Metropolitan News-Enterprise


Thursday, June 6, 2013


Page 1


Court Reaffirms Dismissal Under Disentitlement Doctrine


By a MetNews Staff Writer


The Court of Appeal yesterday denied a motion to reinstate an appeal that it dismissed three months ago under the disentitlement action.

Div. Five, in an order by Justices Richard Mosk and Sandy Kriegler, said the defendants, Ampton Investments, Inc. and Laurence Strenger, “have not demonstrated that they have complied with court orders,” as a result of which the appeal was dismissed in the first place. According to Ampton’s website, Strenger is a graduate of Columbia University and the University of Chicago Law School, and lived in Los Angeles prior to starting the New York-based company.

State Bar records show Strenger has been an active member since 1974.

The April 5 dismissal was based on the court’s conclusion that Ampton and its chief executive officer and general counsel, Strenger, violated New York court orders obtained by the plaintiffs in an effort to enforce the unstayed California judgment in their favor.

“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,” Mosk wrote on that occasion.

The plaintiffs, Herbert W. Stoltenberg and others, obtained a judgment of more than $8.5 million against the defendants. Because the defendants did not seek to stay the judgment, the plaintiffs initiated enforcement proceedings in New York.

After registering the judgment, the plaintiffs served Ampton with a subpoena for financial information. After the defendants did not comply with the subpoena, or with an order compelling a response, the New York trial judge held them in contempt.

The plaintiffs then filed a dismissal motion in the Court of Appeal, based on the disentitlement doctrine. Analogous to the fugitive disentitlement doctrine in criminal law, the doctrine in its civil application permits dismissal of appeals where the appellant has impeded enforcement of the orders being appealed.

The defendants responded to the motion by arguing that the doctrine cannot be applied to frustration of out-of-state court orders, and that, even if it could, it should not apply in this case because the New York orders were not final.

Mosk noted in his previous opinion that the doctrine had been applied in California to similar cases, where judgment debtors were frustrating efforts at enforcement of the judgment while they were appealing, such as by refusing to answer post-judgment interrogatories, to appear for judgment debtor examination, or to deposit assets pursuant to an order in a partnership dissolution.

The fact that the conduct occurred in another jurisdiction does not compel a different result when the effect is to frustrate the enforcement of a California judgment, Mosk said. But he noted that the defendants had the opportunity to comply with the New York orders and seek reinstatement of the appeal, although the panel would not prejudge the merits of such a motion.

In yesterday’s order, the justices explained that the defendants are asking the New York court to vacate the entry of judgment and—in a filing last Friday—claimed that the New York judge held a hearing May 29 but declined to rule, instead staying proceedings and saying rulings would be issued in about 10 days.

That does not represent a change in circumstances, Mosk and Kriegler said, because the defendants still have not demonstrated compliance with court orders. And while the New York judge vacated an earlier order holding the defendants in contempt, California law does not require a contempt finding for the doctrine to apply, the jurists wrote.

“Defendants have had two months since our initial opinion to provide us with a competent and unequivocal showing that they had complied fully with plaintiffs’ information subpoena and that the New York court had made an express finding of full compliance,” they said.  “…Moreover, it was defendants’ burden to provide us with an adequate record, and that would include a transcript of a proceeding ‘on the record’ or a reasonable substitute for such a transcript….Defendants have been making last-minute efforts to avoid the disentitlement doctrine, but these efforts are too little and too late.”

The defendants were represented on appeal by James G. McCarney of Akerman Senterfitt and Robert T. Sturgeon of Sheppard, Mullin, Richter & Hampton. The plaintiffs’ attorneys were Richard A. Love and Kathleen M. Erskine of Love & Erskine and Marc J. Poster of Greines, Martin, Stein & Richland.

The case is Stoltenberg v. Ampton Investments, Inc., B235731.


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