COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

STEPHEN M. GAGGERO,

)
)
)

PLAINTIFF-APPELLANT,

) CASE NO.
)BC286925

-vs-

KNAPP PETERSON & CLARK, ET AL.

DEFENDANTS-RESPONDENTS,

~~~~~~~~~~~~~~~~~~~-)

OR\G\NAL

APPEAL FROM THE SUPERIOR COURT OF LOS ANGELES COUNTY

HONORABLE ROBERT L. HESS, JUDGE PRESIDING
REPORTERS' TRANSCRIPT ON APPEAL
TITLE, INDICES, CERTIFICATE
MAY 29, 2012, JUNE 19, 2012
APPEARANCES:
FOR THE PLAINTIFF/APPELLANT:

WESTLAKE LAW GROUP

BY:
DAVID CHATFIELD
2625 TOWNSGATE ROAD
SUITE 330
WESTLAKE VILLAGE, CA
91361

'ir,r)
'

0
FOR THE DEFENDANTS/RESPONDENTS:

MILLER LLP
BY:
RANDALL MILLER
515 S. FLOWER STREET
SUITE 2150
LOS ANGELES, CA 90071
COURT OF APPEAL - SECOND DIST.

IF Il 1L ~)])
DE: 142012
JOSEPH A. LAMF

Clerk

Deputy Clerk

CAROL CRAWLEY, CSR NO. 7518

OFFICIAL REPORTER
VOLUME 1 OF 1 VOLUME
PAGES 1-39 ONLY

'

SUPERIOR COURT OF THE STATE OF CALIFORNIA.

FOR THE COUNTY OF LOS ANGELES
HON. ROBERT L. HESS,

DEPARTMENT LA 24

STEPHEN GAGGERO, AN INDIVIDUAL; ET AL.,

PLAINTIFF,

JUDGE

)
)

)CASE NO.
) BC286925

-vs-

KNAPP, PETERSEN & CLARKE,

STEPHEN RAY GARCIA, STEPHEN M. HARRIS
AND ANDRE JARDINI,
DEFENDANTS.

] ORlG\NAL

REPORTER'S EXPEDITED TRANSCRIPT OF PROCEEDINGS

TUESDAY, MAY 29, 2012

APPEARANCES:
FOR THE PLAINTIFF:

DAVID CHATFIELD
ATTORNEY AT LAW
2625 TOWNSGATE RD
SUITE 330
WESTLAKE VILLAGE, CA 91361

FOR THE DEFENDANTS:

MILLER LLP
BY:
RANDALL A. MILLER
BY: AUSTA WAKILY
515 SOUTH FLOWER STREET
SUITE 2150
LOS ANGELES, CA 90071

FOR NEW JUDGMENT DEBTORS:

DAVID ESQUIBIAS
2625 TOWNSGATE ROAD
SUITE 330
WESTLAKE VILLAGE, CA 91301

CAROL L. CRAWLEY, CSR #7518

VOLUME 1 OF 1
PAGES 1-28

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

DEPARTMENT lA

STEPHEN M. GAGGERO,

vs.

KNAPP, PETERSEN & CLARKE,

ET AL.,

8
DEFENDANT.
9

)
)
)
)

PLAINTIFF,

5
6

HON. MATTHEW ST. GEORGE, COMMISSIONER

NO. BC 286925

)
)
)
)
)

~~~~~~~~~~~~~~~~~)

10
11

12

REPORTER'S TRANSCRIPT OF PROCEEDINGS

13

TUESDAY, JUNE 19, 2012

14

15

APPEARANCES:

16

FOR PLAINTIFF/
JUDGMENT DEBTOR:

WESTLAKE LAW GROUP

BY: DAVID BLAKE CHATFIELD, ESQ.
2625 TOWNSGATE ROAD
SUITE 330
WESTLAKE VILLAGE, CALIFORNIA 91361

FOR JUDGMENT
CREDITORS ABC :

MILLER LLP
BY: AUSTA WAKILY
ATTORNEY AT LAW
515 SOUTH FLOWER STREET
SUITE 2150
LOS ANGELES, CALIFORNIA 91361

17
18
19
20
21
22
23
24

25
26
27

28

REPORTED BY:

LAURA LOPEZ, CSR NO. 6876

OFFICIAL REPORTER

ALPHABETICAL/CHRONOLOGICAL INDEX OF WITNESSES

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

I N D E X
(JUNE 19, 3012)

2
3

VOLUME

4
5

CHRONOLOGICAL/ALPHABETICAL INDEX OF WITNESSES

(NONE.)

7
8
9
10
11
12
13
14

15
16
17
18
19
20
21
22
23
24
25
26
27

28

EXHIBITS
(NONE.)

1
LOS ANGELES,

CALIFORNIA; TUESDAY, MAY 29,

2012

DEPARTMENT 24 HONORABLE ROBERT L. HESS JUDGE

11:50 A.M.

4
5

APPEARANCES:

(AS NOTED ON TITLE PAGE)

(CAROL L. CRAWLEY,

OFFICIAL REPORTER.

8
9

MR. CHATFIELD:

10
11.

PLAINTIFF.

12

MR.

MORNING~

YOUR HONOR.

14

JOSEPH PRASKE TRUSTEE OF THE GIG.AN IN TRUST,

15

OF THE ARANZANO TRUST, AND THE AQUASANTE FOUNDATION

16

AND VARIOUS LLC'S AND LP'S THAT ARE NOTED IN OUR

17

PLEADING AS A GENERAL PARTNER AND/OR MANAGING MEMBER.

18
19

21

TRUSTEE

I WOULD LIKE TO NOTE FOR THE RECORD THAT

JOSEPH PRASKE IS NOT A PARTY TO THIS ACTION.

20

MS. WAKILI:.
DEFENDANT,

GOOD MORNING, AUSTA WAKILI FOR

KNAPP,

THE COURT:

22

GOOD

DAVID ESQUIBIAS ESPECIALLY APPEARING FOR

13

ESQUIBIAS:

DAVID CHATFIELD ON BEHALF OF THE

PETERSEN & CLARKE.

THIS IS A MOTION TO AMEND THE JUDGMENT

23

TO ADD JUDGMENT DEBTORS ON THE THEORY THAT VARIOUS

24

TRUSTS FOUNDATIONS, AND OTHER BUSINESS ENTITIES

25

INCLUDING LLC'S ARE ALL MR. GAGGERO'S ALTEREGOS, AND

26

THEY SHOULD BE LIABLE FOR OR THEIR ASSETS -- SHOULD

27

BE REACHABLE FOR COLLECTION TO THE JUDGMENTS AGAINST

28

HIM.

I HAVE A VERY SUBSTANTIAL AMOUNT OF EVIDENCE

1
2

ON THE NATURE OF THESE RELATIONSHIPS THAT HAS BEEN

SUBMITTED TO ME .IN CONNECTION WITH THIS MOTION, AND

FRANKLY IT LOOKS TO ME LIKE THESE ARE APPROPRIATE

MOTIONS.

I SEEM TO HAVE QUITE A SHOWING HERE THAT IN

FACT,

MONIES AND WILL.

MR.

AND SINCE WE HAVE,

THAT THE MOTION HAS SOME MERIT,

11

MR.

12

SAY ON THIS POIN_T,

IT SEEMS TO ME

SO LET ME START WITH

GAGGERO'S COUNSEL, AND SEE WHAT YOU WOULD LIKE TO

MR.

CHATFIELD:

SIR.
YOUR HONOR,

IF I MAY START AS

14

REALLY THE PARTY IN INTEREST -- I REPRESENT THE

15

TRUSTEE WHO CONTROLS THESE ASSETS WITHIN THESE

16

TRUSTS.
IF I MAY RESPOND TO THE COURT FIRST,

17

18
19

I WOULD

APPRECIATE THAT.
THE COURT:

WELL,

THE TRUSTEE HAS TO BE -- THE

20

TRUSTEE GETS NAMED,

21

HIS ASSETS ARE BEING SOUGHT.

22

MR.

23

THE COURT:

ESQUIBIAS:

BUT IT IS REALLY THE TRUST THAT

THE CORPUS OF THE TRUST --

I DON'T UNDERSTAND THAT THEY ARE

24

SEEKING TO ADD YOU IN ANY OTHER CAPACITY PERHAPS THAN

25

AS TRUSTEE.
THERE IS CERTAINLY NO INDIVIDUAL CAPACITY.

26

27

YOU KNOW,

10

13

GAGGERO CONTROLS THESE -- DIRECTS THE

28

MR.

ESQUIBIAS:

CORRECT.

ANYONE IS SEEKING MR.

PRASKE.

WE DON'T BELIEVE THAT

WE DON'T BELIEVE THAT KPS IS TRYING TO SAY

THAT MR.

BELIEVE.

THE COURT:

AND I DIDN'T GET THAT OUT OF THEIR

PAPERS.

MR.

ASSETS,

BEING SOUGHT, AND BECAUSE THESE ASSETS ARE CONTAINED

WITHIN IRREVOCABLE TRUSTS -- OR EVEN IF THEY WERE

ESQUIBIA~:

WHICH MR.

WHAT WE DO BELIEVE,

IS THAT THE

PRASKE CONTROLS ARE ASSETS THAT ARE

10

REVOCABLE,

11

TRUSTS THAT THERE ARE CERTAIN PROCEDURES THAT NEED TO

12

BE FOLLOWED WHEN YOU ARE TRYING TO OBTAIN OR CONTROL

13

LEVY OR GARNISH THE ASSETS OF TRUS.TS.

THE FACT IS THAT THESE ARE IRREVOCABLE

AND I WOULD NOTE FOR THE RECORD,

THAT THE

15

PROBATE COURT HAS THE EXCLUSIVE JURISDICTION OF TRUST

16

MATTERS UNDER PROBATE CODE 17000, WHICH SPECIFICALLY

17

STATES THAT ACTIONS AND PROCEEDINGS BY OR AGAINST A

18

CREDITOR ARE VESTED IN THAT COURT AND MORE

19

IMPORTANTLY,

20

MOTION ARE BEING SOUGHT BY A JUDGMENT CREDITOR,

21

NOTICE UNDER THE PROBATE CODE NEEDS TO BE PROVIDED OF

22

THIS MOTION TO THE VESTED CURRENT INCOME AND

23

PRINCIPAL AND REMAINDER BENEFICIARIES OF THESE

24

TRUSTS.

25

THAT WE DON'T

14

PRASKE AS PERSONAL LIABILITY,

BECAUSE THE ASSETS IN THIS PARTICULAR

NO SUCH NOTICE WAS PROVIDED TO ANY

26

BENEFICIARY NOR WAS NOTICE PROVIDED TO THE TRUSTEE OF

27

THESE TRUSTS,

28

PROBAT.E CODE 17203.

AND,

NOTICE WOULD BE REQUIRED UNDER

AND LAST,

STATES THAT THE ASSETS OF AN IRREVOCABLE TRUST ARE

NOT AVAILABLE TO THE SETTLERS CREDITORS,

CASE HERE.

5
6

CONVEYANCE,

AVAILABLE.

THEN IT WOULD BE MADE POTENTIALLY

BUT, AS THE MOVING PARTY HAS CONCEDED IN

THEIR OWN DOCUMENTS THAT THE FRAUDULENT CONVEYANCE

10

CAUSE OF ACTION IS UNAVAILABLE TO THEM DUE TO THE

11

STATUTE OF LIMITATIONS,

12

ONLY EXCEPTION TO PROBATE CODE SECTION 18200 AND

13

PROBATE CODE SECTION 15403.

14
15

CODE -THE COURT:

17

MR.

19
20
21
22

23

FRAUDULENT CONVEYANCE IS THE

I SEE THE COURT IS LOOKING AT THE PROBATE

16

18

JUST A MINUTE.

ESQUIBIAS:

-- I WOULD LIKE TO POINT OUT JUST

ONE CASE.
THE COURT:

MAY I ASK WHERE THIS ARGUMENT APPEARS

IN YOUR OPPOSITION,
MR.

ESQUIBIAS:

SIR?
IT DOES NOT APPEAR.

THE SUBSTANCE

OF THE ARGUMENT WAS FILED.

THE COURT:

IS THERE A REASON,

IS THERE A REASON

24

YOU ARE MAKING AN ARGUMENT NOW THAT APPARENTLY GOES

25

TO JURISDI.CTION?

26

WHICH IS THE

TO THE EXTENT THAT THERE WAS FRAUDULENT

PROBATE CODE 18200 SPECIFICALLY

IS THERE A REASON WHY,

27

MERITORIOUS ARGUMENT,

28

OPPOSITION?

IF THIS IS A

IT WAS NOT INCLUDED IN THE

5
1

MR.

CAN TELL THE COURT THAT I AM

SPECIALLY APPEARING FOR THE PURPOSE OF ARGUING

JURISDICTION AND NOTICE.

6
7

9
10
11

HAVE NO EXPLANATION AS TO WHY IT WASN'T IN

I AM LATE TO THIS PARTY.

THE OPPOSITION.
THE COURT:

THE NOTICE OF SPECIAL APPEARANCE TO

OPPOSE AN OPPOSITION WAS FILED MAY 15TH.

MOVING PAPERS WERE FILED APRIL lOTH,

LOOK AT YOUR PAPERS HERE,

THESE ARGUMENTS,
MR.

AND AS I

DON'T EVEN GET A SNIFF OF

QUITE FRANKLY.

ESQUIBIAS:

WOULD AGREE.

BUT I

DON'T

12

BELIEVE THE FACT THAT THEY WERE NOT RAISED IN THAT

13

DOCUMENT DOES NOT PRECLUDE THE ARGUMENT TODAY.

14

THE COURT:

WELL,

WHY?

SO MY QUESTION IS,

15

THESE ARE ESSENTIAL ARGUMENTS,

16

BACK SO THAT THEY COULD NOT RESPOND TO THEM?

17
18
19

CHATFIELD:

MR.

ESQUIBIAS:

WHY DID YOU HOLD THEM

IT WAS NOT DESIGNED TO AMBUSH THE

MOVING PARTY.
THE COURT:

20

THOUGH,

21

MR.

IS IT ANYTHING OTHER THAN AMBUSH

AT THIS POINT?
ESQUIBIAS:

CAN SEE HOW IT IS PERCEIVED AS

22

THAT BY THIS COURT,

23

THIS MATTER CAN

24

THEM TO RESPOND TO THESE ARGUMENTS.

25

THE COURT:

26

MR.

27

THE COURT:

28

IF

~E

AND PERHAPS MOVING PARTIES XXXJD

CON~INUED

WELL,

ESQUIBIAS:

TO BRIEF IT AND TO ALLOW

YOU HAVEN'T EVEN BRIEFED IT.

I AM PREPARED TO DO SO.

SO THAT,

AGAIN,

RAISES THE QUESTION

THIS IS THE TIME AND PLACE FOR THE HEARING ON THIS

MOTION.

MS.

HAD HE BRIEFED IT OR RAISED IT IN HIS OPPOSITION,

MR.

THESE ARE OFFSHORE TRUSTS.

PRASKE HAS TESTIFIED UNDER

IN A DEBTOR EXAM,

ARANZANO IS AN OFFSHORE TRUST.

THEY HAVE

NEVER BEEN FILED WITH ANY COURT IN CALIFORNIA OR THE

UNITED STATES,

DOCUMENTS THAT ARE PRIVATE.

SO THESE ARE ESSENTIALLY VERY SECRET

THEY HAVE INDEPENDENT CONFIDENTIALITY

10
11

PROVISIONS THAT BOUND PRETTY MUCH THE TRUSTOR THE

12

TRUSTEE,

13

A PROBATE COURT AND ACCORDING TO MR.

14

IS SOMETHING THAT HE SAID HE NEVER FILED,

15

HAD WE HAD ANY IDEA THIS WOULD BE AN ARGUMENT THEY

16

WOULD RAISE WE WOULD HAVE PULLED EXCERPTS FROM THE

17

DEBTOR EXAMINATION TO ADDRESS THAT.

18

SO THEY WON'T BE SOMETHING YOU WILL FIND IN

THE COURT:

DON'T DISAGREE,

JUST A SECOND.

EVIDENCE?

20

SUPPORT OF THESE FACTUAL ASSERTIONS?

21

MR.

ESQUIBIAS:

22

THE COURT:

NO,

PRASKE -- THAT
AND AGAIN

BUT DO I

19

HAVE ANY

DO I HAVE ANY EVIDENCE IN

RAISED BY OPPOSING COUNSEL?

YOUR FACTUAL ASSERTIONS.

YOU HAVE

23

CHARACTERIZED THESE AS IRREVOCABLE AND SUBJECT TO

24

THIS THAT AND THE OTHER.

25

KNOW THAT?

27

28

DON'T KNOW.

HOW DO I

WHERE IS THE EVIDENCE TO SUPPORT IT?

26

CAN I MAKE ONE BRIEF POINT ON THIS?

WAKILI:

MR.

ESQUIBIAS:

YOU WILL NOT FIND IT IN OUR

PLEADING THAT WAS FILED.

7
THE COURT:

DO IT?

MR.

ESQUIBIAS:

THAT WILL

HAVE THE PLEADINGS THAT I

HAVE

REVIEWED IN PREPARATION FOR TODAY'S HEARING,

SHOW OTHER THAN THEIR OWN STATEMENTS IN THEIR

PLEADINGS WHICH ARE CONSIDERED ADMISSIONS THAT THE

TRUSTS ARE IRREVOCABLE.

8
9
10

THE COURT:
POSITION,

HAS THERE -- HAS MR.

PRASKE TAKEN THE

THAT THE TRUSTS THEMSELVES ARE

MR.

CHATFIELD:

HAD NOT PARTICIPATED IN THAT

12

PRIOR DISCOVERY THAT COUNSEL TALKS ABOUT,

13

SAY THIS,

14
15

DID NOT

CONFIDENTIAL?

11

ON BEHALF OF MR.

THE COURT:

BUT

WILL

PRASKE --

AND THAT THE TERMS OF THE TRUST

THE TRUST DOCUMENTS OUGHT NOT TO BE PRODUCED?

16

MR.

ESQUIBIAS:

PRASKE,

WILL SAY THIS ON BEHALF OF

17

MR.

18

VESTED CURRENT INCOME AND PRINCIPAL BENEFICIARIES

THAT IF NOTICE IS

19

THE COURT:

20

MR.

HAS MR.

ESQUIBIAS:

PROVIDED TO THE ALL THE

-- AND HOW WOULD THEY DO THAT?

WE WILL PROVIDE A COPY OF THE

21

TRUST DOCUMENTS TO COUNSEL UPON NOTICE TO THE

22

BENEFICIARIES.

23

IS THERE ANYTHING IN THEIRS,

THE COURT:

HOW WOULD THEY KNOW WHO THE

24

BENEFICIARIES ARE?

25

AM TAKING YOUR RESPONSE AS THE TRUST

26

DOCUMENTS THEMSELVES HAVE NOT BEEN PRODUCED UNDER A

27

CLAIM OF CONFIDENTIALITY.

28

SO AT THIS POINT,

YOU ARE ASSERTING A SERIES

OF THINGS WHICH FIND NO EVIDENTIARY SUPPORT AND THE

REASON THEY HAVE NO EVIDENTIARY SUPPORT,

OBJECTIONS ARE VERY INTERESTING,

I UNDERSTAND IT,

THE OTHER SIDE FROM ACCESS TO THE VERY INFORMATION

THAT YOU CLAIM IS NECESSARY FOR THEM TO GIVE NOTICE.

CALCULATED TO GIVE RISE TO A SYMPATHETIC HEARING.

FOR YOU TO SAY,

WELL YOU CAN'T GO FORWARD WITHOUT

10

GIVING NOTICE TO ALL THESE PEOPLE,

11

WON'T TELL YOU WHO IS ENTITLED TO GET NOTICE.

12

I RESOLVE THAT?
MR.

ESQUIBIAS:

YOU HONOR,

AND BY THE WAY WE

HOW DO

I HAVE A RESPONSE.

I AM NEW TO THIS CASE.

I WILL MAKE SURE THAT

16

OPPOSING COUNSEL HAS A COPY OF THE TRUST DOCUMENTS,

17

SO THAT SHE CAN APPRISE THE SITUATION HERSELF.

18

CAN GIVE NOTICE.

THE COURT:

19

23

WELL,

APPARENTLY,

WAS MR.

MS.
MR.

WAKILI:

CHATFIELD.
THE COURT:

OKAY.

WHAT DO I

DO WITH THAT?

WAS REPRESENTED BY MR.

25

AND THIS IS THE POSITION THAT WAS TAKEN.

26

DO WITH THAT?

28

PRASKE

I BELIEVE HE WAS REPRESENTED BY

24

27

SHE

REPRESENTED BY COUNSEL AT THE DEPOSITIONS?

21
22

HAVE A RESOLUTION.

15

20

AS

GAGGERO HAVE PRECLUDED

14

IS THAT YOU HAVE,

THAT IS NOT A SITUATION THAT IS REASONABLY

13

YOU OR MR.

AND YOUR

MR.

ESQUIBIAS:

DEPOSITIONS.

IF HE

CHATFIELD AT THE DEPOSITIONS,

WHAT DO I

DON'T KNOW ANYTHING ABOUT ANY

I WAS NOT PRESENT,

BUT I WILL TELL THE

COURT NOW,

MR.

TRUSTS,

COOPERATE WITH THE REQUESTS FOR THE DOCUMENTATION.

7
8

NOW REPRESENT

AND WE INTEND TO COMPLETELY AND FULLY

THERE IS NO REASON WHY IT SHOULD NOT BE

DISCLOSED.
THE COURT:

IS THERE A REASON WHY YOU DON'T HAVE

THEM TODAY?
MR.

ESQUIBIAS:

DO HAVE THEM TODAY BUT THEY ARE

I AM NOT AWARE

10

MY VERSIONS WITH MY MARKINGS ON THEM.

11

OF THE REASON WHY THEY WERE NOT PROVIDED IMMEDIATELY

12

TO COUNSEL,

13

THEM -- NOTES THAT THEY ARE IRREVOCABLE NOTES,

14

ASSETS WERE TRANSFERRED TO THESE TRUSTS MANY,

MANY

15

YEARS AGO.

16

THINK THAT WE CAN RESOLVE THIS ISSUE FAIRLY QUICKLY.

17
18

MS.

BECAUSE I

THINK ONCE COUNSEL DOES SEE

READ PROBATE CODE SECTION 18200.

WAKILI:

YOUR HONOR,

COULD I

THE

JUST

GET SOME

CLARIFICATION ON COUNSELS RESPONSE RIGHT NOW?

19

THE COURT:

20

MR.

JUST A SECOND.

ESQUIBIAS:

IT IS NOT MY PRACTICE -- RATHER,

21

LET ME RESTATE THAT IT IS MY PRACTICE TO BE OPEN WITH

22

THIS COURT AND WITH OPPOSING COUNSEL,

23

CLEAR AND TRANSPARENT

24

PRASKE IN HIS CAPACITY AS TRUSTEE OF THESE

AND OPPOSING COUNSEL,

~-

TO BE FAIR AND

TO THE BEST THAT I

INTEND TO DO THAT.

GOING FORWARD,

CAN BE.
I

WOULD

25

ASK THAT THE COURT ISSUE AN INTERIM ORDER IN RELATION

26

TO DISCLOSURE OF THESE TRUST DOCUMENTS,

27

USED BY OPPOSING COUNSEL FOR PURPOSES ONLY FOR THIS

28

MOTION AND FOR GIVING NOTICE,

THAT THEY BE

AND THAT IT IS NOT TO

10
1

BE MADE.
THE DOCUMENTS ARE NOT TO BE MADE PUBLIC OR

3
4

USED FOR ANY OTHER REASON.

THE COURT:

PROTECTIVE ORDER TO THAT EFFECT IN A TIMELY FASHION.

YOU SEE, MR.

REPRESENTED BY COUNSEL FOR MR. GAGGERO.

LOOKS LIKE THEY ARE JOINED AT THE HIP.

10
11

MR. ESQUIBIAS:

SORT OF

I VIEW THAT AS PROBLEMATIC,

YOUR

HONOR, AND THAT IS WHY -THE COURT:

IN CONNECTION WITH THIS MOTION,

12

IS NOT A SITUATION WHERE MR.

13

PRECEDING TIMES,

14

PRASKE,

THIS

DURING THESE

HAS HAD INDEPENDENT COUNSEL.

HE HAS USED MR. GAGGERO AS COUNSEL, WHICH

15

SUGGESTS TO ME -- CERTAINLY LEADS TO AN INFERENCE,

16

THAT THE POSITIONS TAKEN WERE COORDINATED POSITIONS.

17

AND, WHAT I HAVE HERE SUGGESTS,

COMING IN AT

18

THIS POINT IN TIME,

19

WERE NOT IN THE PAPERS, ASSERTING EVIDENCE THAT HAS

20

PREVIOUSLY BEEN REFUSED TO BE PRODUCED, AND THEN

21

SAYING, WELL YOU HAVE GOT TO DELAY IT JUDGE,

22

THAT AND THE OTHER THING.

RAISING ARGUMENTS ORALLY,

23

I WANT TO DO ALL THE THINGS THAT MR.

24

HAS NOT DONE, WHEN HE WAS REPRESENTED BY MR.

25

GAGGERO'S COUNSEL.

26

PRASKE HAS PREVIOUSLY BEEN

YOU COULD HAVE APPLIED FOR A

MR.

ESQUIBIAS:

THAT

THIS

PRASKE

SMELLS LIKE MORE DELAY.

I AM NOT SEEKING AN EXTRAORDINARY
I THINK IT COULD

27

AMOUNT OF TIME TO CONTINUES THIS.

28

BE JUST DAYS IN ORDER FOR THE DOCUMENTS TO BE

11
1
2

TRANSFERRED OVER TO OPPOSING COUNSEL.

THE COURT:

ANYTHING UNTIL I ASKED YOU WHAT THE FACTUAL BASIS FOR

THE ORAL ASSERTIONS YOU WERE MAKING?

MR.

ESQUIBIAS:

YOUR HONOR,

THAT I

ORAL ARGUMENTS ARE COMMON PLACE.

COURTROOM WITH DIFFERENT SETS OF RULES,

APOLOGIZE THAT I AM NOT FAMILIAR WITH THE CIVIL

IT IS A DIFFERENT
AND I

COURTS OR THE RULES OF THIS COURT.

BUT,

THE FACT REMAINS THAT WE HAVE TO GIVE

12

NOTICE TO THESE VESTED PRINCIPAL AND INCOME

13

BENEFICIARIES,

14

THE COURT:

30 DAYS.
I

DON'T KNOW THAT THERE ARE VESTED

I HAVE BEEN

15

INCOME AND PRINCIPAL BENEFICIARIES.

16

DENIED THAT INFORMATION AS DEFENSE COUNSEL HAS BEEN

17

DENIED THAT INFORMATION.

18

MR.

19

THE COURT:

ESQUIBIAS:

WHAT,

SEEK TODAY TO RIGHT THAT WRONG.

IF ANYTHING ELSE ARE YOU

20

OFFERING IN WAY OF INFORMATION THAT HAS BEEN

21

PREVIOUSLY WITHHELD?

22

MR.

ESQUIBIAS:

IT IS HARD FOR ME TO ANSWER THAT

23

QUESTION BECAUSE I

24

PREVIOUSLY WITHHELD.

25

14 DAYS.

26

IS

HAVE BEEN PRACTICING PROBATE LAW FOR 20 YEARS.

11

ALL I CAN TELL YOU,

10

WHY WAS .THIS NOT BROUGHT OUT IN

THE COURT:

27

THAN THAT,

28

DOCUMENT,

DON'T KNOW WHAT HAS BEEN

I

HAVE ONLY BEEN IN THIS CASE

I SUSPECT IT HAS BEEN A LITTLE LONGER

BECAUSE IT TOOK SOME TIME TO PREPARE THE

UNLESS YOU DIDN'T PREPARE IT.

12
MR.

BELIEVE ALL THE INFORMATION

CONTAINED IN THE TRUST INSTRUMENTS AND PERHAPS

FUNDING DATES OF THE ASSETS IN THOSE TRUSTS WOULD BE

SUFFICIENT.

THAT WOULD BE REQUIRED FOR THIS COURT OR OPPOSING

COUNSEL TO MAKE THE CONCLUSION THAT THE ASSETS ARE

UNREACHABLE.

DON'T KNOW OF ANY OTHER INFORMATION

SO,

THE COURT:

YOU WISH TO PROVIDE NOT THE

ENTIRETY OF THE INFORMATION BUT ONLY A PART OF THAT?

MR.

10

ESQUIBIAS:

WE WOULD ONLY WANT TO PROVIDE

11

INFORMATION THAT IS EITHER AGREED UPON BETWEEN MYSELF

12

AND OPPOSING COUNSEL OR IF WE COULD NOT COME TO SOME

13

TYPE OF AGREEMENT,

14

DETERMINE TO BE RELEVANT.
THE COURT:

15
16

EVERYTHING?
MR.

17

WHATEVER THIS COURT WOULD

HOW WOULD I

KNOW WITHOUT YOU PROVIDING

I HEAR AT BEST A CONTINGENT OFFER.

ESQUIBIAS:

PLAN TO HAVE A MEET AND CONFER

18

WITH OPPOSING COUNSEL TO FIND OUT WHAT IN PARTICULAR

19

THEY ARE INTERESTED IN KNOWING ABOUT THESE TRUSTS,

20

BUT IN MY MIND,

21

THE DOCUMENTS THEMSELVES,

22

INFORMATION THEY NEED.

23

ACCORDING TO THE LAW AND ACCORDING TO

I

KNOW IN MY MIND WHAT

REMAIN OPEN TO PERSUASION FROM OPPOSING

24

COUNSEL AS TO ADDITIONAL INFORMATION.

25

MR.

26

()

ESQUIBIAS:

CHATFIELD
MR.

CHATFIELD:

WELL,

YOUR HONOR,

AN ISSUE THAT

27

LOOMS OVER THIS IS THAT,

WHAT THE DEFENDANTS SEEK TO

28

DO HERE IS IMPERMISSIBLE OUTSIDE REVERSE PIERCING.

13

READ THE AUTHORITIES, AND FRANKLY I AM NOT PERSUADED

BY THAT.

IF THE TRUST IS -- IF ONE OR MORE OF THE TRUSTS,

EXAMPLE,

IS WELL ESTABLISHED THAT YOU CAN GO IN TO THE TRUST.

YOU DON'T NAME THE TRUST.

THROUGH THE TRUSTEE,

OF DOUBT ABOUT THAT, AND THE CASE ONE OR MORE RECENT

IS AN ALTER EGO OF MR.

GAGGERO,

YOU HAVE TO GO AT IT

BUT I DON'T THINK THERE IS A LOT

G-R-E-E-N-S-P-A-N

11

V-L-A-D-T LLC,

4TH,

12

GOOD DEAL TO SAY ABOUT THIS.

AND,

191 CAL APP.

IF YOU,

486, AND THAT HAS A

YOU KNOW, THE BASIC PARAMETERS

14

OF AMENDING THE JUDGMENT ARE ARTICULATED IN HALL,

15

H-A-L-L G-0-0-D-H-U-E, H-A-I-S-L-E-Y, AND BARKER

16

VERSES M-A-R-C-0-N-I CONFERENCE CENTER BOARD,

17

APP.

19
20

4TH,

FOR

THE CASE LAW

CASES ON THIS IS GREENSPAN,

18

41 CAL

1551.

AND THERE IS A BUNCH OF OTHER CASES THAT

APPLY ON THIS.
MR. CHATFIELD:

WELL,

YOUR HONOR, AS YOU KNOW FROM

21

HAVING ENTERED THE AWARD APPROVING THE ARBITRATION IN

22

THAT GREENSPAN CASE', THAT THE COURT ON PAGES 513

23

THROUGH 514 OF GREENSPAN STATED THAT IN POSTAL

24

INSTANT PRESS VERSUS KAZO CORP THE COURT OF APPEAL

25

HELD THAT OUTSIDE REVERSE PIERCING OF THE CORPORATE

26

VEIL IS NOT PERMITTED IN CALIFORNIA.

27

IT IS WELL ESTABLISHED THAT YOU CAN PIERCE

10

13

I READ THE ARGUMENT IN DETAIL, AND I

THE COURT:

28

THAT IS,

THE CORPORATE VEIL WILL NOT BE

PIERCED TO SATISFY THE DEBT OF AN INDIVIDUAL

14
1

THE COURT:

RATHER THIS COURT EXPLAINED THE ALTER

EGO DOCTRINE WILL ONLY BE APPLIED TO AN INDIVIDUAL

SHAREHOLDER LIABLE FOR A CORPORATE DEBT WHERE THE

INDIVIDUAL IS HAS DISREGARDED THE CORPORATE FORM BUT

THAT IS NOT --

MR.

CHATFIELD:

HONOR,

REVERSE PIERCING.

AT THE VERY NEXT SENTENCE,

YOUR

IT SAYS THIS CASE DOES NOT INVOLVE OUTSIDE

AND WHY IS THAT?

BECAUSE. THE

10

JUDGMENT WAS AGAINST TWO ENTITIES,

11

SEEKING TO BRING INDIVIDUALS IN AS ADDITIONAL

12

JUDGMENT DEBTORS.

13

THERE WAS A JUDGMENT AGAINST AN INDIVIDUAL,

14

WERE TRYING TO GO AFTER THE TRUST.

15

THE COURT:

AND THEY WERE

NOT -- THIS WAS NOT A CASE WHERE

THIS IS A SITUATION WHERE,

AND THEY

KPC IS

16

SEEKING TO HOLD THE SPECIALLY APPEARING PARTIES

17

LIABLE FOR GAGGERO'S DEBT WHERE THEY ARE ALLEGED TO

18

BE THE ALTER EGOS OF GAGGERO.

19

SHAREHOLDER --

MR.

CHATFIELD:

THAT IS TYPICAL OUTSIDE REVERSE

20

PIERCING.

THERE IS NO OTHER TERM FOR THAT.

AND IT

21

IS NOT RECOGNIZED IN THE STATE OF CALIFORNIA.

22

PROVIDED YOU WITH AUTHORITY ON THAT,

23

AT MY LAST VIEW,

24

STATE EXACTLY THE SAME THING.

25

LIABILITY AND BRING IN ENTITIES TO SATISFY AN

26

INDIVIDUAL'S DEBT.

27

OUTSIDE REVERSE PIERCING, WHICH IT DOESN'T,

28

HAVE TO GO THROUGH AN ADDITIONAL ANALYSIS WHICH THIS

I HAVE

PLUS THERE ARE

24 OTHER UNPUBLISHED DECISIONS WHICH

YOU CANNOT IMPOSE

AND EVEN IF THE STATE RECOGNIZED

YOU WOULD

15
1

0
.

COURT DISPOSED OF IN ITS OWN STATEMENT OF DECISION.

THE COURT:

I KNOW WHERE YOU ARE GOING ON THAT.

GO AHEAD AND SAY IT.

YOU ARE GOINc;.

YOU ARE SUGGESTING THAT THE FACT THAT AT TRIAL

MR.

BEHALF OF PCM TO RECOVER THE ATTORNEY'S FEES,

SOMEHOW DISPOSITIVE.

ON THE FAILURE OF MR. GAGGERO TO PRODUCE CERTAIN

YOU ARE WRONG,

BUT I KNOW WHERE

BECAUSE I READ IT IN YOUR PAPERS.

GAGGERO PUT ON NO EVIDENCE THAT HE WAS SUING ON

IT IS NOT.

IS

THAT WAS A COMMENT

10

EVIDENCE IN THE TRIAL WHEN IT WAS DIRECTED TO THE

11

ISSUE OF DAMAGES, HIS DAMAGES THAT HE WAS CLAIMING

12

AGAINST KNAPP PETERSEN & CLARKE SO,

13

WHAT YOU SAID IN YOUR PAPERS, AND I AM SORRY IT IS

14

NOT

15
16

MR.

CHATFIELD:

YOU KNOW.

I SAW

WHAT I AM SAYING IS SOMETHING A

LITTLE DIFFERENT.

17

I AM .GOING BY YOUR FINDINGS OF FACT, AND YOU

18

STATED ON PAGE 16 OF YOUR STATEMENT OF DECISION THAT

19

UNLESS OTHERWISE SPECIFICALLY STATED,

20

FORTH BELOW ARE EITHER UNDISPUTED OR REPRESENT THOSE

21

WHICH THE COURT FINDS TO BE TRUE BY THE PREPONDERANCE

22

OF THE CREDIBLE EVIDENCE, AND THEN IN THE FINDINGS OF

23

FACT ON PAGE 18, THE COURT STATED THAT IN 1995 AND

24

1996 GAGGERO DID EXTENSIVE ESTATE PLANNING WHICH

25

RESULTED IN ALL OF HIS PERSONAL ASSETS BEING

26

TRANSFERRED TO VARIOUS CORPORATIONS,

27

FOUNDATIONS.

28

THE FACTS SET

TRUSTS

HE RETAINED ABSOLUTELY NO OWNERSHIP INTEREST

16
1

THE COURT:

YOU OMIT SOME OF THE WORDS THAT I

MR.

WERE IN THE ORIGINAL,

CHATFIELD,

MR.

THE COURT:

DID YOU OMIT SOME OF THE WORDS THAT

CHATFIELD:

IN THE STATEMENT OF DECISION?

I AM SUMMARIZING THAT.

YES,

BECAUSE YOU ARE OMITTING FOR THE

PURPOSE

PURPOSE OF TRYING TO SHIELD THEM FROM CREDITORS.

MR.

THERE IS SOMEWHERE IN THERE FOR THE

CHATFIELD:

ACTUALLY,

11

RELATING TO CREDITORS WAS,

12

THREATS,

13

DISCHARGE THE KNBC CREDITORS

THINGS.

16

MR.

WHAT THE COURT SAID

THAT ALTHOUGH GAGGERO USED

BLUSTERS AND ULTIMATUMS TO ATTEMPT TO

THE COURT:

15

DID

PUT IN THERE?

14

I SAID OTHER THINGS.

CHATFIELD:

SAID OTHER

YOU ALSO SAID THAT KNBC'S CLAIM

17

WAS PAID EARLY IN 2002 BY FULL PAYMENT PLUS INTEREST

18

AND AWARDED ATTORNEYS FEES,

19

THE SLOCOM CLAIM WAS WITHDRAWN AND DISMISSED.

20

THE COURT:

NOW,

21

THIS CASE.

22

BEFORE THE COURT.

23

COURT ENTERED,

24

OF APPEALS,

25

THE COURT TODAY.

26
27

IS THERE A DOT DOT DOT IN THERE?

10

AND NO CONTROL.

28

SIR,

AND YOU ALSO STATED THAT

THAT HAS NOTHING TO DO WITH

THAT HAS NOTHING TO DO WITH THE ISSUES

THE STATEMENT OF DECISION THE

WHICH HAS BEEN AFFIRMED BY THE COURT

IS NOT DISPOSITIVE OF ANY ISSUE BEFORE

IF -- IS THERE ANYTHING ELSE YOU WOULD LIKE

TO SAY.
MR.

CHATFIELD:

YES.

KPC HAS NOT MET

~TS

BURDEN

17

OF SHOWING THAT THE BUSINESS ENTITIES OR PRASKE WERE

GAGGERO ALTER EGOS.

THE BUSINESS ENTITIES OR PRASKE'S CONTROLLED THE

LITIGATION OR WERE VIRTUALLY REPRESENTED IN THE

ACTION.

THE COURT:

-~

DOES THE FACT THAT THEY -- IT LET ME

START OUT WITH THIS PREDICATE, MR. CHATFIELD,

THAT THEY HAVE MADE A PRIMA FACIA CASE THAT THESE

ENTITIES ARE ALTER EGOS OF MR.

GAGGERO.

10

THAT,

11

THE UNDERLYING LITIGATION.

12

ENTITIES AS I SEE THEM.

13

OF MR.

14

LITIGATION WHICH HE UNDOUBTEDLY DID,

I THINK

AND IF I DO

THERE IS NO DOUBT THAT MR. GAGGERO CONTROLLED

THESE ARE NOT

~NDEPENDENT

AND IF THEY ARE ALTER EGOS

GAGGERO, AND MR. GAGGERO CONTROLLED THE

15

MR.

16

THE COURT:

ESQUIBIAS:

YOUR HONOR,

THEN WHAT?

IF I MAY RESPOND.

NO, MR. CHATFIELD CAN RESPOND TO THIS.

17

HE WAS ONE OF THE ATTORNEYS WHO REPRESENTED

18

MR.

19

TRIAL.

20

IN FACT

KPC PRESENTED NO EVIDENCE THAT

GAGGERO DURING THE TRIAL PROCEEDINGS OR IN POST

MR. CHATFIELD:

I,

FIRST OF ALL,

FAIL TO

21

UNDERSTAND HOW THE COURT HAS REACHED THE CONCLUSION

22

THAT ALL OF THE ELEMENTS OF ALTER EGO HAVE BEEN

23

FULFILLED WITHOUT ANY EVIDENCE SUPPORTING IT WHEN WE

24

HAVE PROVIDED THE COURT WITH DECLARATIONS.

25

THE DEFENDANTS HAVE PROVIDED THE COURT WITH EVIDENCE

26

AS TO THE CORRECTNESS OF THE SETUP OF THE PARTICULAR

27

ENTITIES -- THE STATUS OF THE ENTITIES AS BEING IN

28

GOOD STANDING IN THE STATE OF CALIFORNIA,

AND ALSO,

THAT THE

18

ENTITIES HAVE -- IT IS IN THE DECLARATION OF

MR.

ESQUIBIAS'S BRIEF,

THAT THE

COMPANIES ARE SEPARATE AND DISTINCT FROM MR.

GAGGERO,

AND THAT THERE IS NO EVIDENCE TO SUPPORT THE

CONCLUSION OTHERWISE.

PRASKE THAT IS IN MR.

BE THE ALTER EGO,

AN INDIVIDUAL AND DO OUTSIDE REVERSE PIERCING TO ADD

ENTITIES AS NEW JUDGMENT DEBTORS.

THE COURT:

YOU CANNOT TAKE A JUDGMENT AGAINST

WELL,

YOU KNOW,

THE EXHIBITS ATTACHED

11

TO THE MOTION CONTAIN TESTIMONY OF BOTH MR.

12

AND MR.

13

SPECIALLY APPEARING PARTIES IS TO PROTECT 100 PERCENT

14

OF MR.

15

PRASKE IS THE ONLY TRUST.EE OF THE TRUST AND

16

FOUNDATION INVOLVED IN THE MOTION.

17

TWO OFFICERS IN PCM.

18

GAGGERO'S WISHES WITHOUT RESISTANCE OR HESITANCE.

19

PRASKE IS ALSO THE REGISTERED AGENT FOR SERVICE OF

20

PROCESS AT EACH OF THE BUSINESS ENTITIES.

21

EVIDENCE SHOWS THAT MR.

22

TESTIFIED UNDER PENALTY OF PERJURY THAT THE GAINS AND

23

LOSSES FOR THE ASSETS AND THE ESTATE PLAN,

24

FLOW THROUGH MR.

25

EVIDENCE OF ALTER EGO STATUS.

26

EVEN IF THEY WERE TO BE FOUND TO

10

AND AGAIN,

GAGGERO

PRASKE SHOWING THAT THE ONLY INTEREST OF THE

GAGGERO'S ASSETS,

BOTH PERSONAL AND BUSINESS.

HE IS ONE OF ONLY

PCM PAYS EVERYTHING AT

KPC'S

GAGGERO'S OWN ACCOUNTANT

GAGGERO'S TAX RETURNS,

ULTIMATELY

WHICH IS MORE

GAGGERO CONTROLLED THE LITIGATION.

HE DID SO

27

BY THE WAY OF THE FINANCIAL ASSETS OF THE SPECIALLY

28

APPEARING PARTIES.

THEIR INTERESTS ARE ALIGNED WITH

19
1

MR.

THEY WOULDN'T EVEN EXIST.

THE SOLE PURPOSE OF THE EXISTENCE OF THE SPECIALLY

APPEARING PARTIES IS TO HOLD MR.

THEY ARE ONE IN THE SAME.

MR.

CHATFIELD:

THE COURT:
KNOW,

WELL,

MR.

PRASKE TESTIFIED THAT

GAGGERO'S ASSETS.

THAT IS THE BOTTOM LINE.

YOUR HONOR,

I DON'T KNOW

YOU MEAN OTHER THAN THE EXHIBITS, YOU

IF I WERE INCLINED, WHICH I AM NOT,

I COULD GO

10

DOWN AND SITE THE PAGE AND LINE NUMBERS OR PAGE

11

NUMBERS .IN THE EXHIBITS WHERE THE DIFFERENT

12

COMPONENTS OF THAT FLOW FROM,

13

INCLINED TO DO THAT.
MR. CHATFIELD:

14

WELL,

BUT, YOU KNOW,

YOUR HONOR,

I AM NOT

I HAVE LOOKED AT

15

THE PAGE AND LINE NUMBERS AND THE TESTIMONY WHICH IS

16

ATTACHED TO THE MOTION, AND I HAVE SEEN THAT THE

17

QUOTATIONS IN THE MOTION AND IN THE REPLY BRIEF ARE

18

NOT WHAT THE PEOPLE ACTUALLY SAID.

19

FOR EXAMPLE, A QUESTION WAS ASKED --

20
21

THE COURT:
THEMSELVES.

22
23
24

WITHOUT THEM -- WITHOUT MR. GAGGERO

WHERE YOU ARE GETTING THIS.

8
9

GAGGERO.

I AM REFERRING TO THE EXHIBITS

I READ THE EXHIBITS.

MR. CHATFIELD:
MR.

AS I SAID, THE MOTION TAKES

PRASKE'S TESTIMONY OUT OF CONTEXT.

THE COURT:

WHAT ASPECT OF MR.

PRASKE'S TESTIMONY

25

IS TAKEN OUT OF CONTEXT?

26

PAGE AND LINE NUMBERS YOU THINK ARE TAKEN OUT OF

27

CONTEXT.

28

MR.

ESQUIBIAS:

GIVE ME THE EXHIBIT AND

YOUR HONOR,

IF I MAY INTERRUPT.

20

THE COURT:

MR.

ESQUIBIAS:

THE COURT:

CHATFIELD'S ARGUMENT.

HE IS ARGUING ABOUT SOMETHING

ABOUT MY CLIENT WHO I

REPRESENT.

HE IS ARGUING ABOUT SOMETHING FROM

WHEN HE REPRESENTED YOUR CLIENT.

ABOUT THE TESTIMONY IN THE JUDGMENT DEBTOR EXAM?

MR.

THE COURT:

MR.

11
12

CHATFIELD:

NO,

ARE YOU TALKING

YOUR HONOR.

WHICH TESTIMONY ARE YOU TALKING ABOUT

IN THE URA CASE?

10

CHATFIELD:
I

YES,

YOUR HONOR,

AND TELL ME

DID NOT REPRESENT HIM IN THE URA CASE,

THE COURT:

14

MR.

WHOM DID YOU REPRESENT,

CHATFIELD:

NO,

I WAS NOT.

MR;

GAGGERO?

I WITHDREW AS

15

ATTORNEY OF RECORD IN THAT CASE PRIOR TO TRIAL.

16

MR.

18

BOSWICK REPRESENTED MR.

THE COURT:

MR.

20

THE COURT:

21

MR.

22

THE COURT:

24

MR.

28

SIR?

WELL

I HAVE THE EXHIBITS RIGHT HERE.

CHATFIELD:

JUNE 13TH,

27

WHAT IS THE PORTION OF THE TESTIMONY

CHATFIELD:

23

26

GAGGERO.

THAT YOU THINK WAS TAKEN OUT OF CONTEXT,

19

25

YOUR

HONOR.

13

17

THIS IS MR.

IN EXHIBIT G.

THE PRASKE CROSS-EXAMINATION

2005.

CHATFIELD:

THE QUESTION WAS ASKED ON PAGE

1001.
THE COURT:

JUST A MINUTE.

THIS.
MR.

CHATFIELD:

ALL RIGHT.

I AM TRYING TO FIND

21

THE COURT:

MR.

CHATFIELD:

WELL,

STARTING ON PAGE 1000 GOING

THROUGH 1001.

MAKES RECOMMENDATIONS TO HIM,

THE ONLY ONE THAT CAN MAKE THE DECISIONS.

GO

MR.

THE COURT:
GAGGERO,

PRASKE TESTIFIED THAT MR.

BUT MR.

BUT THAT MR.

GAGGERO

PRASKE IS
AND IF YOU

-- PAGE 1000 HE SAYS THAT

HE HAS GOT THE TRUST AND THE LLC'S THESE

MR.

ENTITIES WANT TO BUY A PIECE OF PROPERTY..

10

IS THE TRUSTEE,

11

HE TELLS MR.

BUT MR.

MR.

GAGGERO IS THE MANAGER,

PRASKE
AND

PRASKE WHAT HE WANTS TO DO.

THAT IS NOT THE WAY I

CHATFIELD:

READ THE

12

MR.

13

TESTTMONY.

14

MR.

15

MANAGEMENT COMPANY AND MAKES RECOMMENDATION TO

16

MR.

17

WHAT TO DO.

18

HAVE PAGE 1001.

READ THE TESTIMONY TO SAY THAT

GAGGERO IS ONE OF THE PEOPLE WHO WORKS AT THE

PRASKE,

AND MR.

PRASKE MAKES THE DECISION AS TO

THE COURT:
PAGE 1,000,

LINE 22.

19

QUESTION:

20

NOW MR.

21

WANT TO BUY THI$ GREAT PIECE OF PROPERTY.

22

WHAT SHOWING MUST MR.

23

ORDER TO SATISFY YOU AS THE TRUSTEE WITH

24

FIDUCIARY DUTIES,

25

FUNDS FOR THAT PIECE OF PROPERTY?

26

ANSWER:

27

MAKING POSITIVE,

28

TRANSACTIONS.

GAGGERO COMES TO YOU AND SAYS,

HEY I

GAGGERO MAKE TO YOU IN

THAT I AM GOING TO RELEASE

SUCCESSFUL HISTORY OF
SUCCESSFUL

22

QUESTION:

THAT IS IT?

ANSWER:

THING.

QUESTION:

WANT MONEY AND YOU SAY,

ANSWER:

QUESTION:

ANSWER:

MAKING INVESTMENTS FOR THE BENEFIT

THAT IS THE MOST iMPORTANT

SO,

MR.

WELL,

GAGGERO SAYS I
HOW MUCH?

NO.

SO WHAT IS THE PROCESS?

IF IT IS WITH REGARD TO

10

OF THE TRUST,

11

RECOMMENDATiON ON A PROPERTY

12

INVESTMENT.

13

RECOMMENDATION.

14

WHAT IS OUT OF CONTEXT?

MR.

15

CHATFIELD:

HE MAKES A

I WILL FOLLOW THAT

WHAT .IS OUT OF CONTEXT IS THAT

GAGGERO IS NOT THE DECISION MAKER.

16

MR.

17

IS THE DECISION MAKER.

18

THE COURT:

MR.

THE TRUSTEE

PRASKE IS FOR ALL INTENTS AND

19

PURPOSES A RUBBER STAMP.

20

DIRECTED ME TO CONFIRMS THAT IF HE MAKES THE

21

RECOMMENDATION,

22

HARD TO INTERPRET THAT LANGUAGE ANY OTHER WAY.

23
24

MR.

MR.

CHATFIELD:

AND THE TESTIMONY THAT YOU

PRASKE DOES IT.

WELL,

IT IS A LITTLE

HE GOES ON TO SAY ON THAT

PAGE THAT ON LINE 14 LINE 15 IT SAYS

I AM TRYING IN MY nwN

25

QUESTION:

26

MIND TO DISTINGUISH THAT DIFFERENT

27

FROM MR.

28

AND YOU SAYING HOW MUCH,

GAGGERO SAYING I WANT MONEY

BECAUSE --

23

(J

AND THEN ANSWER IS BECAUSE AND

THEN --

QUESTION:

DISTINCTION BETWEEN THOSE TWO?

ANSWER:

AND SAID I WANT $2,000,000 TO SPEND

IN LAS VEGAS.

OTHER WORDS IT HAS TO BE FOR THE

BENEFIT OF THE TRUST?

BECAUSE IF HE CAME TO ME

10

ANSWER:

11

QUESTION:

12

ANSWER:

13

THE COURT:

WHY ARE YOU DRAWING A

I MIGHT SAY NO.

IN

YES.
YES?
YES.
OKAY.

SO,

I WANT THE -- GAGGERO SAYS

14

I WANT THE TRUST TO BUY THIS PROPERTY AND MR.

15

SAYS YES,

16

THE CHECK.

17
18
19
20
21

SIR,

YES,

MR. CHATFIELD:

SIR,

PRASKE

THREE BAGS FULL AND SIGNS

THAT IS NOT NECESSARILY SO,

YOUR

HONOR, ALTHOUGH -THE COURT:

WHAT ABOUT MR.

PRASKE'S TESTIMONY

MEANS IT AIN'T NEC.ESSARILY SO?

MR.

CHATFIELD:

HIS TESTIMONY IS THAT MR.

GAGGERO

22

MAKES THE RECOMMENDATION, AND HE MAKES THE DECISION

23

IT IS NOTHING IN THERE THAT SAYS THAT.

24
25

THE COURT:

WHAT DO YOU DO THEN,

SIR, WITH THE

DIRECT ANSWER?

26

QUESTION:

SO WHAT IS THE PROCESS?

27

ANSWER:

28

INVESTMENTS FOR THE BENEFIT OF THE

IF IT IS REGARD TO MAKING

24
1

TRUST, AND HE MAKES A RECOMMENDATION

ON A PROPERTY INVESTMENT,

FOLLOW THAT RECOMMENDATION.

LIKE NO EXERCISE OF DISCRETION BY

MR.

KNOW,

MR.

THE COURT:

9
10
11
12
13

rs

LIKE,

SOUNDS

YOU

YOU KNOW --

I COMPLETELY DISAGREE,

ESQUIBIAS:

WHEN MR. GAGGERO SAYS JUMP,

YOUR HONOR.
MR.

PRASKE

SAYS HOW HIGH ON HIS WAY UP.

MR.

ESQUIBIAS:

AS A PERSON SITTING HERE LISTENING

TO THE STATEMENTS NOT INVOLVED IN THE DEPOSITION -THE COURT:

THAT

rs

TRIAL TESTIMONY,

SIR.

THIS IS

TRIAL TESTIMONY.

14

MR.

15

TESTIMONY,

16

EXERCISE DISCRETION THAT HE DETERMINES WHETHER IT

17

FOR THE BENEFIT OF THE TRUST.

18

ESQUIBIAS:

AS A PERSON LISTENING TO TRIAL

I CAN TELL YOU IT SOUNDS LIKE HE DOES

THE COURT:

WISH TO MAKE, MR. CHATFIELD?

20

DEALT WITH THAT PARTICULAR ONE

21

YOU POINTED ME TO.

22

PLENTY OF OTHER STUFF.

MR.

rs

DO YOU HAVE ANY DIFFERENT POINTS YOU

19

23

HE SAYS DO IT,

PRASKE.
IT

I WILL

CHATFIELD:

THE ONLY REASON WE

rs

THAT WAS THE ONE

THERE ARE OTHER -- THERE ARE

WELL,

YOUR HONOR,

I DISAGREE THAT

24

THE EVIDENCE SHOWS ALTER EGO, AND AGAIN,

25

EVEN IF IT DID SHOW ALTER EGO,

26

PIERCE IN TO THE ENTITIES IS THROUGH OUTSIDE REVERSE

27

ALTER EGO WHICH

28

CALIFORNIA.

rs

I STATE THAT

THE ONLY WAY YOU CAN

NOT PERMITTED IN THE STATE OF

25
THIS IS A JUDGMENT AGAINST AN INDIVIDUAL,

1
2

YOU ARE TRYING TO MAKE AN ENTITIES AND THEIR ASSETS

SUBJECT TO JUDGMENT AGAINST AN INDIVIDUAL.

THE COURT:

IF I AM JOHN JONES, AND I SET UP A

JOHN JONES TRUST, AND I DUMP ALL MY .ASSETS IN TO IT,

AND I RUN IT AS MY PIGGYBANK, ARE YOU SUGGESTING THAT

JOHN JONES TRUST CAN'T BE REACHED?

MR.

THE COURT:

11

ESQUIBIAS:

MR.

10

ACTUALLY,

YOUR HONOR --

I DON'T THINK SO.

ESQUIBIAS:

I WOULD ACTUALLY SAY,

YES,

THAT'S

CORRECT.

12

THE COURT:

13

MR.

I DON'T THINK SO.

ESQUIBIAS:

14

4TH,

15

DISTRICT.

16

25 A 2006-CASE,

THE COURT:

THAT IS THE LAW UNDER 141 CAL APP.

DIVISION ONE OF THE FOURTH

AND THEN THAT SEEMS TO RUN COUNTER TO

17

GREENSPAN,

18

TO THE TRUST THE ALTER EGO DOCTRINE, MAY APPLY TO THE

19

TRUSTEE -- THE TRUST THROUGH THE TRUSTEE, AND

20

M-I-S-I-K VERSUS D-'-A-R-C-0 197 CAL APP.

21

CITES GREENSPAN.

22
23
24

MR.

THAT REGARD,

26

AUTHORITY.

4TH 1065,

I WILL TELL YOU WHAT -- SAYS IN

YOUR HONOR,

THE COURT:
DISTRICT,

28

BECAUSE GREENSPAN SAYS THAT YOU CAN GO IN

ESQUIBIAS:.

25

27

AND

IT SAYS THAT --

I WILL TAKE THE 2010-CASE OUT OF OUR

BECAUSE I THINK THAT IS THE CONTROLLING

I AM PERSUADED BY THE SHOWING THAT THESE

PERSONS AND ENTITIES ARE ALTER EGOS OF MR.

GAGGERO

26

AND CLEARLY,

PIERCE THE VEIL -- NOT TO GET OUT THESE ENTITIES

WHICH ARE HIS ALTER EGO.

SUBSTANTIAL JUDGMENT AGAINST HIM, AND HE HAS

ATTEMPTED TO USE THESE DEVICES TO PUT HIS ASSETS

BEYOND THE REACH OF LEGITIMATE CREDITORS, AND WE HAVE

HAD A FULL AND FAIR OPPORTUNITY TO LITIGATE THIS.

I AM NOT RESPONSIBLE FOR WHEN MR.

9
10

NEW COUNSEL.

IT WOULD BE INEQUITABLE NOT TO

SINCE HE HAS THIS

PRASKE GETS

I AM NOT RESPONSIBLE FOR WHAT ARGUMENTS

NEW COUNSEL MAKES OR DOESN'T MAKE IN HIS OPPOSITION.

11

I KNOW AT THE MOMENT THERE IS ZERO EVIDENCE

12

TO SUPPORT,

13

THE POSITION THAT THERE IS A PLETHORA OF -- I DON'T

14

KNOW WHO THESE PEOPLE ARE.

15

ZERO EVIDENCE IN THE RECORD TO SUPPORT

AND IN FACT,

I DO KNOW THAT MR.

PRASKE WAS

16

EXTRAORDINARILY VAGUE WHEN HE WAS QUESTIONED AT TRIAL

17

ABOUT THE IDENTITIES OF THESE BENEFICIARIES SUPPOSED

18

BENEFICIARIES.

19

CLEARLY,

YOU KNOW,

THE DECISION WAS MADE LONG AGO TO

20

KEEP THE TRUST DOCUMENTS OUT OF THE HANDS OF THE

21

DEFENSE, AND NOW TO TRY AND INVOKE THE TERMS OF IT,

22

YOU KNOW,

23

IT,

24

HERE,

25

PRIVILEGE.

26

ATTORNEY-CLIENT PRIVILEGE CANNOT BE ASSERTED AS BOTH

27

A SWORD AND A SHIELD, AND IF YOU IN PRETRIAL

28

DISCOVERY ASSERT THE ATTORNEY-CLIENT PRIVILEGE,

WITHOUT GIVING IT TO THE OTHER SIDE.

HAVE

YOU KNOW -- THERE IS A LITTLE BIT OF AN ANALOGY,

TO THE ASSERTION OF THE ATTORNEY-CLIENT
THE GENERAL RULE IS THAT THE

TO

27

()

PROTECT CERTAIN THINGS AGAINST DISCLOSURE,

YOU ARE NOT GOING TO BE ALLOWED TO ALL OF A SUDDEN AT

THE LAST MINUTE,

HAVE GOT ALL THIS STUFF,

ABOUT IT BUT WE ARE NOW MAKING THE DECISION TO WAIVE

IT.

THE -- THIS IS A SITUATION WHERE THESE ISSUES HAVE

BEEN PERCOLATING FOR A LONG TIME, AND THERE IS A

FUNDAMENTAL UNFAIRNESS TO MAKING KPC JUMP THROUGH ALL

DROP IT AND SAY BOY OH BOY,

NOW WE

WE KNOW WE HAVEN'T TOLD YOU

THAT IS ONLY AN ANALOGY,

I HAVE GOT TO TELL YOU

10

THESE HOOPS TO COLLECT THE JUDGMENT AND SAYING NO,

11

YOU CAN'T HAVE X,

12

LAST MINUTE MAKING ARGUMENTS NOT SET FORTH IN THE

13

PLEADINGS WEIGHS ON EVIDENCE, NOT BEFORE THE COURT

14

AND SAYING JUDGE GIVE US A DO OVER.

NO

Y, AND Z, AND THEN COMING IN AT THE

THERE IS A FUNDAMENTAL UNFAIRNESS TO THAT.

15

16

MR. CHATFtELD:

WELL,

YOUR HONOR,

I WOULD

17

RESPECTFULLY WOULD SAY THAT THE REASONING BEHIND IS

18

THERE IS A FUNDAMENTAL UNFAIRNESS FOR BRINGING IN

19

OTHER PEOPLE WITH OTHER INTERESTS WHO DIDN'T ATTEND A

20

TRIAL AS JUDGMENT DEBTORS.

21

ORDINARILY

THE COURT:

MR.

GAGGERO CONTROLS THESE ENTITIES.

22

THEY ARE HIS ALTER EGO,

23

THE COURT OF THAT.

24

MR.

ESQUIBIAS:

25

THE COURT:

THE EVIDENCE FIRMLY PERSUADES

YOUR HONOR,

I WOULD THINK THAT

AND MR. GAGGERO IS THE ONE WHO SET UP

26

THIS SYSTEM, AND MR. GAGGERO IS THE GUY WHO IS -- YOU

27

KNOW,

28

PURPOSES.

THIS IS WHAT HE DID.

HE TOLD ME SO,

AND HE DID IT FOR THESE

IN THE TRIAL,

TO SHIELD HIS

28

ASSETS FROM CREDITORS.

TESTIMONY ON CROSS EXAMINATION AT THE TRIAL IN THIS

CASE.
MR.

I BELIEVE THAT IS INCORRECT,

CHATFIELD:

THAT WAS YOUR CONCLUSION,

HONOR.

UNDERSTAND IS HOW

ENTITIES PACIFIC COAST MANAGEMENT,

WALK LP,

MARINO GLENCO LP,

LLC,

11

ALTER EGO.

14

15
16
17
18
19

20
21
22
23
24

25

26
27

28

WI~HOUT

BUT WHAT I

YOUR;

DON'T

ANY EXAMINATION OF THESE

GINGERBREAD COURT LP,

10

511 OCEAN FRONT

MALIBU BROAD BEACH LP,

BLU HOUSE LLC AND BOARDWALK SUNSET

HOW YOU CAN DETERMINE THAT THEY ARE ALL HIS

THE COURT:

THE MOTION IS GRANTED.

THE ORDER HAS BEEN SIGNED.

13

BELIEVE THAT WAS HIS

12

NOTICE.

THANK YOU.

DEFENSE TO GIVE

29

LOS ANGELES, CALIFORNIA; TUESDAY, JUNE 19, 2012

A.M.

DEPARTMENT lA

APPEARANCES:

HON. MATTHEW ST. GEORGE, COMMISSIONER

(AS NOTED ON TITLE PAGE.)

(LAURA LOPEZ, OFFICIAL REPORTER, CSR #6876.)

5
6

(THE FOLLOWING PROCEEDINGS

WERE HELD IN OPEN COURT:)

8
9

10

BEFORE WE START CALLING THE CASES, I JUST

11

WANT TO LET YOU KNOW TODAY IS THE LAST LAW AND MOTION DAY

12

FOR DEPARTMENT lA.

13

CLOSING, AND IT WILL ONLY BE OPENED BEGINNING IN JULY,

14

MONDAY THROUGH WEDNESDAY.

15

DEPARTMENT 90, 9-0, A, AND WE WILL BE HANDLING MATTERS

16

THURSDAY AND FRIDAY MORNING AND AFTERNOONS.

17

CALENDAR WILL NOW BE ON FRIDAY AFTERNOON, SO IF YOU HAVE

18

POST-JUDGMENT MATTERS THAT YOU NEED TO DEAL WITH IN THE

19

FUTURE.

DUE TO BUDGET CUTS, THIS DEPARTMENT IS

WE WILL REOPEN JULY 5TH AS

LAW AND MOTION

20

BEGINNING WITH NO. 1 ON CALENDAR, STEPHEN R.

21

GAGGERO, G-A-G-G-E-R-0, VS. KNAPP, PETERSEN & CLARKE,

22

BC286925.

23
24
25
26
27

THE COURT:

28

YOUR APPEARANCES.
MR. CHATFIELD:

GOOD MORNING, YOUR HONOR.

DAVID

CHATFIELD APPEARING ON BEHALF OF THE PLAINTIFF.

MS. WAKILY:

GOOD MORNING, YOUR HONOR.

AUSTA WAKILY

APPEARING ON BEHALF OF THE JUDGMENT CREDITORS, ABC.

THE COURT:

WHO'S THE JUDGMENT CREDITOR?

30

MR. CHATFIELD:

THE COURT:

DEFENDANTS, COUNSEL.

JUDGMENT CREDITORS.

MR. CHATFIELD:

THE COURT:

SO WILL YOU SWITCH PLACES, PLEASE.

THE JUDGMENT DEBTOR, STEPHEN GAGGERO.

THANK YOU.

FIRST OF ALL, THIS IS A MOTION FOR A PROTECTIVE

ORDER BY THE JUDGMENT DEBTOR, MR. GAGGERO, I PRESUME

10

BECAUSE HE HAS BEEN SCHEDULED FOR A JUDGMENT DEBTOR

11

EXAMINATION?

12

MR. CHATFIELD:

13

THE COURT:

14

MR. CHATFIELD:

15

TOMORROW UNLESS THE PROOF OF SERVICE IS

NOT CORRECT.
THE COURT:

17

MR. CHATFIELD:

18

THE COURT:

20

YES, YOUR HONOR.

WHEN IS THAT TO OCCUR?

16

19

WELL, WE'LL DEAL WITH THAT TOMORROW.

ALL RIGHT.

OKAY.

I NOTED THAT IN YOUR REPLY YOU FILED A STAY OF

PROCEEDINGS.

21

MR. CHATFIELD:

22

THE COURT:

YES, YOUR HONOR.

AND UNDER LOCAL RULE -- OR EXCUSE ME --

23

CALIFORNIA RULES OF COURT 3.650(B), WHAT GROUND IS IT

24

STAYED UNDER?

25

IN THIS COURT, JUDGMENT DEBTORS,

SO WHO ARE YOU APPEARING ON BEHALF OF, COUNSEL?

WE NO LONGER HAVE PLAINTIFFS AND

THE DEFENDANTS ARE, KNAPP, PETERSEN.

MR. CHATFIELD:

IT'S STAYED UNDER AN APPEAL AFTER

26

JUDGMENT UNDER THE CODE OF CIVIL PROCEDURE SECTION

27

904.l(A) (2).

28

THE COURT:

COUNSEL, THE RULES OF COURT 3.650(B) DO NOT

31

LIST THAT AS A GROUND FOR A STAY OF PROCEEDINGS TO BE FILED

BY COUNSEL.

MR. CHATFIELD:

THE COURT:

THE COURT:

10
11
12

MR. CHATFIELD:

THE COURT:

UNDER WHAT SECTION OF THE CODE OF CIVIL

PROCEDURE DOES THAT APPLY?

THE COURT:

18
19
20

THERE'S NO UNDERTAKING NECESSARY

BECAUSE IT'S A COST ONLY JUDGMENT.

14

17

HAVE YOU POSTED AN

UNDERTAKING?

MR. CHATFIELD:

15

IT'S A JUDGMENT AFTER TRIAL.

THAT'S -- OKAY.

13

16

UNDER 917.l(A).

ALL RIGHT.

BUT THERE IS A MONEY JUDGMENT,

IS THERE NOT?
MR. CHATFIELD:

NO, YOUR HONOR.

IT'S A JUDGMENT FOR

COSTS ONLY.
THE COURT:
THAT.

LET ME HEAR FROM THE JUDGMENT CREDITOR ON

I DON'T BELIEVE YOU'RE CORRECT.

MS. WAKILY:

YOUR HONOR, INITIALLY MR. GAGGERO, ABOUT

21

SEVERAL YEARS AGO, APPEALED THE UNDERLYING JUDGMENT WHICH

22

WAS AN AWARD OF ATTORNEY FEES AND COSTS.

23

NOW FINAL AND FULLY ENFORCEABLE.

24

FURTHER APPEALS.

25

A BOND IN ORDER TO STAY ANY FURTHER ENFORCEMENT EFFORTS.

26
27

YOU A STAY OF PROCEEDINGS?

MR. CHATFIELD:

WELL, YOUR HONOR --

COUNSEL, WHAT SECTION DO YOU BELIEVE GIVES

SO YOUR STAY OF PROCEEDINGS HAS NO EFFECT.

28

THAT JUDGMENT IS

IT'S NOT SUBJECT TO ANY

SO THIS TIME AROUND THEY DO HAVE TO POST

MR. GAGGERO HAD THE BENEFIT OF THE AUTOMATIC

APPEAL WHEN HE APPEALED THE UNDERLYING JUDGMENT YEARS AGO.
THE COURT:

THE AUTOMATIC STAY.

32

MS. WAKILY:

THE COURT:

3
4

MR. CHATFIELD:

THE NATURE OF THE APPEAL IS THAT FOR

VALID DUE PROCESS REASONS, THE STATE OF CALIFORNIA HAS

REJECTED THE CONCEPT OF OUTSIDE REVERSE PIERCING AND A

JUDGMENT RENDERED SOLELY AGAINST AN INDIVIDUAL IS NOT

PERMITTED TO HAVE THE ENTITIES ADDED TO IT.

BUT DESPITE THIS PROHIBITION, THE COURT, ON

10

MAY 29, ENTERED AN AMENDED JUDGMENT NAMING 14 JUDGMENT

11

DEBTORS, INCLUDING MR. GAGGERO AND 13 OTHER NON-PARTY

12

ENTITIES, TO THE AMENDED JUDGMENT.

13

OUTSIDE

14

THE COURT:

WAIT, WAIT.

UNDER THE THEORY OF

I'M NOT AN APPELLATE COURT.

15

YOU MAY HAVE NOTICED.

16

APPELLATE COURT.

17

ON THIS AND THEN CHOSE TO AMEND THE JUDGMENT TO INCLUDE

18

THOSE 14 ENTITIES THAT YOU SAY SHOULD NOT BE INCLUDED?

IN FACT, WE'RE CLOSING SO I'M NOT AN

JUDGE HESS, I BELIEVE, WAS FULLY BRIEFED

.19

MR. CHATFIELD:

20

THE COURT:

YES, YOUR HONOR.

SO YOU'LL DEAL WITH THAT AT THE APPELLATE

21

COURT.

22

YOU'RE APPEARING HERE SOLELY ON BEHALF MR. GAGGERO AS A

23

JUDGMENT DEBTOR?

LET'S DEAL WITH WHAT'S BEFORE THIS COURT.

24

MR. CHATFIELD:

25

THE COURT:

26

ALL RIGHT.

WHAT IS THE NATURE OF YOUR APPEAL, COUNSEL?

YES, EXACTLY.

I ASSUME

YES, YOUR HONOR.

SO YOU'RE ASKING FOR A PROTECTIVE ORDER

WITH REGARD TO MR. GAGGERO?

27

MR. CHATFIELD:

28

THE COURT:

YES.

AND WITH REGARD TO HIM, THERE IS NO STAY.

33

MR. CHATFIELD:

THE COURT:

THE OTHER 14 ENTITIES; RIGHT?

PROTECTIVE ORDER FOR MR. GAGGERO AS AN INDIVIDUAL; IS THAT

CORRECT?

MR. CHATFIELD:

THE COURT:

10
11
12

SO YOU'RE REQUESTING A

YES, YOUR HONOR.

SO LET'S PROCEED.

THE COURT'S TENTATIVE

WAS TO DENY.

DO YOU WISH TO BE HEARD?

MR. CHATFIELD:

YES, YOUR HONOR.

THE CALIFORNIA

CONSTITUTION PROVIDES THAT -THE COURT:

OKAY.

YOU'RE ARGUING A RIGHT TO PRIVACY.

13

HE IS A POST-JUDGMENT DEBTOR.

14

ANYBODY IN A JUDGMENT DEBTOR PROCEEDING ARE SEVERELY

15

LIMITED.

16

MR. CHATFIELD:

17

THE COURT:

18

YES, YOUR HONOR.

ABOUT RIGHTS TO PRIVACY.

MR. CHATFIELD:

20

THE COURT:

22

THE RIGHTS TO PRIVACY FOR

SO LET'S NOT TALK LIKE IN BROAD THINGS

19

21

HAVE YOU .READ THE TROY CASE?

YES, I HAVE, YOUR HONOR.

ALL RIGHT.

PLEASE ADDRESS YOUR REQUEST FOR

A RESTRICTION ON THE JUDGMENT DEBTOR IN LIGHT OF THAT CASE.

MR. CHATFIELD:

WELL; YOUR HONOR, THE ONLY THING THAT

23

WE ARE REQUESTING IS THAT THE INFORMATION BE UTILIZED ONLY

24

BY THE ATTORNEYS AND THE DEFENDANTS -- OR THE JUDGMENT

25

CREDITORS.

26

YOUR APPEAL IS TO THE AMENDED JUDGMENT AND

WELL --

THE COURT:

ACTUALLY, THE FIRST THING YOU'RE ASKING FOR

27

IS THAT A PUBLIC JUDGMENT DEBTOR EXAMINATION BE SEALED.

28

WHAT BASIS DO YOU HAVE FOR THAT?

34

1
2
3

THE COURT:

DID ANY OF THEM DEAL WITH POST-JUDGMENT

PROCEEDINGS?
MR. CHATFIELD:

THE COURT:

NO, YOUR HONOR.

ALL RIGHT.

SO I'LL DENY THAT.

THE NEXT SECTION.

MR. CHATFIELD:

THE COURT:

HOWEVER

COUNSEL, THE COURT PROCEEDINGS,

10

SPECIFICALLY TESTIMONY BY A WITNESS, ARE RARELY SEALED.

11

AND FOR YOU TO ASK FOR THIS COURT TO SEAL A JUDGMENT DEBTOR

12

EXAMINATION HAS NEVER BEEN APPROVED BY ANY COURT AND I'M

13

NOT GOING TO BE THE FIRST.

14

SO NEXT?

15

MR. CHATFIELD:

WELL, THE NEXT REQUEST IS THAT THE ONLY

16

PERSONS WHO SHALL BE PERMITTED TO ATTEND THE JUDGMENT

17

DEBTOR EXAMINATION ARE THE PARTIES AND COUNSEL AND THE

18

COURT REPORTER.

19

WE CITED SEVERAL CASES IN SUPPORT OF

THAT.

MR. CHATFIELD:

THE COURT:

AGAIN, THEY'RE PUBLIC PROCEEDINGS.

ANYBODY

20

WHO WISHES TO ATTEND CAN ATTEND.

SHOULD THERE BE SOMEBODY

21

WHO SHOWS UP THAT YOU HAVE AN OBJECTION TO, WE CAN DEAL

22

WITH IT TOMORROW.

23

PROCEEDINGS.

24

TO TAKE AN INTEREST IN SOMEONE'S JUDGMENT DEBTOR EXAM.

25

IF SOME PARTY SHOWS UP WHO'S INVOLVED AGAINST YOUR CLIENT

26

IN ANOTHER PROCEEDING AND YOU WISH TO BRING THAT TO THE

27

ATTENTION OF THE COURT, I'LL CERTAINLY ADHERE TO THAT.

28

ABSENT THAT, I'M NOT GOING TO MAKE A BLANKET ORDER THAT

BUT THEY ARE, BY NATURE, PUBLIC

I '.LL TELL YOU IT'S VERY RARE FOR ANYONE ELSE

BUT

BUT

35

.
0
.

1
2

WELL, THE THIRD REQUEST IS THAT NO

DISCLOSURES OF THE FINANCIAL INFORMATION SHALL BE MADE TO

ANY PERSON OTHER THAN COUNSEL TO THE DEFENDANTS AND

JUDGMENT CREDITORS.

THE COURT.:

AND DOESN'T THAT FLY DIRECTLY IN THE FACE

OF THE HOLDING IN TROY?

MR. CHATFIELD:

THE COURT:

NO, I DON'T BELIEVE SO, YOUR HONOR.

WELL, TROY SAYS THE JUDGMENT CREDITOR IS

lO

PERMITTED TO CAST A VERY BROAD MAP IN SEEKING OUT ASSETS

11

THAT THE JUDGMENT DEBTOR MAY HAVE TO COLLECT THE JUDGMENT

12

AND IT ENVISIONS THAT THIRD PARTIES WILL BE, BY THE VERY

13

NATURE OF THE PROCEEDINGS, INVOLVED.

SO IT WOULD BE VERY UNUSUAL FOR THIS COURT TO SAY

15

THAT ONLY COUNSEL FOR THE DEFENDANTS AND JUDGMENT CREDITORS

16

AND OTHER PEOPLE WHO ARE DIRECTLY INVOLVED IN THE

17

COLLECTION SHOULD SEE THIS INFORMATION.

18

NATURE OF THESE KIND OF PROCEEDINGS.

19
20
21
22
23
24
25

MR. CHATFIELD:

14

ONLY CERTAIN PEOPLE CAN ATTEND.

MR. CHATFIELD:

IT'S NOT THE

WELL, YOUR HONOR, THE JUDGMENT DEBTOR'S

PRIVATE FINANCIAL INFORMATION IS -THE COURT:

HAS BEEN PUT AT ISSUE SINCE THIS JUDGMENT

WAS THERE TO BE COLLECTED.

MR. CHATFIELD:

IT'S BEEN PUT AT ISSUE AS TO THE

JUDGMENT CREDITOR ONLY, YOUR HONOR.

THE COURT:

NOT REALLY.

THE JUDGMENT CREDITOR IS TO BE

26

GIVEN THE OPPORTUNITY TO PURSUE WHATEVER AVENUES EXISTS TO

27

DISCOVER ASSETS HELD BY THE JUDGMENT DEBTOR.

28

OVER THE LAST FEW YEARS SITTING HERE, THE INVENTIVENESS THE

I HAVE SEEN,

36

JUDGMENT DEBTORS OFTEN HAVE IN MOVING THEIR ASSETS AROUND.

SO VERY OFTEN YOU HAVE TO INVOLVE THIRD PARTIES EVEN IF

THEY DON'T WISH TO BE.

MR. CHATFIELD:

ACTUALLY THE JUDGMENT CREDITOR HAS A RIGHT TO BRING IN

THIRD PARTIES, BUT TO SHARE THE FINANCIAL INFORMATION WITH

ANYONE OTHER THAN SOMEONE WHO'S DIRECTLY INVOLVED IN THE

COLLECTION OF A JUDGMENT IS UNWARRANTED AND VIOLATES THE

CONSTITUTIONAL RIGHT TO PRIVACY.

10

THE COURT:

12

MS. WAKILY:

THANK YOU.

YOUR HONOR, YOU CORRECTLY POINTED OUT THAT

13

IN THIS CASE WE'RE DEALING WITH THAT TYPE OF SITUATION

14

WHERE MR. GAGGERO HAS CREATED MULTIPLE ENTITIES, TRUSTS, A

15

SHOWER OF TRUSTS, FOUNDATIONS.

16

INVOLVED.

17

HIDING HIS ASSETS.

18

LITIGATION AND HE'S DISCLOSED INFORMATION RELATING TO THOSE

19

ASSETS WHEN BENEFICIAL TO HIM.

20

NUMEROUS PEOPLE ARE

HE HAS ESTATE PLANNING ATTORNEYS INVOLVED IN

HE'S BEEN INVOLVED IN A LOT OF

SO FIRST OF ALL, THIS INFORMATION IS NO LONGER

21

PRIVATE.

22

WILL NEED TO DISCUSS HIS TESTIMONY AS AGAINST OTHER PARTIES

23

THAT MAY BECOME SUBJECT TO ANOTHER AMENDED MOTION TO ADD

24

THEM AS A JUDGMENT DEBTOR.

25.

GAGGERO TO CREATE A COMPLICATED ESTATE PLAN TO HIDE HIS

26

ASSETS FROM JUDGMENT CREDITORS.

27

ALL RIGHT.

DO YOU WISH TO BE HEARD, COUNSEL?

11

WELL, THE COURT HAS THE RIGHT OR

28

HE'S PUT AT ISSUE MANY DIFFERENT CASES.

THE COURT:

AND WE

THIS IS AS A RESULT OF MR.

THE PROBLEM THAT I HAVE WITH YOUR NOTION OF

NO DISCLOSURES OF THE FINANCIAL -- DEBTOR'S FINANCIAL

37

INFORMATION SHALL BE MADE TO ANY OTHER PERSON OTHER THAN

COUNSEL FOR THE JUDGMENT CREDITORS AND SUCH PERSONS WHO ARE

DIRECTLY INVOLVED IN THE COLLECTION OF THE JUDGMENT IS THAT

IT'S WAY OVER BROAD.

CERTAIN THINGS WITH PEOPLE IN ORDER TO BE ABLE TO .ASK

QUESTIONS AND DISCOVER INFORMATION.

SO I'M MORE THAN HAPPY TO ADDRESS IT ON AN

INDIVIDUAL BASIS WITH REGARDS TO SPECIFIC LINES OF INQUIRY.

BUT I'M NOT ABOUT TO ISSUE A VERY BROAD ORDER SUCH AS YOUR

10

REQUEST.

11

ORDER, AND I GUESS I'LL SEE YOU HERE TOMORROW FOR THE

12

JUDGMENT DEBTOR EXAMINATION OF MR. GAGGERO.

SO I WILL DENY THIS REQUEST FOR A PROTECTIVE

13

MR. CHATFIELD:

14

THE COURT:

15

MR. CHATFIELD:

16

WELL, YOUR HONOR --

YES, COUNSEL?
THE JUDGMENT DEBTOR WISHES TO APPEAL

THE DETERMINATION OF THE COURT.

17

THE COURT:

18

MR. CHATFIELD:

19

THE COURT:

20

COUNSEL.

21

FILED.

22

CLEARLY, THEY'RE GOING TO DISCUSS

FINE.
AND WE WOULD REQUEST LEAVE TO --

YOU NEED TO FILE YOUR VARIOUS PAPERS,

I'M NOT STAYING ANYTHING UNTIL SOMETHING IS

MR. CHATFIELD:

ONCE I FILE THE APPEAL DOWNSTAIRS IN

23

111 IN THE NEXT 15 MINUTES AND I BRING UP A .COPY OF THE

24

NOTICE OF APPEAL AND THE NOTICE OF STAY, WILL

25

HAPPEN TO THE JUDGMENT DEBTOR EXAM TOMORROW?

26

THE COURT:

27

MR. CHATFIELD:

28

CALENDAR?

WHAT WILL

IT'S STILL ON CALENDAR.

WELL, WHY WOULD IT STILL BE ON

38

YOU'RE JUST REQUESTING A STAY OF MY RULING ON THE

PROTECTIVE ORDER.

5
6
7
8
9
10
11

WELL, BECAUSE YOU HAVEN'T REQUESTED

THE COURT:

MR. CHATFIELD:

YES.

AND YOUR RULING AFFECTS WHAT

HAPPENS IN TOMORROW'S JUDGMENT DEBTOR EXAM.

THE COURT:

RIGHT.

WE'LL DEAL WITH THAT TOMORROW.

IT'S NOT BEFORE THE COURT TODAY.

MS. WAKILY:

TO THE EXTENT -- JUST TO PUT ON THE

RECORD, WE DON'T AGREE THAT THE APPEAL STAYS ALL THE

PROCEEDINGS.

BUT TO THE EXTENT THAT HE FILES AN APPEAL

THE COURT:

I MAY NOT NECESSARILY AGREE EITHER.

IF YOU

12

BELIEVE, COUNSEL, THAT SIMPLY APPEALING THIS PROTECTIVE

13

ORDER AND APPEALING THE AMENDED JUDGMENT SOMEHOW STAYS THE

14

JUDGMENT DEBTOR EXAM OF YOUR CLIENT AS AN INDIVIDUAL, I

15

SUGGEST YOU BRING ME SOME CASE LAW TOMORROW.

16

MR. CHATFIELD:

17

THE COURT:

18

MR. CHATFIELD:

19

MS. WAKILY:

20

THE COURT:

ALL RIGHT.

THANK YOU.
THANK YOU.

THANK YOU.

I'LL GIVE NOTICE.

AGAIN, I'M TAKING AS A GIVEN THAT THE

21

ORIGINAL JUDGMENT WHICH HAS BEEN THROUGH THE APPELLATE

22

PROCESS IS FINAL, IS ENFORCEABLE AND ABSENT -- WELL,

23

THERE'S NO FURTHER APPELLATE REVIEW.

24

MS. WAKILY:

25

THE COURT:

RIGHT.
SO AS FAR AS I CAN TELL, THE EXAMINATION

26

WILL GO FORWARD UNLESS YOU BELIEVE YOU'RE ENTITLED TO A

27

STAY WHILE THE APPEAL OF THE PROTECTIVE ORDER AFFECTING

28

THAT JUDGMENT DEBTOR EXAM HAS BEEN RESOLVED.

AND IN WHICH

. .. .

. ..

39

CASE, THEN MAYBE THEN YOU'LL HAVE TO FILE AN UNDERTAKING OF

SOME SORT.

FOR SOME CASE LAW.

MR. CHATFIELD:

THE COURT:

MR. CHATFIELD:

7
8
9

10
11
12
13

14
15

16
17

18
19

20
21

22
23
24

25

26

27

28

I JUST DON'T KNOW.

SO THAT'S WHY I'M ASKING

ALL RIGHT.

THANK YOU.
THANK YOU, YOUR HONOR.

(THE PROCEEDINGS WERE CONCLUDED.)

-000-

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

DEPARTMENT lA

STEPHEN M. GAGGERO,
PLAINTIFF,

5
6

HON. MATTHEW ST. GEORGE, COMMISSIONER

vs.

KNAPP, PETERSEN & CLARKE,

ET AL.,

DEFENDANTS.
9

)
)
)
)

NO. BC 286925

)
)

)
)

REPORTER' S
CERTIFICATE

~~~~~~~~~~~~~~)

10
11

12

I, LAURA LOPEZ, OFFICIAL REPORTER OF THE

13

SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF LOS

14

ANGELES, DO HEREBY CERTIFY THAT THE FOREGOING PAGES 29

15

THROUGH 39, INCLUSIVE, COMPRISE A FULL, TRUE, AND CORRECT

16

TRANSCRIPT OF THE PROCEEDINGS TAKEN IN THE MATTER OF THE

17

ABOVE-ENTITLED CAUSE ON JUNE 19, 2012.

18
19

DATED THIS

13TH

DAY OF SEPTEMBER, 2012.

20
21
22
23
24
25
26
27

28

, CSR NO. 6876

ER

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES
DEPT. LA 24
HONORABLE ROBERT L HESS, JUDGE
STEPHEN GAGGERO, AN INDIVIDUAL;
PLAINT I FF,

)
)
) CASE NO.
)BC286925
) REPORTER'S
)CERTIFICATE
DEFENDANTS. )

-VSKNAPP, PETERSEN & CLARKE,

STATE OF CALIFORNIA
SS
COUNTY OF LOS ANGELES
I, CAROL L. CRAWLEY, OFFICIAL REPORTER OF THE
SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF
LOS ANGELES, DO HEREBY CERTIFY THAT. THE FOREGOING PAGES,
1-28 COMPRISE A FULL, TRUE, AND CORRECT TRANSCRIPT OF THE
PROCEEDINGS HELD ON MAY 29, 2012, IN DEPARTMENT 24 OF THE
LOS ANGELES COURT IN THE MATTER OF THE ABOVE-ENTITLED CAUSE.

DATED