we assume
that failure

he could

and explained

have

why he

nor opportunity

to do either

is true;

B.

The

the Same

Lawyer

when

he supposedly

made

the same

says

refused

observation
THE

by counsel

to bring

discovery

appellants

COURT:

In connection

that Praske

times

... You

The court

the truth

could

only

and the appellants

of claim

are designed
failed

in order

to

to prevent.

Even

to turn them

over,

on its Unsupported
both

Praske

and

Finding

Gaggero

that

at the

Refusal.

to produce

for Mr. Gaggero.

(CT2

how any of the appellants

that Gaggero

and willfully

Hinged

Represented

three

into the case.

responses.

of proof

he answered

him.

Ruling

twice

when

on him in his individual

ever explained

burdens

of this Supposed
order

agent

served

by presuming

only be held against

Court's

The minute

tried

had the documents

Trial

Time

had been

nor respondents

that is what

or any of the appellants.

as appellants'

But a court may not presume

that Gaggero
could

discovery

to appellants

one and the same.

to Praske

was acting

for Gaggero's

responses

find that the claim

be imputed

had even

the trial court

be held accountable

attribute
were

or sought

from Praske,

things.

is no finding

could

ruling.

the trust instruments

As it is, he never

Nor can Gaggero's

There

of the court's

support

was represented

the trust documents.

during

Sort of looks

26

(CT3

540.)

The

attorney
court

the hearing:

see, Mr. Praske

with this motion,

by Gaggero's

has previously
like they

been

are joined

this is not a situation

represented

at the hip.

where

Mr. Praske,

during theseprecedingtimes,hashadindependentcounsel,
He hasusedMr. Gaggero'scounsel,which suggeststo me - certainly
leadsto an inferencethatthe positionstakenwereeoordlnatedpositions.(RT
10:7-14.)
The accusationhasno supportin the record. The supposedrefusalnever
happened,so thereis no way to saywho representedGaggeroor Praskeat the time.
Gaggerowasrepresentedat the hearingby David Chatfield, while appellantswere
representedby David Esquibias.(CT3 379-396,397-414,RT 1.)
So how did respondentssuggestto the court thatPraskeandGaggeroshared
counsel.'?By dismissivelycalling Chatfield andEsquibias"purportedly" separateand
by noting thattheir offices are in the samesuite.(CT3 433:13-16.)_/ But sharing
spacedoesnot supporta reasonableinferencethatlawyersarepart of a singlefirm.
(SeeChambers
showed

v. Kay (2002)

that Chatfield

different

phone

assistants

and Esquibias

numbers

signed

that they share

Conduct,

rule

C.

Amended
When
that party's
Const.,

a court

constitutional

art. I, 7.)

_/These
rebutted

Such

of a single

Judgment

is Reversible

to let a party

offer

right to a fair hearing.

violations

statements

are structural

appear

is literally

law firm.

(Cal.

of substantial

Them

in their

in the oppositions.
27

Different

There

ways

uniformly

firm names,

379, 397.)

no

Rules

respondents

Prof.

persuaded

evidence.

to Let Appellants

Penalizing

evidence

different

(CT3

396, 414.)

instead

Refusal

Before

refuses

have

This but one of many

Court's

Documents

The available

They

(CT3

any of the attributes

and innuendo

The Trial

not.

fax numbers.

of service.

1-100(B)(1)(a).)

with appearances

142, 150.)

were

and different

their proofs

evidence

court

29 Cal.4th

Produce

is Another

the Trust

Reason

Why

the

Per Se.
evidence
(U.S.
errors

reply

critical
Const.,

to its case,
14th Amend.;

and are irrebuttably

brief,

and

thus

were

it violates
Cal.
presumed

not

the

to beprejudicial. (In re
such

errors

is mandatory.

Once
produce

counsel

stating

"You

realized

fashion."

limiting

could

(WI" 10.)

documents,

though

have

been

appellants'

counsel

"...coming
papers,
then

applied

offered

for a short

asked

for

676, 685.)
to

continuance

rejected

to that effect

never

as

hls request,

in a timely

appellants

tbr the

such an order.

to produce
the court

appellants

the trust documents

mere

held that the papers

should

of obstruction.

The court

moments
already

faulted

for
in at this point
evidence

in time,

raising

arguments

that has previously

well you have

" '1 want

represented

order

Reversal

had the burden

The court

respondents

of the accusation,

asserting

saying,

appellants

(RT 8-10.)

had any reason to seek

and accused

140 Cal.App.4th

believed

for a protective
because

389, 394-395.)

to do so and asked

disclosure.

appellants

produced

G., supra,

he offered

Of course,

after they first learned

99 Cal.App.4th

that the court

their

they never

Even

C. (2002)

(In re Enrtque

the trust documents,

well as an order

have

Angela

got to delay

to do all the things

by Mr. Gaggero's

been

it Judge,

Smells

that were not in the

to be produced,

and

this that and the other thing.

that Mr. Praske

counsel.'

orally,
refused

has not done,

like more

when

delay."

he was

(RT 10:17-

25.)
Counsel
unmoved,
(RT

explained

again

demanding

10:26-11:18.)

entitled

to notice,

defense

counsel

anything

else

withheld?"

(2009)

counsel

the court
has been

denied

(RT

only a short

why the argument

explained

complained

are you offering

v. New

of Carlsson

to know

When

that there

"I have

been

that information"

continuance,

but the court

had not been

were
denied

beneficiaries

sooner.
who were

that information

and demanded

an way of information

made

to know

that has been

was

as
"What,

if

previously

11:19-21.)

"Denying
(Kelly

that he needed

a party

the right to testify

West Federal

(2008)

Savings

163 Cal.App.4th

170 Cal.App.4th

1103,

or to offer evidence

(1996)

is reversible

49 Cal.App.4th

659, 677; accord

Gordon

Motor

281,291;

1114-1116.)

Eisenberg,

28

v. Nissan

et al., agree

per se."
Marriage

Co., Ltd.

that an "erroneous

denialof a party's right

per se." (Eisenberg,
Courts
competent,

to testify

et al., supra,

must

(Elktns

"To this end a trial judge

court,

"(Ibid.)

are entitled

ESTOPPED

ADMITTED

AND

position

respondents

I have

Palisades

A declaration

In addition,

the

failed

to do

EGO

CLAIM

THAT
SEPARATE.

is really

Gaggero's,
they were

his

duped into doing so.

That gambit

succeeded

and then filed

of Mr. Gaggero's

Their
in the trial

of Mr. Gaggero's

and filed

readily

certain

committed
at least

the funds
$1,650,000,

29

estate

the separate
which

As

personal

estate

(CT2

finances
have

are ready,

necessary

to close

by payment

I am

285.)
his own and
&his

sufficient

entities

in

at 938

over which

after describing

entities
These

estate.

located

available."

for Gaggero,

went on to describe

is worth

personal

of the real property

of $1,100,000

I manage

in Yura said:

funds from Mr. Gaggero's

on the 938 property.

and have
which

money

about-face.

The portion

drafted

resources,

to commit

938 property
into escrow,

FINANCIALLY

they were

for purchase

in excess

the escrow

for his

evidence

AN ALTER

both in this case and when

to authorize

Road.

they

financial
"10.

able

ARE

over a portion

agreed

has well

to close

1357-1358.)

PROCEEDINGS

drafted for Praske

of $1,100,000
Beach

presented

not stand for it.

"I am trustee

his family's

TO MAKE

not claimed

a complete

should

A declaration

the amount

1337,

what the trial court

IN PRIOR

APPELLANTS

represents

but this court

trustee

That is precisely

they now insist that appellants'

motion

41 Cal.4th

all

to a reversal.

ARE

THEY

is reversible

properly

and relevant

took the opposite

trustee,

(2007)

any issue

material,

in Yura - and they have

alter-ego

Court

upon

all competent,

GAGGERO

lawyers

v. Superior

bearing

he has heard

RESPONDENTS

respondents

evidence

that is presented

to introduce.'

Although

to present

any issue

parties

BECAUSE

to the parties

not determine

until

IIl.

its ease

should

consideration

Appellants

establishing

8:311.)

and material

for determination."

here.

evidence

give "a full and t'air opportunity

relevant,

desire

or present

estate:
assets

willing
escrow

of $1,100,000

and
on the

12. Lastly, the trusteeandattorneyof my personalestate,JosephJ,

Praske,hasagreed to authorize the necessary funds ($1,100,000)
from my
personal

estate

$1,100,000

have

claimed

that either

haven't

accused

"personal

never

Praske

themselves

to these

respondents'

vouched

for them

in a court

who later

argued

that Gaggero

28:12-14,

29:1-2;

of doing

the same

insisting
recover
solely

papers

thing.
they

They

were

ownership

interest

there

own choice

may have

called

during

with that company."

on respondents'
from the estate

argument,

Of

and

of a scheme

believe

their

the estate

(CTI

own history

plan is

they now complain.

Gaggero's

trial in the present

words,

lacked

standing

that he was

case,
to

litigating

that Gaggero
at trial,
interest.

of years ....

him a director

documents

37:13-20.)

declarations

are part

of which

- in other

Yet they

of the phrase

they ignore

actually

certainly

insist that the lawyers

are separate

and he testified

He is nothing.

They

(CT1

these

respondents

He has no ownership
for a number

of

never

innocently.

and that he therefore

that that was not an accurate

is not an officer.

was separate

position

facts.

by appellants.

in the fraud

had advanced

got all the corporate

Based

even

to their

And though

separate

in his deposition,

relationship

court,

that they wrote

if respondents

argued

to PCM.

learned

these

fraud

and appellants

took the same

consultant
somebody

about

the Yura

do not mention

are complicit

the business

"testified

them

of a supposed

Even

that he and PCM

for himself.

misled

- and even

of law.

has well in excess

and they have

CT3 422:11-13,422:21-23,433:4-18),

fraudulent,

money

the statements,

of misleading

as evidence

My estate

287-288.)

disavowed

very declarations

estate"-

Respondents

(CT2

or Gaggero

course,

somehow

the 938 property.

at its disposal.)"

Respondents

now point

to purchase

at some

(Trial

3O

in time,
he was.

was that

but he later
Okay.

as a director.

by design,

disavowed

I have
[[] He
any

RT6 3629:8-19.)

years

that

point

He is not listed

the trial court

he had created

his testimony

of what

He has expressly,

[] He has had no

I believe

description

for PCM.

that he is merely

expressly

earlier.

(CT1

found
85-87.)

that Gaggero
It concluded

"the only plaintiff in this actionis Mr. Gaggeroin his personalcapacity. No

otherpersonor entity hasjoined this actionasa plaintiff', andthereis no
credibleevidencethatMr. Gaggerohasauthorityto representany otherperson
or entity (whetherby an assignmentor otherwise)in assertingthesedamage
claims." (CT1 85.)
RespondentsagaininsistedthatGaggerois separatefrom appellantsin this
very court in July of 2009,during his appealfrom the original judgment. As they
explainedon page35 of their brief:
"(g)

Gaggero lacks standing to recover expenditures by his

trusts.

In light of Gaggero's
bills

came

from

a trust,

As a trust beneficiary,

testimony

that the money

only the trust has standing

Gaggero

proceeding

estoppel

prevents

that is contrary

proceeding."

(Jackson

[citations

omitted].)

This variety

changing

its position

over

changes

have
"The

dual purposes

Judicial

estoppel

inconsistent

Appellants

previously
have

been

(CT3
argued

allowed

is intended

raised

process."

parties

to prevent

extraordinary

will otherwise

140 Cal.App.4th

1456,

392-394.)
that appellants

The court

are separate

to take the opposite

litigants

from

position.

31

unfair

playing

in a miscarriage

from

fast and loose

when

a party's

of justice."

(CT3

15:2-16:25.)

Gaggero,

of

strategies.

and quotation

in the trial court.

it. (RT

the integrity

to be invoked

1468, citations

rejected

from

such positional

are to maintain
opponents'

issue

171, 181
a party

when

earlier

(Ibid.)

reined[y]

the judicial-estoppel

to prevent

from

result

in the

in a legal

60 Cal.App.4th

proceedings

this doctrine

interest

in the same or some

"is invoked

on the judicial

It is an

taken

for damages.

and has no standing

a position

(1997)

of judicial

and to protect

behavior

v. Ligon (2006)
omit_ted.)

ofestoppel

in interest

asserting

previously

for applying

system

with the courts.

did Gaggero.

impact

from

of Los Angeles

the course

an adverse

the judicial

a party

to a position

v. County

to pay his legal

a claim

has "no legal title or ownership

trust assets."
[Citation].
He is not the real party
to sue on behalf of the trust. [Citations]"
"Judicial

used

to bring

respondents

(Levin
marks

408.)

So

But having
should

not

IV.

APPELLANTS
Sometimes

he owns

CANNOT

when

by mingling

the corporate

which

variations

The

allowed
under

If one person
intermingling
paying

their

against

one of the businesses

veil-piercing,
(1922)

common

allowed

"piercing

for the debts

(2 A.L.R.6th
the result

195.)

of a
There

are

below.

the distinctions

over the reasons

before

between

why

which

the obvious,

doctrine

and disregards

doctrine

if she controlled

some

the
are

is not permitted

appellants

explaining

will briefly

why none of

allowed

their separate

identities,

and with her own in order

says she can be liable
the litigation.

under

to avoid

for a judgment

This process

California

law. (Minifie

is ordinary
v. Rowley

481,487.)
creditor

ego of the first because

ownership.

can also be added

entity.

LLC (2011)

is called

responsible

they won a judgment

with each other's

then the alter-ego

The judgment
the alter

so, of course,

by blurring

two businesses

and it has long been

187 Cal.

v. LADT,

Corp.

Liability.

of the alter-ego

finances

debts,

it his alter ego and

Inc. v. Kaswa

Greenspan

entity

29 judgment.
owns

their

("PIP");

At the risk of stating

forms

the May

Press,

and glossing

As a result,

varieties.

Instant

of them justify

in the trial court

aren't.

of a business

will deem

a shareholder

but none

EGOS.

a court

as a separate

liability

ALTER

the separateness

Doing

of Alter-Ego

of alter-ego

the various

support

concept,

Varieties

and others

describe

1518

he has not treated

won

any of these

1513,

(Postal

It is a way to make

Respondents
types

with his own,

513 ("Greenspan").)

on this basic

A.

different

1510,

486,

veil".

corporation

disregards

liable for its debts.

162 Cal.App.4th

191 Cal.App.4th

them

an individual

its finances

hold him personally

(2008)

BE GAGGERO'S

can also ask the court

their

If the second
as judgment

in California.

finances

business

debtors.

(Las Palmas

Assoc.

to find that the second

are intermingled
or the owner

and because

controlled

This is the single-enterprise

v. Las Palmas
32

Ctr. Assoc.

business
they

the litigation,

is
share
they

rule and it, too, is

(1991)

235

Cal,App.3d1220,1249-1250("Las Palmas").)
But what
court

it the judgment

to hold the businesses

called

"outside

would

allow

reverse

in place

pp. 1521-1522.)
1513,

1518;

would

instead

be to execute

reverse

on the owner's

(PIP,

and if there

supra,

the
is

states
were

162 Cal.App.4th

is forbidden.

at p. 513.)

interest

process

for short. _/ Some

litigation

piercing

191 Cal.App.4th

That

wants

at

(ld. at pp. 1512-

The creditor's

in the businesses.

remedy

(PIP,

supra,

162

at p. 1522.)
instead

the businesses,

Even

principles,

so, it is what

happened

doctrine.

if the original

of the businesses
some

to the businesses.

the businesses
equivalent

E/It is called
pierce'

ease

individual,

involves
attempting

corporate

entity

(Fletcher

Cyclopedia

of corporate

remedy

and

deemed

debtor

is to allege

really

This

reason

say it should

to do it.

ever be

the

individual

33

from

- not because
over

the law give

because
veil

the original

the accusation,

"[t]he

41.70.

'reverse

through

within
one

but because

typical

claiming
from

then

they are somehow

her defense,

be considered

of Corporations

veil".)

transfers

or someone

corporate
will

Doesn't

If he can prove

control

piercing

insider,

to pierce

own them?

her finances

it does - but not via the alter-ego

3439.07.)

reverse

has intermingled

fraudulent

or had some

of the Law

does not own

egos anyway.

is no sensible

which

she doesn't

Of course

a corporate
the

her alter

There

to pay the judgment

"outside"

concededly

here.

(Civ. Code,

debtor

debtor

or theories

even though

can be forced

to the original

them

judgment

sort of remedy?

The creditor's

judgment

it does not exist.

cases,

But what

her creditor

wants

because

are no statutes,

with those

that the individual

but the creditor

has no name,

allowed.

piercing"

shareholders.

though,

and the creditor

debtors?

the owner's

their other

supra,

alone,

judgment

or "reverse

controlled

In California,

Suppose

debtor

to protect

the owner

as additional

veil piercing",

Greenspan,

Cal.App.4th

There

liable

it, if the businesses

safeguards

process

is against

and

"Reverse

so that

such
the

the same."
plereing

of

their own participationin the fraud. Of course,sucha claim mustbe supportedwith

evidenceof the transactionsandbroughtbeforeit becomestime-barred.

B.

Appellants
Theories.

Respondents

were

and the trial court

have

been

Gaggero,

did not explain

which

one it was using.

veil-piercing.

After

all, appellants

supra,
neither

common

ownership

(CT1

piercing
1513.)

over

respondents

29:25-26,

at length

if it were

or their assets.

12, 31:12-18,

31:18-20,

add appellants
29:24-26,
what

their

(CT1

32:4-5,

primary

it would
times
28:2-7,

33:13-15,

not

the single-enterprise
inter alia, it requires

judgment

debtors.

Just as appellants
not have

could

(Las

do not own Mr.

an owner,

supra,
have

be liable

there

is no

been

improper

36:2-6,

40:4-6,

42:16-17;
theory

actually

was.
34

here,

31:7-8,

42:15-16;

since
does not own
31:8-11,

31:11-

CT3 428:15-17

piercing

and that this was just a fallback

CT3 424:19-24,428:4-430:2.)

at pp. 1512-

that Gaggero

29:21-22,

reverse

_/Reverse

162 Cal.App.4th

in their papers
29:1-4,

through

428:4-431:24.)

that the court did not need reverse

to the judgment

40:23-28,

law. (PIP,

at least twenty

insisted

invoking

CT3 424:15-24,

allowed

the appellants

k/They

could

on,

do not own Mr.

here because,

that appellants

40:23-42:17;

by California

conceded

relying

him and the appellants.

argued

is forbidden

he does

they were

The mechanism

clearly

and additional

Since

any of these

do.

at pp. 1249-1250.)
else.

Under

mechanism

that they were

the original

does anyone

But even

that they

But that rule does not apply

between

Respondents

claimed
hinted

235 Cal.App.3d

Gaggero,

piercing.

never

respondents

36:11-13.)
ownership

Palmas,

Egos

about which

and respondents

common

Alter

vague

ordinary

(CTI

not Gaggero's

notably

At one point
rule,

Are

in order

position.

to

(CTI

They did not say

430:20-21,432:3-5,432:5-7,432:7-9,432:9-10,432:11-12.)_/ After all, if Gaggero

ownedthe appellants,respondentscould havejust seizedsomeof his ownership
intereststo satisfythejudgment.
The only theorythatremainsis fraudulenttransfer. But respondentsmadeno
suchclaim, andthe court madeno suchfindings. They did not bring a separateaction
againstappellants.And they concedethat a fraudulent-transferclaim would have
beentime-barred.(CT1 29:2-4,40:19-20,42:15.16.)
Appellantscould not be liable for Gaggero'sjudgment underanyot'these
theories,evenit"they actually hadcontrolledthe litigation.

1.

Outside Reverse
California.

The difference
ordinary

between

veil-piercing

reverse

law permits
to move

is that "[o]utside

corporate

creditors,

collection

procedures."

and allow

goals,

assets

judgment

(PIP,

supra,

alter

advance

debtor

those

law. Traditional

equitable

remedy

individual

purpose.

brief

liability,

circumvent

a statute,

The

reason

shareholders

normal

creditor

of the corporate
have

California

circumstances
it is

and

judgment

while

very different

due to limitations

piercing

proper

piercing,

the judgment

the shareholders

owners.

at p. 1513.)

and reverse

when

while

abused

concerns.

cannot

reach

on liability
veil is justified
the corporate

or accomplish

having
When
the

imposed

made

in Gaggero's

the same
appeal

from

concession
the original
35

in 2009

on pages

judgment.

by

as an
form

a wrongful

[Citations.]

_JRespondents
of their

under

to bypass

by addressing

shareholders

of their

innocent

162 Cal.App.4th

goals

businesses,

but not down.

can harm

creditors

is a corporation,

corporate

courts

of command

ego doctrine

of the individual

evade

allowing

is straightforward:

of their

for the debts

piercing

in

veil-piercing

for the debts

liable

chain

reverse

"Traditional
a judgment

liable

businesses

up the figurative

is Forbidden

and reverse

but not the latter,

forbidden

similar

owners

makes

the former

liability

ordinary

makes

veil-piercing

Veil-Piercing

11 and 35

to

"The sameabuseof the corporateform doesnot exist when the

judgmentdebtoris the shareholder.In that situation,the corporateform is not
beingusedto evadea shareholder'spersonalliability, becausethe shareholder
did not incurthe debtthroughthe corporateguiseandmisusethat guiseto
escapepersonalliability for the debt.The judgment creditor can enforce the
judgment
Upon

against

acquiring

the shares,

As we have

seen

evidence

already,

ownership,

PIP

would

Appellants
The court
piercing

still forbid

pointed

accepted

or that California

availability
merely

It does

depends

how

that California

true

works

form

Rather,

the issue addressed

transfer

of personal

assets

the judgment

to the corporation.

Corp.

v. Banks

Cir. 1998)
afford

judgment

accomplished
unacceptable
Nothing
that reverse

(10th

151 F.3d

by outside

Cir.1990)

creditors

in PIP suggests

piercing

is never

In other

896 F.2d

(CT1

(CT3

of

404-407.)

involve

reverse

piercing

42.)

in states

and that its

But the passage

that allow

Instead,

piercing

seeks

they

it. (ld. at p.

PIP rejects

piercing

words,

the idea

1557]

means
those

of a postjudgment
remedies."

36

piercing

fraudulent
Energy

transfer

of

and Metals
1.R.S. (10th

conveyance
Outside

seeks

already

reverse

motion,

piercing,

is an

(ld. at p. 1523.)

is fact-specific.

in California.

liability.

from collection

reverse

and [Floydv.

in that situation.

is not the

is the shareholder's
the assets

outside

in [Cascade

to address

from personal

to shield

and fraudulent

that its holding

available

a finding

CT3 424, 428-431.)

from the shareholder's

protection

to pursue

supported

bar reverse

reverse

conversion

by the expedient

no

and repeatedly

but to no avail.

the shareholder

But, as explained

1295],

shortcut

reverse

to the corporation

creditor

assets

the

to appellants.

in California.

to shield

of the shareholder.

rights

piercing:

issue that outside

of the corporate

to protect

is true

have

29, 40-42;

reverse-piercing

reverse

whatever

- and certainly

that this case didn't

the facts.

misuse

by a creditor

either

upon

law ever allows

"The

could

does not always

not say that the same

will have

no evidence

his liability

it. (CT1

that PIP

case

describes

shifting

law allows

argued

in a given

if the evidence

claim

in the corporation.

any of the appellants,

this out to the trial court,

respondents'

Respondents

offered

owned

But even

creditor

shares

(ld. at p. 1522.)

respondents

- that Gaggero

that he did not.

including

the judgment

had in the corporation."

conceded

1524.)

assets,

shareholder

substantial

cited

the shareholder's

Factual

It says quite
differences

clearly

between

this

caseand PIP

do not exempt

2.

Even

it from PIP's

if California

Respondents
Even if reverse
proper here because
the trial court
PCM,

piercing
the basic

showed

were

beneficiaries,

and other

not met.

partner of any of the limited

partnerships,

of either

of the limited

395, 411-413.)
Outside

law permitted

partners,

is an independent

reason

offered

to provide

rejected

his proposal

because

Praske

had supposedly

were

and what

were

interests

3.

adequately

they held.

(PIP, supra,

The Single-Enterprise

this information

unless

thus

Does

could

from

refused

not decide

it had some

162 Cal.App.4th

Rule

would

it during the hearing,

The court could

protected

piercing

why the evidence

counsel

interests

companies,

shareholders,

appellants'

stakeholders'

did not seek

(RT 6-12.)

that

Respondents

reverse

And when

during discovery.

of

it.

the appellants'

Respondents

liability

appellants.

over the records

before

or director

reverse

angrily

been

The only evidence

not support

court

piercing.

not have

officer,

and frequently.

stakeholders

Showing.

it would

is not a shareholder,

failure to identify

Piercing,

tile Necessary

of any of the trusts. (CT3

here even if California

Reverse

in California,
were

member

both freely

Respondents'

to Make

allowed

or limited

or managing

these points

be unavailable

Failed

that Mr. Gaggero

and that he is not a trustee

conceded

Law Allowed

requirements

that he is not a general

he is not a member

holding.

the

to hand
whether

the

idea who they

at pp. 1523-1524.)

not Support

the Amended

Judgment.
Respondents
piercing

under

hold that there

suggested

that appellants

the "single-enterprise"
was a single

supported

such

a holding.

findings.

The amended

rule.

enterprise.
And there

judgment

could
(CT1

There

36:11-13.)

are no factual

is no evidence

cannot

be affirmed

37

be held liable

which

without

reverse-

But the trial court

findings
could

on this basis.

have

which

did not

could

supported

have
such

"Generally,
However,

under

companies."
alter

alter

(Las Palmas,

ownership

if(I)

p 2-31,

While

ordinary

veil-piercing

and reverse

enterprise

citing

it laterally

The single-enterprise
Palmas

supra,

the debts
"common
ownership

of individuals.

is fatal

owner
does

of a single

liable

California

single-enterprise

cannot

enterprise

made

Perhaps
they

187 Does

Liability

Where

realizing

wanted,

there

business

(Las
apply

can never

to

be

The lack of common

why.

invoked

was the common

concession

Another

be outside

liability

not Allow

himself

Respondents'

162 Cal.App.4th

38

at pp. 1249-1251.)

companies."

else.

Gaggero

that he

is that making

reverse

veil-piercing

at pp. 1512-1513.)

The

to the entities.

Courts

it Is Otherwise

repeatedly

(Rutter

argument.

that none of the existing

respondents

Corporations

It thus cannot

no owners,

would

shift the owner's

Section

sister

added.)

is just one reason

supra,

one

to another.

up of the AJDs.

(PIP,

upon

the single-

by claiming

law forbids.

of the

to business,

and anyone

of their owner

in the

from owner

have

for the debts

of another

from

single-enterprise

be saved

common

of command

only "between

an individual

under

up the chain

one business

individuals

between

rule cannot

4.

result

Since

Guide:

235 Cal.App.3d

at p. 1249, emphasis

not own any of the appellants

businesses
which

from

to respondents'

The judgment

it down

rule applies

235 Cal.App.3d

ownership"

liability

moves

the rule, "the

an injustice

Practice

supra,

sister

and (ii) disregard

to prevent

California

Las Palmas,

piercing

rule moves

is necessary

moves

Under

or conduit

enterprise'),

relationship.

between

two or more corporations

('single

(Friedman,

2:52.8,

at p. 1249.)

is but an instrumentality

venture

2010)

to owner

between

of the corporations
creditors."

can be found

235 Cal.App.3d

one corporation

nature

corporation's

supra,

business

for the parent-subsidiary

rule, liability

may be applied

of a single

separate

is reserved

the single-enterprise

ego doctrine

pursuit

ego liability

to Impose

Alter

-Ego

Forbidden.

alter-ego
section

theories
187's

would
statement

support

the

that courts

may use"all the meansnecessary"to enforcethe court'sjurisdiction. (CT1 25:9-10,

29:12-26,34:13-20;CT3 429:7-10,429:23-430:2,431:19-20.) In additionto its
prominentrole in respondents'papers,section187is the only authoritycited in the
judgmentdraftedby their counsel.(CT3 541:21.)
Section187codifies the courts' "inherentpower to control the courseof
litigation[.]" (Keelerv.
power

is limited.

The

"[C]ourts
fashion

must

(People

tread

the litigation,

courts

since

lnc. v. Hurt,
Section

new

carefully

(2012)

so would

187 allows

courts

whom

5.
The trial court

far exceeded

when

violate

596, 600.)
those

exercising

additional

their

their

limits.
inherent

procedures

authority

of dubious

1499,

judgment

But that inherent

1507.)

constitutional

For example,

debtors

due process

to

section

who did not control

rights.

(NEC

debtors

within

Electronics

at pp. 778-779.)
only to add new judgment

It does not give them

debtors

46 Cal.2d

211 Cal.App.4th

208 Cal.App.3d

ego framework.

adding

judgment

to name

doing

supra,

(1956)

[and] may not sanction

v. Lujan

187 does not permit

Court

amended

new procedures

validity."

alter

Superior

authority

the law otherwise

Greenspan

Does

invoked

Greenspan,

said a trust can be liable for the debts

to go beyond

says cannot

Not Support
supra,

that framework

of its settlor.

(RT

by

be added.

the Amended
twice

the existing

Judgment.

at the hearing,
13:7-12,

insisting

25:16-21.)

that it

It was

wrong.
Greenspan
trustee,

its settlor,

judgment

targets
returned

from an order denying

and two other businesses

had confirmed

(Greenspan,
reversed,

was an appeal

supra,

an arbitration

191 Cal.App.4th

could

to the trial court

actually

by the settlor

award against

a business

at pp. 495-496.)

but it did not rule that the motion

of the motion

owned

should

be held

liable

for further proceedings.

39

a motion

Division
have

been

to add a trust, its

as new debtors
owned

by the trust.

One of this court

granted

as alter egos.

or that the

The case

(Id. at pp. 528-529.)

after a

instead

Greenspan
procedural
partly

reversed

issues

because

creditor's

that have

no bearing

it had incorrectly

evidence.

aspects

the trial court

partly

on the present

sustained

doctrine

it had ruled

on
and

to most of the judgment

The trial court

that had nothing

incorrectly

case (ld. at pp. 508-509)

objections

(ld. at pp. 522-526.)

of the alter-ego

because

had also erred

to do with trusts.

on several

(ld. at pp. 509-

517.)
Part of the opinion
businesses
That

owned

trusts

respondents

judgment

relied

- and even

liability

a trust that owns

them,

This case
judgment

in Greenspan

gathered

respondents

business

through

conducted

More

intermingled

Adding

of the business

_/Although
settlor

(In

the trust as a debtor

an irrevocable

re Barnes

and those

(Bankr.

held liable

trust
E.D.

and

Cal.

the judgment

is against

reasons.

with evidence

For one, the

of the alter egos'

(/d. at p. 506.)

Here,

no such evidence.

in Greenspan
was owned
of another
involved

its assets
275

was against

by a trust which
business

ordinary

for its debt.

2002)

does not

of the trust personally.

discovery.

judgment

Greenspan

for other

and provided

The business

finances

Greenspan
did not address
be added as a new judgment
1123,

discovery

was being

where

from the

and only after

trusts.

the settlor

his motion

post-judgment

the original

respective

pp. 496-497,503.)
the owner

no such

is allowed

it is against

supported

not an individual.

their

to his irrevocable

_-q/

But the

direction,

of ownership

from Greenspan

extensive

fundamentally,

entity,

where

CT3 428:7-9.)

in the opposite

proof

against

(ld. at pp. 517-522.)

34:26-35:1;

without

of businesses

let alone

to judgments

showing.

liability

then,

is also distinguishable

creditor

finances

on. (CT1

from the settlor

hint that reverse-piercing

can be added
factual

in this case transferred

to the businesses

first transferring
even

by the trusts" on a proper

is the portion

amended

did say that trusts

it owned.
veil-piercing,

Adding

the sister

are not owned

B.R.

(ld. at

889,

by its

895-896),

the rule that only the original debtor's

owner may
debtor. (S.E.C.v.
Hickey (9 th Cir. 2003) 322 F.3d

1128.)
40

since

companywasproperunderthe single-enterpriserule. (ld. atp. 507.)

the trust to the same
Greenspan
corporation
instead

opposed

he doesn't

grounds.

issue

likewise

it sustained
The Court

does

the facts

businesses
Because

trusts

had denied

objections,

reversed

because

to the judgment

He
on

that status

mattered

no part

whether

they own - can be added

as debtors

250, 258),

Greenspan

have

in the court's

the different

Greenspan

is not authority

should

that

businesses

(/d. at pp. 522have

been

been

held

in its recitation
There

is no

of irrevocable

does not say irrevocable

against

admitted,

liable.

analysis.

legal status

on a judgment

by the
since

as to those

that the trust was irrevocable

played

considered

the motion

could

owned

by a trust,

not on the merits.

or how the companies

mentions

owned

the evidence

at all.

a case

52 Cal.2d

The trial court

Greenspan

that the court

and revocable

of a

that argument.

or how businesses

with businesses

whether

(ld. at p. 497),

indication

not be added

enterprise

of Appeal

while

for the debts

did not make

not say whether

their evidentiary

and did not discuss

And

he could

owner.
can be liable

the settlor

held

(ld. at pp. 506, 507, 514-518.)

also was not raised.

523.)

a settlor

since

by claiming

can be part of a single

because

corporate

whether

own,

the motion

The decision
settlor

as any other

did not discuss

which

procedural

standards

Greenspan

trusts
their

for an issue it does

not discuss

(Ex Parte

does not support

the amended

judgment

- or

settlors.

Tartar

(1959)

against

appellants.

V.

THE

TRUSTS

BECAUSE
Three
trusts.

(CTI

194; c'r3

373,

reclaim

and are not reachable

Hammer

(2006)

NOT

ARE

of the appellants

trust can no longer

debts

COULD

THEY

BE ADDED

- Giganin,

Arenzano,

469-471,473,481.)
the trust's

JUDGMENT

and Aquasante

Because

assets,

by his creditors

141 Cal.App.4th

TO THE

I17AT,
EVOCABLE.

those
under

25, 30-31

assets

of an irrevocable

are not available

any circumstances.

("Laycock").)

41

the settlor

- are irrevocable

Appellants

to pay his

(Laycock
tried

v.

to explain

of

this to the trial court (RT 3:6-10,4:1-6:7, 24:7-25:26),but it rejectedtheir argument.

(RT 25:27-28:14,CT3 540.)

A.

Irrevocable
Settlors.

A settlor's
Code,

18200.)

Bank

of California

Cal.

2002)

(1965)

that Gaggero's
(CT1

28-29,

irrevocable

that the trusts

settlor

beneficiaries.

141 Cal.App.4th

funds

from the policy

His judgment

the trustee
The
overcome

a trust's

terminating
section

Court

at p. 27.)

of Appeal

which

There

have

nature
nothing

supra,

paid

judgment

are those

42

years

before

earlier,

his death.

he
and

(Laycock,

had borrowed
debt.

(Id. at p.

court,

but

(Id. at p. 29.)
conduct

because
set forth

to do with the actions

the

after the

shortly

in the probate

that the settlor's

any circumstances

of a trust"

a decedent

that the decedent

claim.

by all of

at p. 30.)

trust thirteen

proceeds

at p. 31.)

that permit

trust to pay a personal

on their

holding

under

against

was evidence

an

of conduct

into that trust after

the insurance

instead

brought

are no cases

141 Cal.App.4th

entered

argued

by his creditors.

is via a petition

by way

v.

E.D.

141 Cal.App.4th

"There

of another

affirmed,

irrevocability

reachable

(DiMaria

(Bankr.

after establishing

life insurance

were

sought

summary

the irrevocable

15403,

had been

and used assets

creditors

was granted

supra,

policy

They

trust revocable

an irrevocable

of his insurance

supra

15403.)

(Laycock,

in Layeock

He had established

the proceeds

Code,

revocable.

of their

(Prob.

reach.

82.)

does

(Laycock,

their

Trusts,

assets

trust revocable

an irrevocable

established."

The judgment

28.)

(Prob.

were

their

for the Debts

In re Barnes

(2012)

a settlor

it revocable.

an irrevocable

of a trust to make

died.

But nothing

trust can make

trust has been

made

of law.

only if it is revocable.

254, 258-259;

did not claim

36-37.)

Liable

trust are beyond

60 Cal.Jur.3d

The only way to make

the trust's

assets

of an irrevocable

had somehow

as a matter

Be Held

895-896;

conduct
32-33,

Never

237 Cal.App.2d

889,

Respondents

May

was wrong

can reach a trust's

assets

275 B.R.

decision

Trusts

creditors
The

This

can never

"the only means

in Probate

of the settlor.

Code

(Id. at p. 30,

of

emphasisadded.) The opinion wenton to saythat "by expresslygiving settlors'

creditorsthe right to reachonly the assetsof revocabletrusts,the Legislature...has
clearly indicatedan intention thatcreditorsareto be boundby the termsof an
irrevocabletrust to the sameextentsettlors,beneficiariesandotherclaimantsare
boundby suchan instrument."(ld. at p. 31.)
Appellantsmadethis argumentin the trial court,but the courtrejectedit
becauseit believedGreenspan,
25.)

But Greenspan

about

making

the trust.

wasn't

supra,

about

making

Cal.4th

599, 620.)

around

irrevocability

cannot

be liable.

Since

and since

Gaggero's

written

making

discovery

revocable.
("QPRT")
U.S.C.

They conceded
(CT1

that Giganin

Bogert,

of businesses

v. Goodin

showing

isn't

that All Three

stating

It is
owned

(1998)

17
of getting

of the Trusts

Are

Praske's

Yura testimony

and

the trusts are irrevocable.

and did not even

claim

Personal

are irrevocable

the trusts

Residence

were
Trust

by definition.

and Trustees

(CT1

(Thomson

(26
West

2013) 1201.)
These
Fassberg
Ca].App.4th

statements

Const.
720,

are binding

admissions

Co. v. Housing

Authority

752; accord

0. F. Nelson

by counsel.

(Evid.

of City of Los Angeles

& Co. v. U_S. (9 th Cir.

43

by

on the list, the trusts

to the contrary.

of Trusts

(RT

that any of the trusts was

is a Qualified

The Law

debts.

was no evidence

and QPRTs

result.

lists "the only means"

included

responses

this evidence

31; CT2 193-194),

2702(a)(3)(A);

Shows

There

did not dispute

15403

a contrary

for the settlor's

(Santisas

an alter-ego

own evidence

194; CT3 373,469-471,473,481.)

Respondents

here.

section

reached

for the debts

there was no evidence

But respondents'
verified

Code

Evidence

The trial court believed

liable

the ruling

Probate

The Undisputed
Irrevocable.

irrevocable.

a trust liable

both the trust and the settlor

It thus does not support

B.

had subsequently

Code,
(2007)
1945)

1220;
152
149 F.2d

692,695.) Suchan admissionis conclusive,evenwhenthe sameparty alsooffers

contraryevidence.(In re
Appellant's
provided

Vincent

counsel

this evidence
THE

tried

I don't

in support

COURT:

disagree,

but do I have

Raised
No, your

is the evidence

MR. ESQUIBIAS:
THE

COURT:

for today's

The trial court

was required

evidence

(Hinkle

The trier

is a "rational

ground"

The appellate

court

rejected

is clear,

if"it

disbelieved."
Co. (1996)

(Ibid.;

court

positive,
accord

44 Cal.App.4th

The
much

court

offered

less all of them.

need

disregard

accept

not re-weigh

1160,

no grounds
Since

there

the evidence

(1942)
which

for rejecting

this evidence

was no contrary

evidence

it.

44

in

are irrevocable.

had not

uncontradicted
but only if there
457,461.)

the trial court

that it cannot

rationally

Pacific

That was the situation

in order

own statements

20 Cal.2d

Co. v. Southern

in

if respondents

691,697),

testimony

Development
1204.)

even

12 Cal.2d

and of such a nature

Beck

than their

even

v. Coffin

uncontradicted

reviewed

free to reject

Co. (1939)
(Blank

know.

that was filed.

that the trusts

this evidence

of fact is normally
Pacific

other

admissions

to accept

I don't

that will do it?

that I have

did not show

for the rejection.

must

in theirs,

the pleadings

are considered

v. Southern

characterized

it?

anything

hearing,

which

its truth.

You have

to this and that and the other.

! have

their pleadings
(RT 6:18-7:7.)

admitted

counsel?

assertions.

to support

Is there

Do I have

assertions?

by opposing
factual

had

any evidence?

You will not find it in our pleading

MR. ESQUIBIAS:
preparation

factual

757.)

that respondents

but to no avail:

these as irrevocable
and subject
How do I know that?
Where

at the hearing

752,

its truth,

of these

MR. ESQUIBIAS:
THE

125 Cal.App.3d

to explain

and admitted

COURT:

any evidence

B. (1981)

be

Transportation

here.
as to any of the trusts,

to weigh

to rule that the trial court

against

it, this

was wrong

to

C.

This

Court

Burden
The minute
instruments

of Proof

that would
happened,

the parties

seeking

"Except

show

which

Richfield

Co. (2001)

desiring

relief"].)

There

the panics

burden

of proving
"[T]here

settlor's

Cal.App.4th

is not part
law may

46, 49.)
trust

"expressly
admissibility

if this
as

for not

Code or case law that trusts

rule applies

to amend

subject

here. L/ Respondents

the judgment,

15400

so they bore the

to alter ego liability.

assets

held by the trust", the

(Laycock,

to meet their burden

is often

supra,

of proof

141

because

labeled

"Presumption

of

by publishers

and

not enacted

into

heading

a statute.
Kahrs

which

(People
v. County

itself is a default

explaining

that

by

trust

the

Instead,

was

v. Avanessian

(1999)

76

of Los Angeles

(1938)

28

rule about

a trust

141 Cal.App.4th

unless

It is not

and
it is

about

how to draft and interpret

who must offer

in its absence.

bore the burden

how to write

is revocable

instrument."

it is about

It says nothing
about
the court may presume

supra,

v.

but that label was created

accord

the trustee

as to

500; accord Aguilar

in the Evidence

A descriptive

The statute

of proof

826, 861 [burden of proof falls on "party

failed

to interpret

(Laycoek,

Code,

that in order to reach

section

irrevocable

_/In Laycock,
not revocable.

(Evid.

has the burden

that "the trust was revocable."

or trial procedure.

such documents.
evidence
or what

Even

appellants

was

dispute

instruments,

made

540.)

ruled against

in their motion

635,641-642;

Cal.App.2d

(CT3

trust

The trial court

so this general

and in print,

of the statute.

Cal.App.4th
interpret

Code

not be used

the various

on respondents

25 CalAth

at p. 30.) _/ Respondents

online

to provide

by law," a party

that each appellant

Y/Probate

Parties.

of proof was

or defense.

relief

must prove

revocability"

the

The burden

is no presumption

is no serious

creditor

provided

or irrevocable,

seeking

on the Wrong

Placed

was not theirs to meet.

Atlantic

were

Court

the trusts are revocable.

of the trusts.

to its claim

are either revocable

the Trial

for refusing

not matter.

as otherwise

each fact essential

Because

re Revocability

whether

it would
assets

a burden

Reverse

order fauks appellants

had really

meeting

Must

of proving

an instrument

into

that the trust was

at pp. 29-30.)

But that is
(continued...)

45

they did not produce

Cal.App.4th
the trusts

the trust instruments

at p. 30.

Without

such evidence,

they

by Laycock,
could

supra,

not possibly

141

establish

that

were revocable.

Appellants

were

decision

on their

27:15.)

It deemed

against

the parties

recognized

prejudiced

supposed

revocability

against

There

is No Substantial

had failed to prove

debtors.

it is revocable.

A settlor's

(Heifetz

But the revocability

and determining

from language

Heifetz,

147 Cal.App.2d

Cal.App.4th

otherwise,

could

be decided

it would

appellants.

that the Trusts

it could not have

can only reach

of America

(1957)

have

had to

It then would

(2002)

Were

made

them additional

the assets

of a trust by proving
776,

"by examining

the settlor
1194,

at p. 783 ["The nature and extent

Crook,

supra,

1206;

in court.

95 Cal.App.4th

has the
accord

of the rights

of the instrument."].)

the trust documents

782-784.)

the trust instrument

whether

95 Cal.App.4th

by the four comers

Revocable.

or at least realized

147 Cal.App.2d

used in the instrument"

of producing

at p. 30; accord

retained

Respondents

(Laycock,

supra,

at p. 1209 ["Under

2/(...continued)
because

she was

creditors

could

at p. 850.)
burden
relief.

seeking

summary

not win at trial.

fell on her.

judgment

and thus had to prove

(/d. at p. 29, citing Aguilar,

She was the one seeking

appropriately

its

Had the court

that the trusts are irrevocable,

v. Contreras

by the trustor are to measured

thus had the burden

which

of proof.

than against

of a trust can only by proved

it. (Crook

supra,

rather

based

540; RT 26:11-

fell on respondents,

Evidence

creditors

v. Bank

right to revoke

(CT3

question

their burden

expressly

favor.

Had the court recognized

judgment

the court

this evidence.

actually

them

since

a factual

to meet

of proof

had to rule in appellants'

respondents

to provide

who had failed

that the burden

D.

by this error,

failure

the trusts'

hold the lack of evidence

have

as required

relief

Here,

from

though,

46

the court,

supra,

that the

25 Cal.4th

so at that stage

it was respondents

the

who sought

141

California law, the existenceor nonexistenceof

by examining

must

be determined

the trust instrument"].)

Respondents
instruments

could

have

to be presented

other

evidence

even

claim

were.

a right to revoke

which

subpoenaed

to the court,

suggested

were

seen, they

or otherwise

but they didn't.

that the trusts

that any of the trusts

And as we have

appellants

were

revocable,

conceded

They

the point

for the

did not introduce

revocable,

much

arranged

either.

less prove

They

any

did not

that all of them

and provided

ample

evidence

to

the contrary.

E.

That

The
Greenapan

Appeal

Laycock

and partly

because

it was

since

outside

Greenspan

Inc. v. Superior

this district.
upon

Court

decision

opinion[.]"

(Cuccia

F.

"has

Respondents

have

But the'trlal

court

(CT3

The formal

The closest

made

thing

(2007)

153 Cal.App.4th

claimed

that appellants

(CT3

either

541-542)

47

of their

Courts

Equity

of

Sales,

disagrees

with

Court.
in the trial court, w/

or in its minute
about

is the court's

on page 3 oftheir

it

347, 354.)

says nothing

finding

tbr the

law in the appellate

this issue

from the bench

for an extension

which

In the Trial

waived

likewise

to a waiver

made this claim

application

the declared

(Auto

is no

liable

because

of the District

A trial court

with

There

trust

Laycock

division

tills Issue

finding

(RT 25.)

of this state[.]"

455.)

Preserved

in the record

to appellants'

450,

Amply

order

to reject

courts

conflict

an irrevocable

of every

but to follow

Court

no waiver

of a perceived

making

had no authority

no choice

W/They most recently

opposition
brief.

not about

57 Cal.2d

v. Superior

because

Is Irrelevant.

from the Fourth District.

"Decisions

(1962)

District

partly

... all the superior

Appellants

540.)

was

And the court

are binding

an appellate

Another

rejected

of its settlor.

originated

Is from

trial court

such conflict,
debts

Laycock

March

order.

waiver.

remark

that

27, 2013

time to file this

appellantshad"apparentlyrefusedto producethe trust documentson the groundsthat

they areconfidential" andthatthis supposed"refusal hasresultedin therenow being
no evidentiary[sic] for any of the factualassertionsconcerningthe trust which
counselhasmadetoday." (CT3 540.) But evenifa refusalwhich actually
could

be deemed

occurred

a waiver,

the holding

does not encompass

Laycock's

on its merits

the argument

1.

the trial court

mistakenly

believed

by its own terms

to "factual

assertions".

actually

established

support

either

during

waived

offered

had

debts.

that the trusts

Rejected
The trial court

lawyer

irrevocability.

(RT 6).

that appellants

had waived

When

and rejected
counsel

Raised
it on the
early

that it did

there

or forfeited

the argument
cited Laycock

was revocable,

or an order

cannot

(Tahoe

as a matter
making

be waived

National

and

them

in the trial

Bank

of law to
liable

for

court and

v. Phillips

(1971)

8:276.1.)

the Issue

in the Trial

Court,

and the Court

Merits.

were

irrevocable

was any evidence

But the court

Be Waived.

in the May 29 hearing

that the trusts

whether

Cannot

was insufficient

are revocable

et al., supra,

mentioned

in their opposition

considered

evidence

of the evidence

Appellants

and rejected

demonstrating

that any of the trusts

for the first time on appeal.

2.

considered

29 hearing,

of the Evidence

Their

11, 23, fn. 17; Eisenberg,

appellants'

the May

no evidence

Insufficiency

the court

It

at all. (RT 25:4-26.)

the opposite.

a finding

may be asserted

Indeed,

Insufficiency

Respondents

Gaggero's

is limited

legal arguments.

holding

not consider

argued

which

cannot.
Moreover,

Cal.3d

a refusal

occurred

before

that appellants

(RT 5), and it asked

it of the trusts'

did not rule that the argument

it. Instead,

had not

as the hearing

was untimely,
progressed,

or

the court

on its merits.
and explained

48

its holding,

the court

rejected

the

argument- not becauseit hadbeenwaivedbut ratherbecausethe court believed

Greenapan

said otherwise.

Greenspan

rather

Second

Appellate
THE

(RT 25.)

The court

than Laycock

because

Distriet

Laycock

while

COURT:

went

Greenspan

was more

was from

Do you have

on to say it would
recent

follow
and was from

the

the Fourth:

any different

points

you wish to make,

Mr.

Cbatfield?
The only reason we dealt with that particular
one is that was the one
you pointed me to. There are other - there are plenty of other stuff.

shows

MR. CHATFIELD:

Well,

Your

Honor,

alter ego, and again,

I state that even

I disagree

if it did show

way you can pierce in to the entities is through

is not permitted
in the state of California.

entities

that the evidence

outside

alter

reverse

THE

Trust,

THE

COURT:

ifI am John Jones,

COURT:

Actually,
I don't

MR. ESQUIBIAS:
THE

and I set up a John Jones

COURT:

'-A-r-c-o

Honor

actually

think

- the trust through

1065 cites

say, yes, that's

did cite

judgments.

not about
about

correct.

141 Cal.App.4th

to run counter

Laycock's

Greenspan.

25, a 2006

to Greenspan,
ego doctrine,

and M-i-s-i-k

versus

_/

- says in that regard,

Your

for Laycock.

Greenspan,

(Misik,

reverse

the trustee,

I will tell you what

W/This is the citation

_/Misik

says that you can go in to the trust the alter

197 Cal.App.4th

but

supra,

piercing,
validity

and

and I

are you suggesting

so.

And then that seems

to the trustee

an

so.

I would

MR. ESQUIBIAS:

nothing
decision.

think

I don't

COURT:

Green_pan

may apply

amending

Your

MR. ESQUIBIAS:
That is the law under
Division
One of the Fourth District. w/
TIIE

was

ego which

to make

MR. ESQUIBIAS:

because

alter

This is a judgment
against an individual,
and you are trying
and their assets subject to judgment
against an individual.

dump all my assets in to it, and I run it as my piggybank,

that John Jones Trust can't be reached?

case,

ego, the only

only

for general

197 Cal.App.
it did not
and

does

49

statements

at pp. 1073,
involve

not

support

trusts.
the

about

1075.)

Misik

It thus
trial

says

court's

D-

Honor, it saysthat- _/
THE COURT: I
think

that is the controlling

The waiver
court.

rule applies

As Steven

appellate

court

objection

could

Appellants
and rejected

procedural

been,

it on the merits.

for this court

VI.

THERE

failed

33 Cal.App.4th
defects

argument

because

to raise

in the trial

1108 explains,

or erroneous

in the court
in the court

It did not treat

rulings

below."

below.

the argument

"An
where

an

(ld. at p. 1117.)
The court

as waived.

considered

There

is no

to do so either.

IS INSUFFICIENT

AMENDED

EVIDENCE

TO SUPPORT

THE

JUDGMENT.
this court must accept

evidence,
review

an appellant

but was not, raised

their Laycock

case out of our district,

(RT 24-25.)

only to issues

will not consider

reason

evidence

authority.

S. (1995)

have

Although

the 2010

W. v. Matthew

did raise

substantial

will take

the findings

factual

findings

at issue here were

was aptly described

in Kuhn

that are supported

not.

by

The nature of substantial-

v. Department

of General

Services,

supra:
There
evidence,

are two aspects

First,

to a review

one must resolve

of the respondent
and presume
inferences.
Second, one must
is substantial.
While
with a determination
must

blindly

seize

in favor
determine

any evidence

The Court

determinations

of the trial court.

mean]

need
anything

ponderable

in support

of Appeal

not be affirmed

legal significance.

'was

implies

_/The

Obviously

first dash in this sentence

the reporter

did not know

of the respondent
supported
'[I]fthe

appears

the word

in favor

by a mere
word
cannot

to echo

the

scintilla

'substantial'
must

to affirm
of

[is to

be of

be deemed

be reasonable
.... credible,
and of
is whether
a reasonable
trier of fact

to be a mention

how to transcribe.
50

in order

... merely

that such evidence

synonymous
with 'any' evidence.
It must
solid value....'
The ultimate determination

which

of the

in the evidence

that our "power"

begins and ends
evidence,
this does not mean we
not created

A decision
on review.'

at all, it clearly

sufficiency

conflicts

of the judgment
all reasonable
whether the evidence
thus marshaled

it is commonly
stated
that there is substantial

the judgment.
evidence

of the legal

all explicit

of"Laycock"

could havefound for the respondentbasedon the wholerecord. While

substantialevidencemay consistof inferences,suchinferencesmustbe "a
productof logic andreason"and"must reston the evidence"; inferences that
are the result
(Kuhn,

of mere

supra,

speculation

22 Cal.App.4th

or conjecture

cannot

at pp. 1632-1633,

support

footnotes

a finding.

and citations

omitted.)
As we shall see, the evidence

on which

the trial court

based

its decision

does

not meet this standard.

A.

The

Though

Evidence.

filled

with sound

on any of the appellants.

evidence

revealed

Stripped

Gaggero's

estate

CT3 411.)

Gaggero

and LP appellants

planning

attorney.

interest

191,212-213.)

The LLCs

property.

(CT2

314-319,

into each

of the LLCs

into a trust.

(CT1

took place

in 1997

and

1998.

373,469-471,473.

481.)

property

in Ventura

offshore

trust organized

of the trusts.
LLCs

little light
the

370.)

CT2

(CT1

Giganin
where

under

transferred

of those

CT2

Gaggero

(CT1
lives.

trusts,

will become

along

Praske
actual

129-130;

a piece

(CT2

370.)

real

of real property
LLC and LP

All of these

(CT2

193,196.)

steps

(CT3

374.)

(CT2

194; CT3

It owns

the

Arenzano
Gaggero

with the rest of his family.

beneficiaries.

CT2 190-

in each

trusts.

has sole discretion

51

He initially

31; CT2 193-194.)

the laws ofAnguilla.

212-213;

192; CT3 411.)

are all irrevocable

is a QPRT.

190-192.

of owning

his interests

CT2 360-CT3

127, 152-163;

and Aquasante,

(CT1

for the purpose

Gaggero

191-193;

CT2

in his role as

(CT2 274.)

and LPs.

created

and Aquasante

County

of Arenzano

beneficiaries

ofthe

and LPs were

162-163;

Arenzano,

potential

very

and innuendos,

by Praske

152-163;

and LPs, and then transferred

126,

As the trustee

124-130,

of each

in each

360-CT3

Giganin,

209.)

sheds

distortions

were all created

(CT1

was the settlor

a controlling

beneficiary

of its hyperbole,

motion

the following:

The trust, LLC

owned

and fury, respondents'

is an

is a potential
(CT2

to decide

which

208-209.)

The

205-

gains

andlossesrealizedby the trustsarereportedon Gaggero'stax returns.(CT2 241.)

Praskehasbeenthe trusteeof eachof the threetrustssincethey were
established.(CT1 166-167;CT2195;CT3 412.) He alsorunsPCM. (CT2 187-188,
195-196.) The LLCs andLPs eachcontractedwith PCM to managetheir assetsand
finances.(CT2 187-188,195-196,269.) The LLCs andLPs all usethe samemailing
address,while they andPCM haveall designatedPraskeastheir agentfor serviceof
process.(CT3 309, 314-319.)

oversee

(CT1

purchases

with a truck,
PCM
his funds.

insurance,
issues

(CT2

Gaggero
purchased

and sales.

the checks

detailed

prepared

trusts,
Malibu

Some

The

much

papers

They

offered

less all of them.

which

also provides

but the checks

oath that entities

(CT1

statements

him

are drawn

on

be structured.

are more

noteworthy

within

the estate

could

have

145-146,

164-175;

CT2

197-

were made

Gaggero.

would

no evidence
Aside

(CT2

a different

that Gaggero
Praske's

which

entity.

in declarations
281-288.)

None

(CT2

for PCM
309,

Gaggero's
papers

prove

is a beneficiary

of them

because

showed
33:7-8,

case that

(CT1

216),

respondents

but it actually

an address

or agent

314-319.)
monthly

omitted

pay was

$3,000.

this information.
52

(Trial

there

admit

all of the appellants

39:7-9),

and did not include

than for

of any of the

in the Yura

Foundation

Indeed,

(CT1

they didn't

testimony

that their evidence

and the same agent

address

of 2001,

Respondents'

from

for what

with the Aquasante

claimed

for any of the trusts.

_/As

of these

trust received

_/Respondents

3005.)

2/ PCM

and to

375-376.)

bills,

had identified.

is "associated"

used the same address

showed

the properties

Gaps.

Broadbeach

no evidence

under

they represented

how the transactions

they did.

to manage

(CT3

that pay Gaggero's

stated

while

Respondents'
what

other benefits.

that Gaggero

281-288.)

B.

G aggero

252-261.)

real estate

respondents

pays

140; CT2 213-215,360.)

and some

and Praske

201,222-223,

PCM

RT6 3004-

is

thatthe estateplan may includeadditional trusts

evidence

that any of the three trusts named

LLCs or LPs is Praske's

Aquasante.

(CT2

did not identify

any of the trusts'

offer

did not introduce

LLC,

Respondents
There

to maintain

distinct

articles

no evidence

records

their
party

or that they failed

broadly

claimed

Separateness

alleging

(1992)

to support

(Wollersheim,

"There
there

is a sufficient

the individual
as those
cause

supra,

unity

also did not identify

of any of the
that they failed

other

obligations.

appellants'

to any of the LPs, LLCs

assets

as his

or trusts.

an Injustice.
bears

(Mid-Century

the

Ins. Co.

means

by a preponderance

proving

of the

at p. 1017].)
the corporate
between

it that the separate

exist;

will sanction
v. D 'Arco

53

to overcome

this btu'den

and ownership

no longer
(Misik

the "burden

entity."

Carrying

finding

controlling
alone

did not

the operating

funds,

used

1212.)

of interest

result."

their

that Gaggero

for disregarding

of the corporation

likewise

operations

any of their

69 Cal.App.4th

and the corporation

They

to meet

Promote

an alter-ego

or organization

an inequitable

the internal

of the corporate

1205,

are two requirements

individual

They

or limited

for any of the trusts.

relationship

existence

9 Cal.App.4th

each fact necessary

evidence.

with

Both that Appellants

and Gaggero
and Ownership
and that Recognizing

would

an alter-ego

of the separate

v. Gardner

the general

partnerships,

that they commingled

Respondents
Had to Prove
Shared
a Unity of Interest

presumption

is "associated"

of incorporation.

about

they did not tie any of his transactions

The

LLC.

of any of the limited

was no evidence

respondents

C.

of PCM,

of either

or the trust instruments

offered

appellants.

own,

the only

own any of these particular

Broadbeach

the shareholders

PCM's

agreements

of either

although

33:8-11),

beneficiaries.

the partnership

agreement

And

that Malibu

of any of the LPs, or the members

They

in the motion

(CT1

216.)

Respondents
partners

Yura testimony

and entities

and second,
a fraud,
(2011)

entity:

first,

that

the corporation
personalities
that treating

promote

injustice,

197 Cal.App.4th

and
of the

the acts
or
1065,

1071-1072("Misild').)
"Both of theserequirementsmustbe foundto exist beforethe corporate
existencewill bedisregarded".(Alexanderv.
Cal.App.3d

39, 47.)

Without

be reversed.

(Ibid.)

Although

disregarded

vary

235 Cal.App.3d

according

substantial
"the

at p. 1248),

circumstances

and only when

corporate

Co. (1985)

There

conditions

courts

"[T]he

Ol

evidence

have

form

is no "Unity

which

no discretion

104

the judgment

a corporate

entity

(Las Palmas,

to depart

will be disregarded

290,

(1980)

of both prongs,

of each case"

the ends of justice

39 Cal.3d

of the Chimes

under

to the circumstances

requirements.

Management

Abbey

from

(Mesler

may be
supra,

these

basic

only in narrowly

so require."

must

defined

v. Bragg

300-301.)

of Interest

and Ownership"

Between

Appellants

and Gaggero.

1.

Respondents'

Concession

the Appellants
As we have
unity

of interest

organization
corporation
emphasis

seen,

controlling
no longer
added.)

Conclusively

an alter ego finding

and ownership

between

(Misik,

is proper

disproved

it by conceding

appellants

or their

31:12-18,

31:18-20,

assets.

twenty
(CT1

32:4-5,

times

that Gaggero

28:2-7,

29:1-4,

33:13-15,

36:2-6,

or
and the

at pp. 1071-1072,

such

unity,

they actually

does not own any &the

29:21-22,
40:4-6,

there is "a sufficient

of the individual

fail to prove

Any of

Unity.

and the individual

197 Cal.App.4th

Not only did respondents

Not Own

the Required

only where

personalities

supra,

Does

Disproves

the corporation

it that the separate

exist[.]"

that Gaggero

31:7-8,

42:15-16;

31:8-11,

31:11-12,

CT3 428:15-17,

430:20-21,432:3-5,432:5-7,432:7-9,432:9-10,432:11-12.)
Of course,
respondents
concession

conceding

can no longer

the point
dispute

of fact by a party

even

once

or deny.

or a party's

is a binding

A judicial

attorney

54

judicial

admission

during

judicial

admission

which

"is a voluntary
proceedings."

(29A

Am.Jur.2dEvidence, 783.) It "may ... bean allegationof a pleadingor an attorney's

concessionor stipulationto facts." (Smithv.
Cal.App.3d
issue

259,

269.)

in the case."

accord

1 Witkin,

admission
a matter

It has a "conclusive

(GelJb
Cal.

v. Lockheed

Evidence

is not merely

his judicial

admission

This concession
alter-ego
prerequisite

ego liability,

2003)

322 F.3d

Cyclopedia

of the Law

concession

would

But even

they

offered

The lack of such evidence

they

failed

to carry

their

2.

instead

argued

at length

complete

control

In Riddle
managing

agent

as his own could

concession

supra,

A party

34, 47-48,

California

of the truth
"may

ownership

is a

or 'guideline.'
added;

Even

accord

by itself,

at p. 48.)

is part of an

law, "[o]wnership

'factor'

of

not

140 Cal.App.4th

ease because

41.10.)

as an

98, p. 922 ["The judicial

1128, emphasis

not bound

no evidence

burden

of proof

" (S.E.C.v.
1 Fletcher

respondents'

v. Leuschner
of a corporation
not be liable

(1959)

Evidence

the ownership
controlled

51 Cal.2d

as an alter

requirement

But it means

Is not Enough.
in their motion.

the appellants,

the required

They

and that such control

But without

ownership,

unity.

574, the Supreme

ego for the company's

55

would

any of the appellants.

of Control

wife and son owned

explained,

claim

point.

36:11-38:10.)

to establish

whose

their

in light of their concession.

31:7-32:24,

is not enough

concession,
owned

on this essential

Ownership,

that Gaggero
(CT1

by their

that Gaggero

is not surprising

did not confront

was all they had to prove.

even

were

Without

Respondents

1123,

the matter

a full reversal.

if respondents

still fail because

(Gelfo,

82

140 Cal.App.4th

the issues."])

and not a mere

of Corporations,

require

Hearsay,

it from

Under

(2006)

it is a conclusive

to respondents'

by definition.

to alter

(9 th Cir.

Hickey

of a fact;

& Co. (1978)

and "removes

Corp.

on appeal."

is fatal

relationship

Martin

of removing

E. Heller

effect"

(5th ed. 2012)

evidence

and has the effect

repudiate

Walter

Court

held that the

it and who used

debts.

its funds

As the Court

"The evidenceis not sufficientto bring Leuschner,Sr., within the first of these
requirements[of unity of interestandownership]. It is undisputedthathe held
noneof the stock,andthereis no evidencethat hehadany interestasan owner
in the businessoperatedby eitherof the two corporationsor thathe hada right
to sharein any profits they might make.Instead,hereceiveda monthly salary.
Under all the circumstances,he is to beregardedas havingbeena managing
employeeof the two companies,andhis controlover their affairs mustbe
treatedasthatwhich would be exercisedby a managingagentratherthanthat
of a shareholderor owner.It follows thattherewasnot suchunity of 'interest
andownership'betweenLeuschner,Sr., andthe corporationsthatthe separate
personalitiesof the corporationsandthe individual no longerexisted[.]" (ld. at
p. 580.)
Riddle
the same

did impose

company

was similar

but who did own stock.

that was enough
the husband.
which

to be its alter
ownership
supra,

at p. 1129.)

Naturally,

appellants

respondents
would

evidence

Respondents
each other's,
offered

it would

not own

is Insufficient

Unity

of Interest

tying

not be enough.

"make

lie as to

and was held not

sense

controls

only

if

(Hickey,

any of them

that he does.

controls

and

corporation

ego finding."

inference

share,

or

But even

all of the appellants,

if

that

any of them.

Evidence

to Establish

the Required

and Ownership.

that appellants'
the same

his interests

results

with

agents

none would

in that company

that Gaggero

that Gaggero

There

but not that they were

no evidence

this point

proved

claimed

either

but a single

over a second

for an alter

a reasonable

the fact that he does

3.

these

requirement

supports

had conclusively

not offset

explains,

do not agree

owned

control

conduct

not managing

as to her where

but she held no stock

is an absolute

322 F.3d

The wife

similar

As Hickey

and son, whose

and who were

finding

She had exercised

ego. (Ibid.)

that respondents'

on the wife

to the husband's

an alter-ego

also pierced,

of stock

liability

(Id. at pp. 580-581.)

to support

(Ibid.)

the Court

alter-ego

ownership
as Gaggero's.

to theirs.

They were
56

interests

Here again,
required

were the same

(CTI

32:25.)

even

to prove

They

if they could

a "unity

as

prove

of interest

and ownership".
Without

(Misik,

ownership,

appellants

supra,

even

Gaggero's

197 Cal.App.4th

having

completely

Respondents'
Even

is no formula

must be made according

"Among

location;

fhctors

of the corporation;

instrumentality

long list of factors

'[a]mong'

Knudsen

others
Corp.

223,249-250.)

examine

Asia,

There
no evidence

directors

Rothert

outright.

owns

any portion

As we have

whether

of any of these

and

for debts

to maintain

minutes

absence

of an individual."
factors

of

LLP (1999)

69
a court

the doctrine."

99 Cal.App.4th

they repeatedly

may be

and instead

to apply

factors.

as a
(Ibid.)

of each case."

228,

Respondents

of any of the appellants,

seen,

or

and the use of a corporation

circumstances

(2002)

liable

formalities;

is determinative,

to determine

evidence

failure

& Bunshoft,

factor

are one

of the individual

The enumerated

v. Hancock,

Inc.

The decision

the doctrine

assets

for the business

the particular

single

Insufficient

use of the same office

of corporate

capitalization;

Inc. v. Fil-Cartoons,

that Gaggero

in applying

and officers;

disregard

is not exhaustive.

"No

Been

Ownership.

and ownership.

and other

'under

is no substantial

all of them

not make

out that he is personally

or conduit

all the circumstances

(VirtualMagic

of funds

and inadequate

"This

Cal.App.4th

owns

assets

Have

to Prove

in a corporation;

holding

records;

shell,

(Morrison

must

identical

corporate

mere

considered

would

case.

to be considered

of all stock

an individual

Would

unity of interest

commingling

the corporation;

corporate

interests

Did Not Have

to the facts of a given

ownership

or adequate

Evidence

if They

for proving

the many

individual's
business

identical

added.)

alter egos.

a.

There

at p. 1073, emphases

much

conceded

245.)
offered
less that he

that he does

not own any of them.

Respondents
33:7-8,
(CT2

39:7-9.)

claimed
Their

309, 314-319.)

address.

They

that the appellants

evidence
They

also showed

showed

offered

business

address.

(CT1

that this was only true of the LCs and LLPs.

no evidence

no evidence

all use a single

that PCM

that Gaggero

57

or the trusts

uses it.

use the same

Becauserespondentsofferedno financial recordsof any of the appellants,there

is no evidenceof comminglingwith Gaggero. They likewiseoffered no evidence
eitherthat Gaggeroholdshimself out aspersonallyliable for appellants'debtsor that
they do so for his.
Respondentsdid not identify the directorsor officers of anyappellant,w/ Even
if they had,andevenif the lists hadbeenidentical,that would describeappellants'
relationshipswith eachotherandnot with Gaggero.
Thereis no evidencethatany of the appellantsfailed to maintainminutesor
corporaterecords. Respondentspoint to no
disregarded;
were

indeed,

Gaggero's

corporate

alter egos

assets

because

conduit

leaves

of what
failed

the court
without

retained

the trust

what

to such

also did not allege

as a mere
Because

respondents
business

Even

any of the appellants

their

formalities
absence

motion

but

of

precisely

resources.

of an individual."

found.

adhered

they brought

of a corporation

of their

have

which

define

what

or

sought

to shift liability

had to prove

that he was the

is the opposite

if they had tried to prove

instruments,

instrumentality

the motion

would

- which

shell,

of what

the opposite
powers,

they argued
they would

and
have

if any, Gaggero

over the trusts.

Respondents

instead

such

to the appellants,

instrumentality

Respondents

capitalization;

only "use

for the business

from Gaggero
mere

did have

formalities

was that respondents

anyway.

or inadequate

appellants
That

their claim

corporate

treated

offered

trying

to prove.

_9/This factor
alter

trusts,

(CT1

only makes

unit, presuming

31-33,

sense

any of the specific

36-42;

when

the truth

CT3 428-423.)

both the original

appellants.
of a large

They
part of

_f Respondents

debtor

and the

ego are corporations.

_/Their
different

about

all ten of them as a single

they were

alleged

no evidence

types

papers

made

of appellants,

LCs or LLPs

somewhat

different

but offered

operated.
58

no facts

legal
about

arguments
how

as to the

the particular

did

not evenallege,
LLCs

much

any facts

specific

to any of the individual

trusts,

or LPs.
Seeking

to justi_

does

not distinguish

does

he distinguish

supported
draw

this lack of specificity,

between

this claim

have

of dollars
instead

the different

between

come

the entities

only by quoting

such distinctions,

would

from.

(CT1

more,

did not happen,

Cal.App.4th

relied

in the Yura

as a mere

at p. 1073.)

Evidence

(CT1

he'd

justly

But Mlsik

But they

some

be saddled

funds

with millions
he was asked

a real estate

requires

purchase

evidence

or conduit[.]"

of a hypothetical

nor

asked.

about

instrumentality

where

the question

been

on testimony

36:17-20.)

plan,

that did not ask him to

source"

he answered

that "Gaggero

in the estate

to a question

cannot

lawsuit.

shell,

plan."

for a "general

later pretended

respondents

of a corporation

in the estate

because

claimed

or foundation[s]

Appellants

debt merely

resulting

trusts

asked

149.)

of the one respondents

respondents

his answer

and instead

of Gaggero's

What's

"use

less prove,

that

of actual

(Misik,

supra,

197

use does not meet this

requirement.
The best respondents

could

its property

and that the trusts'

31:24-32:1,

33:1-2,

for the settlor

QPRT

ofa

is distinct

36:21-22;
QPRT

from

gains

the settlor

expressly

by the internal

194.)

There

A settlor's
anything
frequently
784)

is nothing
liability

improper.

and are perfectly

[112 S.Ct.

1021,

but owns

Revenue

remotely

are reported

planning

legitimate.

117 L,Ed.2d

Code.

(Estate

described
of Hearst

(Holywell
The

Corp.
income
59

(CT 1

But it is perfectly

property

such

v. Smith
of many

normal

are for. A
he transferred

140203.)
2702,

QPRTs

subdivision

are
(c);

trusts.

a grantor
(1977)

QPRTs
which

Taxation

(26 U.S.C.
about

live on

on his tax returns.

that is what

a residential
Federal

lets Gaggero

of a trust does not imply

merely

196].)

since

improper

for the taxes

that Giganin

432:24-26.)

(34 Am.Jur.2d

This evidence

used in estate

losses

to live in its property,

to occupy.

CT1

and

to argue

CT3 424:11-14,

to it and continues
allowed

do was

- or even

trust.

Grantor

67 Cal.App.3d
(1992)

suggest
trusts

are

777, 783-

503 U.S. 47, 56-57

such trusts

must

be reported

on the settlor'stax returns.(26 U.S.C. 671-677;Bogert,The

Trustees

(Thomson

was obeying
evidence

West

2013)

the tax laws.

of alter

268.15.)

Even

ego status."

b.

The testimony

so, the trial court

(RT

Law

means

specifically

of Trusts

and

only that Gaggero

cited

it as "more

18:20-25.)

Respondents
Enough

Have

Failed

to Overcome

to Prove

Appellants'

Unity

Strong

Separateness

from

Gaggero.
Of course,
had to prove
corporation

not just any "unity

a unity

so strong

no longer

Respondents

actually

are.

ownership,
between

exist[.]"
failed

not own appellants

and since

appellants

E.

be its alter

complete

owned

The
alter-ego

of the corporation
Cal.App.4th
such

form,

of what

to find any unity

and the

at p. 1072.)

since they conceded

of both that was strong

Gaggero

respondents'

of either

enough

interest

to erase

does

interests
or

the separateness

v. Abarbanel
doctor

more

at 1073.)

was

Would

is not enough,

who owns

(1978)
not alter

Gaggero

Not

100%

by itself,

to create

of a corporation

77 Cal.App.3d

would

702,715-716

ego of professional

[absent

corporation

which

him full-time].)
than that.
"that

sanction
Since

from

Injustice.

and ownership

If it was, anybody

also requires
would

Separateness

or Promote

of interest

employed

law requires

finding

Respondents

of the individual

197 Cal.App.4th

no evidence

had no basis

unity

ego. (See Jines

and which

they offered

a Fraud

relationship.

abuse of corporate

personalities

such a showing,

Appellants'

Sanction

an alter-ego

supra,

will do.

and Gaggero.

Enforcing

Even

(Misik,

less a unity

and ownership"

the separate

to make

The trial court

much

"that

of interest

there

As the second

adherence
a fraud

to the fiction

or promote

is no such

a finding.
60

prong

fiction

of Misik

of the separate

injustice."
here,

explains,

there

(Misik,

an

existence

supra,

are no grounds

197
for

he

1.
Without
appellants
judicial

Appellants'
a unity of interest

is not a "fiction"
admissions.

acknowledging

justice

simply

does not require

2.

is not a Fiction.
existence

proved

might promote

Respondents'

of the

by respondents'

injustice,

plan was a series

of fraudulent

were

But even

fraudulent.

their judgment

be forced

against

unable

Gaggero

to pay his debt,

to pay it for him.

Ego Motion

Is a Fraudulent

Transfer

and ls Time-Barred.

is that Gaggero

creditors.

a fraud or promote

If he is presently

Alter

in Disguise

allege

to frustrate

not "sanction

just result.

that third parties

respondents

in order

would

limit them to enforcing

Claim

1998

the separate

to a fiction

motion

That is an entirely

What

Gaggero

It is a fact, conclusively

adhering

respondents'

It would

personally.

and ownership,

at all.

While

from

a fact cmmot.

Denying
injustice."

Separateness

In other

transfers.

gave

words,

away

they claim

Appellants

if they were,

it would

valuable

in 1997 and

that his entire

do not agree

not matter

assets

estate

that the transfers

because

the claim

is time-

barred.
"A single
transfer,'
debtor

accurate

would
of some

reaching

be difficult
property

that interest

Enf. Judgm.,
respondents
applies

479,

was

interest

p. 516.)

the transferred

remedy
assets

all aspects

However,

broadly

with the object

to them
claim

(Civ.

Code,

or effect

(8 Witkin,

That the transfers

indebted

incurred."

covering

their claims."

the creditor's

A creditor's
attach

to state.

to satisfy

or became

"whether

obligation

definition,

occurred

is beside

arose

before

3439.04,

for a fraudulent

transfer

as part of a suit against

61

of the term
speaking,

it is a transfer

of preventing
Cal. Procedure
before

the point,

creditors

by a
from

(5th ed. 2008)

Gaggero

hired

since the definition

or after the transfer

subd.

'fraudulent

was made

or the

(a).)

is to sue the transferee

the transferor,

directly,

to

or to levy the assets

pursuantto ajudgment againstthe creditor.(Civ. Code, 3439.07.) Civil Code

section3439.09setsthe limitations periodsfor fraudulenttransferclaims. The longest
is sevenyearsfrom the time of the transfer.(Civ. Code, 3439.09,subd.(C).) Any
fraudulenttransferclaim againstappellantshadto be broughtby 2005at the latest.
Sinceonly a creditormay bring a fraudulenttransferactionandsincerespondents
becameGaggero'screditorsin 2008,they could neverhavemadesucha claim

3.

Enforcing

a Statute

nor Promotes
Respondents

freely

was too late to bring

42:15-16.)

Their

grievance,

meant

claim

to address
Statutory

justice.

limits

is time-barred

time

limits

authority.

"The

injustice

of injustice."
at p. 1149.)
creditor,

faith makes
Oakland

since

it inequitable
Co. (1962)

Respondents
in Gaggero's
negotiation,

retainer

them

were

would

characterized

decided

should

would

some

the corporate
825,

is

conduct

fiction]."

defy

the

to the

in the statute.

is not a general
supra,
every

notion

394 F.3d
unsatisfied

amounting

(Assoc.

to bad

Vendors,

Inc. v.

842.)

That agreement

was the product

62

liability

would

be listed

fees and costs

revisions

The

be exceptions

their attorneys'

by detailed

to meet.

injustice

"is not to protect

where

property

they promote

Inc. v. M-MLS.com,

ego doctrine

210 Cal.App.2d

agreement.

Gaggero's

veil to be pierced

him protection,

[to maintain

there

exceptions

Design,

40:19-20,

alter-ego

promote

believed

it

by appellants.

actually

a corporate

and Home

awarded

a Fraud

because

29:2-4,

were unable

the Legislature

those

of the alter

to afford

(CT1
received

respondents

it was not caused

claims,

Floor

instead.

motion

is not the kind of "injustice"

that allows

The purpose

Meat

which

If the Legislature

(Katzir's

but rather

lawsuit

exist because

on fraudulent-transfer

Sanctions

their alter-ego

is not that appellants

set a deadline

To hold that enforcing

Legislature's

transfer

then,

- especially

Neither

an Injustice.
that they brought

a fraudulent

but that the Legislature

fact that their

admit

of Limitations

to the drafts

based

on a provision

of "extensive

... by Mr. Gaggero."

(JA2

401.) As they explainedon the first pageof their brief in the prior appeal,they had
"negotiat[ed]a singularly detailedretaineragreement[.]" Respondentsmadethis
contractwith their eyeswide openaboutGaggero'sfinancesandaboutappellants'
independence.Evenif they somehowdid not know abouthis finances,they choseto
maketheir deal without that information. That they now want to collect from him but
can't is not an inequitableresult,andit doesnot supportan alter-egofinding against
appellants.(Assoc.Vendors,
sufficient

to merely

not pierced,

show

supra,

210 Cal.App.2d

that a creditor

at p. 842 ["Certainly,

will remain

and thus set up such an unhappy

unsatisfied

circumstance

it is not

if the corporate

as proof

veil is

of an 'inequitable

result'"].)
Statutes

of limitations

has passed.

They

party

claim

whose

alter-ego

motion

apply

whether

what respondents

F.

purpose

is Nothing

Consequences

is involved

(10 th Cir.

994 F.2d

1990)

k/As

This

Cascade

consider

them

amount

section

is to prevent

of time

just or not.

and bring

in Civil Code

limits

About

Making

Own Business
a corporate

If a

a successful
3439.09

creditors

would

from doing

(Cascade
also,

contracting

"[i]n

of conducting
financed.'"

business

(Cascade,

63

the

contract-like

& Metals

Corp.

e.g., In re Sims (5th Cir.

parties

choose

cases,

is whether

of loss or injury

Bear

a consensual,

Energy

nonconsensual

and the question

a risk

Respondents

Decisions.

veil when

1577; 2/see

is so because

dealing,

the device

be marginally

1557,

explained:

to transfer

through

that may

periods

Unjust

to pierce

896 F.2d

of voluntary

businessmen
public

a certain

cry "injustice"

than in other scenarios.

210, 218-219.)

element

simply

of those

of their

Courts are less likely

Bank

parties

after

did here.

There

transaction

could

the limitations

The very

to bar claims

the affected

is time-barred
instead,

be meaningless.

are supposed

there

is 'no
for

of the general

in the name of a corporation

supra,

1993)

how they will

it is reasonable

to members

v.

896 F.2d at p. 1577.)

allocaterisk andacceptthe premisethatthey aredealingwith eitheran individual or

entity of limited liability.

That is what

respondents

did when

they

agreed

to work

for

Gaggero.
The Legislature
conversion

and fraudulent

expedient
those

means

(PIP,

Respondents
assessing

bargain,
would

there
erase

for unhappy

transfer.

supra,

"Outside

and advising

is nothing

unjust

the distinction

Where

a party

about

bears

its case but fails to offer

remand.

(Baxter

v. Peterson

entitled

to another

chance

They

holding

them

to make

by the

to pursue

result"

of proof

evidence,

the showings

a bad

To rule otherwise

and an unhappy

Means

They

creditor.

May

not

has a full and fair opportunity

the claim

150 Cal.App.4th

in negotiating

If they made

to Prove Their Case

in the Trial Court.

the burden

(2007)

shortcut

to its terms.

an "inequitable

sufficient

for

accomplished

are well-versed

on legal consequences.

Failure
Chance

which

piercing,

claims

at p. 1523.)

attorneys.

between

Respondents'
Have Another

to bring

is an unacceptable

162 Cal.App.4th

risks,

creditors

reverse

motion,

are experienced

G.

present

ways

of a postjudgment

remedies."

deals,

enacted

may not be retried

673, 681.)

they failed

Respondents

to make

to
on

are not

the first time

around.

VII.

THE

TRIAL

EXCLUSIVE

COLrRT

INVADED

JURISDICTION

THE PROBATE
OVER

COURT'S

THE TRUSTS'

INTERNAL

AFFAIRS.
Probate
jurisdiction

subd.

section

of proceedings

proceedings
immunity,

Code

include
power,

(b)(2).)

those

subdivision

concerning
to determine

privilege,

Other

inter alia, "[a]ctions

17000,

divisions

duty,

(a) gives

the probate

court "exclusive

the internal affairs

of trusts."

Such

"the

or right"

existence
under

of the superior

and proceedings

court

by or against
64

or nonexistence

the trust.
have

(Prob.

concurrent

creditors

of any

Code,

17200,

jurisdiction

or debtors

of trusts"

over,
and

"[o]ther actionsand proceedings

involving

17000,

Whether

subd.

whether

(b)(2)

they are revocable

thus were

not properly

"Internal

successor

the trustee's
of Mullins

respondents,

respondents
placing

to enforce

and third

subdivision

(b)(3),

motion

and

of trusts"

and

because

trust provisions,

financial

the trusts

against

Gaggero's

arrangements"
assets,

to

the trustee's

egos.

because
leading

order

available

over
alter

over

(Estate

assets

"authority

the trusts'

authority

The trial court's

the trusts'

It also asserted

changes

arrangements."

added.)

it made

financial

of the trust,

And

it

it enabled

to orders

the judgment

persons

within

would

the meaning

the trustee

for each

The motion

fit within

because

did not qualify

of Probate

of the trusts

Code

is not Gaggero

didn't

of Probate

Code

owe respondents

involving

section

also was not a proceeding

the exception

the trusts

as a proceeding

17000,
but rather

by a credttor

section

anything

of

17000,
until

after the

was granted.
The

definition

motion

was

of"internal

the start of the hearing,

included
being

from

924, 93 l, emphasis

their judgment

since

(b)(2)

Code,

entities

affairs

of the terms

of the trust's

acts had made

- who was not a party.

subdivision

deviation

of the trust's

to amend

the trustee

which

(Prob.

into receivership.

The motion

the trusts

other

not beneficiaries.

it held that those

all of them

Praske

trustee,

the "administration

the internal

modification

i_rom trust provisions"

who were

because

"concerning

include

206 Cal.App,3d

was a "deviation

persons."

the trial court.

acts, or the administration

(1988)

modified

before

and third

the trusts are fully separate

are questions

trust affairs..,

in a designated

acts"

and (b)(3).)

trustees

in the written

informed

about
affairs

how the trusts

of trusts."

Appellants

but the court rebuffed

opposition.

of the jurisdiction
therein

were

(wr

3-6.)

of the court

or has been

filed

for settlement",

proceeding

in its own case and allow

pointed

the argument
That

the account

Court

This is the very

this out to the trial court

because

was yet another

in probate

a Superior

65

set up and operated.

it had not been

error.

"[U]pon

and that an account

"should

to be settled

postpone

by the court

is to be
the
having

at

primaryjurisdiction thereof."(Dowdall v.
There

is no requirement

timeframe.

Once

that this notice

appellants

informed

at the hearing,

the trial court

VIII.

GAGGERO

THAT

SEPARATE

in its opinion

upon

AND

the law of the case

progress,

both in the lower

(1975)

13 Cal.3d

judgment

835,

that his finances

judgment.

(Opn.

PCM's.

(CT1

of decision,

86.)

with checks

This court

crucial

to the outcome,

favor.

Respondents

have

been

court,

stating

Under

a rule

that rule

subsequent

retrial

928.)
action,

482, 491,
Such

would

that finding.

(People

v. Shuey

from the original

leading

it to affirm

have

required

said Gaggero

would

were

have

parties,

the

a reversal.
could

(Opn. at 20-21)

the prevailing

or rule

appeal

his finances

it the judgment

states

its subsequent

appeal[.]"

the trial court

been

or appeal
quoting

Gaggero's

the law-of-the-case

and makes

determinations

whether

affirmed

of law necessary

establishes

Cal.4th

decision

the appeal,

that principle

to throughout

from appellants',

without

not have

jurisdiction

not recover

distinct

from

The finding

was

been

in Gaggero's

so they would

not

fees and costs.

this court

law of the case.

to the decision,

from PCM because

affirmed

because

would

awarded

Because

distinct

statement

court's

in deciding

This court held in Gaggero's

were

a particular

FINANCIALLY

court,

and upon subsequent

A contrary

legal fees he had paid

of the probate

ARE

the [reviewing]

at 20-23.)

In its 2008

or within

CASE.

and must be adhered

841.)

183 Cal. 348, 353.)

to yield.

APPELLANTS

court

(1920)

in writing

or rule of law necessary

becomes

Court

the trial court

OF THE

an appeal,

a principle

be given

was required

IS LAW

"[W]here,

Superior

doctrine,

to the decision

it determinative

in the same
9 Witkin,
"must

in the trial court

financial

case.'"

decision

of the case,

conclusively

(Morohoshi

v. Pacific

(4th ed 1997)

in all subsequent
(Eisenberg,

is

of an appellate

of the same

or on a later appeal."

66

"'[t]he

that finding

of the rights

Cal. Procedure
be followed

separateness,

parties

Home

in any

(2004)

Appeal,

895, p.

proceedings

in the

et al., supra,

34

14:172.)
The finding
decision"

that Gaggero

because,

without

thus law of the case,

is financially

it, this court

judgment

merely

where

appellate

decision

764,

786.)

doctrine

"Indeed,

have

finding

to say that the original

and the amended

the earlier

would

and it bars a contrary

It is no answer

separate

the judgment.

was mistaken
Law

(People

the former

to the
It is

now.

the error.

was wrong.

of the law of the case becomes

had to reverse

judgment

corrects

it is only when

was "necessary

rule

this point

of the case applies

v. Stanley

is deemed

at all important."

about

(1995)

erroneous

(Tally

even

10 Cal.4th
that the

v. Ganahl

(1907)

151

Cal. 418,421.)

IX.

THE

AMENDED

DIRECTLY
A.

JUDGMENT

CONTRADICTS

The 2012
Cannot

Finding

In its January
claim

8, 2008

of evidence

expenses

on his behalf
but the court

party

- had made

court,

the absence

87.)

This court

alter egos
on findings
been made

excluded
payments

of evidence
later affirmed
trial court

$498,000

would

at the time.

have

Finding

were

fees PCM

connected

was a management
clients

the evidence

Alter
PCM

Egos

and

Gaggero

that finding.

(CT1
to PCM

(Opn.

deemed

PCM

67

had advanced

which

the clients'

paid

funds

that PCM - which

86.)
barred

due to

to his. (JA2 412.)

According

rather

than

was not a

to the trial

such a holding.

and the other

in a judgment
amended

Gaggero's

(CT1

86-

at 20-21.)

of precisely

The May 29, 2012

rejected

company

using

and found

"gratuitously".

resulted

that

the trial court

in legal

of its other

later

IT

JUDGMENT.

are All Gaggero's

the 2008

finances

tying

BECAUSE

Separate.

due to the (supposed)presence

which

O1/dGINAL

of decision,

that PCM

and those

these

But the same

statement

that PCM's

had tried to show

its own,

with

to recover

Gaggero

STAND

that Appellants

Are Financially

that he was entitled

the absence

THE

Be Reconciled

Gaggero

CANNOT

appellants

such evidence.
in Gaggero's
judgment

Gaggero's

That order
favor

rests

had they

is thus irreconcilably

in

conflict with the originaljudgment. Sincethe original judgmentis now final and
cannotbe altered,the only way to resolvethe conflict is by reversingthe amended
judgment.
The originaljudgment would havebeenin Gaggero'sfavor hadthe trial court
foundthat the PCM paymentsweremadewith his money. Respondentswould then
havebeenheld liable for thosepayments,andGaggerowould havebecomethe
judgmentcreditorratherthanthejudgmentdebtor. Therewould be nojudgment
againstGaggeroandthusnothing appellantscould havebeenmadeto pay for. Even
thoughthe disputedpaymentscamefrom PCM andnot the otherappellants,had
Gaggerobeenthe original judgment creditor,
name

any additional

judgment

The only way

was by holding
the original

judgment
which

the trial court

that respondents

judgment

There

appears

the original
in those

CC-California
1048.)

The

later deem

cases

proved

Plaza

should

v. Paller

judgments

in the same

case,

to

alter

have

between

case. L/ There
a contrary

prevailed

over

have

egos

cost them

decisions

the original.

(See,

such a ruling

51 Cal.App.4th

must be consistent
the amended

been

judgment

makes

reverse

an amended

amended

(1996)

judgments

and should

that would

& Goldstein

judgment

hold that amended

no reason

Gaggero's

inconsistencies

judgment

of the original

This court

appellants

was not yet final when

Associates

been

at trial.

in the same

the amended

have

the very thing

to be no case law about

judgment

finality

could

final judgment

would

later.

had proved

had it been

and a prior

entered;

debtors

there

was
e.g.,

1042,

impossible

here.

with earlier

judgment

for violating

this requirement.
A similar

problem

arises

3-Z/There are cases

appear

inconsistent

with

when

where
the

a jury's

a clerical
earlier

Estate (1938) 10 Cal.2d 709, 716-717),

involved
no actual conflict.

special

error

judgment

verdicts

are inconsistent

made

an amended

(see,

e.g.,

68

and

judgment

In re Goldberg's

but they are not on point

because

in

they

cannotbe harmonizedwith oneanother. The only way to resolvesucha conflict on

appealis to reversethejudgment.(See,e.g., Lambert
Cal.App.4th

1179,

that designers

! 183-1184

were

negligent];

Cal. 599, 601-602

uncontradicted

special

the original
an option.

Only

Where
resolved

conflicts

judgment

Tavaglione
consistent

of the findings
(1993)

special

Co. (1977)
in place,

special

Funds

special

is final.

Reversing

general

in the special

4 Cal.4th

finding

the judgment

159

Packing

461,467-468

or modifying

(Code

1156.)

Where

and inconsistent
over

be reversed.

verdicts,

Co.

[where

Here,

though,

it is no longer

they must

Civ. Proc.,
a general

with another,

the contrary

530, 540-541.)
must

Valley

prevails].)

and special

verdict.

1150,

prevail

19 Cal.3d

Co. (1911)

but

both with

cf. Napa

verdict

67

may now be changed.

between

finding

Pac.

16 Cal.App.

(1998)

was not defective

conflicted

findings];

(1911)

verdict,

judgment
arise

which

Motors

design

v. Southern

findings

Gaggero

the amended

with one special

FordMotor
conflicts

against

v. Billings

and the consistent

Cross

with general

such conflicts

in favor

special

Red

that truck

Sessions

and with other

Relief&

verdict

findings

compare

[disregarding

evidence

v. San Francisco

[special

v. General

special

be

625;
verdict

the general
finding.

But when

the trial court

(Lambert,

supra,

is
verdict

(Hasson
leaves

v.
the

67 Cal.App.4th

at

pp. 1183-1184.)
Inconsistent
they

special

are challenged

the conflict
which
amended

on appeal

is between

is not.

a contrary

judgment

conflict

Accepted

Respondents
forbids

ruling.

Thus,

of a single judgment.

When

is final and an amended

this conflict

the Benefits

which

a party

which

is by reversing

those

Here,
judgment

aspects

&the

with the original.

May Not

a party

part

they are not yet final and can both be reversed.

an original

which

Having

Equity

are necessarily

The only way to resolve

judgment

B.

verdicts

of the

Contradict

accepts

Original

the benefits

who accepts

69

Judgment,

It.

the benefit

of a ruling

from later seeking

of part of a judgment

will not

beheardto challenge
Associates,

Inc. v. Glendora

Similarly,

a party, which

different,

contrary

Cal. 618,

620 ["The

whether
order

the remainder

ruling.

be the final

result

existed

place.
succeed
relying

X.

which

determination

result.

and that the party

took advantage

of it.

won

at trial because

Respondents

accepted

let respondents
the entire

this point.
appellants

This court

should

769.)

may not later seek

the rule rests

(1902)

135

are the same

or an intermediate

which

RESPONDENTS'

amount

not depen d

is only that the

Gaggero's

money

separate

judgment

by

cake and eat appellants',

from appellants,

does

not allow
they

along

respondents

should

never

for such gamesmanship.

undermine

55-MONTH

matters

of the original

Gaggero's

the very judgment

fatally

What

it does

it.

now by proving

against

because

deemed

the benefit

have

Equity

not stand

now by arguing
on findings

the court

and then enforcing

later collected

against

766,

County

of the cause

the favorable

underscores

judgment

upon

ruling

v. Riverside

m'kedfor

the party

The trial court

costs,

County

(See A l J. Vela &

129 Cal.App.3d

one pre-trial

estoppel

it on appeal

they

(1982)

from judicial

from appellants'.

That

on appeal.

of the procedure."])

is different

Respondents

defending

Dist.

from

rule and the principle

This principle
whether

School

(San Bernardino

in the course

upon

Unified

has benefitted

such judgment
made

of that judgment

those

DELAY

they

with interest
to enforce

have

won

Respondents
are trying

of the original

WAIVED

too.
and

their
in the first
should

to enforce,

not

or by

judgment.

THEIR

ALTER-EGO

CLAIM.
As Gaggero
on information
they believed

in his opposition,

they had obtained

there was reason

during the nearly

on September

explained

five-month

10, 2007

before

the respondents'

the end of the trial in 2007.

to hold appellants
window

and before

argument

liable,

they should

after the court granted

judgment

was

70

entered

(CT3
have

their motion

on February

was based
394.)

If

acted on it
for judgment

5, 2008.

At a

bareminimum,they shouldhaveactedwhenthey first soughtattorneyfeesandcosts

on March 7, 2008.(JA2 430-432;JA6 1552-1582.)
Instead,respondentswaited until April of 2012beforethey beganpursuing
appellants.(CT1 24.) By then,morethanhalf a million dollarsof statutoryinterest
hadaccruedon thejudgment. Hundredsof thousandsof dollarsmorewereaddedfor
feesandcostswhich respondentsincurredwhile trying to collect on thejudgment.
And appellantshadto pay all of it.

A.

A Court

May

Not Add

of the Relationship
A judgment
creditor

"was

(Abaft,

supra,

["no legal
available

aware

to judgment

September

citingJines

creditor

Motion

the Judgment

Against

order

the original

did not reveal

order

before

all of respondents'

before

to include

anything

judgment

before

debtors

Knew

if the judgment

the judgment

supra,

adding"

if the ereditor

was entered."

77 Cal.App.3d

an alter

ego based

at p. 717
upon

facts

trlal].)

Was

Based

Gaggero

evidence

granting

Debtors

Was Entered.
alter-ego

v. Abarbanel,

Respondents'

10, 2007

Judgment
Judgment

of the alter ego relationship

basis for ... post-judgment

Nearly

them

may not be amended

6:1573,

B.

New

Before

Was Entered

of the supposed

their motion
was entered

of substance

about

on Information

in Early
relationship

for judgment.
on February

the relationship

They

Had

Before

2008.
pre-dates

the

It was thus available

5, 2008.

between

What

remains

Gaggero

and

appellants.
Respondents'
PCM

"pays

evidence

for all of Gaggero's

paid

to respondents

have

used

Mortice

primary

appellants'

based

upon

between

personal
2000

resources
declarations

of the supposed
expenses..."

and 2002.

(CTI

- in 1998 or 1999

alter-ego
- which

38:11.)

tncludes

They

is that

the fees

he

also say he could

- to pay for a house

they wrote for him and Praske

71

relationship

tn 2001.

in Santa
(CT1

36:23-

to

37:4,

37:17-20;

from the 2007

CT2 223,283-288.)
trial in this case,

Respondents'
of decision,
the December
91, 93-111,
been

second

114-116.)

presented

But these

at the 2007

6, 2010

They

(CT1

opinion

judgment

documents

trial.

trial.

other

the trial court's

May

amended

about

Yura

also included

from this court's

28, 2010

evidence

and the 2005

evidence

excerpts

Their

January

8, 2008

in Gaggero's

statement

appeal,

fees and costs.

discussed

did not reveal

comes

51:14-52:26.)

awarding

merely

transactions

the evidence

any new

and

(CT1

60-

that had

information

about

appellants.
The
beyond
2009

few more

what

recent

respondents

third-party

motion

exam

the very

respondents

mentioned

on April

learned

about

whether

involved,
Trial
(Trial
worked

RT4

three

53:5-15),

(CT1

prevented

trial proves
Their

he had set up his estate

2132-2134),
and PCM.

counsel

and asked
(Trial

disputes

them

no new

53:16-54:2.)

from the websites

from

getting

clearly

printed

it sooner.

They

that respondents

(Trial

questions

those

they first

had

specifically

how Mr. Praske

PCM's

of the

all along.

Gaggero

creditors,

about

about

is the reason

questioned

similar

gave

9,

their

that this was when

RT9 4814-4816.)
72

discovery

Respondents

in his own name.

him twice

Their

available

more

plan to avoid

had assets

They cross-examined

publicly
even

brought

33:18-34:6,

them

June

of interest

have

answers

but did not claim

had been

by then.

Gaggero

(CT2

of Praske's

likewise

309-319.)

of state.

of the 2007

for both Gaggero

322-354)

in Gaggero's

or that anything

1836-1839,

should

more years.

291-306,

information

nothing

secretaries

information

RT6 3005.)

transcript

information

(CTI

and whether

The

377) revealed

in their motion.

that the information

The transcript
all the relevant

(CT2

no material

are the two sets of public

the information,

also do not deny

of waiting

the dispute

3, 2012

earlier.

357-CT3

lack of information

and Nevada

provided

if it had, respondents

and 2012

All that remains

pages

(CT2

instead

in 2011

information;

California

had years

- and even

soon afterwards

with Gaggero

of evidence

already

debtor

any of the appellants

pieces

was

RT5 2769-2773;
history

and structure

of a lawyer

They

also asked

who had

Gaggeroif hecould haveobtainedmoneyfrom Prasketo paya six-figure debtto one

of his creditors,andhe saidhecould have.(Trial RT6 3067-3068.)_/Even asthey
pressedhis creditorsin 2001to settleby arguinghe couldn't afford to paythem (Trial
RT5 2501-2511,2738-2740,2757;Trial RT6 3014-3016,3118-3119),their own fees
werebeingpaid with checksfrom PCM. (Trial RT6 3139-3140.)

C.

Claimants

"[T]o
diligence

justify

717,

the evidence

them

The Court
reversed

creditor

was named
of Appeal

judgment.

agreed

because

"Here,

more

the subject

no suggestion

is similarly

to add appellants.

after

have

motion.

acted

(1975)

with due

52

can be justified

became

available.

been

supra,

was its alter

debtor

on that basis

supported

where
But that

persuaded

ego.

seven

the alter-ego

too long before

in the record
There

The
years

finding,

seeking

the judgment

until
were

at the time of the filing

supra,

104 Cal.App.3d

no explanation
entry

later.
but it

to amend

the

Gaggero

did not ask Gaggero

accomplished.
73

to seven

year

that respondents

this motion

unaware

was filed.

have
There

of appellant's

of the complaints

or at the time

at p. 48.)

in the record

of their judgment
against

for the close

is no suggestion

that respondents

The judgment

_/Respondents
would

Court

of the Chimes,

sole shareholder

had waited

to satisfy

with Abbey
(Alexander,

than four years

v. Abbey

is no explanation

any effort

There

have

explained,

is likewise
of trial."

Parties.

must

delays

only recently

that the evidence

ever made
connection

Lengthy

judgment

the creditor

there

in filing

debtor's

an additional

As the court

delay

in Alexander

that the judgment

anyway

plaintiff

v. Superior

6:1574.)
was based

Adding

here.

The judgment

shareholder

when

defendants,

(Mclntire

supra,

the motion

happened

the trial court

of new

in as parties."

721; Ahart,

on which

is not what

Use Due Diligence

the addition

to bring

Cal.App.3d

Must

for why respondents

against

Gaggero

was entered

to explain

how

before

on February

waited
they moved
5, 2008

such a transaction

(JA7 1876)andaffirmed on May 6, 2010. Yet respondentsdelayedfiling their alteregomotion until April 10, 2012,while interestandcostscontinuedto accumulate.
(CT1 24.)
If respondentsbelievedappellantswereGaggero'salteregos,they shouldhave
broughtan alter-egomotion oncethe trial court grantedtheir section631.8motion for
judgmenton September10,2007. That is when it becameclearthatthey would seek
feesandcostsfrom Gaggero,whom they knew could not pay a largeawardat therime
andwhoserelationshipsto appellantswerealreadyknown to them.

D.

That

Delaying

Respondents
had only recently
argued
that,

matters

expedient

mean

to pay millions
respondents

entitled

creditor.

were

would

not Excuse

their delay,

be reversed

not whether

manner

applies

respondents

they

(CT3

and

427-428.)

waiting

was

it is convenient

alter egos,

preferred

that

on appeal

whether

to the alleged

It.

upon evidence

with Gaggero.

diligent,

10, 2007

(Code

Prejudiced

by respondents'

not the

to wait does

motion

order granting

on February
would

Civ. Proc.,

while

not

not have

74

they pursue

their motion

Delay.

they have

during the almost

5, 2008,

917.1,

by Respondents'
delay since

the judgment

their alter-ego

only and appellants

failed.

That

based

to justify

dispute

were

Severely

to satisfy

of that judgment

until the appeal

if the judgment

was

Does

to wait.

of dollars

the September

for costs

challenged

is about fairness

were prejudiced

had brought

entry

When

respondents

requirement

Appellants

Appellants

that their motion

they had a discovery

of the judgment

E.

for Respondents

A duty to act in a timely

The diligence

they were

between

claim

available.

is whether

for them.

convenience

been

become

Convenient

only that they did not know

But what

actual

did not even

after it was affirmed,

or not.

Was

been

their appeal.
five-month

for judgment

any resulting

appeal

(d).)

Even

then,

If

window
and the

would

had to pay the judgment

subd.

forced

have

unless
they

could

and

have

paid the judgment

It would

also have

that respondents

could

judgment

automatic

been

respondents

waited

appellants

- which

potentially

have

until

ruinous

appellants

grown

from $1,327,674.40

15, 2012.

(MJN

Exhs.

THE

COURT

APPELLANTS
AND
DUE

respondents

SHOULD

ORDER

WHOLE

to reversing

"When
may

FOR

the judgment

whole.

In doing

before

and conditions

findings,

As section

be returned

of all property

order, so far as such restitution

or rights not restored.

restitution
inequitable.'

whose

if the j udgment
" (Stockton

property

TO MAKE
HAVE

this court should

the reviewing

is consistent

on the judgment

The reviewing

judgment

or

of third parties

and

to compensate

Inc. v. Palermo

75

for
and

by order, refer such matters

taken under a judgment

or set aside,

terms

court may take evidence

or may,

they

or order.

on reasonable

with rights
sufficient

court

to the positions

lost by the erroneous

judgment

order

908 explains:
or modified,

and rights

INCURRED

THEY HAVE SUFFERED

AMENDED
JUDGMENT.

of or execution

has been

is reversed
Theatres

to pay the judgment

- in full on

THEY

so far as possible

make findings concerning

such matters
to the trial court for determination."
"A person

with the

obliged

court may order restitution

may direct the entry of a money

property

COSTS

DAMAGES
OF THE

the enforcement

so, the reviewing

were

to the

of this fact by

Faced

RESPONDENTS

or order is reversed

direct that the parties

occupied

the May 29,

and thus not subject

to $2,238,509.51

THE

the alter-ego

to make appellants

interests.

2, 3.)

THE CONSEQUENTIAL
TO THE ENFORCEMENT

In addition

for costs

and costs

as well as

was over,

took full advantage

by then had

November

appeal

into receivership.

effects,

their

in interest.

in lees

judgments,

defending

after Gaggero's

appellants

more

amended

incurred

was not merely

$400,000

of dollars

in various

Respondents

to place

approximately

of thousands

appellants
clear.

moving

saving

awarded

not be more

against

receivership's

XI.

since

stay of enforcement.

successfully

earlier,

them hundreds

fees and costs

Because
2012

saved

have

the substantial
Prejudice

two years

'is entitled

unless

restitution

would

(1953)

121 Cal.App.2d

to

be
616, 619.)

Only

extreme

circumstances

v. Wall (2011)
creditor

have

196 Cal.App.4th

pay interest

litigation

tactics

in enforce

restitution

could justify
1060,

on $800,000

had made
costs].)

to entities

denying

1067 [affirming

in punitive

the judgment

There

which

never

have

e.g., Gunderson

to make judgment

because

pay

remotely

(See,

refusal

damages

creditor

is nothing

should

restitution.

judgment

$100,000

inequitable

become

judgment

appellants'

payment

debtor's

more

than

about

ordering

debtors

it should

in the first

place.
This means
and awarding
expenses

them

associated

interest

efforts.

have

expenses

equal

respondents

of dollars

to the property's

The trial court

has the same

decision

is left to the trial court

appellants
must

whole,

for the

and with the related

associated

And because
to repay

for any lost rental

from

costs
appeals.

with

the appellants

their

loan,

income

will

respondents

and to pay an

the time of sale until the time

them.

v. Bill & Vince's,

appeal.

them

them

fees and court

and interest

in order

appreciation

(Rogers

another

motions

the costs

real estate

reimbursing

attorney

to pay the judgment.

to compensate

reimburse

include

also include

of the judgment

they lost due to respondents'

and assignment

to sell commercial

be ordered

amount

they

millions

It also means

and the opportunities

with the receiver

borrowing

should

and costs.

These

substantially,

likely

than just refunding

they incurred

enforcement

More

more

lnc.

authority

to order

restitution

(1963)

219 Cal.App.2d

322,

here,

it will inevitably

come

Appellants

respectfully

leaving

the trial court

ask this court

pay.

//
//

76

324-325.)
back

to order

only to determine

as this court.
But if the

to this court

respondents

how much

in yet

to make

respondents

CONCLUSION
The trial court's
appellants

cannot

findings

stems

withheld

the trust

finding

be additional

directly

from

violating

variety,

liability

of alter-ego
The evidence

egos.

the exclusive
relief

before

delays

their

and directly

obtained

make

prejudiced

respondents

errors
more

have

and should

directly

of law, no

three

for Gaggero's

debts.
Gaggero's

each of the ten

that Gaggero

owned

irrevocable

trusts

all in order

to give

court,

have

sought

$2.2 million,
rights,

incurred

the exclusive
judgment,

contrary

cost appellants

their

And as a matter

any of the appellants

breached

the original

positions

than

for the first

of evidence

of the probate

had

on appellants

reverse-pierced

absence

that

The alter ego

that appellants

liable

to deem

also invades

contradicts

own to protect

respondents

appellants

of law.

means

almost

and

and

five years

earlier,

appellants.

judgment

have

rights.

improperly

It also wrongly

that they could

it by taking
These

costs

could

belief

that was sprung

due process

jurisdiction

The amended

of their

their

judgment

any of them.

respondents

court

- a belief

his own litigation

as a matler

unfounded

and did so in the complete

controlled
invaded

the court's

controlled

debtors

was also insufficient

The amended

appellants,

judgment

instruments

time at the hearing,

alter

that Gaggoro

dearly

by forcing

appellants

//
//

77

largely

to those

of the probate

because

respondents

they took before.

- by obliging

them

them

attorney

and by saddling

since

jurisdiction

to incur
them

were

to pay

with additional

added

fees and costs

fees and

to the judgment.

Appellants
positions

respectfully

by reversing

which

it was based,

Dated:

June 24, 2013

ask this court to restore

both the amended

and by ordering

judgment

respondents

Respectfully

them to their rightful

and the alter-ego

finding

on

to make them whole.

submitted,

LAW OFFICES

OF EDWARD

A. HOFFMAN

Management,
Inc. 511 OFW L.P., Gingerbread
Court L.P., Malibu Broadbeach,
L.P., Marina
Glencoe L.P., Blu House L.L.C., Boardwalk
Sunset L.L.C.,

Joseph

Giganin Trust, Arenzano

Foundation

78

Praske

as Trustee

Trust,

for

and Aquasante

CERTIFICATE OF WOl_) COUNT

(Cal. Rulesof Court,
The text of this Brief consists
WordPerfect

version

16.0.0.429

software

with which

DATED:

June 24, 2013

of 24,835

(also known

rule 8.204(e)(1))
words

as counted

as WordPerfect

by the Core[

X6) word-processing

it was written.

Respectfully

submitted,

/
Edward A. Hoffman
Law Offices of Edward

A. Hoffman

Attorney tbr Appellants

Pacific Coast
Management,
Inc., 511 OFW L.P.,
Gingerbread
Court L.P., Malibu
Broadbeach,
L.P., Marina Glencoe L.P.,
Blu House L.L.C., Boardwalk
Sunset
L.I,.C., Joseph Praske as Trustee lbr
Giganin Trust, Arenzano
Trust, and
Aquasante
Foundation

79

PROOFOF
I, Edward

A. Hoffman,

declare

SERVICE

BY MAIL

as follows:

1 am over eighteen (18) years of age and not a party to the within action. My
business address is 12301 Wilshire Boulevard,
Suite 500, Los Angeles, California
90025. On June 24, 2013, I served the within
APPELLANTS'

OPENING

BRIEF

on each of the following,

by placing a true copy thereof in a sealed envelope
postage fully prepaid, in the United States mail at Los Angeles, California,
addressed as follows:
Office

Randall A. Miller, Esq.

Austa Wakily, Esq.
Miller LLP
515 South Flower
l.os Angeles,

CA

Clerk of Cotu't-

Los Angeles,

CA

Clerk, Department

of the Clerk

Supreme Court of California

350 McAllister
Street

Street,

Suite 2150

San Francisco,

90071-2201

(Electronic

Civil

Los Angeles Superior

111 North Hill Street

with

David
Court

CA

94102-3600

Service)

Blake

Chatfield

Attorney
Westlake Law Group
2625 Townsgate
Rd., Suite 330
Westlake Village, CA 91361

90012
24

Los Angeles Superior

111 North Hill Street

Court

Los Angeles, CA 90012

(Courtesty
copy for Delivery
Hon. Robert L. Hess

to the

I declare under penalty of perjury that the foregoing is true and correct
that I signed this declaration
on June 24, 2013 at Los Angeles, Calitbmia.

Edward

80

A. Hoffinan

and