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Herbert W. Stoltenberg, As Trustee, Etc. et al v. Ampton Investments

April 4, 2013

HERBERT W. STOLTENBERG, AS TRUSTEE, ETC. ET AL., PLAINTIFFS AND RESPONDENTS,
v.
AMPTON INVESTMENTS, INC. ET AL., DEFENDANTS AND APPELLANTS.



(Los Angeles County Super. Ct. No. BC322141) APPEAL from a judgment of the Superior Court of the County of Los Angeles, Terry A. Green, Judge.

The opinion of the court was delivered by: Mosk, Acting P. J.

CERTIFIED FOR PUBLICATION

Dismissed.

INTRODUCTION

Defendants, an individual and a corporation, appealed from a California judgment in favor of plaintiffs, but did not post a bond to stay enforcement of the judgment. Plaintiffs, after registering the judgment in New York where defendants are located, attempted to enforce the registered sister-state judgment there by serving a subpoena seeking financial information from the corporate defendant. Defendants did not comply with the subpoena or with a New York trial court order compelling them to respond to it. As a result, the New York trial court held defendants in contempt. In dismissing defendants' appeal under the disentitlement doctrine, we hold that the doctrine applies to noncompliance with and contempt of New York trial court orders, which noncompliance and contempt directly affect and frustrate the enforcement of a California judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Following a jury trial, the trial court entered a judgment on the verdict in favor of plaintiffs and respondents,*fn1 awarding them a total of $8,516,704 in compensatory damages, plus costs.*fn2 Defendants Ampton Investments, Inc. and Laurence Strenger*fn3 (defendants) filed a timely notice of appeal from the judgment but did not, pursuant to Code of Civil Procedure 917.1, post a bond to stay enforcement of the judgment. Instead, defendants filed a petition for a writ of supersedeas to stay enforcement of the judgment pending appeal, which petition this court denied.

Because enforcement of the judgment was not stayed, plaintiffs registered their California judgment in the State of New York (N.Y. C.P.L.R 5401, et seq.), where defendants are domiciled, and initiated enforcement proceedings in the courts of that state. Among other steps, plaintiffs served a subpoena on defendant Ampton Investments, Inc.*fn4 for financial information, but defendants did not comply with it.

Plaintiffs then obtained from the New York trial court an order to show cause why defendants should not be held in contempt. Defendants objected and moved to stay all judgment enforcement proceedings. The New York trial court found there was no basis for a stay and ordered both defendants to respond to the financial information subpoena within ten days. The court's order stated, "Failure to comply with this Order may result in [defendants] being held in contempt." Nevertheless, defendants did not comply with that order.

Plaintiffs next obtained a second order to show cause why defendants should not be held in contempt. Defendants filed a cross-motion to dismiss the contempt proceeding contending that they were not served properly with the order to show cause and other underlying orders. Plaintiffs replied with their proof of proper service of the order to show cause on defendants. The New York trial court entered an order finding defendants in contempt, fining them $500, and ordering them to comply with the outstanding subpoena within 30 days or face further sanctions, including costs. Plaintiffs gave notice of entry of the contempt order, but defendants still did not comply with the subpoena, the order compelling compliance with it, or the contempt order.

In response to defendants' noncompliance with and contempt of the orders of the New York trial court, plaintiffs filed in this court a motion to dismiss defendants' appeal based upon the disentitlement doctrine. Defendants filed a notice of appeal in New York, purporting to appeal from "the Judgment from the Superior Court for the State of California, County of Los Angeles as entered in the Supreme Court of the State of New York," the initial order compelling compliance with the subpoena, and the subsequent contempt order. Defendants also filed their opposition to the motion to dismiss the appeal in this court contending that the disentitlement doctrine cannot be based on noncompliance with trial court orders from another jurisdiction and that, in any event, the New York trial court orders were not final and were pending appeal in that jurisdiction.

Plaintiffs subsequently filed a supplemental motion to dismiss this appeal, arguing that defendants' continued noncompliance with the New York trial court orders, including defendants' failure to comply with the subpoena within 30 days of the contempt order, had, in effect, placed defendants in "double contempt." Defendants then paid the $500 sanction required by the contempt order but, to date, have not complied with that portion of the contempt order requiring them to respond to plaintiffs' financial information subpoena. Defendants responded to plaintiffs' second supplemental motion to dismiss the appeal, maintaining, inter alia, that defendants had paid the $500 fine required by the contempt order. We requested letter briefing on certain issues related to the motion to dismiss the appeal, to which letter the parties responded.

Plaintiffs most recently filed a motion in the New York trial court for further sanctions pursuant to the contempt finding against defendants. Plaintiffs also filed in this court a second supplemental motion for judicial notice*fn5 advising that defendants had not yet complied with the New York trial court order compelling compliance with the information subpoena or the ...


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