1

Filed 7/2/15 Lalanne v. Armanio CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or or dered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

ROBERT LALANNE, Plaintiff and Respondent,

v. MICHELE ARMANINO et al.
, Defendants and Appellants ; CHRISTOPHER ANDREAS, Third Party Claimant and Respondent. A140972
(San Francisco City and County Super. Ct. No. CPF

- 13

- 513216)

In ongoing and multi phased litigat ion, Robert Lal anne obtained an arbitration

a ward against his sister, Michel e Armanino , in her personal cap acity and in her capacity

as the managing member of a limited liability corporation

. Armanino claimed an offset against the arbitration award and paid Lal anne the remainder. Lal anne then obtained a judgment confirming the arb itration award, and Armanino moved to compel acknowledgement of satisfaction of judgment

. The trial court denied the motion.
Lal anne ’s attorney, who had been assigned an interest in the judgment
, obtained a writ of
execution and Armanino moved to recall and quash the writ

. The court denied this
motion as well . We affirm the rulings on both motions . We also attempt to provide guidance should the motions b e renewed following this appeal.2 I. B ACKGROUND Lalanne ’s and Armanino ’s parents formed several esta te planning entities in which Lalanne, Armanino and o ther immediate family members hol d financial interests . The
entities include Lalanne LLC (LLC), a real property investment venture ; the Lalanne 1997 Trust; and the Lalanne Ranch Partnership. At some po int, Lalanne became the managing member of LLC , trustee of the t rust , and managing general partner of the

p artnership . In 2006 or ea rly 2007, Armanino took over the se positions.
A. 2007

– 2008 Settlements of Disputes Between Lalanne and Armanino Several disputes between Lalanne and Armanino (in her individual capacity and in her management capacities of the various estate planning entities ) were submitted to
mediation before the Hon orable Ellen S. James (retired ) under the auspices of JAMS, an alt ernative dispute resolution firm (formerly J udicial Arbitration and Mediation Service s )

. In 2007, Lalanne and Armanino arrived at a partial settlement, which was memo rialized in a signed agreement

. This s ettlement required LLC and the Lalanne 1997 Trust to make certain immediate distributions to Lalanne ; Lalanne and his wife to vacate a home that belonged to the t rust; Armanino to sell the home; and LLC and the t rust to then make
certain distributions from the sale proceeds . In 2008, Lalanne and Armanino resolved their remaining disputes and signed a second settlement agreement (2008 Settlement).
The 2008 Settlement provided in part :

“ [3] b. As LLC Manager, [Armanino] shall, by Monday, June 16, 2008, distribute $339,000 to the members in accordance with their interests.

. . . In addition, [Armanino]
shall

. . . advance $125,000 to [Lalanne], which advance shall be credited against future distributions from the LLC, and shall accrue simple interest at 6% per annum. Notwithstanding anything to the contrary in the LLC agreement, in the future, after the reserve is replenished to $625,000, all net income of the LLC, except amounts necessary to maintain a reserve of $625,000 or such other amount as the Parties may agree or Judge James may determine is appropri ate under the circumstances then prevailing, shall be distributed to the members, in accordance with their interests, on at least a quarterly
basis.3

“ [3] c. The Parties agree the [Lalanne Ranch] Partnership should sell the ranch as

s oon as reasonably pract icable. .

. .

“ [3] e. [ sic ] [Lalanne] agrees that the following amounts shall be considered advances to him, which advances shall be deducted from his distribution( s) of the proceeds from the sale of the ranch: $12,000 for the ranch truck, which shall be credited to the Entity that paid for the truck; $116,694.91 for the items reflected in Exhibit B,
which advances shall be credited to the 1997 Trusts [ sic ] ; $12,633.19 for accounting fees and a pet hospital bill, which shall be credited to the LLC; and $20 0,000, for all other potential claims, which shall be credited to the 1997 Trust. ” The 2008 Settlement provided that “[a]ny and all disp utes concerning this Agreement

. . . shall be mediated and, if unresolved, arbitrated at JAMS,” before Judge James if a vailable.
B

. Arbitration of Dispute over Section 3 ( b ) of the 2008 Settlement
Lalanne claimed that LLC breached s ection 3 ( b ) of the 2008 Settlement (Section 3(b)), and the matter went to arbitration before Judge James in 2012

. 1 LLC had made the $339,000 distribution and $125,000 advance required by S ection 3(b) but no other distributions. The parties disagreed about the meaning of “ reserve” and “net
income” in Section 3(b) and thus disagreed about whether further distributions were required. In an interim a ward
, Judge James agreed with Lalanne’s interpretation of th os e terms and ordered the parties to submit supplemental briefing on Lalanne’s “proportionate amount of the distributions that sho uld have been made. ” In a second
interi m a ward, Judge James determined the amount of Lalanne ’s interest in LLC , permitted a temporary increase in reserves, and ordere d LLC to make a distribution to Lalanne based on those facts but allowing it to offset the $125,000 advance that had been
made to Lalanne. In a t hird i nterim a ward, James awarded Lalanne $155,000 in attorney fees and costs as the prevailing party ( fee award)

.

1 Armanino and LLC were identified as the responding parties to this arbitration proceeding. For purposes of simplicity, we refer to both as LLC except where necessary to refer to Armanino separately.4

In communications about the the final award’s specific wording
, the parties disagreed about wheth er LLC should be permitted to offset alleged debts owed by
Lalanne from future distributions and the fee award , including the debts listed in

s ection 3(e) of the 2008 Settlement (Section 3(e))

. LLC reported that Lalanne had sold his interest in the ranch property in 2011, and argu ed that Lalanne’s debts listed in
S ection 3(e) were therefore “payable now because [Lalanne] has .

. . received all the proceeds that he will ever receive from the sale” of the ranch property. It argued that “the final award should not pre

- judge issues re lating to [Lalanne ’s] S ection 3(e) obligations (which are not encompassed in this proceeding), and should not prejudice [ LLC ’s ] ability to enforce those obliga tions.” (Some c apitalization omitted.) It further argued that
Lalanne had “long been aware that [ LLC ] considered [the S ection 3(e)] obligations triggered and intended to offset the amounts due under Section 3(e) against any distributions payable to [ LLC ]. .

. . Lalanne had the opportunity to[,] but chose not to[,] include that dispute in this procee ding.” Lalanne argued that Section 3(e) had not been triggered ; that it was incumbent on LLC , not him, to raise Section 3(e) in the arbitration if it wanted to offset those debts from the pay ments ordered by Judge James ; and that the
offsets should not be permitted.
In her f inal a ward
, Judge James expressly decline d to make any ruling re garding
Section 3(e) obligations: “ All issues regarding the sale of the ranch and resulting obligations and appropriate set

- offs are the subject of another pending arbit ration. In the list of [Lalanne’s] Statement of Claims for this arbitration, the dispute regarding whether [his] sale of an interest in the ranch property triggered his repayment obligations under [Section] 3(e) of the [2008 Settlement ] was not included. [Citation.] [ LLC ] did not
include [Section] 3(e) issues in its presentation at trial at t he Arbitration Hearing either. [¶] [ LLC ] is ordered to make the awarded distributions from the money in the LLC
accounts. The reserve amount is to be subtracted fro m [the amount deposited in specified accounts]. The $125,000 that [Lalanne] owes the LLC shall be subtracted from the remaining proportionate balance due to him. This distribution shall be made within seven days of this Final Award.” Thus, the f inal a wa rd did not specify a dollar amount of the5

distribution, but only specified the manner in which the distribution should be calculated. The court slightly increased the fee award to $156,600. On April 13, 2013, s hortly after the f inal a ward was issued, Armanino informed
Lalanne and other family members that she planned to make distributions from LLC and
the Lalanne 1997 Trust (as well as another trust) and detailed for each family member the planned distribution s, deductions , and net pay ments . For Lalanne, the calculation was the following:
LLC Distribution $ 263,743.59

1997 Trust Distribution $ 253,714.08 Douglas Trust Distribution $ 18,248.96
Fee Award $ 156,600.00 $ 692,306.64 2
Debt to LLC ( $ 137,633.19)
Debt to Trust ( $ 316,694.91)
Debt to Ranch ( $ 12,000.00) LLC Capital (Deficit) ( $ 172,746.00) ( $ 639,074.10)
Net Distribution $ 53,232.54 In other words, Armanino deducted what she alleged to be due from Lal anne under Section 3(e) of the 2008 Settlement (as well as other sums). Lalanne’s “ net distribution” was paid to Center Street Development Company, which held a lien against Lalanne’s recovery in the arbitration

. 3
After Lalanne objected to the distribution deductions
, Judge James convened a hearing on April 16, 2013, to resolve the dispute. She heard argument and ruled, “[T]here were never any circumstances in this arbitration where I considered anything

2 This is the total reported by Armanino in her April 13, 2013 correspondence.

3 In 2012, Lalanne stipulated to entry of judgment for $338,795.17 in favor of Center Street Development Company based on his failure to repay certain loans. The company then filed a notice of ju dgment lien.6

other than [Section] 3(b). So whether the [Section] 3(e) deductions are appropriate was
well be yond the scope of this arbitration and I didn’t rule on it, and I am not going to be
able to rule on the entitlement or lack of entitlement to the [Section] 3(e) offsets. [¶]

. . . [¶]

. . . I never get involved in enforcement of my judgment.” Judge James issued a

c orrected final a ward (the James Award) with immaterial changes and left the remedial language of the award unchanged

. C. Petition to Confirm the James Award In September 2013, Lalanne petitioned the San Francisco Superior Court to confirm the James Award and to “enjoin [ LLC ], until such time as [a writ of execution] can be filed and served, from engaging in any further unlawful ‘distributions’ or fraudulent transfers of [Lalanne’s] rightful share of the joint funds held in [LLC]

accounts

. ” He asked the court to enter two separate judgments , one ordering a $459,057.61 distribution to Lalanne by September 30, plus interest, and another ordering
immediate payment of the $156,600 fee award , plus interest.
On October 7, 2013, the court (Hon. Peter J. Busch ) confirm ed the James Award “in all respects as made ” and entered judgment “in conformity []with” the award (the James Judgment). The court expressly denied Lalanne’s “request to enter two judgments that alter the award; nor will the Court address other issues concerning the enforcement or interpretation of the award.” Lalanne assigned the James J udgment to his counsel, Christopher Andreas.
D. Arbitration of Lalanne Ranch Partnership Dispute
On October 15, 2013, the Hon orable Richard A. Hodge (ret ired ) issued a final
award in an arbitration between the Lalanne Ranch Partnership and Lalanne (the Hodge Award) conducted under the auspices of the Americ an Arbitration Association

. Although
this apparently was the “pending arbitration” referenced in the James A ward, the James
Award mistaken ly noted that th is arbitration encompassed “[a]ll issues regarding the sale of the ranch and resulting obligations and appropriate set

- offs

. ” According to t he Hodge Award
, t he Lalanne Ranch Partnership alleged that
La lanne breached his fiduciary duties as a partner when he sold his interest in ranch7

property that was owned by the partnership

. Judge Hodge agreed, finding Lalanne
violated a p artnership restriction on sales of ranch property by (1) encumbering his
intere st with a deed of trust, and (2) selling his interest to Center Street Development Company

. Judge Hodge awarded the p artnership $1.1 million in damages as well as attorney fees and costs. He rejected Lalanne’s “request that the [Hodge] Award provide
inst ruction as to how [Armanino] should ‘appropriately credit the partners’ capital
accounts’ .

. . primarily because a resolution of that and similar financial issues would require extended inquiry beyond the appropriate confines of this arbitration. Intra

P artnership accounting issues are not within the scope of this arbitration, nor does the record provide an adequate basis for the adjudication of such issues.” The Hodge A ward does not expressly address Section 3(e) of the 2008 Settlement.
On December 23, 2013, the San Francisco Superior Court (Judge Marla Miller) confirmed the Hodge Award and entered a $1,556,332 judgment against Lalanne and in
favor of the Lalanne Ranch Partnership ( the Hodge Judgment). The p artnership assigned
the Hodge J udgment to LLC.
E

. Motion to Compel Acknowledgement of Satisfaction of Judgment On September 16, 2013, Armanino made a distribution of LLC and Lalanne
1997 Trust assets

. Lalanne’s distribution was calculated as follows:

LLC Distribution $41,457.51
1997 Trust Dist ribution 28,259. 6 5
Total Distribution $69,717.16 4
On October 8, 2013, the day after the trial court confirmed the James Award, LLC
served Andreas with a demand for acknowledgement of s atisfaction of the James Judgment. Andreas objected
, and LLC filed a motion to compel acknowledgement of satisfaction of the James Judgment (motion to compel)

. LLC argued, “By making the

4 Center Street Development Company argued it should receive the distribution pursuant to its judgment lien, but Andreas argued that such a payment would amount to a fraudulent transfer of LLC funds. Armanino filed an interpleader action in C ontra Costa County Superior Court to resolve the conflicting claims on the funds.8

April 13 distribution and a second distribution on September 16, 2013, [ LLC has]
satisfied [its] obligations under the [James] Judgment.” The hearing on the motion to compel was continued to January 2014. While the motion to compel was still being briefed, Andreas obtained a writ of
execution on “the only stated number in the [Ja mes J udgment ] ,” the $156,600 fee award

. 5

LLC filed an ex parte application to stay enforcement of the writ pending a ruling on the motion to compel. Judge Miller granted the application on December 24, 2013

. However, LLC apparently failed to serve a certified copy o f the stay order on the sheriff.
O n December 31, 2013, LLC received notices that the bank h o ld ing LLC’s accounts had been served a notice of levy and planned to remit $156 ,676 from those accounts to the
sheriff. LLC brought the December 24, 2013 stay order to the bank’s attention and , o n January 3, 2014, also obtained from the court a supplemental stay order that expressly applied to the bank. No further action was taken on the writ until at least April 8, 2014. The day a fter h earing on January 28 , 2014 , the court (Hon. Ernest H. Gold smith)
denied the motion to compel (January 29 Order)

. The order stated that the motion was

“ predicated on the assumption that th[ e ] [April 2013] $53,232.54 distribution constitutes compliance with the arbitrator’s award .

. . . [Lalanne], on the other hand, contends that the offsets were improper. [Judge James] clearly stated that

. . . deductions pursuant to [Section] 3(e) of the parties’ settlement were not before her.

. . . The Court believes that it is premature to determin e whether [LLC] distributed the proper amount and satisfied the judgment. The Court finds that that determination should occur after the parties resolve

t heir dispute regarding [Section] 3(e). ” The court denied the motion without prejudice
, subject to re newal “ once the offset dispute is adjudicated.” LLC appealed from the January 29 Order on February 3, 2014

. F

. Motion to Recall and Quash Writ of Execution On February 4, 2014, Andreas filed an ex parte application to lift the stay of
enforcement of the writ of execution, but his application was denied. On February 28 ,

5 A replacement writ was issued on December 5, 2013, to correct a technical error.9

LLC filed a motion to recall and quash the writ of execution (motion to recall) . The first ground for the motion was that LLC’s appeal of the January 29 O rder automatically stayed enforc ement of the James J udgment

. A second ground was that the James
J udgment was unenforceable because the court ruled in the January 29 Order that it could

not determine whether any payments were due under that judgment. A third ground was
that LLC was entitled to offset the $1.5 million Hodge Judgment against the James Judgment. In opposition, Andreas argued that any stay triggered by the appeal rendered
recall and quashing of the writ unnecessary; in fact, preserving the status quo (the point of an automatic stay pending appeal) required continued pendency of the writ. He conceded that enforcement of the writ was stayed until the appeal was resolved. Andreas
also argued that the Section 3(e) debts were not appropriate offsets for reasons alre ady stated, and that the Hodge Judgment was not an appropriate equitable setoff because it was entered after the James Judgment “in favor of the [ Lalanne Ranch Partnership ] by
another arbitration tribunal in an unrelated action based on a different contrac t.” In a tentative decision, the court (Judge Goldsmith) wrote that it intended to grant
the motion to recall : “First, while it is not entirely clear, the Court tends to believe that [LLC] may have satisfied the judgment. The [James Judg ment] order [ed] [ LLC] to make
a distribution and [LLC] made the distribution. The [James Judg ment] does not award a certain sum of damages. [Judge James] addressed the offset issue and refused to alter the
award

. . . . Second, in light of the uncertainty regarding sat isfaction of the judgment, it is improper to allow the writ of execution to remain in place. Third, an appeal generally extinguishes the lien that a writ of execution creates. ” (Citing Adir Internat

. , LLC v. Superior C ourt (2013) 216 Cal.App.4th 996, 100 1 ( Adir )

. ) At the hearing on the motion to recall
, however, the court questioned whether it was necessary to recall and quash the writ of execution because a stay pending an appeal might be automatically effected by operation of law

. LLC reported that the funds had already been taken from its bank accounts and wer e being held by the sheriff. LLC argued that, under Adir, supra, 216 Cal.App.4th 996, it would have no remedy if the
sheriff disbursed the funds despite the automatic stay; rather, the only wa y it could10

protect itself was by way of its motion to recall . Andreas disagreed. After issuance of the supplemental stay order, he reported, no further action had been taken on the writ and
the court had denie d Andreas’s February 4, 2014 ex parte applica tion to lift the stay. If the sheriff nevertheless disbursed the funds, LLC would have a remedy against the
sheriff. The court commented : “If this is lifted, then what’s going to happen? We’re just going to have more litigation about what happens to th at money. I don’t know who’s entitled to it. And I’m not going to make those judgments now.

. . . [¶]

. . . [¶]

. . . [T]he status quo is well preserved. ” The court denied the motion to recall and a summary order was filed on May 7, 2014

. LLC ’s appeal from this order was filed under the same
number as its appeal from the January 29 O rder (appeal No. A140972)

. II. D ISCUSSION A. Motion to Compel LLC argues the trial court erred in denying its motion to compel. We affirm the
order

.

“ A motion to compel acknowledgment of satisfaction or partial satisfaction of a judgment ( [Code Civ. Proc.,] §§ 724.050, subd. (d), 724.110, subd. (b)) is an entirely acceptable procedure for seeking an offset against a judgment. ” 6 ( Jhaveri v. Teitelbaum (2009) 176 Cal.App.4 th 740, 75 3 .) “[A] court of equity will compel a set

- off when mutual demands are held under such circumstances that one of them should be applied against the other and only the balance recovered. The insolvency of the party against
whom the relief is sou ght affords sufficient ground for invoking this equitable principle. [Citations.]

. . . The fact that the demand of the plaintiff has not been reduced to judgment
is no obstacle to its allowance as set

- off agai nst a judgment. ” ( Harrison v. Adams (1942)
2 0 Cal.2d 646, 648

– 649 ; see also Erlich v. Superior Court (1965) 63 Cal.2d 551, 555

. ) “A trial court’ s decision to apply a credit in partial satisfaction of the judgment is an exercise of the court’ s equitable discretion. [Citation.] An abuse of discretion occurs when, in light of applicable law and considering all re levant circumstances, the court’ s

6 Undesignated statutory references are to the Code of Civil Procedure.11

rulin g exceeds the bounds of reason. ” ( Jhaveri v. Teitelbaum , supra, 176 Cal.App.4th at

p. 749.) If the court makes factual findings in support of its order, we review th e findings for substantial evidence. ( Id. at p. 748.)
1. Distribution Requirement
LLC first argues that simply by making the April 13, 2013 distribution, it satisfied
the James A ward’s distribution requirement , which LLC describes as a requirement “to make a ‘distribution’ of an unspecified amount within seven days

. ” The description is
inaccurate. Although Judge James did not specify a dollar amount of the distribution, she specified how the distribution should be calculated: “T he reserve amount is to be
subtracted from [ the amount in specified a ccounts ] . The $125,000 tha t [Lalanne] owes LLC shall be subtracted from the remaining proportionate balance due to him.” Thus,
before the trial court could compel acknowledgement of sat isfaction of the distribution aspect of the James J udgment, it had to and was able to determine whether the amount of
the distribution satisfied the James A ward’s requirements. 7

2

. Mutuality Lalanne correctly argues that the only possible offsets to the James Ju dgment are
claims for which Lalanne is liable to LLC . To establish an equitable offset, “mutuality is essential.” ( Harrison v. Adams , supra, 20 Cal.2d at p. 649.) The only claimed offsets in the April 13, 2013 distribution that satisfied this mu tuality requirement were the alleged “Debt to LLC” and possibly the “LLC Capital [Deficit].” The sum of both of these offsets ($137,633.19 + $172,746.00 = $ 310,379.19) plus the amount paid to Lalanne (i.e., actually paid to Center Street Development Compa ny as creditor of Lalanne) in April 2013 ($53,232.5 4 + $310,379.19 = $363,611.73) wa s insufficient to fully satisfy the amounts due under the James Judgment (the $263,743.58 April 2013 LLC
distribution + $156,600 fee award = $420,343 .58) , assuming LLC’s ca lculation of the

7 On a related is sue, LLC unpersuasively argued below that its payment of the September 2013 distribution was some evidence that it satisfied the James Judgment. The James Award required LLC to make a distribution within seven days of the April 8, 2013 award according to the above

- quoted formula. LLC’s payment of an additional distribution in September could not have satisfied that obligation.12

underlying distribution was correct

. Therefore, the trial court properly denied LLC’s motion to compel acknowledgement of full satisfaction of judgment.
3

. Validity of Claim ed Offsets For guidance to the trial court in t he event LLC’s motions are renewed following this appeal , we consider whether any of the amounts claimed by LLC under the
2008 Settlement could properly be taken as equitable offsets, thus potentially entitling LLC to acknowledgement of partial sa tisfaction of judgment. (See § 724.110 ; Jhaveri v. Teitelbaum , supra, 176 Cal.App.4th at p. 752.)
LLC ’s primary argument in the trial court and on appeal i s that the motion to compel should have been granted because Judge James declined to determine whether the
Section 3(e) de bts could be offset against the April 2013 distribution. But this theory attempts to reallocate LLC’s burden , as the moving party, to prov e the claim or defense underlying the motion. (S ee Evid. Code, § 500

. ) Moreover , a court may grant a motion to compel acknowledgement of satisfaction of judgment only if it finds the judgme nt has
been satisfied in fact . (S ee George S. Nolte Consulting Civil Engineers, Inc. v. Magliocco (1979) 93 Cal.App.3d 190, 193 [discussing former § 675, subd. (a) , predecess or statute to § 724.010, subd. (a) ]; Hrimnak v. Watkins (1995) 38 Cal.App.4th 964, 986 ( con c . opn. of Davis, J. )

. ) Here, LLC had to prove payment of a distributi on calculated under the James Award’s terms (which LLC itself calculated as $ 263,743.58) plus the $156,600 fee award even though it only disbursed only $53,232.54. In order to satisfy this burden, it had to prove the validity of the claimed offsets. T he fact that
entitlement to the offset s had not yet been resolved thus could have been a reason t o deny
the motion
, but not to grant it.
Should t he motion to compel be brought again after resolution of this appeal , the
trial court would have the option to take evidence and determine the validity of the
claimed offse ts

. Courts generally have jurisdiction to decide offs et

- related issues when they are raised in a motion to compel even if the issues were not decided by the court or arbitrator who issued the underlying judgment

. (See, e.g., Granberry v. Islay Investments (1995) 9 Cal.4th 738, 750 [ validity of claim underlying offset request and equitable13

defenses to claim ]; Cunningham v. Magidow (2013) 219 Cal.App.4th 298, 304

– 306 [ judgment debtor ’s entitlement to offset the claim ]; Brienza v. Tepper (1995)
35 Cal.App.4th 1839, 1847

– 1850 [ priority of competing offset claims ] .)
The court would also have discretion not to decide such issues in the context of a motion to compel if it determine s that it would be inequitable to do so , and that the issue
would be better decided in a different forum. (S ee Schumacher v. Ayerve (1992)
9 Cal.App.4th 1860, 1865 [motion to compel acknowledgement of satisfaction of judgment properly denied where trial court could not determine whether judgment was satisfied under ambiguous arbitration award terms ]; Pierson v. Honda (1987)
194 Cal.App.3d 1411, 1414 [same].) Here, for example, in order to determine whet her LLC satisfied the judgment, the trial court would have to interpret the 2008 Settlement and decide whether Section 3(e) had been triggered and Section 3(e) debts were therefore properly offset from the distribution required by the James Award. The 2008 Settlement, however, requires that such interpretation issues be submitted to arbitration. The trial court therefore might reasonably deny the motion to comp el because issues necessary to decide whether the James Judgment were satisfied need to be resolved in another forum.
These matters must be addressed to the trial court’s discretion in the first instance.
B. Motion to Recall LLC argues the trial court er red in denying its motion to recall. We agree in par t but conclude the error was not prejudicial. A trial court has inherent equitable power to recall and quash a writ of execution that was improperly or inadvertently issued. ( Ahart, Cal. Practice Guide : Enforcing Judgments and Debts (The Rutter Group 2014) ¶ 6:612 , p. 6D

- 70 ( r ev

. #1 , 2014) (Ahart)

. ) However, this is not the only available procedure for suspending action on a writ of execution. The trial court may also order a stay of execution. ( Id. at ¶ 6:611 at

pp. 6D

- 69 to 6D

- 70 (r ev. #1 , 2014).) The court has “broad discretion in determining
whether to

. . . enjoin collection of [a] judgment ” pendi ng decision of the validity of a disputed claim for offset. ( Erlich v. Superior Court , supra, 63 Ca l.2d at p. 556.) LLC based its motion to recall on three grounds.14

First, LLC argues that the wri t should be recalled because LLC had valid offsets to the $156,600 fee award on which the writ was based

. A claim of offset may be a proper ground for bringing a motion to recall. (Ahart, supra, ¶ 6:613 at p. 6D

- 70 (r ev

. #1 , 2014).) However, we have already concluded that LLC has not yet established its right to
the claimed offsets. Thus
, on the existing record, the t rial court did not err in denying the
motion on this ground

. LLC next argues that denial of its motion to recall was inconsistent with the court’s statement that it was “ premature ” to de termine whether the judgment has been
satisfied. In making this stat ement, t he court suggested that the issue of LLC’s
entitlement to the Section 3(e) setoffs should be resolved in another forum

. LLC argues that accordingly the James Judgment is unenforceable until the Section 3(e) issue is
resolved in some other forum an d thus the writ of execution should be recalled and quashed (and should never have been issued in the first place)

. Under this approach, however, the judgment creditor would bear the burden of proving the invalidity of the judgment debtor’s claimed offset s. S imilar to LLC’s argument with respect to the motion to compel, LLC again seeks to reallocate the burden of proof. Lalanne , as judgment creditor, took appropriate action to obtain a judgment against LLC

. Andreas, as judgment creditor by assignment, then took appropriate action to enforce the fixed amount of that judgment (the $156,600 fee award) by obtaining a writ of exec ution. If
LLC wanted to preserve its right to take its claimed offsets despite Lalanne’s apparent insolvency, it should have take n affirmative action to do so. Had LLC brought an action
to establish its entitlement to the Section 3(e) offsets, it could have ask ed the court to stay enforcement of the James Judgment pending resolution of the offset action pursuant to section 918.5 , t hus protecting its interests

. I t failed to do so. In the absence of such an action, we see no barrier to Andreas’s e nforcement of the James Judgment. Finally
, LLC argues that the writ should be recalled because of its pending appeal
of the January 29 O r der. T his argument requires that we first determine whether the appeal stayed enforcement of the James J udgment ; if so
, we then determine whether the
writ should have been recalled and quashed to effect that stay. We conclude the appeal15

stayed enfor cemen t of the judgment and LLC was entitled to an order directing the sheriff
to release any funds that had been levied (but not an order recalling and quashing the writ). However
, LLC was not prejudiced by the court’s denial of the motion because a stay of enforcement of the writ was in place

. Section 916, subdivision (a) provides, with ex ceptions not relevant here , “[A] n appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced ther ein or affected thereby, including enfor cement of the judgment or order

. . . .” 8 Andreas suggested below that, regardless of the undertaking requirement, enforcement of a judgment is stayed only by an appeal from the judgment
itself , not by an appeal fro m an order denying a motion to compel acknowledgement of satisfaction of judgment . But section 916’s language is broad , providing that an appeal from an order “ stays proceedings in the trial court upon the

. . . order

. . . or upon the
matters embraced th erein or affected thereby

. ” (§ 916, subd. (a) , italics added

. )

“ ‘ “ [W]hether a mat ter is ‘embraced’ in or ‘affected’ by a judgment [or order] within the meaning of [section 916] depends on whether postjudgment [or postorder] proceedings
on the matte r wo uld have any effect on the ‘effectiveness’ of the appeal.” [Citation.] “ If so, the proceedings are stayed; if not, t he proceedings are permitted.” ’ ” ( Cunningham v. Magidow , supra, 219 Cal.App.4th at p. 304 , quoting Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189 .) In Cunningham , the court held that an appeal of an order that granted a motion to compel acknowledgement of partial satisfaction of judgment did not embrace or affect postorder proceedings that involved only the amount of the judgment that would have remained unpaid assuming the validity of the appealed

8 LLC correctly notes that, while an undertaking is usually required to stay enforcement of a money judgment pending appeal (§ 91 7.1), this requirement does not apply to routine costs ( id. , subd. (d); Bank of San Pedro v. Superior Court (1992) 3 Cal.4th 797, 800

– 801), and at least one court has held that it does not apply to awards of contractual attorney fees ( Ziello v. Superior Co urt (1999) 75 Cal.App.4th 651, 655 & fn. 2; see also Chapala Management Corp. v. Stanton (2010) 186 Cal.App.4th 1532, 1546

– 1547 [undertaking requirement does not apply to award of statutory attorney fees under Civ. Code, § 1354]). We assume for purposes o f argument that no undertaking was required for LLC’s appeal of the January 29 Order.16

order . ( Ibid. ) Here, however, postorder proceedings to levy the writ of execution wer e embraced by or affected by LLC’s appeal of the January 29 O rder because collect i on of the $156,600 fee award would undermine the purpose of the appeal, which was to allow LLC to offset equitable claims against that amount, at least in part. Th erefore, we agree
with LLC that appeal of the January 29 Order triggered a stay under sectio n 916.
The next issue is whether LLC had the right to a court order prohibiting the sheriff from disbursing levied funds because of the section 916 stay pending appeal. Citing Adir, supra, 216 Cal.App.4th 996, LLC argues that it needed to file its motion to recall in order to preserve its rights under the stay

. The trial court disagreed because it believed the appeal automatically extinguished the liens created by the writ of execution. We
conclude that LLC was entitled to an order, but not an order re c alling and quashing the
writ.
In Adir , the judgment debtor attempted to enforce a stay of a judgment pending appeal by simply notifying the sheriff of the appeal. The sh eriff had already levied funds
i n the debtor’s accounts pursuant to a writ of executi on . Despite receiving notice about the appeal, the sheriff disbursed those funds to the judgment creditor. The debtor then
asked the court to order the judgment creditor to return the funds. The appellate court held the trial court had no jurisdiction to do so. ( Adir, supra, 216 Cal.App.4th at p. 998.)
LLC relies on dicta in the opinion, which describes how the debtor could have prevented disbursement of the funds: “the debtor .

. . could have sought an order from the court recalling and/or quashing the writ of execution and releasing the liens.” ( Id. at p. 1003.) In support of the statement, Adir cites California Commerce Bank v. Superior Court (1992) 8 Cal.App.4th 582 ( C alifornia C ommerce B ank ) , which describes in more detail the proper procedure under the current statutory scheme for enforcement of judgments : “Section 697.040, subdivision (a)(1) provides that if enforcement of a judgment is stayed on appeal by the giving of a sufficient undertaking, existing liens created under
Division 2 (§§ 695 .010

– 709.030) are extinguished. Section 697.710 provides that a ‘levy on property under writ of execution creates an execution lien on the property from the time of levy .

. . .’ Under section 697.050 ‘[i]f a lien created pursuant to this division is17

ext inguished, property held subject to the lien shall be released unless the property is to be held under another lien or the property is ordered by the court to be held pending resolution of a dispute concerning its proper disposition.’ .

. . [T]he Law Revis ion
comment on section 697.050 explained that for property that had been levied upon by a levying officer, release was governed by section 699.060. [Citation.] [¶]
Section 699.060, subdivision (a), requires a levying officer to release property, inter al ia, upon receipt of a certified copy of a court order for release or written directions to release from the judgment creditor or his attorney . The release extinguishes any execution lien in favor of the judgment creditor on the released property. Subdivi sion (b) of section 699.060 provides that ‘[i]f the property to be released has been taken into custody under the levy, it shall be released to the person from whom it was taken unless otherwise ordered by the court .

. . .’ ” ( California Commerce Bank , s upra, 8 Cal.App.4th at pp. 586

– 587 , italics added .)
As we read California Commerce Bank and the cited statutes, LLC could have requested an order directing the sheriff to release LLC funds and, as recognized in Adir
, “the court would h ave been required to issue ” such an order if requested. ( Adir, supra, 216 Cal.App.4th at 1000
, citing California Commerce Bank, supra
, 8 Cal.App.4th at

p. 587. ) An order recalling and quashing the writ would not necessarily have required the
sheriff to return the levied fun ds. “ ‘ When the writ has been regularly issued and executed, money collected, while in the hands of the officer, is property of the judgment
creditors and not the debtor. Nothing can be done with it other than to turn it over to the
creditor.

. . . The r ights of the parties cannot be interfered with except through procedure authorized by statute.’ ” ( California Commerce Bank , at pp. 584

– 585.) As explained in California Commerce Bank , the “procedure authorized by statute” is a request for an
order direct ing release of the levied funds, not an order recalling and quashing the writ of
execution. (§ 699.060.) LLC was entitled to such an order. Nevertheless, we conclude LLC was not prejudiced. A stay order had already been issued and the parties agreed th at the stay would remain in effect until any appeal of18

the order denying the motion to compel was resolved. 9 Following resolution of this appeal, of course, the stay pending appeal will no longer be in effect. At that point, the parties will be free to t ake other measures to protect their rights and interests.
III. D ISPOSITION The orders are affirmed. The stay pending appeal shall remain in effect for
30 days following issuance of the remittitur to permit the parties to file appropriate new
motions in the trial court. LLC shall bear Andreas’s costs on appeal.

_________________________ BRUINIERS, J.

WE CONCUR:

_________________________ JONES, P. J.

_________________________ SIMONS, J.

9 Although not briefed by the parties, the stay apparently was authorized by section 918. (See also Ahart, supra, ¶ 6:619 at p. 6D

- 74 (rev. #1, 2014); Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2014) ¶ 7:61, p. 7

- 23.)