American Rag Cie v. Haralambus CA2/8
B304350
| Cal. Ct. App. | Jul 13, 2021Background
- LaRocca obtained a judgment against Haralambus for roughly $1.2M (affirmed on appeal); Haralambus had a separate judgment against LaRocca for ~$119k that was later offset.
- The parties entered a stipulation: Haralambus would pay $1M on specified terms in exchange for satisfaction and release of liens; failure to pay would void the stipulation.
- Haralambus obtained a royalty judgment against American Rag for past royalties (~$279,850); the surety on American Rag’s appeal bond paid the money portion but disputes remained about ongoing royalty obligations and the declaratory relief portion.
- LaRocca assigned her (post-offset) judgment to American Rag (≈$1.3–$1.45M). American Rag sought a judgment debtor examination to aid enforcement.
- Haralambus moved for a protective order, claiming sums owed to him (royalties and other pending claims) would satisfy American Rag’s assigned judgment; the trial court denied the protective order on the basis of American Rag’s opposition, and Haralambus appealed.
- The Court of Appeal affirmed, finding Haralambus waived appellate review by presenting a one-sided record and, on the merits, that his claimed offsets remained disputed and were not reduced to a money judgment sufficient to block the debtor exam.
Issues
| Issue | Plaintiff's Argument (American Rag) | Defendant's Argument (Haralambus) | Held |
|---|---|---|---|
| Whether Haralambus waived appellate review by failing to present a fair, complete factual record | American Rag: Haralambus’ brief omitted and failed to address facts and arguments in American Rag’s opposition; waiver results | Haralambus: Trial court failed to properly review facts; no oral argument or evidentiary hearing; court gave no reasoning | Court: Waiver—Haralambus’ one-sided recitation and failure to address opposition waived appellate review |
| Whether trial court abused its discretion by denying a protective order blocking a judgment debtor examination | American Rag: Haralambus offered no evidence that disputed claims were reduced to money judgments or likely to exceed the assigned judgment; debtor exam warranted | Haralambus: Pending royalty/declaratory and other litigation would satisfy or offset the judgment, making the exam futile | Court: No abuse—claimed offsets/disputed claims were unresolved and not reduced to judgments; protective order not justified |
| Whether denial without hearing/oral explanation was improper | American Rag: Parties agreed to resolution on submitted papers; denial based on its opposition was permissible | Haralambus: Lack of oral argument, evidentiary hearing, and stated reasoning deprived him of fair adjudication | Court: No error—court may decide on submitted papers; denial may rest on opposition materials |
Key Cases Cited
- Erlich v. Superior Court, 63 Cal.2d 551 (1965) (factors for staying/enjoining collection when debtor asserts a disputed claim)
- Foreman & Clark Corp. v. Fallon, 3 Cal.3d 875 (1971) (appellate waiver where appellant’s brief fails to fairly present facts)
- County of Solano v. Vallejo Redevelopment Agency, 75 Cal.App.4th 1262 (1999) (requirement to discuss all significant facts on appeal)
- People ex rel. Harris v. Sarpas, 225 Cal.App.4th 1539 (2014) (discovery orders reviewed for abuse of discretion)
- Reichardt v. Hoffman, 52 Cal.App.4th 754 (1997) (matters raised first in reply brief generally not considered)